1
EXHIBIT 10.3(a)
LEASE AGREEMENT
DATED AS OF APRIL 1, 1996
BY AND BETWEEN
HPTWN CORPORATION,
AS LANDLORD
AND
GARDEN HOTEL ASSOCIATES TWO LP,
AS TENANT
2
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Affiliated Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Base Total Hotel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Base Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Capital Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.11 Capital Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12 Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.14 Collective Leased Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.15 Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 Condemnor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 Consolidated Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 Date of Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.21 Disbursement Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.22 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.23 Encumbrance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.24 Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.25 Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.26 Environmental Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.27 Environmental Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 Excess Total Hotel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 Extended Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 FF&E Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.32 FF&E Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.33 Financial Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.34 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.35 Fixed Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.36 Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.37 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
[1.38 Ground Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.39 Government Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.40 Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.41 Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.42 Hotel Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.43 Hotel Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.44 Immediate Family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.45 Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.46 Incidental Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.47 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.48 Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.49 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.50 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.51 Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.52 Landlord Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.53 Lease Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.54 Leased Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.55 Leased Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.56 Leased Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.57 Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.58 Leasehold Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.59 Leasehold Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.60 Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.61 Lending Institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.62 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.63 Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.64 Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.65 Minimum Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.66 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.67 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.68 Other Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.69 Overdue Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.70 Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.71 Partnership Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.72 Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.73 Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.74 Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.75 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.76 Pledge and Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.77 Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.78 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.79 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.80 SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.81 State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.82 Stock Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.83 Subordinated Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.84 Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.85 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.86 Successor Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.87 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.88 Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.89 Tenant's Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.90 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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1.91 Total Hotel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.92 Uniform System of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.93 Unsuitable for Its Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.94 WHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.95 Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.96 Wyndham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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 Extended Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 3: RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.1 Minimum Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.2 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.1.3 Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2 Late Payment of Rent, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.3 Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.4 No Termination, Abatement, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.5 Security for Tenant's Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4: USE OF THE LEASED PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.1 Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.1.1 Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.1.2 Necessary Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1.3 Lawful Use, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 Compliance with Legal/Insurance Requirements, Etc. 26
4.3 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.3.1 Restriction on Use, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.3.2 Indemnification of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 5: MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Maintenance and Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1.1 Tenant's General Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1.2 FF&E Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.3 Landlord's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.1.4 Nonresponsibility of Landlord, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.2 Tenant's Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.3 Yield Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.4 Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE 6: IMPROVEMENTS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.1 Improvements to the Leased Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Salvage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 7: LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2 Landlord's Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 8: PERMITTED CONTESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 9: INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.1 General Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.2 Replacement Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.3 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.4 Form Satisfactory, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.5 Blanket Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.6 No Separate Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.7 Indemnification of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 10: CASUALTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.1 Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2 Damage or Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2.1 Damage or Destruction of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2.2 Partial Damage or Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2.3 Insufficient Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.2.4 Disbursement of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.3 Damage Near End of Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.4 Tenant's Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.5 Restoration of Tenant's Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.6 No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.8 Effect on Other Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 11: CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.1 Total Condemnation, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.2 Partial Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.3 Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.4 Temporary Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.5 Allocation of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.6 Effect on Other Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 12: DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
12.3 Tenant's Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.4 Application of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.5 Landlord's Right to Cure Tenant's Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 13: HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 14: LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14.1 Landlord Notice Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14.2 Landlord's Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 15: PURCHASE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
15.1 First Refusal to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
15.2 Landlord's Option to Purchase the Tenant's
Personal Property; Transfer of Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 16: SUBLETTING AND ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
16.1 Subletting and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
16.2 Required Sublease Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
16.3 Permitted Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
16.4 Sublease Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
16.5 Required Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 17: ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
17.1 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
17.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
17.3 General Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 18: LANDLORD'S RIGHT TO INSPECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 19: LEASEHOLD MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
19.1 Leasehold Mortgages Authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
19.2 Notices to Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
19.3 Cure by Leasehold Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
19.4 Landlord Estoppel Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 20: HOTEL MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
20.1 Landlord May Grant Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
20.2 Subordination of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
20.3 Notice to Mortgagee and Superior Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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ARTICLE 21: ADDITIONAL COVENANTS OF TENANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
21.1 Prompt Payment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
21.2 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
21.3 Maintenance of Accounts and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
21.4 Notice of Litigation, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
21.5 Indebtedness of Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
21.6 Financial Condition of Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
21.7 Distributions, Payments to Affiliated Persons, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 66
21.8 Prohibited Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
21.9 Liens and Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
21.10 Merger; Sale of Assets; Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 22: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
22.1 Limitation on Payment of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
22.2 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
22.3 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
22.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
22.5 Acceptance of Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
22.6 No Merger of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
22.7 Conveyance by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
22.8 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
22.9 Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
22.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
22.11 Trade Area Restriction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
22.12 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
22.13 Counterparts; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
22.14 Applicable Law, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
22.15 Right to Make Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
22.16 Nonrecourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
22.17 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
EXHIBITS
A - Annual Minimum Rent
B - Other Leases
C - The Land
D - Restricted Trade Area
E - Form of Landlord Estoppel
8
LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into as of this ___ day of _________,
1996, by and between HPTWN CORPORATION, a Delaware corporation, as landlord
("Landlord"), and GARDEN HOTEL ASSOCIATES TWO LP, a Texas limited partnership,
as tenant ("Tenant").
W I T N E S S E T H :
WHEREAS, Landlord owns fee simple title to the Leased Property [holds
the tenant's interest under the Ground Lease]_(this and other capitalized terms
used and not otherwise defined herein having the meanings ascribed to such
terms in Article 1); and
WHEREAS, Landlord wishes to lease the Leased Property to Tenant and
Tenant wishes to lease the Leased Property from Landlord, all subject to and
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
agree as follows:
ARTICLE 1
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) the terms defined in
this Article shall have the meanings assigned to them in this Article and
include the plural as well as the singular, (ii) all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance
with GAAP, (iii) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this
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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.
1.1 "Additional Rent" shall have the meaning given such term in
Section 3.1.2(a).
1.2 "Additional Charges" shall have the meaning given such term in
Section 3.1.3.
1.3 "Affiliated Person" shall mean, with respect to any Person, (a)
in the case of any such Person which is a partnership, any partner in such
partnership, (b) in the case of any such Person which is a limited liability
company, any member of such company, (c) any other Person which is a Parent, a
Subsidiary, or a Subsidiary of a Parent with respect to such Person or to one
or more of the Persons referred to in the preceding clauses (a) and (b), (d)
any other Person who is an officer, director, trustee or employee of, or
partner in or member of, such Person or any Person referred to in the preceding
clauses (a), (b) and (c), and (e) any other Person who is a member of the
Immediate Family of such Person or of any Person referred to in the preceding
clauses (a) through (d).
1.4 "Agreement" shall mean this Lease Agreement, including Exhibits A
to D hereto, as it and they may be amended from time to time as herein
provided.
1.5 "Applicable Laws" shall mean all applicable laws, statutes,
regulations, rules, ordinances, codes, licenses, permits and orders, from time
to time in existence, of all courts of competent jurisdiction and Government
Agencies, and all applicable judicial and administrative and regulatory
decrees, judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal property or human
health (except those requirements which, by definition, are solely the
responsibility of employers) or the Environment, including, without limitation,
all valid and lawful requirements of courts and other Government Agencies
pertaining to reporting, licensing, permitting, investigation, remediation and
removal of underground improvements (including, without limitation, treatment
or storage tanks, or water, gas or oil ▇▇▇▇▇), or emissions, discharges,
releases or threatened
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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.
1.6 "Award" shall mean all compensation, sums or other value awarded,
paid or received by virtue of a total or partial Condemnation of the Leased
Property (after deduction of all reasonable legal fees and other reasonable
costs and expenses, including, without limitation, expert witness fees,
incurred by Landlord, in connection with obtaining any such award).
1.7 "Base Total Hotel Sales" shall mean Total Hotel Sales for the
Base Year; provided, however, that in the event that, with respect to any Lease
Year, or portion thereof, for any reason (including, without limitation, a
casualty or Condemnation) there shall be, for two hundred seventy (270) days or
more in any Lease Year, a reduction in the number of rooms at the Hotel or any
other Hotel (as defined in the Other Leases) or a change in the services
provided at the Hotel or such other Hotels (including, without limitation,
closing of restaurants or the discontinuation of food or beverage services)
from the number of rooms or the services provided during the Base Year, in
determining Additional Rent payable with respect to such Lease Year, Base Total
Hotel Sales shall be reduced as follows: (a) in the event of the termination
of any of the Other Leases and following application of any business
interruption or Award proceeds collected with respect thereto, all Total Hotel
Sales attributable to the Leased Property demised thereunder during the Base
Year shall be subtracted from Base Total Hotel Sales; (b) in the event of a
complete closing of a Hotel and following application of any business
interruption or Award proceeds collected with respect thereto, all Total Hotel
Sales attributable to such Hotel during the Base Year shall be subtracted from
Base Total Hotel Sales throughout the period of such closing; (c) in the event
of a partial closing of a Hotel
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affecting any number of guest rooms in such Hotel and following application of
any business interruption or Award proceeds collected with respect thereto,
Total Hotel Sales attributable to guest room occupancy or guest room services
at such Hotel during the Base Year shall be ratably allocated among all guest
rooms in service at such Hotel during the Base Year and all such Total Hotel
Sales attributable to rooms no longer in service shall be subtracted from Base
Total Hotel Sales throughout the period of such closing; (d) in the event of a
closing of a restaurant and following application of any business interruption
or Award proceeds collected with respect thereto, all Total Hotel Sales
attributable to such restaurant during the Base Year shall be subtracted from
Base Total Hotel Sales throughout the period of such closing; and (e) in the
event of any other change in circumstances affecting any Hotel, Base Total
Hotel Sales shall be equitably adjusted in such manner as Landlord and Tenant
shall reasonably agree.
1.8 "Base Year" shall mean the 1996 calendar year.
1.9 "Business Day" shall mean any day other than Saturday, Sunday, or
any other day on which banking institutions in The Commonwealth of
Massachusetts or the State of Texas are authorized by law or executive action
to close.
1.10 "Capital Addition" shall mean any renovation, repair or
improvement to the Leased Property (or portion thereof), the cost of which
constitutes a Capital Expenditure.
1.11 "Capital Expenditure" shall mean any expenditure treated as
capital in nature in accordance with GAAP.
1.12 "Claim" shall have the meaning given such term in Article 8.
1.13 "Code" shall mean the Internal Revenue Code of 1986 and, to the
extent applicable, the Treasury Regulations promulgated thereunder, each as
from time to time amended.
1.14 "Collective Leased Properties" shall mean, collectively, the
Leased Property and every other Leased Property (as defined therein) under the
Other Leases.
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1.15 "Commencement Date" shall mean the date of this Agreement.
1.16 "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.
1.17 "Condemnor" shall mean any public or quasi-public authority, or
private corporation or Person, having the power of Condemnation.
1.18 "Consolidated Financials" shall mean, for any Fiscal Year or
other accounting period of Tenant, annual audited and quarterly unaudited
financial statements of Wyndham prepared on a consolidated basis, including
Wyndham's consolidated balance sheet and the related statements of income and
cash flows, all in reasonable detail, and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding Fiscal
Year, and prepared in accordance with GAAP throughout the periods reflected.
1.19 "Date of Taking" shall mean the date the Condemnor has the right
to possession of the Leased Property, or any portion thereof, in connection
with a Condemnation.
1.20 "Default" shall mean any event or condition which with the
giving of notice and/or lapse of time may ripen into an Event of Default.
1.21 "Disbursement Rate" shall mean an annual rate of interest equal
to the greater of, as of the date of determination, (i) the Interest Rate and
(ii) the per annum rate for ten (10) year U.S. Treasury Obligations as
published in The Wall Street Journal plus three hundred fifty (350) basis
points.
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1.22 "Distribution" shall mean (a) any declaration or payment of any
dividend (except dividends payable in common stock of Tenant) on or in respect
of any shares of any class of capital stock of Tenant, (b) any purchase,
redemption, retirement or other acquisition of any shares of any class of
capital stock of a corporation, (c) any other distribution on or in respect of
any shares of any class of capital stock of a corporation, or (d) any return of
capital to shareholders.
1.23 "Encumbrance" shall have the meaning given such term in Section
20.1.
1.24 "Entity" shall mean any corporation, general or limited
partnership, limited liability company or partnership, stock company or
association, joint venture, association, company, trust, bank, trust company,
land trust, business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.
1.25 "Environment" shall mean soil, surface waters, ground waters,
land, stream, sediments, surface or subsurface strata and ambient air.
1.26 "Environmental Obligation" shall have the meaning given such
term in Section 4.3.1.
1.27 "Environmental Notice" shall have the meaning given such term in
Section 4.3.1.
1.28 "Event of Default" shall have the meaning given such term in
Section 12.1.
1.29 "Excess Total Hotel Sales" shall mean, with respect to any Lease
Year, or portion thereof, the amount of Total Hotel Sales for such Lease Year
with respect to the Collective Leased Properties, or portion thereof, in excess
of Base Total Hotel Sales with respect to the Collective Leased Properties for
the equivalent period.
1.30 "Extended Terms" shall have the meaning given such term in
Section 2.4.
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1.31 "FF&E Estimate" shall have the meaning given such term in
Section 5.1.2(c).
1.32 "FF&E Reserve" shall have the meaning given such term in Section
5.1.2(a).
1.33 "Financial Officer's Certificate" shall mean, as to any Person,
a certificate of the chief financial officer or chief accounting officer (or
such officers' authorized designee) of such Person, duly authorized,
accompanying the financial statements required to be delivered by such Person
pursuant to Section 17.2, in which such officer shall certify (a) that such
statements have been properly prepared in accordance with GAAP and are true,
correct and complete in all material respects and fairly present the
consolidated financial condition of such Person at and as of the dates thereof
and the results of its and their operations for the periods covered thereby,
and (b) certify that no Event of Default has occurred and is continuing
hereunder.
1.34 "Fiscal Year" shall mean the calendar year.
1.35 "Fixed Term" shall have the meaning given such term in Section
2.3.
1.36 "Fixtures" shall have the meaning given such term in Section
2.1(d).
1.37 "GAAP" shall mean generally accepted accounting principles
consistently applied.
[ 1.38 "Ground Lease" shall mean ______________.]
1.39 "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.
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1.40 "Hazardous Substances" shall mean any substance:
(a) the presence of which requires or may hereafter require
notification, investigation or remediation under any federal, state or
local statute, regulation, rule, ordinance, order, action or policy; or
(b) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "pollutant" or
"contaminant" under any present or future federal, state or local
statute, regulation, rule or ordinance or amendments thereto including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. et seq.) and the Resource
Conservation and Recovery Act (42 U.S.C. section 6901 et seq.) and the
regulations promulgated thereunder; or
(c) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
and is or becomes regulated by any governmental authority, agency,
department, commission, board, agency or instrumentality of the United
States, any state of the United States, or any political subdivision
thereof; or
(d) the presence of which on the Leased Property causes or
materially threatens to cause an unlawful nuisance upon the Leased
Property or to adjacent properties or poses or materially threatens to
pose a hazard to the Leased Property or to the health or safety of
persons on or about the Leased Property; or
(e) without limitation, which contains gasoline, diesel fuel
or other petroleum hydrocarbons or volatile organic compounds; or
(f) without limitation, which contains polychlorinated
biphenyls (PCBs) or asbestos or urea formaldehyde foam insulation; or
(g) without limitation, which contains or emits radioactive
particles, waves or material; or
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(h) without limitation, constitutes materials which are now or
may hereafter be subject to regulation pursuant to the Material Waste
Tracking Act of 1988, or any Applicable Laws promulgated by any
Government Agencies.
1.41 "Hotel" shall mean the Wyndham Garden Hotel being operated on the
Leased Property.
1.42 "Hotel Mortgage" shall mean any Encumbrance placed upon the
Leased Property in accordance with Article 20.
1.43 "Hotel Mortgagee" shall mean the holder of any Hotel Mortgage.
1.44 "Immediate Family" shall mean, with respect to any individual,
such individual's spouse, parents, brothers, sisters, children (natural or
adopted), stepchildren, grandchildren, grandparents, parents-in-law, brothers-
in-law, sisters-in-law, nephews and nieces.
1.45 "Impositions" shall mean collectively, all taxes (including,
without limitation, all taxes imposed under the laws of the State, as such laws
may be amended from time to time, and all ad valorem, sales and use, or similar
taxes as the same relate to or are imposed upon Landlord, Tenant or the
business conducted upon the Leased Property), assessments (including, without
limitation, all assessments for public improvements or benefit, whether or not
commenced or completed prior to the date hereof), water, sewer or other rents
and charges, excises, tax levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property or
the business conducted thereon by Tenant (including all interest and penalties
thereon due to any failure in payment by Tenant), which at any time prior to,
during or in respect of the Term hereof may be assessed or imposed on or in
respect of or be a lien upon (a) Landlord's interest in the Leased Property,
(b) the Leased Property or any part thereof or any rent therefrom or any
estate, right, title or interest therein, or (c) any occupancy, operation, use
or possession of, or sales from, or activity conducted on, or in connection
with the Leased Property or the
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leasing or use of the Leased Property or any part thereof by Tenant; provided,
however, that nothing contained herein shall be construed to require Tenant to
pay (i) any tax based on net income imposed on Landlord, (ii) any net revenue
tax of Landlord, (iii) any transfer fee or other tax imposed with respect to
the sale, exchange or other disposition by Landlord of the Leased Property or
the proceeds thereof, (iv) any single business, gross receipts tax, transaction
privilege, rent or similar taxes as the same relate to or are imposed upon
Landlord, (v) any interest or penalties imposed on Landlord as a result of the
failure of Landlord to file any return or report timely and in the form
prescribed by law or to pay any tax or imposition, except to the extent such
failure is a result of a breach by Tenant of its obligations pursuant to
Section 3.1.3, (vi) any Impositions imposed on Landlord that are a result of
Landlord not being considered a "United States person" as defined in Section
7701(a)(30) of the Code, (vii) any Impositions that are enacted or adopted by
their express terms as a substitute for any tax that would not have been
payable by Tenant pursuant to the terms of this Agreement or (viii) any
Impositions imposed as a result of a breach of covenant or representation by
Landlord in any agreement governing Landlord's conduct or operation or as a
result of the gross negligence or willful misconduct of Landlord.
1.46 "Incidental Documents" shall mean the Pledge and Security
Agreement, the Stock Pledge Agreement and the Partnership Interest Pledge
Agreement.
1.47 "Indebtedness" shall mean all obligations, contingent or
otherwise, which in accordance with GAAP should be reflected on the obligor's
balance sheet as liabilities.
1.48 "Insurance Requirements" shall mean all terms of any insurance
policy required by this Agreement and all requirements of the issuer of any
such policy and all orders, rules and regulations and any other requirements of
the National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon Landlord, Tenant or the Leased Property.
1.49 "Interest Rate" shall mean ten percent (10%) per annum.
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1.50 "Land" shall have the meaning given such term in Section 2.1(a).
1.51 "Landlord" shall have the meaning given such term in the
preambles to this Agreement and shall also include its permitted successors and
assigns.
1.52 "Landlord Liens" shall mean liens on or against the Leased
Property or any payment of Rent (a) which result from any act of, or any claim
against, Landlord or any owner of a direct or indirect interest in the Leased
Property, or which result from any violation by Landlord of any terms of this
Agreement or the Purchase Agreement, or (b) which result from liens in favor of
any taxing authority by reason of any tax owed by Landlord or any fee owner of
a direct or indirect interest in the Leased Property; provided, however, that
"Landlord Lien" shall not include any lien resulting from any tax for which
Tenant is obligated to pay or indemnify Landlord against until such time as
Tenant shall have already paid to or on behalf of Landlord the tax or the
required indemnity with respect to the same.
1.53 "Lease Year" shall mean any Fiscal Year or portion thereof,
commencing with the 1996 Fiscal Year, during the Term.
1.54 "Leased Improvements" shall have the meaning given such term in
Section 2.1(b).
1.55 "Leased Intangible Property" shall mean all hotel licensing
agreements and other service contracts, equipment leases, booking agreements
and other arrangements or agreements affecting the ownership, repair,
maintenance, management, leasing or operation of the Leased Property to which
Landlord is a party; all books, records and files relating to the leasing,
maintenance, management or operation of the Leased Property belonging to
Landlord; all transferable or assignable permits, certificates of occupancy,
operating permits, sign permits, development rights and approvals,
certificates, licenses, warranties and guarantees, rights to deposits, trade
names, service marks, telephone exchange numbers identified with the Leased
Property, and all other transferable intangible property, miscellaneous rights,
benefits and privileges of any kind or character belonging to Landlord with
respect to the Leased Property.
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1.56 "Leased Personal Property" shall have the meaning given such
term in Section 2.1(e).
1.57 "Leased Property" shall have the meaning given such term in
Section 2.1.
1.58 "Leasehold Mortgage" shall mean a mortgage, a deed to secure
debt, or other security instrument by which the leasehold estate or any other
rights of Tenant (including, without limitation, rights created by this
Agreement) is mortgaged, conveyed, assigned, or otherwise transferred by
Tenant, to secure a loan or loans obtained, or obligations incurred or
guaranteed, by Tenant to a Lending Institution.
1.59 "Leasehold Mortgagee" shall mean the holder of any Leasehold
Mortgage.
1.60 "Legal Requirements" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Leased Property or
the maintenance, construction, alteration or operation thereof, whether now or
hereafter enacted or in existence, including, without limitation, (a) all
permits, licenses, authorizations, certificates and regulations necessary to
operate the Leased Property for its Permitted Use, and (b) all covenants,
agreements, restrictions and encumbrances contained in any instruments at any
time in force affecting the Leased Property, including those which may (i)
require material repairs, modifications or alterations in or to the Leased
Property or (ii) in any way materially and adversely affect the use and
enjoyment thereof, but excluding any requirements arising as a result of
Landlord's status as a real estate investment trust.
1.61 "Lending Institution" shall mean any United States insurance
company, banking corporation, federally insured commercial or savings bank,
national banking association, United States savings and loan association,
employees' welfare, pension or retirement fund or system, corporate profit
sharing or pension trust, college or university, or real estate investment
trust, including any corporation qualified to be treated for federal tax
purposes as a real estate investment trust, such trust having a
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net worth of at least $100,000,000 and shall also mean and include Bankers
Trust Company and any Person participating in a loan syndicate with Bankers
Trust Company.
1.62 "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.
1.63 "Management Agreement" shall mean the Amended and Restated
Management Agreement, dated the date hereof, between Tenant and Wyndham,
together with all amendments, modifications and supplements thereto.
1.64 "Manager" shall mean Wyndham or an Affiliated Person with
respect to Wyndham and permitted assignees.
1.65 "Minimum Rent" shall mean, with respect to each calendar year,
the sum set forth on Exhibit A.
1.66 "Notice" shall mean a notice given in accordance with Section
22.10.
1.67 "Officer's Certificate" shall mean a certificate signed by an
officer of the certifying Entity duly authorized by the board of directors of
the certifying Entity.
1.68 "Other Leases" shall mean, collectively, the Lease Agreements
between Landlord and Tenant described on Exhibit B.
1.69 "Overdue Rate" shall mean, on any date, a per annum rate of
interest equal to the lesser of fifteen percent (15%) and the maximum rate then
permitted under applicable law.
1.70 "Parent" shall mean, with respect to any Person, any Person
which owns directly, or indirectly through one or more Subsidiaries or
Affiliated Persons, five percent (5%) or more of the voting or beneficial
interest in, or otherwise has the right or power (whether by contract, through
ownership of securities or otherwise) to control, such Person.
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1.71 "Partnership Pledge Agreement" shall mean the Partnership
Interest Pledge Agreement, dated as of the date hereof, made by the partners of
Tenant to Landlord.
1.72 "Permitted Encumbrances" shall mean all rights, restrictions,
and easements of record set forth on Schedule B to the applicable owner's or
leasehold title insurance policy issued to Landlord on the date hereof, plus
any other such encumbrances as may have been consented to in writing by
Landlord from time to time.
1.73 "Permitted Liens" shall mean any Liens granted in accordance with
Section 21.9(a).
1.74 "Permitted Use" shall mean any use of the Leased Property
permitted pursuant to Section 4.1.1.
1.75 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
such Person where the context so admits.
1.76 "Pledge and Security Agreement" shall mean the Pledge and
Security Agreement, dated as of the date hereof, made by Tenant for the benefit
of Landlord.
1.77 "Purchase Agreement" shall mean the Purchase and Sale Agreement,
dated as of March 5, 1996, by and between Landlord and Garden Hotel Associates
Limited Partnership, as amended.
1.78 "Records" shall have the meaning given such term in Section 7.2.
1.79 "Rent" shall mean, collectively, the Minimum Rent, Additional
Rent and Additional Charges.
1.80 "SEC" shall mean the Securities and Exchange Commission.
1.81 "State" shall mean the state or commonwealth or district in
which the Leased Property is located.
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1.82 "Stock Pledge Agreement" shall mean the Stock Pledge Agreement
made by Wyndham to Landlord with respect to the stock of the required assignee
of Tenant pursuant to Section 16.5.
1.83 "Subordinated Creditor" shall mean any creditor of Tenant which
is a party to a Subordination Agreement in favor of Landlord.
1.84 "Subordination Agreement" shall mean any agreement executed by a
Subordinated Creditor pursuant to which the payment and performance of Tenant's
obligations to such Subordinated Creditor are subordinated to the payment and
performance of Tenant's obligations to Landlord under this Agreement.
1.85 "Subsidiary" shall mean, with respect to any Person, any Entity
(a) in which such Person owns directly, or indirectly through one or more
Subsidiaries, forty-nine percent (49%) or more of the voting or beneficial
interest or (b) which such Person otherwise has the right or power to control
(whether by contract, through ownership of securities or otherwise).
1.86 "Successor Landlord" shall have the meaning given such term in
Section 20.2.
1.87 "Tangible Net Worth" shall mean the excess of total assets over
total liabilities, total assets and total liabilities each to be determined in
accordance with GAAP, excluding, however, from the determination of total
assets: (a) goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other similar intangibles; (b) all
deferred charges or unamortized debt discount and expense; (c) all reserves
carried and not deducted from assets; (d) treasury stock and capital stock,
obligations or other securities of, or capital contributions to, or investments
in, any Subsidiary; (e) securities which are not readily marketable; (f) any
write-up in the book value of any asset resulting from a revaluation thereof
subsequent to the Commencement Date; (g) deferred gain; and (h) any items not
included in clauses (a) through (g) above that are treated as intangibles in
conformity with GAAP; and excluding, however, from the determination of total
liabilities deferred fees payable to the Manager in accordance with the
Management Agreement.
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1.88 "Tenant" shall have the meaning given such term in the preambles
to this Agreement and shall also include its permitted successors and assigns.
1.89 "Tenant's Personal Property" shall mean all motor vehicles and
consumable inventory and supplies, furniture, furnishings, movable walls and
partitions, equipment and machinery and all other tangible personal property of
Tenant, if any, acquired by Tenant on and after the date hereof and located at
the Leased Property or used in Tenant's business at the Leased Property and all
modifications, replacements, alterations and additions to such personal
property installed at the expense of Tenant, other than any items included
within the definition of Fixtures or Leased Personal Property.
1.90 "Term" shall mean, collectively, the Fixed Term and the Extended
Terms, to the extent properly exercised pursuant to the provisions of Section
2.4, unless sooner terminated pursuant to the provisions of this Agreement.
1.91 "Total Hotel Sales" shall mean, for each Fiscal Year during the
Term, all revenues and receipts of every kind derived by Tenant from operating
the Leased Property and parts thereof, including, but not limited to: income
(from both cash and credit transactions), after deductions for bad debts, and
discounts for prompt or cash payments and refunds, from rental of rooms,
stores, offices, meeting, exhibit or sales space of every kind; license, lease
and concession fees and rentals (not including gross receipts of licensees,
lessees and concessionaires); income from vending machines; health club
membership fees; food and beverage sales; wholesale and retail sales of
merchandise (other than proceeds from the sale of furnishings, fixture and
equipment no longer necessary to the operation of the Hotel, which shall be
deposited in the FF&E Reserve); service charges, to the extent not distributed
to the employees at the Hotel as gratuities; and proceeds, if any, from
business interruption or other loss of income insurance; provided, however,
that Total Hotel Sales shall not include the following: gratuities to Hotel
employees; federal, state or municipal excise, sales, use or similar taxes
collected directly from patrons or guests or included as part of the sales
price of any goods or services; insurance proceeds (other than proceeds from
business interruption or other loss of
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income insurance); Award proceeds (other than for a temporary Condemnation);
any proceeds from any sale of the Leased Property or from the refinancing of
any debt encumbering the Leased Property; proceeds from the disposition of
furnishings, fixture and equipment no longer necessary for the operation of the
Hotel; and interest which accrues on amounts deposited in the FF&E Reserve.
1.92 "Uniform System of Accounts" shall mean A Uniform System of
Accounts for Hotels, Eighth Revised Edition, 1986, as published by the Hotel
Association of New York City, as the same may be further revised from time to
time.
1.93 "Unsuitable for Its Permitted Use" shall mean a state or
condition of the Hotel such that (a) following any damage or destruction
involving the Hotel, the Hotel cannot be operated in the good faith judgment of
Tenant on a commercially practicable basis for its Permitted Use and it cannot
reasonably be expected to be restored to substantially the same condition as
existed immediately before such damage or destruction, and as otherwise
required by Section 10.2.4, within twelve (12) months following such damage or
destruction or such shorter period of time as to which business interruption
insurance is available to cover Rent and other costs related to the Leased
Property following such damage or destruction, or (b) as the result of a
partial taking by Condemnation, the Hotel cannot be operated, in the good faith
judgment of Tenant or the Manager on a commercially practicable basis for its
Permitted Use.
1.94 "WHC" shall mean Wyndham Hotel Corporation, a Delaware
corporation, which it is currently contemplated will, directly or indirectly,
succeed to substantially all of the business and assets of Wyndham Hotel
Company, Ltd., certain shares of which will be publicly traded on a nationally
recognized exchange and all permitted successors and assigns of such
corporation.
1.95 "Work" shall have the meaning given such term in Section 10.2.4.
1.96 "Wyndham" shall mean, prior to the assignment described in
Section 16.5, Wyndham Hotel Company, Ltd., a Texas limited partnership, and
following the assignment described in Section 16.5, WHC.
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ARTICLE 2
LEASED PROPERTY AND TERM
2.1 Leased Property. Upon and subject to the terms and conditions
hereinafter set forth, Landlord leases to Tenant and Tenant leases from
Landlord all of Landlord's right, title and interest in and to all of the
following (collectively, the "Leased Property"):
(a) those certain tracts, pieces and parcels of land, as more
particularly described in Exhibit C, attached hereto and made a part
hereof (the "Land");
(b) all buildings, structures and other improvements of every
kind including, but not limited to, alleyways and connecting tunnels,
sidewalks, utility pipes, conduits and lines (on-site and off-site),
parking areas and roadways appurtenant to such buildings and structures
presently situated upon the Land (collectively, the "Leased
Improvements");
(c) all easements, rights and appurtenances relating to the
Land and the Leased Improvements;
(d) all equipment, machinery, fixtures, and other items of
property, now or hereafter permanently affixed to or incorporated into
the Leased Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and
apparatus, sprinkler systems and fire and theft protection equipment,
all of which, to the maximum extent permitted by law, are hereby deemed
by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto, but
specifically excluding all items included within the category of
Tenant's Personal Property (collectively, the "Fixtures");
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(e) all machinery, equipment, furniture, furnishings, moveable
walls or partitions, computers or trade fixtures or other personal
property of any kind or description used or useful in Tenant's business
on or in the Leased Improvements, and located on or in the Leased
Improvements, and all modifications, replacements, alterations and
additions to such personal property, except items, if any, included
within the category of Fixtures, but specifically excluding all items
included within the category of Tenant's Personal Property
(collectively, the "Leased Personal Property");
(f) all of the Leased Intangible Property; and
(g) any and all leases of space (including any security
deposits held by Tenant or the Manager pursuant thereto) in the Leased
Improvements to tenants thereof.
2.2 Condition of Leased Property. Tenant acknowledges receipt and
delivery of possession of the Leased Property and Tenant accepts the Leased
Property in its "as is" condition, subject to the rights of parties in
possession, the existing state of title, including all covenants, conditions,
restrictions, reservations, mineral leases, easements and other matters of
record or that are visible or apparent on the Leased Property, all applicable
Legal Requirements, the lien of any financing instruments, mortgages and deeds
of trust existing prior to the Commencement Date or permitted by the terms of
this Agreement, and such other matters which would be disclosed by an
inspection of the Leased Property and the record title thereto or by an
accurate survey thereof. TENANT REPRESENTS THAT IT HAS INSPECTED THE LEASED
PROPERTY AND ALL OF THE FOREGOING AND HAS FOUND THE CONDITION THEREOF
SATISFACTORY AND IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF LANDLORD
OR LANDLORD'S AGENTS OR EMPLOYEES WITH RESPECT THERETO AND TENANT WAIVES ANY
CLAIM OR ACTION AGAINST LANDLORD IN RESPECT OF THE CONDITION OF THE LEASED
PROPERTY. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN
RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS
FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS
TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT
BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT. To the maximum
extent permitted by law, however, Landlord hereby
27
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assigns to Tenant all of Landlord's rights to proceed against any predecessor
in title for breaches of warranties or representations or for latent defects in
the Leased Property. Landlord shall fully cooperate with Tenant in the
prosecution of any such claims, in Landlord's or Tenant's name, all at Tenant's
sole cost and expense. Tenant shall indemnify, defend, and hold harmless
Landlord from and against any loss, cost, damage or liability (including
reasonable attorneys' fees) incurred by Landlord in connection with such
cooperation.
2.3 Fixed Term. The initial term of this Agreement (the "Fixed
Term") shall commence on the Commencement Date and shall expire December 31,
2012.
2.4 Extended Term. Provided that no Event of Default shall have
occurred and be continuing, this Agreement shall be in full force and effect,
and the term of all of the Other Leases shall be simultaneously extended
(unless any such Other Leases shall have been terminated pursuant to the
provisions of Articles 10 or 11 thereof or unless the Other Lease pertaining to
real property in Seatac, Washington shall be terminated or extinguished due to
the termination of the Ground Lease [as defined therein] as a result of a
default by the ground lessee thereunder which was not caused by Tenant), the
Term shall be automatically extended for four (4) consecutive renewal terms of
twelve (12) years each (collectively, the "Extended Terms"), unless Tenant
shall give Landlord Notice, not later than two (2) years prior to the scheduled
expiration of the then current Term of this Agreement (Fixed or Extended, as
the case may be), that Tenant elects not so to extend the term of this
Agreement and the Other Leases (and time shall be of the essence with respect
to the giving of such Notice). It is expressly understood and agreed that such
Notice from Tenant shall be void and of no effect and the Term shall be
automatically extended unless Tenant shall simultaneously elect not to extend
the term of the Other Leases.
Each Extended Term shall commence on the day succeeding the expiration
of the Fixed Term or the preceding Extended Term, as the case may be. All of
the terms, covenants and provisions of this Agreement shall apply to each such
Extended Term, except that Tenant shall have no right to extend the Term beyond
the expiration of the Extended Terms. If Tenant shall give Notice that it
elects not to extend the Term in accordance with this
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Section 2.4, this Agreement shall automatically terminate at the end of
the Term then in effect and Tenant shall have no further option to extend the
Term of this Agreement. Otherwise, the extension of this Agreement shall be
automatically effected without the execution of any additional documents; it
being understood and agreed, however, that Tenant and Landlord shall execute
such documents and agreements as either party shall reasonably require to
evidence the same.
[Notwithstanding the foregoing, to the extent this Agreement shall be in
effect on any date that Landlord has the right, under the provisions of the
Ground Lease, to elect to renew or extend the term of the Ground Lease,
Landlord shall so extend the term of the Ground Lease and the Term of this
Agreement shall be deemed to be automatically extended to the expiration of the
term of the Ground Lease, as renewed or extended.]
ARTICLE 3
RENT
3.1 Rent. Tenant shall pay, in lawful money of the United States of
America which shall be legal tender for the payment of public and private
debts, without offset, abatement, demand or deduction (unless otherwise
expressly provided in this Agreement), Minimum Rent and Additional Rent to
Landlord and Additional Charges to the party to whom such Additional Charges
are payable, during the Term. All payments to Landlord shall be made by wire
transfer of immediately available federal funds or by other means acceptable to
Landlord in its sole discretion. Rent for any partial Accounting Period shall
be prorated on a per diem basis.
3.1.1 Minimum Rent.
(a) Minimum Rent shall be paid in advance on the first
Business Day of each month; provided, however, that the first payment of
Minimum Rent shall be payable on the Commencement Date (and, if
applicable, such payment shall be prorated as provided in the last
sentence of the first paragraph of Section 3.1).
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(b) Adjustments of Minimum Rent Following Disbursements
Under Sections 5.1.3(b), 10.2.4 or 11.2. Effective on the date of each
disbursement to pay for the cost of any repairs, maintenance,
renovations or replacements pursuant to Sections 5.1.3(b), 10.2.4 or
11.2, the Minimum Rent shall be increased by a per annum amount equal to
the Disbursement Rate times the amount so disbursed. If any such
disbursement is made during any month on a day other than the first day
of a month, Tenant shall pay to Landlord on the first day of the
immediately following month (in addition to the amount of Minimum Rent
payable with respect to such month, as adjusted pursuant to this
paragraph (b)) the amount by which Minimum Rent for the preceding month,
as adjusted for such disbursement on a per diem basis, exceeded the
amount of Minimum Rent paid by Tenant for such preceding month.
3.1.2 Additional Rent.
(a) Amount. Commencing with the Second Lease Year, for each
Lease Year or portion thereof, Tenant shall pay an aggregate amount of
additional rent ("Additional Rent") with respect to such Lease Year,
pursuant to this Agreement and the Other Leases, in an amount, not less
than zero, equal to eight percent (8%) of Excess Total Hotel Sales.
(b) Monthly Installments. Commencing with the Second Lease
Year, installments of Additional Rent for each Lease Year or portion
thereof shall be calculated and paid monthly in arrears, together with
an Officer's Certificate setting forth the calculation of Additional
Rent due and payable for such month.
(c) Reconciliation of Additional Rent. In addition, on or
before April 30, of each year, commencing April 30, 1997, Tenant shall
deliver to Landlord an Officer's Certificate setting forth the Total
Hotel Sales for the Collective Leased Properties for such preceding
Lease Year, together with an audit of Tenant's revenues for the
preceding Lease Year, conducted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Co., or another
"Big Six", so-called, firm of independent certified public accountants
proposed by Tenant and approved
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by Landlord (which approval shall not be unreasonably withheld or
delayed).
If the annual Additional Rent for such preceding Lease Year as shown in
the Officer's Certificate exceeds the amount previously paid with respect
thereto by Tenant, Tenant shall pay such excess to Landlord at such time as the
Officer's Certificate is delivered, together with interest at the Interest
Rate, which interest shall accrue from the close of such preceding Lease Year
until the date that such certificate is required to be delivered and,
thereafter, such interest shall accrue at the Overdue Rate, until the amount of
such difference shall be paid or otherwise discharged. If the annual
Additional Rent for such preceding Lease Year as shown in the Officer's
Certificate is less than the amount previously paid with respect thereto by
Tenant, provided that no Event of Default shall have occurred and be
continuing, Landlord shall grant Tenant a credit against the Rent next coming
due in the amount of such difference, together with interest at the Interest
Rate, which interest shall accrue from the date of payment by Tenant until the
date such credit is applied or paid, as the case may be. If such credit cannot
be made because the Term has expired prior to application in full thereof,
provided no Event of Default has occurred and is continuing, Landlord shall pay
the unapplied balance of such credit to Tenant, together with interest at the
Interest Rate, which interest shall accrue from the date of payment by Tenant
until the date of payment by Landlord.
(d) Confirmation of Additional Rent. Tenant shall utilize, or
cause to be utilized, an accounting system for the Collective Leased
Properties in accordance with its usual and customary practices and in
accordance with GAAP, which will accurately record all Total Hotel Sales
and Tenant shall retain, for at least three (3) years after the
expiration of each Lease Year, reasonably adequate records conforming to
such accounting system showing all Total Hotel Sales for such Lease
Year. Landlord, at its own expense, except as provided hereinbelow,
shall have the right, exercisable by Notice to Tenant within one (1)
year after receipt of the applicable Officer's Certificate, by its
accountants or representatives to audit the information set forth in the
Officer's Certificate referred to in subparagraph (c) above and, in
connection with such audits,
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to examine Tenant's and the Manager's books and records with respect
thereto (including supporting data and sales and excise tax returns).
If any such audit discloses a deficiency in the payment of Additional
Rent and, either Tenant agrees with the result of such audit or the
matter is otherwise compromised with Landlord, Tenant shall forthwith
pay to Landlord the amount of the deficiency, as finally agreed or
determined, together with interest at the Interest Rate, from the date
such payment should have been made to the date of payment thereof. If
such deficiency, as agreed upon or compromised as aforesaid, is more
than four percent (4%) of the Total Hotel Sales reported by Tenant for
such Lease Year and, as a result, Landlord did not receive at least
ninety-five percent (95%) of the Additional Rent payable with respect to
such Lease Year, Tenant shall pay the reasonable cost of such audit and
examination. If any such audit discloses that Tenant paid more
Additional Rent for any Lease Year than was due hereunder, and either
Landlord agrees with the result of such audit or the matter is otherwise
determined, provided no Event of Default has occurred and is continuing,
Landlord shall grant Tenant a credit equal to the amount of such
overpayment against the Rent next coming due in the amount of such
difference, as finally agreed or determined, together with interest at
the Interest Rate, which interest shall accrue from the time of payment
by Tenant until the date such credit is applied or paid, as the case may
be. If such a credit cannot be made because the Term has expired before
the credit can be applied in full, provided no Event of Default has
occurred and is continuing, Landlord shall pay the unapplied balance of
such credit to Tenant, together with interest at the Interest Rate,
which interest shall accrue from the date of payment by Tenant until the
date of payment from Landlord.
Any proprietary information obtained by Landlord with respect to Tenant
pursuant to the provisions of this Agreement shall be treated as confidential,
except that such information may be used, subject to appropriate
confidentiality safeguards, in any litigation between the parties and except
further that Landlord may disclose such information to its prospective lenders,
provided that Landlord shall direct and obtain the agreement of such lenders to
maintain such information as confidential. The obligations of Tenant and
Landlord contained
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in this Section 3.1.2 shall survive the expiration or earlier termination of
this Agreement.
3.1.3 Additional Charges. In addition to the Minimum
Rent and Additional Rent payable hereunder, Tenant shall pay to the appropriate
parties and discharge as and when due and payable the following (collectively,
"Additional Charges"):
(a) Impositions. Subject to Article 8 relating to permitted
contests, Tenant shall pay, or cause to be paid, all Impositions before
any fine, penalty, interest or cost (other than any opportunity cost as a
result of a failure to take advantage of any discount for early payment)
may be added for non- payment, such payments to be made directly to the
taxing authorities where feasible, and shall promptly, upon request,
furnish to Landlord copies of official receipts or other reasonably
satisfactory proof evidencing such payments. If any such Imposition may,
at the option of the taxpayer, lawfully be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Imposition),
Tenant may exercise the option to pay the same (and any accrued interest
on the unpaid balance of such Imposition) in installments and, in such
event, shall pay such installments during the Term as the same become due
and before any fine, penalty, premium, further interest or cost may be
added thereto. Landlord, at its expense, shall, to the extent required
or permitted by Applicable Law, prepare and file all tax returns and pay
all taxes due in respect of Landlord's net income, gross receipts, sales
and use, single business, transaction privilege, rent, ad valorem,
franchise taxes and taxes on its capital stock, and Tenant, at its
expense, shall, to the extent required or permitted by Applicable Laws
and regulations, prepare and file all other tax returns and reports in
respect of any Imposition as may be required by Government Agencies.
Provided no Event of Default shall have occurred and be continuing, if
any refund shall be due from any taxing authority in respect of any
Imposition paid by Tenant, the same shall be paid over to or retained by
Tenant. Landlord and Tenant shall, upon request of the other, provide
such data as is maintained by the party to whom the request is made with
respect to the Leased Property as may be necessary to prepare any
required returns and reports. In the event Government Agencies classify
any
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property covered by this Agreement as personal property, Tenant shall
file all personal property tax returns in such jurisdictions where it may
legally so file. Each party shall, to the extent it possesses the same,
provide the other, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as personal
property. Where Landlord is legally required to file personal property
tax returns for property covered by this Agreement, Landlord shall
provide Tenant with copies of assessment notices in sufficient time for
Tenant to file a protest. All Impositions assessed against such personal
property shall be (irrespective of whether Landlord or Tenant shall file
the relevant return) paid by Tenant not later than the last date on which
the same may be made without interest or penalty.
Landlord shall give prompt Notice to Tenant of all Impositions
payable by Tenant hereunder of which Landlord at any time has knowledge;
provided, however, that Landlord's failure to give any such notice shall
in no way diminish Tenant's obligation hereunder to pay such Impositions,
unless such failure continues for more than twelve (12) months after the
date Landlord learned of such Imposition.
(b) Utility Charges. Tenant shall pay or cause to be paid all
charges for electricity, power, gas, oil, water and other utilities used
in connection with the Leased Property.
(c) Insurance Premiums. Tenant shall pay or cause to be paid
all premiums for the insurance coverage required to be maintained
pursuant to Article 9.
(d) Other Charges. Tenant shall pay or cause to be paid all
other amounts, liabilities and obligations, including, without
limitation, [ground rents and other sums payable under the Ground Lease]
and all amounts payable under any equipment leases and all agreements to
indemnify Landlord under Sections 4.3.2 and 9.7.
(e) Reimbursement for Additional Charges. If Tenant pays or
causes to be paid property taxes or similar or other Additional Charges
attributable to periods after the end of the Term, whether upon
expiration or sooner termination of
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this Agreement (other than termination by reason of an Event of Default),
Tenant may, within a reasonable time after the end of the Term, provide
Notice to Landlord of its estimate of such amounts. Landlord shall
promptly reimburse Tenant for all payments of such taxes and other
similar Additional Charges that are attributable to any period after the
Term of this Agreement.
3.2 Late Payment of Rent, Etc. If any installment of Minimum Rent,
Additional Rent or Additional Charges (but only as to those Additional Charges
which are payable directly to Landlord) shall not be paid within ten (10) days
after its due date, Tenant shall pay Landlord, on demand, as Additional
Charges, a late charge (to the extent permitted by law) computed at the Overdue
Rate on the amount of such installment, from the due date of such installment
to the date of payment thereof. To the extent that Tenant pays any Additional
Charges directly to Landlord or any Hotel Mortgagee pursuant to any requirement
of this Agreement, Tenant shall be relieved of its obligation to pay such
Additional Charges to the Entity to which they would otherwise be due. If any
payments due from Landlord to Tenant shall not be paid within ten (10) days
after its due date, Landlord shall pay to Tenant, on demand, a late charge (to
the extent permitted by law) computed at the Overdue Rate on the amount of such
installment from the due date of such installment to the date of payment
thereof.
In the event of any failure by Tenant to pay any Additional Charges when
due, Tenant shall promptly pay and discharge, as Additional Charges, every
fine, penalty, interest and cost which is added for non-payment or late payment
of such items. Landlord shall have all legal, equitable and contractual
rights, powers and remedies provided either in this Agreement or by statute or
otherwise in the case of non-payment of the Additional Charges as in the case
of non-payment of the Minimum Rent and Additional Rent.
3.3 Net Lease. The Rent shall be absolutely net to Landlord so that
this Agreement shall yield to Landlord the full amount of the installments or
amounts of the Rent throughout the Term, subject to any other provisions of
this Agreement which expressly provide otherwise, including those provisions
for adjustment or abatement of such Rent.
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3.4 No Termination, Abatement, Etc. Except as otherwise specifically
provided in this Agreement, each of Landlord and Tenant, to the maximum extent
permitted by law, shall remain bound by this Agreement in accordance with its
terms and shall not take any action without the consent of the other to modify,
surrender or terminate this Agreement. In addition, except as otherwise
expressly provided in this Agreement, Tenant shall not seek, or be entitled to,
any abatement, deduction, deferment or reduction of the Rent, or set-off
against the Rent, nor shall the respective obligations of Landlord and Tenant
be otherwise affected by reason of (a) any damage to or destruction of the
Leased Property or any portion thereof from whatever cause or any Condemnation,
(b) the lawful or unlawful prohibition of, or restriction upon, Tenant's use of
the Leased Property, or any portion thereof, or the interference with such use
by any Person or by reason of eviction by paramount title; (c) any claim which
Tenant may have against Landlord by reason of any default (other than a
monetary default) or breach of any warranty by Landlord under this Agreement or
any other agreement between Landlord and Tenant, or to which Landlord and
Tenant are parties; (d) any bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding up or other
proceedings affecting Landlord or any assignee or transferee of Landlord; or
(e) for any other cause whether similar or dissimilar to any of the foregoing
(other than a monetary default by Landlord); provided, however, that the
foregoing shall not apply or be construed to restrict Tenant's rights in the
event of any act or omission by Landlord constituting gross negligence or
willful misconduct. Except as otherwise specifically provided in this
Agreement, Tenant hereby waives all rights arising from any occurrence
whatsoever, which may now or hereafter be conferred upon it by law (a) to
modify, surrender or terminate this Agreement or quit or surrender the Leased
Property or any portion thereof, or (b) which would entitle Tenant to any
abatement, reduction, suspension or deferment of the Rent or other sums payable
or other obligations to be performed by Tenant hereunder. The obligations of
each party hereunder shall be separate and independent covenants and
agreements, and the Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provisions of this Agreement. In
any instance where, after the occurrence of an Event of
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Default, Landlord retains funds which, but for the occurrence of such Event of
Default, would be payable to Tenant, Landlord shall refund such funds to Tenant
to the extent the amount thereof exceeds the amount necessary to compensate
Landlord for any cost, loss or damage incurred in connection with such Event of
Default.
3.5 Security for Tenant's Performance. Tenant acknowledges that the
Retained Funds (as defined in the Purchase Agreement) constitute security for
the faithful observance and performance by Tenant of all the terms, covenants
and conditions of this Agreement by Tenant to be observed and performed. If
any Event of Default shall occur and be continuing, Landlord may, at its option
and without prejudice to any other remedy which Landlord may have on account
thereof, appropriate and apply so much of the Retained Funds as may be
necessary to compensate Landlord toward the payment of the Rent or other sums
or loss or damage sustained by Landlord due to such breach by Tenant. It is
understood and agreed that the amount of the Retained Funds is not to be
considered as prepaid rent, nor shall damages be limited to the amount of the
amount of the Retained Funds. Provided this Agreement shall not be terminated
as a result of an Event of Default, the Retained Funds shall be paid as
provided in the Purchase Agreement, Section 3.2(b)(ii) of the Purchase
Agreement being incorporated herein by this reference solely for the purpose of
setting forth such payment provisions, such Purchase Agreement not having been
merged with the Agreement.
ARTICLE 4
USE OF THE LEASED PROPERTY
4.1 Permitted Use.
4.1.1 Permitted Use.
(a) Tenant shall, at all times during the Term and at any
other time that Tenant shall be in possession of the Leased Property,
continuously use and operate, and cause the Manager to use and operate,
the Leased Property as a Wyndham Garden hotel and any uses incidental
thereto. Tenant shall not use (and shall direct the Manager not to use)
the Leased Property or any portion thereof for any other use without
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the prior written consent of Landlord. No use shall be made or
permitted to be made of the Leased Property and no acts shall be done
thereon which will cause the cancellation of any insurance policy
covering the Leased Property or any part thereof (unless another
adequate policy is available), nor shall Tenant sell or otherwise
provide or permit to be kept, used or sold in or about the Leased
Property any article which may be prohibited by law or by the standard
form of fire insurance policies, or any other insurance policies
required to be carried hereunder, or fire underwriter's regulations.
Tenant shall, at its sole cost (except as expressly provided in Section
5.1.2(b)), comply (or direct the Manager to comply) with all Insurance
Requirements. Tenant shall not take or omit to take (and Tenant shall
direct the Manager not to take or omit to take) any action, the taking
or omission of which materially impairs the value or the usefulness of
the Leased Property or any part thereof for its Permitted Use.
(b) In the event that, in the reasonable determination of
Tenant, it shall no longer be economically practical to operate the
Leased Property as a Wyndham Garden hotel, Tenant shall give Landlord
Notice thereof, which Notice shall set forth in reasonable detail the
reasons therefor. Thereafter, Landlord and Tenant shall negotiate in
good faith to agree on an alternative use for the Leased Property,
appropriate adjustments to the Additional Rent and other related
matters; provided, however, in no such event shall the Minimum Rent be
reduced or abated.
4.1.2 Necessary Approvals. Tenant shall proceed with all due
diligence and exercise best efforts to obtain and maintain, and shall direct
the Manager to obtain and maintain, all approvals necessary to use and operate,
for its Permitted Use, the Leased Property and the Hotel located thereon under
applicable law.
4.1.3 Lawful Use, Etc. Tenant shall not, and shall direct the
Manager not to, use or suffer or permit the use of the Leased Property or
Tenant's Personal Property, if any, for any unlawful purpose. Tenant shall
not, and shall direct the Manager not to, commit or suffer to be committed any
waste on the Leased Property, or in the Hotel, nor shall Tenant cause or permit
any
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unlawful nuisance thereon or therein. Tenant shall not, and shall direct the
Manager not to, suffer nor permit the Leased Property, or any portion thereof,
to be used in such a manner as (i) might reasonably impair Landlord's title
thereto or to any portion thereof, or (ii) may reasonably allow a claim or
claims for adverse usage or adverse possession by the public, as such, or of
implied dedication of the Leased Property or any portion thereof.
4.2 Compliance with Legal/Insurance Requirements, Etc. Subject to
the provisions of Article 8 and Section 5.1.3(b), Tenant, at its sole expense,
shall (or shall direct the Manager to) (i) comply with all material Legal
Requirements and Insurance Requirements in respect of the use, operation,
maintenance, repair, alteration and restoration of the Leased Property and with
the terms and conditions of any ground lease affecting the Leased Property and
(ii) procure, maintain and comply with all appropriate licenses, and other
authorizations and agreements required for any use of the Leased Property and
Tenant's Personal Property, if any, then being made, and for the proper
erection, installation, operation and maintenance of the Leased Property or any
part thereof.
4.3 Environmental Matters.
4.3.1 Restriction on Use, Etc. During the Term and any other
time that Tenant shall be in possession of the Leased Property, Tenant shall
not (and shall direct the Manager not to) store, spill upon, dispose of or
transfer to or from the Leased Property any Hazardous Substance, except in
compliance with all Applicable Laws. During the Term and any other time that
Tenant shall be in possession of the Leased Property, Tenant shall maintain
(and shall direct the Manager to maintain) the Leased Property at all times
free of any Hazardous Substance (except in compliance with all Applicable
Laws). Tenant shall promptly: (a) upon receipt of notice or knowledge and
shall direct the Manager upon receipt of notice or knowledge promptly to,
notify Landlord in writing of any material change in the nature or extent of
Hazardous Substances at the Leased Property, (b) transmit to Landlord a copy of
any Community Right to Know report which is required to be filed by Tenant or
the Manager with respect to the Leased Property pursuant to ▇▇▇▇ Title III or
any other Applicable Law, (c) transmit to Landlord copies of any
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citations, orders, notices or other governmental communications received by
Tenant or the Manager or their respective agents or representatives with
respect thereto (collectively, "Environmental Notice"), which Environmental
Notice requires a written response or any action to be taken and/or if such
Environmental Notice gives notice of and/or presents a material risk of any
material violation of any Applicable Law and/or presents a material risk of any
material cost, expense, loss or damage (an "Environmental Obligation"), (d)
observe and comply (and direct the Manager to observe and comply) with all
Applicable Laws relating to the use, maintenance and disposal of Hazardous
Substances and all orders or directives from any official, court or agency of
competent jurisdiction relating to the use or maintenance or requiring the
removal, treatment, containment or other disposition thereof, and (e) pay or
otherwise dispose of any fine, charge or Imposition related thereto, unless
Tenant or the Manager shall contest the same in good faith and by appropriate
proceedings and the right to use and the value of the Leased Property is not
materially and adversely affected thereby.
If, at any time prior to the termination of this Agreement, Hazardous
Substances (other than those maintained in accordance with Applicable Laws) are
discovered on the Leased Property, subject to Tenant's and the Manager's right
to contest the same in accordance with Article 8, Tenant shall take (and shall
direct the Manager to take) all actions and incur any and all expenses, as are
required by any Government Agency and by Applicable Law, (i) to clean up and
remove from and about the Leased Property all Hazardous Substances thereon,
(ii) to contain and prevent any further release or threat of release of
Hazardous Substances on or about the Leased Property and (iii) to use good
faith efforts to eliminate any further release or threat of release of
Hazardous Substances on or about the Leased Property.
4.3.2 Indemnification of Landlord. Tenant shall protect,
indemnify and hold harmless Landlord and each Hotel Mortgagee, their trustees,
officers, agents, employees and beneficiaries, and any of their respective
successors or assigns with respect to this Agreement (collectively, the
"Indemnitees" and, individually, an "Indemnitee") for, from and against any and
all debts, liens, claims, causes of action, administrative orders or notices,
costs, fines, penalties or expenses (including, without limitation, reasonable
attorney's fees and expenses)
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imposed upon, incurred by or asserted against any Indemnitee resulting from,
either directly or indirectly, the presence during the Term (or any other time
Tenant shall be in possession of the Leased Property) in, upon or under the
soil or ground water of the Leased Property or any properties surrounding the
Leased Property of any Hazardous Substances in violation of any Applicable Law
or otherwise, provided that any of the foregoing arises by reason of any
failure by Tenant, the Manager or any Person claiming by, through or under
Tenant or the Manager to perform or comply with any of the terms of this
Section 4.3, except to the extent the same arise from the acts or omissions of
Landlord or any other Indemnitee or during any period that Landlord or a Person
designated by Landlord (other than Tenant) is in possession of the Leased
Property. Tenant's duty herein includes, but is not limited to, costs
associated with personal injury or property damage claims as a result of the
presence prior to the expiration or sooner termination of the Term and the
surrender of the Leased Property to Landlord in accordance with the terms of
this Agreement of Hazardous Substances in, upon or under the soil or ground
water of the Leased Property in violation of any Applicable Law. Upon Notice
from Landlord and any other of the Indemnitees, Tenant shall undertake the
defense, at Tenant's sole cost and expense, of any indemnification duties set
forth herein, in which event, Tenant shall not be liable for payment of any
duplicative attorneys' fees incurred by any Indemnitee.
Tenant shall, upon demand, pay to Landlord, as an Additional Charge, any
cost, expense, loss or damage (including, without limitation, reasonable
attorneys' fees) reasonably incurred by Landlord and arising from a failure of
Tenant to observe and perform the requirements of this Section 4.3, which
amounts shall bear interest from the date ten (10) days after written demand
therefor is given to Tenant until paid by Tenant to Landlord at the Overdue
Rate.
4.3.3 Survival. The provisions of this Section 4.3 shall
survive the expiration or sooner termination of this Agreement.
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ARTICLE 5
MAINTENANCE AND REPAIRS
5.1 Maintenance and Repair.
5.1.1 Tenant's General Obligations. Tenant shall, at its sole
cost and expense (except as expressly provided in Section 5.1.3(b)), or shall
direct the Manager to, keep the Leased Property and all private roadways,
sidewalks and curbs appurtenant thereto (and Tenant's Personal Property) in
good order and repair, reasonable wear and tear excepted (whether or not the
need for such repairs occurs as a result of Tenant's or the Manager's use, any
prior use, the elements or the age of the Leased Property or Tenant's Personal
Property or any portion thereof), and shall promptly make (or cause the Manager
to make) all necessary and appropriate repairs and replacements thereto of
every kind and nature, whether interior or exterior, structural or
nonstructural, ordinary or extraordinary, foreseen or unforeseen or arising by
reason of a condition existing prior to the commencement of the Term (concealed
or otherwise). All repairs shall be made in a good, workmanlike manner,
consistent with the Manager's and industry standards for like hotels in like
locales, in accordance with all applicable federal, state and local statutes,
ordinances, by-laws, codes, rules and regulations relating to any such work.
Tenant shall not take or omit to take (and shall direct the Manager not to take
or omit to take) any action, the taking or omission of which would materially
and adversely impair the value or the usefulness of the Leased Property or any
part thereof for its Permitted Use. Tenant's obligations under this Section
5.1.1(a) shall be limited in the event of any casualty or Condemnation as set
forth in Sections 10.2 and 11.2 and also as set forth in Section 5.1.3(b) and
Tenant's obligations with respect to Hazardous Substances are as set forth in
Section 4.3.
5.1.2 FF&E Reserve.
(a) Upon execution of this Agreement, the FF&E Funded Amount
(as defined in the Purchase Agreement) has been deposited in a reserve
account (the "FF&E Reserve") in a bank designated by Tenant and approved
by Landlord. The purpose of the FF&E Reserve is to cover the cost of:
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(i) Replacements and renewals to the Hotel's furnishings, fixtures
and equipment;
(ii) Certain routine repairs and maintenance to the Hotel building
which are normally capitalized under GAAP such as exterior and
interior repainting, resurfacing building walls, floors, roofs and
parking areas, and replacing folding walls and the like; and
(iii) Major repairs, alterations, improvements, renewals or
replacements to the Hotel's buildings' structure, roof, or
exterior facade, or to its mechanical, electrical, heating,
ventilating, air conditioning, plumbing or vertical transportation
systems.
Tenant agrees that it will, from time to time, execute such
reasonable documentation as may be requested by Landlord and any Hotel
Mortgagee to assist Landlord and such Hotel Mortgagee in establishing or
perfecting its security interest in Landlord's residual interest in the
funds which are in the FF&E Reserve, it being acknowledged and agreed
that the funds in the FF&E Reserve are the property of Tenant; provided,
however, that no such documentation shall contain any amendment or
modification of any of the provisions of this Agreement. It is
understood and agreed that, during the Term, the FF&E Reserve may not be
applied against debts secured by a Hotel Mortgage nor shall any Hotel
Mortgagee have the right to approve the release of such funds pursuant to
the terms of this Agreement unless and until Landlord shall default
in its obligations to such Hotel Mortgagee.
(b) Throughout the Term, Tenant shall transfer (as of the end
of each month of the Term) into the FF&E Reserve an amount equal to five
percent (5%) of Total Hotel Sales for such month. Together with the
documentation provided to Landlord pursuant to Section 3.1.2(c), Tenant
shall deliver to Landlord an Officer's Certificate setting forth the
total amount of deposits made to and expenditures from the FF&E Reserve
for the preceding Fiscal Year, together with a reconciliation of such
expenditures with the applicable FF&E Estimate.
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(c) Each year, on or before December 1 of the preceding year,
Tenant shall prepare an estimate (the "FF&E Estimate") of FF&E Reserve
expenditures necessary during the ensuing Fiscal Year, and shall submit
such FF&E Estimate to Landlord for its review and approval, which
approval shall not be unreasonably withheld or delayed. In the event
Landlord shall fail to respond within thirty (30) days after receipt of
the FF&E Estimate, such FF&E Estimate shall be deemed approved by
Landlord. All expenditures from the FF&E Reserve shall be (as to both
the amount of each such expenditure and the timing thereof) both
reasonable and necessary, given the objective that the Hotel will be
maintained and operated to a standard comparable to competitive hotels.
(d) Tenant shall, consistent with the FF&E Estimate approved
by Landlord, from time to time make expenditures from the FF&E Reserve as
it deems necessary provided that Tenant shall not materially deviate from
the FF&E Estimate approved by Landlord without the prior approval of
Landlord, except in the case of emergency where immediate action is
necessary to prevent imminent danger to person or property.
(e) Upon the expiration or sooner termination of this
Agreement, funds in the FF&E Reserve and all property purchased with
funds from the FF&E Reserve during the Term shall be paid, granted and
assigned to Landlord as Additional Charges.
(f) It is understood and agreed that the FF&E Reserve pursuant
to this Agreement and the Other Leases shall be maintained on a
consolidated basis.
5.1.3 Landlord's Obligations.
(a) Except as otherwise expressly provided in this Agreement,
Landlord shall not, under any circumstances, be required to build or
rebuild any improvement on the Leased Property, or to make any repairs,
replacements, alterations, restorations or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary,
structural or nonstructural, foreseen or unforeseen, or,
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except as provided in Section 5.1.3(b), to make any expenditure
whatsoever with respect thereto, or to maintain the Leased Property in
any way. Except as otherwise expressly provided in this Agreement,
Tenant hereby waives, to the maximum extent permitted by law, the right
to make repairs at the expense of Landlord pursuant to any law in effect
on the date hereof or hereafter enacted. Landlord shall have the right
to give, record and post, as appropriate, notices of nonresponsibility
under any mechanic's lien laws now or hereafter existing.
(b) If, at any time, funds in the FF&E Reserve shall be
insufficient for necessary and permitted expenditures thereof or,
pursuant to the terms of this Agreement, Tenant is required to make any
expenditures in connection with any repair, maintenance or renovation
with respect to the Leased Property and the amount of such disbursements
or expenditures exceeds the amount on deposit in the FF&E Reserve or such
repair, maintenance or renovation is not a permitted expenditure from the
FF&E Reserve as described in Section 5.1.2(a)(i), (ii) and (iii), Tenant
may, at its election, give Landlord Notice thereof, which Notice shall
set forth, in reasonable detail, the nature of the required repair,
renovation or replacement, the estimated cost thereof and such other
information with respect thereto as Landlord may reasonably require.
Provided that no Event of Default shall have occurred and be continuing
and Tenant shall otherwise comply with the applicable provisions of
Article 6, Landlord shall, within ten (10) Business Days after such
Notice, subject to and in accordance with the applicable provisions of
Article 6, disburse such required funds to Tenant (or, if Tenant shall so
elect, directly to the Manager or any other Person performing the
required work) and, upon such disbursement, the Minimum Rent shall be
adjusted as provided in Section 3.1.1(b); provided, however, that, in the
event that Landlord shall elect not to disburse any funds pursuant to
this Section 5.1.3(b), Tenant's sole recourse shall be to elect not to
make the applicable repair, maintenance or renovation.
5.1.4 Nonresponsibility of Landlord, Etc. All materialmen,
contractors, artisans, mechanics and laborers and other persons contracting
with Tenant with respect to the Leased
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Property, or any part thereof, are hereby charged with notice that liens on the
Leased Property or on Landlord's interest therein are expressly prohibited and
that they must look solely to Tenant to secure payment for any work done or
material furnished by Tenant, the Manager or for any other purpose during the
term of this Agreement.
Nothing contained in this Agreement shall be deemed or construed in any
way as constituting the consent or request of Landlord, express or implied, by
inference or otherwise, to any contractor, subcontractor, laborer or
materialmen for the performance of any labor or the furnishing of any materials
for any alteration, addition, improvement or repair to the Leased Property or
any part thereof or as giving Tenant any right, power or authority to contract
for or permit the rendering of any services or the furnishing of any materials
that would give rise to the filing of any lien against the Leased Property or
any part thereof nor to subject Landlord's estate in the Leased Property or any
part thereof to liability under any Mechanic's Lien Law of the State in any
way, it being expressly understood Landlord's estate shall not be subject to
any such liability.
5.2 Tenant's Personal Property. Tenant shall provide and maintain
throughout the Term all such Tenant's Personal Property as shall be necessary
in order to operate in compliance with applicable Legal Requirements and
Insurance Requirements and otherwise in accordance with customary practice in
the industry for the Permitted Use and all of such Personal Property shall,
upon the expiration or earlier termination of this Agreement, become the
property of Landlord. If, from and after the Commencement Date, Tenant
acquires an interest in any item of tangible personal property (other than
motor vehicles) on, or in connection with, the Leased Property which belongs to
anyone other than Tenant, Tenant shall require the agreements permitting such
use to provide that Landlord or its designee may assume Tenant's rights and
obligations under such agreement upon the termination of this Agreement and the
assumption of management or operation of the Hotel by Landlord or its designee.
5.3 Yield Up. Upon the expiration or sooner termination of this
Agreement, Tenant shall vacate and surrender the Leased Property to Landlord in
substantially the same condition in which the Leased Property was in on the
Commencement Date, except as
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repaired, rebuilt, restored, altered or added to as permitted or required by
the provisions of this Agreement, reasonable wear and tear excepted (and
casualty damage and Condemnation, in the event that this Agreement is
terminated following a casualty or total Condemnation in accordance with
Article 10 or Article 11 excepted).
In addition, upon the expiration or earlier termination of this
Agreement, Tenant shall, at Landlord's sole cost and expense, use its good
faith efforts to transfer to and cooperate with Landlord or Landlord's nominee
in connection with the processing of all applications for licenses, operating
permits and other governmental authorizations and all contracts, including
contracts with governmental or quasi-governmental Entities which may be
necessary for the use and operation of the Hotel as then operated. If
requested by Landlord, Tenant will direct the Manager to continue to manage the
Hotel after the expiration of the Term and for up to one hundred twenty (120)
days, on such reasonable terms (which shall include a market rate management
fee and an agreement to reimburse the Manager for its reasonable out-of-pocket
costs and expenses, and reasonable administrative costs), as Landlord shall
reasonably request.
5.4 Management Agreement. Tenant shall not, without Landlord's prior
written consent, amend or modify the provisions of the Management Agreement
which provide (i) that, from and after the occurrence of any Default or Event
of Default, all amounts due from Tenant to the Manager shall be subordinate to
all amounts due from Tenant to Landlord, (ii) for operation of the Leased
Property under the "Wyndham" and "Wyndham Garden" names, (iii) that Wyndham,
the Manager and their Affiliated Persons are prohibited from operating,
managing or franchising another Wyndham Garden hotel within the designated area
on Exhibit D and (iv) for termination thereof, at Landlord's option, upon the
termination of this Agreement. Tenant shall not take any action, grant any
consent or permit any action under the Management Agreement which might have a
material adverse effect on Landlord, without the prior written consent of
Landlord; provided, however, that Landlord's consent shall not be required in
connection with any assignment of the Manager's rights under the Management
Agreement to (x) any Affiliated Person of Wyndham having the full power, right
and authority to provide all services and organizational expertise as
contemplated and
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required by the Management Agreement or (y) any Person (including, but not
limited to, any Lending Institution) who acquires all or substantially all of
the management contracts of Wyndham (including, without limitation, all of the
Management Agreements with respect to the Collective Leased Properties that
have not been theretofore cancelled or terminated pursuant to the terms
thereof), provided that, in either such case, the Leased Property will retain
the right to use the "Wyndham" and "Wyndham Garden" names. In the event of an
assignment pursuant to clause (y) preceding, provided that the successor
Manager (i) assumes, in writing all obligations of the Manager under the
Management Agreement, and (ii) has a Tangible Net Worth, as of the date of
assignment, equal to the greater of the Tangible Net Worth of Wyndham as of the
date of this Agreement, and the Tangible Net Worth of Wyndham as of the date of
such assignment, Wyndham shall be released from all liabilities arising under
the Management Agreement from and after the effective date of such assignment.
Tenant shall not agree to any change in the Manager (except as provided in the
preceding sentences), to any change in the Management Agreement (except as
provided in the preceding sentences), terminate the Management Agreement or
permit the Manager to assign the Management Agreement (except as provided in
the preceding sentences) without the prior written approval of Landlord in each
instance; provided, however, that the Manager may grant a security interest in
its right to receive payments under the Management Agreement without Landlord's
prior written approval.
ARTICLE 6
IMPROVEMENTS, ETC.
6.1 Improvements to the Leased Property. Tenant shall not make,
construct or install (and shall direct the Manager not to construct or install)
any Capital Additions (other than Capital Additions of the type described in
Section 5.1.2(a)(ii) and approved pursuant to Section 5.1.2(c)) without, in
each instance, obtaining Landlord's prior written consent, which consent shall
not be unreasonably withheld, delayed or conditioned provided that (a)
construction or installation of the same would not adversely affect or violate
any Legal Requirement or Insurance Requirement applicable to the Leased
Property and (b) Landlord
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shall have received an Officer's Certificate certifying as to the satisfaction
of the conditions set out in clause (a) above; provided, however, that no such
consent shall be required in the event immediate action is required to prevent
imminent danger to person or property. Prior to commencing construction of any
Capital Addition, Tenant shall submit, or shall direct the Manager to submit,
to Landlord, in writing, a proposal setting forth, in reasonable detail, any
such proposed improvement and shall provide to Landlord such plans and
specifications, and such permits, licenses, contracts and such other
information concerning the same as Landlord may reasonably request. Landlord
shall have thirty (30) days to review all materials submitted to Landlord in
connection with any such proposal. Failure of Landlord to respond to Tenant's
or the Manager's proposal within thirty (30) days after receipt of all
information and materials requested by Landlord in connection with the proposed
improvement shall be deemed to constitute approval of the same. Without
limiting the generality of the foregoing, such proposal shall indicate the
approximate projected cost of constructing such proposed improvement and the
use or uses to which it will be put. No Capital Addition shall be made which
would tie in or connect any Leased Improvement with any other improvements on
property adjacent to the Leased Property (and not part of the Land) including,
without limitation, tie-ins of buildings or other structures or utilities.
Tenant shall not finance, and shall direct the Manager not to finance, the cost
of any construction of such improvement by the granting of a lien on or
security interest in the Leased Property or such improvement, or Tenant's
interest therein, without the prior written consent of Landlord, which consent
may be withheld by Landlord in Landlord's sole discretion. Any such
improvements shall, upon the expiration or sooner termination of this
Agreement, remain or pass to and become the property of Landlord, free and
clear of all encumbrances other than Permitted Encumbrances.
6.2 Salvage. All materials which are scrapped or removed in
connection with the making of either Capital Additions or non-Capital Additions
or repairs required by Article 5 shall be or become the property of the party
that paid for such work.
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ARTICLE 7
LIENS
7.1 Liens. Subject to Article 8, Tenant shall not, directly or
indirectly, create or allow to remain and shall promptly discharge, at its
expense, any lien, encumbrance, attachment, title retention agreement or claim
upon the Leased Property or Tenant's leasehold interest therein or any
attachment, levy, claim or encumbrance in respect of the Rent, other than (a)
Permitted Encumbrances, (b) restrictions, liens and other encumbrances which
are consented to in writing by Landlord, (c) liens for those taxes of Landlord
which Tenant is not required to pay hereunder, (d) subleases permitted by
Article 17, (e) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (i) the same are not yet due and payable, or
(ii) are being contested in accordance with Article 8, (f) liens of mechanics,
laborers, materialmen, suppliers or vendors incurred in the ordinary course of
business that are not yet due and payable or are for sums that are being
contested in accordance with Article 8, (g) any Hotel Mortgages or other liens
which are the responsibility of Landlord pursuant to the provisions of Article
21, (h) Landlord Liens and any other voluntary liens created by Landlord and
(i) Leasehold Mortgages.
7.2 Landlord's Lien. In addition to any statutory landlord's lien
and in order to secure payment of the Rent and all other sums payable hereunder
by Tenant, and to secure payment of any loss, cost or damage which Landlord may
suffer by reason of Tenant's breach of this Agreement, Tenant hereby grants
unto Landlord a security interest in and an express contractual lien upon
Tenant's Personal Property (except motor vehicles and liquor licenses and
permits), and Tenant's interest in all ledger sheets, files, records, documents
and instruments (including, without limitation, computer programs, tapes and
related electronic data processing) relating to the operation of the Hotels
(the "Records") and all proceeds therefrom, subject to any Permitted
Encumbrances; and such Tenant's Personal Property shall not be removed from the
Leased Property at any time when a Default or an Event of Default has occurred
and is continuing.
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Upon Landlord's request, Tenant shall execute and deliver to Landlord
financing statements in form sufficient to perfect the security interest of
Landlord in Tenant's Personal Property and the proceeds thereof in accordance
with the provisions of the applicable laws of the State. Tenant hereby grants
Landlord an irrevocable limited power of attorney, coupled with an interest, to
execute all such financing statements in Tenant's name, place and stead. The
security interest herein granted is in addition to any statutory lien for the
Rent.
ARTICLE 8
PERMITTED CONTESTS
Tenant shall have the right to contest the amount or validity of any
Imposition, Legal Requirement, Insurance Requirement, Environmental Obligation,
lien, attachment, levy, encumbrance, charge or claim (collectively, "Claims")
as to the Leased Property, by appropriate legal proceedings, conducted in good
faith and with due diligence, provided that (a) the foregoing shall in no way
be construed as relieving, modifying or extending Tenant's obligation to pay
any Claims as finally determined, (b) such contest shall not cause Landlord or
Tenant to be in default under any mortgage or deed of trust encumbering the
Leased Property (Landlord agreeing that any such mortgage or deed of trust
shall permit Tenant to exercise the rights granted pursuant to this Article 8)
or any interest therein or result in or reasonably be expected to result in a
lien attaching to the Leased Property, (c) no part of the Leased Property nor
any Rent therefrom shall be in any immediate danger of sale, forfeiture,
attachment or loss, and (d) Tenant shall indemnify and hold harmless Landlord
from and against any cost, claim, damage, penalty or reasonable expense,
including reasonable attorneys' fees, incurred by Landlord in connection
therewith or as a result thereof. Landlord agrees to join in any such
proceedings if required legally to prosecute such contest, provided that
Landlord shall not thereby be subjected to any liability therefor (including,
without limitation, for the payment of any costs or expenses in connection
therewith) unless Tenant agrees by agreement in form and substance reasonably
satisfactory to Landlord, to assume and indemnify Landlord with respect to the
same. Tenant shall be entitled to any refund of any Claims and
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such charges and penalties or interest thereon which have been paid by Tenant
or paid by Landlord to the extent that Landlord has been fully reimbursed by
Tenant. If Tenant shall fail (x) to pay or cause to be paid any Claims when
finally determined, (y) to provide reasonable security therefor, or (z) to
prosecute or cause to be prosecuted any such contest diligently and in good
faith, Landlord may, upon reasonable notice to Tenant (which notice shall not
be required if Landlord shall reasonably determine that the same is not
practicable), pay such charges, together with interest and penalties due with
respect thereto, and Tenant shall reimburse Landlord therefor, upon demand, as
Additional Charges.
ARTICLE 9
INSURANCE AND INDEMNIFICATION
9.1 General Insurance Requirements. Tenant shall, at all times
during the Term and at any other time Tenant shall be in possession of the
Leased Property, keep the Leased Property and all property located therein or
thereon, insured against the risks and in the amounts as follows and shall
maintain the following insurance:
(a) "All-risk" property insurance, including insurance against
loss or damage by fire, vandalism and malicious mischief, earthquake,
explosion of steam boilers, pressure vessels or other similar apparatus,
now or hereafter installed in the Hotel located at the Leased Property,
with the usual extended coverage endorsements, in an amount equal to one
hundred percent (100%) of the then full Replacement Cost thereof (as
defined in Section 9.2);
(b) Business interruption insurance covering risk of loss
during the lesser of the first twelve (12) months of reconstruction or
the actual reconstruction period necessitated by the occurrence of any
of the hazards described in subparagraph (a) above, in such amounts as
may be customary for comparable properties in the area and in an amount
sufficient to prevent Landlord or Tenant from becoming a co-insurer;
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(c) Comprehensive general liability insurance, including
bodily injury and property damage in a form reasonably satisfactory to
Landlord (and including, without limitation, broad form contractual
liability, independent contractor's hazard and completed operations
coverage) in an amount not less than One Million Dollars ($1,000,000)
per occurrence, Three Million Dollars ($3,000,000) in the aggregate and
umbrella coverage of all such claims in an amount not less than Fifty
Million Dollars ($50,000,000);
(d) Flood (if the Leased Property is located in whole or in
part within an area identified as an area having special flood hazards
and in which flood insurance has been made available under the National
Flood Insurance Act of 1968, as amended, or the Flood Disaster
Protection Act of 1973, as amended (or any successor acts thereto)) and
such other hazards and in such amounts as may be customary for
comparable properties in the area;
(e) Worker's compensation insurance coverage if required by
applicable law for all persons employed by Tenant on the Leased Property
with statutory limits and otherwise with limits of and provisions in
accordance with the requirements of applicable local, State and federal
law, and employer's liability insurance as is customarily carried by
similar employers; and
(f) Such additional insurance as may be reasonably required,
from time to time, by Landlord or any Hotel Mortgagee and which is
customarily carried by comparable lodging properties in the area.
9.2 Replacement Cost. "Replacement Cost" as used herein, shall mean
the actual replacement cost of the property requiring replacement from time to
time, including an increased cost of construction endorsement, less exclusions
provided in the standard form of fire insurance policy. In the event either
party believes that the then full Replacement Cost has increased or decreased
at any time during the Term, such party, at its own cost, shall have the right
to have such full Replacement Cost redetermined by an independent accredited
appraiser approved by the other, which approval shall not be unreasonably
withheld or delayed. The party desiring to have the full Replacement Cost so
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redetermined shall forthwith, on receipt of such determination by such
appraiser, give Notice thereof to the other. The determination of such
appraiser shall be final and binding on the parties hereto until any subsequent
determination under this Section 9.2, and Tenant shall forthwith conform the
amount of the insurance carried to the amount so determined by the appraiser.
9.3 Waiver of Subrogation. Landlord and Tenant agree that (insofar
as and to the extent that such agreement may be effective without invalidating
or making it impossible to secure insurance coverage from responsible insurance
companies doing business in the State) with respect to any property loss which
is covered by insurance then being carried by Landlord or Tenant, respectively,
the party carrying such insurance and suffering said loss releases the other of
and from any and all claims with respect to such loss; and they further agree
that their respective insurance companies shall have no right of subrogation
against the other on account thereof, even though extra premium may result
therefrom. In the event that any extra premium is payable by Tenant as a
result of this provision, Landlord shall not be liable for reimbursement to
Tenant for such extra premium.
9.4 Form Satisfactory, Etc. All insurance policies and endorsements
required pursuant to this Article 9 shall be fully paid for, nonassessable and
be issued by insurance carriers authorized to do business in the State, having
a general policy holder's rating of no less than B++ in Best's latest rating
guide. All such policies described in Sections 9.1(a) through (d) shall
include no deductible in excess of Two Hundred Fifty Thousand Dollars
($250,000) and, with the exception of the insurance described in Sections
9.1(e), shall name Landlord and any Hotel Mortgagee as additional insureds, as
their interests may appear. All loss adjustments shall be payable as provided
in Article 10. Tenant shall cause all insurance premiums to be paid and shall
deliver policies or certificates thereof to Landlord prior to their effective
date (and, with respect to any renewal policy, prior to the expiration of the
existing policy). All such policies shall provide Landlord (and any Hotel
Mortgagee if required by the same) thirty (30) days prior written notice of any
material change or cancellation of such policy. In the event Tenant shall fail
to effect such insurance as herein required, to pay the premiums therefor or to
deliver such policies or certificates to Landlord or any Hotel Mortgagee at the
times
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required, Landlord shall have the right, but not the obligation, subject to the
provisions of Section 12.5, to acquire such insurance and pay the premiums
therefor, which amounts shall be payable to Landlord, upon demand, as
Additional Charges, together with interest accrued thereon at the Overdue Rate
from the date such payment is made until (but excluding) the date repaid.
9.5 Blanket Policy. Notwithstanding anything to the contrary
contained in this Article 9, Tenant's obligation to maintain the insurance
herein required may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant, provided,
that (a) the coverage thereby afforded will not be reduced or diminished from
that which would exist under a separate policy meeting all other requirements
of this Agreement, and (b) the requirements of this Article 9 are otherwise
satisfied. Without limiting the foregoing, the amounts of insurance that are
required to be maintained pursuant to Section 9.1 shall be on a Hotel by Hotel
basis, and shall not be subject to an aggregate limit, except for flood,
earthquake, umbrella and such other coverages as may be approved by Landlord.
9.6 No Separate Insurance. Tenant shall not take out separate
insurance, concurrent in form or contributing in the event of loss with that
required by this Article 9, or increase the amount of any existing insurance by
securing an additional policy or additional policies, unless all parties having
an insurable interest in the subject matter of such insurance, including
Landlord and all Hotel Mortgagees, are included therein as additional insureds
and the loss is payable under such insurance in the same manner as losses are
payable under this Agreement. In the event Tenant shall take out any such
separate insurance or increase any of the amounts of the then existing
insurance, Tenant shall give Landlord prompt Notice thereof.
9.7 Indemnification of Landlord. Notwithstanding the existence of
any insurance provided for herein and without regard to the policy limits of
any such insurance, Tenant shall protect, indemnify and hold harmless Landlord
for, from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and reasonable expenses (including, without limitation,
reasonable attorneys' fees), to the maximum extent permitted by law, imposed
upon or incurred by or asserted against
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Landlord by reason of: (a) any accident, injury to or death of persons or loss
of or damage to property occurring on or about the Leased Property or adjoining
sidewalks or rights of way, (b) any past, present or future use, misuse,
non-use, condition, management, maintenance or repair by Tenant or anyone
claiming under Tenant of the Leased Property or Tenant's Personal Property or
any litigation, proceeding or claim by governmental entities or other third
parties to which Landlord is made a party or participant relating to the Leased
Property or Tenant's Personal Property or such use, misuse, non-use, condition,
management, maintenance, or repair thereof including, failure to perform
obligations (other than Condemnation proceedings) to which Landlord is made a
party, (c) any Impositions that are the obligations of Tenant to pay pursuant
to the applicable provisions of this Agreement, and (d) any failure on the part
of Tenant or anyone claiming under Tenant to perform or comply with any of the
terms of this Agreement. Tenant, at its expense, shall contest, resist and
defend any such claim, action or proceeding asserted or instituted against
Landlord (and shall not be responsible for any duplicative attorneys' fees
incurred by Landlord) or may compromise or otherwise dispose of the same, with
Landlord's prior written consent (which consent may not be unreasonably
withheld or delayed). In the event Landlord shall unreasonably withhold or
delay its consent, Tenant shall not be liable pursuant to this Section 9.7 for
any incremental increase in costs or expenses resulting therefrom. The
obligations of Tenant under this Section 9.7 are in addition to the obligations
set forth in Section 4.3 and shall survive the termination of this Agreement.
ARTICLE 10
CASUALTY
10.1 Insurance Proceeds. Except as provided in the last clause of
this sentence, all proceeds payable by reason of any loss or damage to the
Leased Property, or any portion thereof, and insured under any policy of
insurance required by Article 9 (other than the proceeds of any business
interruption insurance) shall be paid directly to Landlord (subject to the
provisions of Section 10.2) and all loss adjustments with respect to losses
payable to Landlord shall require the prior written consent of
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Landlord; provided, however, that, so long as no Event of Default shall have
occurred and be continuing, all such proceeds less than or equal to Two Hundred
Fifty Thousand Dollars ($250,000) shall be paid directly to Tenant and such
losses may be adjusted without Landlord's consent. If Tenant is required to
reconstruct or repair the Leased Property as provided herein, such proceeds
shall be paid out by Landlord from time to time for the reasonable costs of
reconstruction or repair of the Leased Property necessitated by such damage or
destruction, subject to and in accordance with the provisions of Section
10.2.4. Provided no Default or Event of Default has occurred and is
continuing, any excess proceeds of insurance remaining after the completion of
the restoration shall be paid to Tenant. In the event that the provisions of
Section 10.2.1 are applicable, the insurance proceeds shall be retained by the
party entitled thereto pursuant to Section 10.2.1. All salvage resulting from
any risk covered by insurance shall belong to Landlord, provided any rights to
the same have been waived by the insurer.
10.2 Damage or Destruction.
10.2.1 Damage or Destruction of Leased Property. If, during
the Term, the Leased Property shall be totally or partially destroyed and the
Hotel located thereon is thereby rendered Unsuitable for Its Permitted Use,
either Landlord or Tenant may, by the giving of Notice thereof to the other,
terminate this Agreement, whereupon, this Agreement shall terminate, Landlord
shall be entitled to retain the insurance proceeds payable on account of such
damage and Tenant shall thereafter have no obligation to pay Rent for periods
arising after the effective date of termination.
10.2.2 Partial Damage or Destruction. If, during the Term,
the Leased Property shall be totally or partially destroyed but the Hotel is
not rendered Unsuitable for Its Permitted Use, Tenant shall, subject to Section
10.2.3, promptly restore the Hotel as provided in Section 10.2.4.
10.2.3 Insufficient Insurance Proceeds. If this Agreement is
not otherwise terminated pursuant to this Article 10 and the cost of the repair
or restoration of the Leased Property exceeds the amount of insurance proceeds
received by Landlord and Tenant pursuant to Article 9(a), (c), (d) or, if
applicable, (e),
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Tenant shall give Landlord Notice thereof which notice shall set forth in
reasonable detail the nature of such deficiency and whether Tenant shall pay
and assume the amount of such deficiency (Tenant having no obligation to do so,
except that, if Tenant shall elect to make such funds available, the same shall
become an irrevocable obligation of Tenant pursuant to this Agreement). In the
event Tenant shall elect not to pay and assume the amount of such deficiency,
Landlord shall have the right (but not the obligation), exercisable at
Landlord's sole election by Notice to Tenant, given within sixty (60) days
after Tenant's notice of the deficiency, to elect to make available for
application to the cost of repair or restoration the amount of such deficiency;
provided, however, in such event, upon any disbursement by Landlord thereof,
the Minimum Rent shall be adjusted as provided in Section 3.1.1(b). In the
event that neither Landlord nor Tenant shall elect to make such deficiency
available for restoration, either Landlord or Tenant may terminate this
Agreement by Notice to the other, whereupon, this Agreement shall terminate as
provided in Section 10.2.1. It is expressly understood and agreed, however,
that, notwithstanding anything in this Agreement to the contrary, Tenant shall
be strictly liable and solely responsible for the amount of any deductible and
shall, upon any insurable loss, pay over the amount of such deductible to
Landlord at the time and in the manner herein provided for payment of the
applicable proceeds to Landlord.
10.2.4 Disbursement of Proceeds. In the event Tenant is
required to restore the Leased Property pursuant to Section 10.2, Tenant shall
(or shall direct the Manager to) commence promptly and continue diligently to
perform the repair and restoration of the Leased Property (hereinafter called
the "Work"), so as to restore the Leased Property in compliance with all Legal
Requirements and so that the Leased Property shall be, to the extent
practicable, substantially equivalent in value and general utility to its
general utility and value immediately prior to such damage or destruction.
Subject to the terms hereof, Landlord shall advance the insurance proceeds and
any additional amounts payable by Landlord pursuant to Section 10.2.3 to Tenant
regularly during the repair and restoration period so as to permit payment for
the cost of any such restoration and repair. Any such advances shall be made
not more than monthly within ten (10) Business Days after Tenant submits to
Landlord a written requisition and substantiation therefor on AIA Forms G702
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and G703 (or on such other form or forms as may be reasonably acceptable to
Landlord). Landlord may, at its option, condition advancement of said
insurance proceeds and other amounts on (i) the absence of any Event of
Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld,
delayed or conditioned), (iii) general contractors' estimates, (iv) architect's
certificates, (v) unconditional lien waivers of general contractors, if
available, (vi) evidence of approval by all governmental authorities and other
regulatory bodies whose approval is required and (vii) such other certificates
as Landlord may, from time to time, reasonably require.
Landlord's obligation to disburse insurance proceeds under this Article
10 during the last two (2) years of the Term shall be subject to the release of
such proceeds by any Hotel Mortgagee to Landlord; otherwise each such Hotel
Mortgagee shall be obligated to make such funds available for Landlord's use in
accordance with the terms of this Agreement. If any Hotel Mortgagee shall be
unwilling to disburse insurance proceeds in accordance with this Agreement,
Tenant shall have the right to terminate this Agreement and Tenant shall
thereafter have no obligation to pay Rent for periods arising after the
effective date of termination.
Tenant's obligation to restore the Leased Property pursuant to this
Article 10 shall be subject to the release of available insurance proceeds by
the applicable Hotel Mortgagee to Landlord or directly to Tenant and, in the
event such proceeds are insufficient, Landlord electing to make such deficiency
available therefor (and disbursement of such deficiency).
10.3 Damage Near End of Term. Notwithstanding any provisions of
Section 10.1 or 10.2 to the contrary, if damage to or destruction of the Leased
Property occurs during the last twelve (12) months of the Term (including any
exercised Extended Terms) and if such damage or destruction cannot reasonably
be expected to be fully repaired and restored prior to the date that is six (6)
months prior to the end of such Term, the provisions of Section 10.2.1 shall
apply as if the Leased Property had been totally or partially destroyed and the
Hotel rendered Unsuitable for its Permitted Use.
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10.4 Tenant's Property. All insurance proceeds payable by reason of
any loss of or damage to any of Tenant's Personal Property shall be paid to
Tenant and, to the extent necessary to repair or replace Tenant's Personal
Property in accordance with Section 10.5, Tenant shall hold such proceeds in
trust to pay the cost of repairing or replacing damaged Tenant's Personal
Property.
10.5 Restoration of Tenant's Property. If Tenant is required to
restore the Leased Property as hereinabove provided, Tenant shall either (a)
restore all alterations and improvements made by Tenant and Tenant's Personal
Property, or (b) replace such alterations and improvements and Tenant's
Personal Property with improvements or items of the same or better quality and
utility in the operation of the Leased Property.
10.6 No Abatement of Rent. This Agreement shall remain in full force
and effect and Tenant's obligation to make all payments of Rent and to pay all
other charges as and when required under this Agreement shall remain unabated
during the Term notwithstanding any damage involving the Leased Property
(provided that Landlord shall credit against such payments any amounts paid to
Landlord as a consequence of such damage under any business interruption
insurance obtained by Tenant hereunder). The provisions of this Article 10
shall be considered an express agreement governing any cause of damage or
destruction to the Leased Property and, to the maximum extent permitted by law,
no local or State statute, laws, rules, regulation or ordinance in effect
during the Term which provide for such a contingency shall have any application
in such case.
10.7 Waiver. Tenant hereby waives any statutory rights of
termination which may arise by reason of any damage or destruction of the
Leased Property.
10.8 Effect on Other Leases. Any termination of this Agreement
pursuant to this Article 10 shall not terminate or otherwise affect the Other
Leases or Tenant's ability to extend the Other Leases pursuant to the terms and
provisions thereof.
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ARTICLE 11
CONDEMNATION
11.1 Total Condemnation, Etc. If either (i) the whole of the Leased
Property shall be taken by Condemnation or (ii) a Condemnation of less than the
whole of the Leased Property renders the Leased Property Unsuitable for Its
Permitted Use, this Agreement shall terminate, Tenant and Landlord shall seek
the Award for their interests in the Leased Property as provided in Section
11.5 and Tenant shall thereafter have no obligation to pay Rent for periods
arising after the effective date of termination.
11.2 Partial Condemnation. In the event of a Condemnation of less
than the whole of the Leased Property such that the Leased Property is still
suitable for its Permitted Use, Tenant shall, to the extent of the Award
actually received by Tenant and any additional amounts disbursed by Landlord as
hereinafter provided, commence promptly and continue diligently to restore the
untaken portion of the Leased Improvements so that such Leased Improvements
shall constitute a complete architectural unit of the same general character
and condition (as nearly as may be possible under the circumstances) as the
Leased Improvements existing immediately prior to such Condemnation, in full
compliance with all Legal Requirements, subject to the provisions of this
Section 11.2. If the cost of the repair or restoration of the Leased Property
exceeds the amount of the Award, Tenant shall give Landlord Notice thereof
which notice shall set forth in reasonable detail the nature of such deficiency
and whether Tenant shall pay and assume the amount of such deficiency (Tenant
having no obligation to do so, except that if Tenant shall elect to make such
funds available, the same shall become an irrevocable obligation of Tenant
pursuant to this Agreement). In the event Tenant shall elect not to pay and
assume the amount of such deficiency, Landlord shall have the right (but not
the obligation), exercisable at Landlord's sole election by Notice to Tenant
given within sixty (60) days after Tenant's Notice of the deficiency, to elect
to make available for application to the cost of repair or restoration the
amount of such deficiency; provided, however, in such event, upon any
disbursement by Landlord thereof, the Minimum Rent shall be adjusted as
provided in Section 3.1.1(b). In the event that neither Landlord nor Tenant
shall elect to make such deficiency available for restoration, either Landlord
or Tenant may
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terminate this Agreement, whereupon, the entire Award shall be retained by
Landlord and Tenant shall thereafter have no obligation to pay Rent for periods
arising after the effective date of termination.
Subject to the terms hereof, Landlord shall contribute to the cost of
restoration that part of the Award necessary to complete such repair or
restoration, together with severance and other damages awarded for the taken
Leased Improvements and any deficiency Landlord has agreed to disburse, to
Tenant regularly during the restoration period so as to permit payment for the
cost of such repair or restoration. Landlord may, at its option, condition
advancement of such Award and other amounts on (i) the absence of any Event of
Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld or
delayed), (iii) general contractors' estimates, (iv) architect's certificates,
(v) unconditional lien waivers of general contractors, if available, (vi)
evidence of approval by all governmental authorities and other regulatory
bodies whose approval is required and (vii) such other certificates as Landlord
may, from time to time, reasonably require. Landlord's obligation under this
Section 11.2 to disburse the Award and such other amounts shall be subject to
(x) the collection thereof by Landlord and (y) during the last two (2) years of
the Term, the release of such Award by the applicable Hotel Mortgagee;
otherwise each such Hotel Mortgagee shall be obligated to make such funds
available for Landlord's use in accordance with the terms of this Agreement.
Tenant's obligation to restore the Leased Property shall be subject to the
release of the Award by the applicable Hotel Mortgagee to Landlord. If any
Hotel Mortgagee shall be unwilling to release such Award in accordance with
this Agreement, Tenant shall have the right to terminate this Agreement.
11.3 Abatement of Rent. Other than as specifically provided in this
Agreement, this Agreement shall remain in full force and effect and Tenant's
obligation to make all payments of Rent and to pay all other charges as and
when required under this Agreement shall remain unabated during the Term
notwithstanding any Condemnation involving the Leased Property. The provisions
of this Article 11 shall be considered an express agreement governing any
Condemnation involving the Leased Property and, to
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the maximum extent permitted by law, no local or State statute, law, rule,
regulation or ordinance in effect during the Term which provides for such a
contingency shall have any application in such case.
11.4 Temporary Condemnation. In the event of any temporary
Condemnation of the Leased Property or Tenant's interest therein, this
Agreement shall continue in full force and effect and Tenant shall continue to
pay, in the manner and on the terms herein specified, the full amount of the
Rent. Tenant shall continue to perform and observe all of the other terms and
conditions of this Agreement on the part of the Tenant to be performed and
observed. Provided no Event of Default has occurred and is continuing, the
entire amount of any Award made for such temporary Condemnation allocable to
the Term, whether paid by way of damages, rent or otherwise, shall be paid to
Tenant. Tenant shall, promptly upon the termination of any such period of
temporary Condemnation, at its sole cost and expense, restore the Leased
Property to the condition that existed immediately prior to such Condemnation,
in full compliance with all Legal Requirements, unless such period of temporary
Condemnation shall extend beyond the expiration of the Term, in which event
Tenant shall not be required to make such restoration. For purposes of this
Section 11.4, a Condemnation shall be deemed to be temporary if the period of
such Condemnation is not expected to, and does not, exceed twelve (12) months.
11.5 Allocation of Award. Except as provided in Section 11.4 and the
second sentence of this Section 11.5, the total Award shall be solely the
property of and payable to Landlord. Any portion of the Award made for the
taking of Tenant's leasehold interest in the Leased Property, loss of business
during the remainder of the Term, the taking of Tenant's Personal Property, or
Tenant's removal and relocation expenses shall be the sole property of and
payable to Tenant (subject to the provisions of Section 11.2). In any
Condemnation proceedings, Landlord and Tenant shall each seek its own Award in
conformity herewith, at its own expense.
11.6 Effect on Other Leases. Any termination of this Agreement
pursuant to this Article 11 shall not terminate or otherwise affect the Other
Leases or Tenant's ability to extend the Other Leases pursuant to the terms and
provisions thereof.
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ARTICLE 12
DEFAULTS AND REMEDIES
12.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default" hereunder:
(a) should Tenant fail to make any payment of the Rent or any
other sum (including, but not limited to, funding of the FF&E Reserve)
payable hereunder when due; or
(b) should Tenant fail to maintain the insurance coverages
required under Article 9 and such failure shall continue for ten (10)
Business Days after Notice thereof (except that no Notice shall be
required if any such insurance coverages shall have lapsed); or
(c) should Tenant default in the due observance or performance
of any of the terms, covenants or agreements contained herein to be
performed or observed by it (other than as specified in clauses (a) and
(b) above) and such default shall continue for a period of fifteen (15)
Business Days after Notice thereof from Landlord to Tenant; provided,
however, that if such default is susceptible of cure but such cure cannot
be accomplished with due diligence within such period of time and if, in
addition, Tenant commences to cure or cause to be cured such default
within fifteen (15) Business Days after Notice thereof from Landlord and
thereafter prosecutes the curing of such default with all due diligence,
such period of time shall be extended to such period of time (not to
exceed an additional one hundred eighty (180) days in the aggregate) as
may be necessary to cure such default with all due diligence; or
(d) should an event of default by Tenant or any Affiliated
Person as to Tenant occur and be continuing beyond the expiration of any
applicable cure period under any of the Incidental Documents, the Other
Leases or the Management Agreement; or
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(e) should there occur a final unappealable determination by
applicable state authorities of the revocation or limitation of any
material license, permit, certification or approval required for the
lawful operation of the Hotel in accordance with its Permitted Use or the
loss or material limitation of any material license, permit,
certification or approval under any other circumstances under which
Tenant is required to cease its operation of the Hotel in accordance
with its Permitted Use at the time of such loss or limitation; or
(f) should any material representation or warranty made by
Tenant or, at any time prior to the required assignment pursuant to
Section 16.5, by the Seller (as defined in the Purchase Agreement) under
or in connection with this Agreement, any Incidental Document, the Other
Leases or the Purchase Agreement, or in any document, certificate or
agreement delivered in connection herewith or therewith prove to have
been false or misleading in any material respect on the date when made or
deemed made and the same shall continue for five (5) Business Days
after Notice thereof from Landlord; or
(g) should Tenant generally not be paying its debts as they
become due or should Tenant make a general assignment for the benefit
of creditors; or
(h) should any petition be filed by or against Tenant under
the Federal bankruptcy laws, or should any other proceeding be instituted
by or against Tenant seeking to adjudicate Tenant a bankrupt or
insolvent, or seeking liquidation, reorganization, arrangement,
adjustment or composition of Tenant's debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for Tenant or for any
substantial part of the property of Tenant and such proceeding is not
dismissed within ninety (90) days after institution thereof, or should
Tenant take any action to authorize or effect any of the actions set
forth above in this paragraph; or
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(i) should Tenant cause or institute any proceeding for its
dissolution or termination, except as contemplated by or in connection
with the assignment contemplated by Section 16.5; or
(j) should the estate or interest of Tenant in the Leased
Property or any part thereof be levied upon or attached in any proceeding
and the same shall not be vacated or discharged within the later of (x)
one hundred and twenty (120) days after commencement thereof, unless the
amount in dispute is less than $250,000, in which case Tenant shall give
notice to Landlord of the dispute but Tenant may defend in any suitable
way, and (y) thirty (30) days after receipt by Tenant of Notice thereof
from Landlord (unless Tenant shall be contesting such lien or attachment
in good faith in accordance with Article 8); or
(k) at any time after the assignment required by Section 16.5,
should Tenant at any time cease to be a wholly owned direct or indirect
Subsidiary of Wyndham;
then, and in any such event, Landlord, in addition to all other remedies
available to it, may terminate this Agreement by giving Notice thereof to
Tenant and upon the expiration of the time, if any, fixed in such Notice, this
Agreement shall terminate and all rights of Tenant under this Agreement shall
cease. Landlord shall have and may exercise all rights and remedies available
at law and in equity to Landlord as a result of Tenant's breach of this
Agreement.
Upon the occurrence of an Event of Default, Landlord may, in addition to
any other remedies provided herein, enter upon the Leased Property or any
portion thereof and take possession of any and all of Tenant's Personal
Property, if any, and the Records, without liability for trespass or conversion
(Tenant hereby waiving any right to notice or hearing prior to such taking of
possession by Landlord) and sell the same at public or private sale, after
giving Tenant reasonable Notice of the time and place of any public or private
sale, at which sale Landlord or its assigns may purchase all or any portion of
Tenant's Personal Property, if any, unless otherwise prohibited by law. Unless
otherwise provided by law and without intending to exclude any other manner of
giving Tenant reasonable notice, the requirement
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of reasonable Notice shall be met if such Notice is given at least ten (10)
days before the date of sale. The proceeds from any such disposition, less all
expenses incurred in connection with the taking of possession, holding and
selling of such property (including, reasonable attorneys' fees) shall be
applied as a credit against the indebtedness which is secured by the security
interest granted in Section 7.2. Any surplus shall be paid to Tenant or as
otherwise required by law and Tenant shall pay any deficiency to Landlord, as
Additional Charges, upon demand.
12.2 Remedies. None of (a) the termination of this Agreement
pursuant to Section 12.1, (b) the repossession of the Leased Property or any
portion thereof, (c) the failure of Landlord to re-let the Leased Property or
any portion thereof, nor (d) the reletting of all or any of portion of the
Leased Property, shall relieve Tenant of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or
re-letting. In the event of any such termination, Tenant shall forthwith pay
to Landlord all Rent due and payable with respect to the Leased Property
through and including the date of such termination. Thereafter, Tenant, until
the end of what would have been the Term of this Agreement in the absence of
such termination, and whether or not the Leased Property or any portion thereof
shall have been re-let, shall be liable to Landlord for, and shall pay to
Landlord, as current damages, the Rent and other charges which would be payable
hereunder for the remainder of the Term had such termination not occurred, less
the net proceeds, if any, of any re-letting of the Leased Property, after
deducting all reasonable expenses in connection with such reletting, including,
without limitation, all repossession costs, brokerage commissions, legal
expenses, attorneys' fees, advertising, expenses of employees, alteration costs
and expenses of preparation for such reletting. Tenant shall pay such current
damages to Landlord monthly on the days on which the Minimum Rent would have
been payable hereunder if this Agreement had not been so terminated with
respect to such of the Leased Property.
At any time after such termination, whether or not Landlord shall have
collected any such current damages, as liquidated final damages beyond the date
of such termination, at Landlord's election, Tenant shall pay to Landlord an
amount equal to the
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present value (discounted at the Interest Rate) of the excess, if any, of the
Rent and other charges which would be payable hereunder from the date of such
termination (assuming that, for the purposes of this paragraph, annual payments
by Tenant on account of Impositions and Additional Rent would be the same as
payments required for the immediately preceding twelve calendar months, or if
less than twelve calendar months have expired since the Commencement Date, the
payments required for such lesser period projected to an annual amount) for
what would be the then unexpired term of this Agreement if the same remained in
effect, over the fair market rental for the same period. Nothing contained in
this Agreement shall, however, limit or prejudice the right of Landlord to
prove and obtain in proceedings for bankruptcy or insolvency an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, the damages are to be proved, whether
or not the amount be greater than, equal to, or less than the amount of the
loss or damages referred to above.
In case of any Event of Default, re-entry, expiration and dispossession
by summary proceedings or otherwise, Landlord may (a) relet the Leased Property
or any part or parts thereof, either in the name of Landlord or otherwise, for
a term or terms which may at Landlord's option, be equal to, less than or
exceed the period which would otherwise have constituted the balance of the
Term and may grant concessions or free rent to the extent that Landlord
considers advisable and necessary to relet the same, and (b) may make such
reasonable alterations, repairs and decorations in the Leased Property or any
portion thereof as Landlord, in its sole and absolute discretion, considers
advisable and necessary for the purpose of reletting the Leased Property; and
the making of such alterations, repairs and decorations shall not operate or be
construed to release Tenant from liability hereunder as aforesaid. Subject to
the last sentence of this paragraph, Landlord shall in no event be liable in
any way whatsoever for any failure to relet all or any portion of the Leased
Property, or, in the event that the Leased Property is relet, for failure to
collect the rent under such reletting. To the maximum extent permitted by law,
Tenant hereby expressly waives any and all rights of redemption granted under
any present or future laws in the event of Tenant being evicted or
dispossessed, or in the event of Landlord obtaining possession of the Leased
Property, by reason of the occurrence and continuation
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of an Event of Default hereunder. Landlord covenants and agrees, in the event
of any termination of this Agreement as a result of an Event of Default, to use
reasonable efforts to mitigate its damages.
12.3 Tenant's Waiver. IF THIS AGREEMENT IS TERMINATED PURSUANT TO
SECTION 12.1 OR 12.2, TENANT WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT
TO A TRIAL BY JURY IN THE EVENT OF SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES
SET FORTH IN THIS ARTICLE 12, AND THE BENEFIT OF ANY LAWS NOW OR HEREAFTER IN
FORCE EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR DEBT. IN ADDITION,
TENANT UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT, IN THE EVENT THIS AGREEMENT
IS TERMINATED PURSUANT TO SECTION 12.1 OR 12.2, THE RETAINED FUNDS (AS SUCH
TERM IS DEFINED IN THE PURCHASE AGREEMENT) SHALL NOT BE PAID OR PAYABLE (TENANT
WAIVING, ON BEHALF OF ITSELF AND ITS AFFILIATED PERSONS, ALL CLAIMS AND CAUSES
OF ACTION WITH RESPECT THERETO).
12.4 Application of Funds. Any payments received by Landlord under
any of the provisions of this Agreement during the existence or continuance of
any Event of Default (and any payment made to Landlord rather than Tenant due
to the existence of any Event of Default) shall be applied to Tenant's current
and past due obligations under this Agreement in such order as Landlord may
determine or as may be prescribed by the laws of the State.
12.5 Landlord's Right to Cure Tenant's Default. If an Event of
Default shall have occurred and be continuing, Landlord, after Notice to Tenant
(which Notice shall not be required if Landlord shall reasonably determine
immediate action is necessary to protect person or property), without waiving
or releasing any obligation of Tenant and without waiving or releasing any
Event of Default, may (but shall not be obligated to), at any time thereafter,
make such payment or perform such act for the account and at the expense of
Tenant, and may, to the maximum extent permitted by law, enter upon the Leased
Property or any portion thereof for such purpose and take all such action
thereon as, in Landlord's sole and absolute discretion, may be necessary or
appropriate therefor. No such entry shall be deemed an eviction of Tenant.
All reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees) incurred by Landlord in connection therewith, together with
interest thereon (to the extent permitted by law) at the Overdue Rate from the
date such
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sums are paid by Landlord until repaid, shall be paid by Tenant to Landlord, on
demand.
ARTICLE 13
HOLDING OVER
Any holding over by Tenant after the expiration or sooner termination of
this Agreement shall be treated as a daily tenancy at sufferance at a rate
equal to two (2) times the Minimum Rent and other charges herein provided
(prorated on a daily basis). Tenant shall also pay to Landlord all damages
(direct or indirect) sustained by reason of any such holding over. Otherwise,
such holding over shall be on the terms and conditions set forth in this
Agreement, to the extent applicable. Nothing contained herein shall constitute
the consent, express or implied, of Landlord to the holding over of Tenant
after the expiration or earlier termination of this Agreement.
ARTICLE 14
LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT
14.1 Landlord Notice Obligation. Landlord shall give prompt Notice
to Tenant of any matters affecting the Leased Property of which Landlord
receives written notice or actual knowledge and, to the extent Tenant otherwise
has no notice or actual knowledge thereof, Landlord shall be liable for any
liabilities arising from the failure to deliver such Notice to Tenant.
14.2 Landlord's Default. If Landlord shall default in the
performance or observance of any of its covenants or obligations set forth in
this Agreement or any obligation of Landlord, if any, under any agreement
affecting the Leased Property, the performance of which is not Tenant's
obligation pursuant to this Agreement, and any such default shall continue for
a period of ten (10) days after Notice thereof with respect to monetary
defaults and thirty (30) days after Notice thereof with respect to non-monetary
defaults from Tenant to Landlord and any applicable Hotel Mortgagee, or such
additional period as may be
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reasonably required to correct the same, Tenant may declare the occurrence of a
"Landlord Default" by a second Notice to Landlord and to such Hotel Mortgagee.
Thereafter, Tenant may forthwith cure the same and, subject to the provisions
of the following paragraph, invoice Landlord for costs and expenses (including
reasonable attorneys' fees and court costs) incurred by Tenant in curing the
same, together with interest thereon (to the extent permitted by law) from the
date Landlord receives Tenant's invoice, at the Overdue Rate. Tenant shall
have no right to terminate this Agreement for any default by Landlord hereunder
and no right, for any such default, to offset or counterclaim against any Rent
or other charges due hereunder.
If Landlord shall in good faith dispute the occurrence of any Landlord
Default and Landlord, before the expiration of the applicable cure period,
shall give Notice thereof to Tenant, setting forth, in reasonable detail, the
basis therefor, no Landlord Default shall be deemed to have occurred and
Landlord shall have no obligation with respect thereto until final adverse
determination thereof; provided, however, that in the event of any such adverse
determination, Landlord shall pay to Tenant interest on any disputed funds at
the Interest Rate, from the date demand for such funds was made by Tenant until
the date of final adverse determination and, thereafter, at the Overdue Rate
until paid. If Tenant and Landlord shall fail, in good faith, to resolve any
such dispute within ten (10) days after Landlord's Notice of dispute, either
may submit the matter for resolution to a court of competent jurisdiction.
ARTICLE 15
PURCHASE RIGHTS
15.1 First Refusal to Purchase. Provided, (a) no Default or Event of
Default shall have occurred and be continuing, (b) this Agreement shall be of
full force and effect, and (c) other than as expressly permitted or required by
Section 16, Tenant shall not have assigned this Agreement (other than a
collateral assignment to or from a Leasehold Mortgagee or as contemplated by
Section 16.5) or subleased all or any portion of the Leased Property, Tenant
shall have a first refusal option to purchase the Leased Property upon the same
price, terms and conditions as
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Landlord shall propose to sell the Leased Property, or upon the same price,
terms and conditions of any offer from a third party to purchase the Leased
Property which Landlord intends to accept (or has accepted subject to Tenant's
right of first refusal herein provided); provided, however, that, if the
proposed purchase price is for other than cash, Tenant shall have the right to
purchase the Leased Property on cash equivalent terms determined by the
agreement of the parties or, if they cannot agree within ten (10) Business
Days, by arbitration in accordance with the rules of the American Arbitration
Association then in effect. If, during the Term, Landlord reaches such
agreement with a third party or proposes to offer the Leased Property for sale,
Landlord shall promptly give written notice to Tenant of the purchase price and
all other material terms and conditions of such agreement or proposed sale and
Tenant shall have sixty (60) days thereafter to exercise Tenant's option to
purchase by written notice to Landlord thereof. Failure of Tenant to respond
within such 60-day period shall be deemed a waiver of Tenant's right to
purchase the Leased Property with respect to such offer pursuant to this
Section 15.1. If Tenant exercises its option, the sale to Tenant shall be
consummated upon the same terms and conditions as contained in such agreement
or Landlord's notice of the proposed sale. If Tenant shall not exercise its
option to purchase within the time period and in the manner above provided,
Landlord shall be free to sell the Leased Property to such third party at the
price and upon terms substantially similar to those offered to Tenant. The
rights granted to Tenant pursuant to this Section 15.1 shall not apply to any
financing or sale- leaseback transaction or any transaction pursuant to which
Landlord is merged or consolidated with another Person; provided, however, that
any Person who shall acquire the Leased Premises shall acquire them subject to,
and shall be bound by, the provisions of this Section 15.1. The provisions of
this Section 15.1 shall inure to the benefit of Tenant and any permitted
successors and assigns of Tenant pursuant to this Agreement.
15.2 Landlord's Option to Purchase the Tenant's Personal Property;
Transfer of Licenses. Landlord shall have the option to purchase Tenant's
Personal Property, at the expiration or termination of this Agreement, for an
amount equal to the then net market value thereof (current replacement cost as
determined by appraisal less accumulated depreciation on Tenant's books
pertaining thereto), subject to, and with appropriate price
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adjustments for, all equipment leases, conditional sale contracts, UCC-1
financing statements and other encumbrances to which such Personal Property is
subject. Upon the expiration or sooner termination of this Agreement, Tenant
shall use its best efforts to transfer and assign to Landlord or its designee,
or assist Landlord or its designee in obtaining, any contracts, licenses, and
certificates required for the then operation of the Leased Property.
ARTICLE 16
SUBLETTING AND ASSIGNMENT
16.1 Subletting and Assignment. Except as provided in Section 16.3
and Article 19, Tenant shall not, without Landlord's prior written consent
(which consent may be given or withheld in Landlord's sole and absolute
discretion), assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer this Agreement or sublease (which term shall be deemed to include the
granting of concessions, licenses and the like), all or any part of the Leased
Property or suffer or permit this Agreement or the leasehold estate created
hereby or any other rights arising under this Agreement to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or permit the
use or operation of the Leased Property by anyone other than Tenant and the
Manager, or the Leased Property to be offered or advertised for assignment or
subletting. From and after the assignment required by Section 16.5, for
purposes of this Section 16.1, an assignment of this Agreement shall be deemed
to include any direct or indirect transfer of any interest in Tenant such that
Tenant shall cease to be a wholly owned direct or indirect Subsidiary of
Wyndham or any transaction pursuant to which Tenant is merged or consolidated
with another Entity or pursuant to which all or substantially all of Tenant's
assets are transferred to any other Entity, as if such change in control or
transaction were an assignment of this Agreement; provided, however, that the
foregoing shall not be construed to prohibit collateral assignments or pledges
of the capital stock of Tenant to Lending Institutions otherwise permitted by
this Agreement.
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If this Agreement is assigned or if the Leased Property or any part
thereof are sublet (or occupied by anybody other than Tenant, the Manager and
their respective employees or hotel guests) Landlord may collect the rents from
such assignee, subtenant or occupant, as the case may be, and apply the net
amount collected to the Rent herein reserved, but no such collection shall be
deemed a waiver of the provisions set forth in the first paragraph of this
Section 16.1, the acceptance by Landlord of such assignee, subtenant or
occupant, as the case may be, as a tenant, or a release of Tenant from the
future performance by Tenant of its covenants, agreements or obligations
contained in this Agreement.
No subletting or assignment shall in any way impair the continuing
primary liability of Tenant hereunder (unless Landlord and Tenant expressly
otherwise agree that Tenant shall be released from all obligations hereunder),
and no consent to any subletting or assignment in a particular instance shall
be deemed to be a waiver of the prohibition set forth in this Section 16.1. No
assignment, subletting or occupancy shall affect any Permitted Use. Any
subletting, assignment or other transfer of Tenant's interest under this
Agreement in contravention of this Section 16.1 shall be voidable at Landlord's
option.
16.2 Required Sublease Provisions. Any sublease of all or any
portion of the Leased Property entered into on or after the date hereof shall
provide (a) that it is subject and subordinate to this Agreement and to the
matters to which this Agreement is or shall be subject or subordinate; (b) that
in the event of termination of this Agreement or reentry or dispossession of
Tenant by Landlord under this Agreement, Landlord may, at its option, terminate
such sublease or take over all of the right, title and interest of Tenant, as
sublessor under such sublease, and such subtenant shall, at Landlord's option,
attorn to Landlord pursuant to the then executory provisions of such sublease,
except that neither Landlord nor any Hotel Mortgagee, as holder of a mortgage
or as Landlord under this Agreement, if such mortgagee succeeds to that
position, shall (i) be liable for any act or omission of Tenant under such
sublease, (ii) be subject to any credit, counterclaim, offset or defense which
theretofore accrued to such subtenant against Tenant, (iii) be bound by any
previous modification of such sublease not consented to in writing by Landlord
or by any previous prepayment of more
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than one (1) month's Rent, (iv) be bound by any covenant of Tenant to undertake
or complete any construction of the Leased Property or any portion thereof, (v)
be required to account for any security deposit of the subtenant other than any
security deposit actually delivered to Landlord by Tenant, (vi) be bound by any
obligation to make any payment to such subtenant or grant any credits, except
for services, repairs, maintenance and restoration provided for under the
sublease that are performed after the date of such attornment, (vii) be
responsible for any monies owing by Tenant to the credit of such subtenant, or
(viii) be required to remove any Person occupying any portion of the Leased
Property; and (c), in the event that such subtenant receives a written Notice
from Landlord or any Hotel Mortgagee stating that an Event of Default has
occurred and is continuing, such subtenant shall thereafter be obligated to pay
all rentals accruing under such sublease directly to the party giving such
Notice or as such party may direct. All rentals received from such subtenant
by Landlord or the Hotel Mortgagee, as the case may be, shall be credited
against the amounts owing by Tenant under this Agreement and such sublease
shall provide that the subtenant thereunder shall, at the request of Landlord,
execute a suitable instrument in confirmation of such agreement to attorn. An
original counterpart of each such sublease and assignment and assumption, duly
executed by Tenant and such subtenant or assignee, as the case may be, in form
and substance reasonably satisfactory to Landlord, shall be delivered promptly
to Landlord and (a) in the case of an assignment, the assignee shall assume in
writing and agree to keep and perform all of the terms of this Agreement on the
part of Tenant to be kept and performed and shall be, and become, jointly and
severally liable with Tenant for the performance thereof and (b) in case of
either an assignment or subletting, Tenant shall remain primarily liable, as
principal rather than as surety, for the prompt payment of the Rent and for the
performance and observance of all of the covenants and conditions to be
performed by Tenant hereunder.
The provisions of this Section 16.2 shall not be deemed a waiver of the
provisions set forth in the first paragraph of Section 16.1.
16.3 Permitted Sublease. Notwithstanding the foregoing, including,
without limitation, Section 16.2, but subject to the provisions of Section 16.4
and any other express conditions or
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limitations set forth herein, Tenant may, in each instance after Notice to
Landlord, sublease space at the Leased Property for newsstand, gift shop,
parking garage, health club, restaurant, bar or commissary purposes or similar
concessions in furtherance of the Permitted Use, so long as such subleases do
not demise, in the aggregate, in excess of two thousand (2,000) square feet,
will not violate or affect any Legal Requirement or Insurance Requirement, and
Tenant shall provide such additional insurance coverage applicable to the
activities to be conducted in such subleased space as Landlord and any Hotel
Mortgagee may reasonably require.
16.4 Sublease Limitation. For so long as Landlord or any Affiliated
Person as to Landlord shall seek to qualify as a real estate investment trust,
anything contained in this Agreement to the contrary notwithstanding, Tenant
shall not sublet the Leased Property on any basis such that the rental to be
paid by any sublessee thereunder would be based, in whole or in part, on the
income or profits derived by the business activities of such sublessee, any
other formula such that any portion of such sublease rental would fail to
qualify as "rents from real property" within the meaning of Section 856(d) of
the Code, or any similar or successor provision thereto or would otherwise
disqualify Landlord for treatment as a real estate investment trust.
16.5 Required Assignment. Upon the consummation of the initial
public offering of the shares of WHC as currently contemplated for at least
Twenty Five Million Dollars ($25,000,000), the initial Tenant named herein
shall be required to assign its interest under this Agreement, directly or
indirectly, to a corporate subsidiary of WHC, wholly owned by WHC.
Simultaneously with the foregoing assignment, Wyndham shall execute and deliver
to Landlord the Stock Pledge Agreement, which pledge Landlord agrees to
subordinate to the lien of a Lending Institution as provided in this Agreement.
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ARTICLE 17
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
17.1 Estoppel Certificates. At any time and from time to time, upon
not less than ten (10) Business Days prior Notice by either party, the party
receiving such Notice shall furnish to the other an Officer's Certificate
certifying that this Agreement is unmodified and in full force and effect (or
that this Agreement is in full force and effect as modified and setting forth
the modifications), the date to which the Rent has been paid, that no Default
or an Event of Default has occurred and is continuing or, if a Default or an
Event of Default shall exist, specifying in reasonable detail the nature
thereof, and the steps being taken to remedy the same, and such additional
information as the requesting party may reasonably request. Any such
certificate furnished pursuant to this Section 17.1 may be relied upon by the
requesting party, its lenders and any prospective purchaser or mortgagee of the
Leased Property or the leasehold estate created hereby.
17.2 Financial Statements.
(a) Prior to the assignment contemplated by Section
16.5, Tenant shall furnish the following statements to Landlord:
(i) within ninety (90) days after the end of each Fiscal Year, an
audited balance sheet and operating statement for such year,
certified by an independent certified public accountant reasonably
satisfactory to Landlord and accompanied by a Financial Officer's
Certificate;
(ii) within thirty (30) days after the end of each month, an unaudited
operating statement prepared on a Hotel by Hotel basis, including
occupancy percentages and average rate, accompanied by a Financial
Officer's Certificate;
(iii) at any time and from time to time upon not less than twenty (20)
days Notice from Landlord, any financial reporting information
required to be filed by
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Landlord with any securities and exchange commission, the SEC or
any successor agency, or any other governmental authority or
required pursuant to any order issued by any court, governmental
authority or arbitrator in any litigation to which Landlord is a
party, for purposes of compliance therewith; and
(iv) promptly, upon Notice from Landlord, such other information
concerning the business, financial condition and affairs of Tenant
as Landlord reasonably may request from time to time.
(b) From and after the assignment contemplated by
Section 16.5, Tenant shall furnish the following statements to Landlord:
(i) within forty-five (45) days after each of the first three
quarters of any Fiscal Year, the most recent Consolidated
Financials, accompanied by the Financial Officer's Certificate;
(ii) within ninety (90) days after the end of each Fiscal Year, the
most recent Consolidated Financials for such year, certified by an
independent certified public accountant reasonably satisfactory to
Landlord and accompanied by a Financial Officer's Certificate;
(iii) within thirty (30) days after the end of each month, an unaudited
operating statement prepared on a Hotel by Hotel basis, including
occupancy percentages and average rate, accompanied by a Financial
Officer's Certificate;
(iv) promptly after the sending or filing thereof, copies of all
reports which Tenant or Wyndham sends to its security holders
generally, and copies of all periodic reports which Tenant or
Wyndham files with the SEC or any stock exchange on which its
shares are listed or traded;
(v) at any time and from time to time upon not less than twenty (20)
days Notice from Landlord, any Consolidated Financials or any
other financial
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reporting information required to be filed by Landlord with any
securities and exchange commission, the SEC or any successor
agency, or any other governmental authority, or required pursuant
to any order issued by any court, governmental authority or
arbitrator in any litigation to which Landlord is a party, for
purposes of compliance therewith; and
(vi) promptly, upon Notice from Landlord, such other information
concerning the business, financial condition and affairs of Tenant
and Wyndham as Landlord reasonably may request from time to time.
Landlord may at any time, and from time to time, provide any Hotel Mortgagee
with copies of any of the foregoing statements.
In addition, Landlord shall have the right, from time to time at
Landlord's sole cost and expense, upon reasonable Notice, during Tenant's
customary business hours, to cause Tenant's books and records with respect to
the Leased Property to be audited by auditors selected by Landlord at the place
where such books and records are customarily kept.
17.3 General Operations. Tenant shall furnish to Landlord:
(a) Within thirty (30) days after receipt or modification
thereof, copies of all licenses authorizing Tenant and/or the Manager
to operate the Hotel for its Permitted Use;
(b) Not less than thirty (30) days after the commencement of
any Fiscal Year, proposed annual income and ordinary expense and capital
improvement budgets setting forth projected income and costs and expenses
projected to be incurred by Tenant in managing, owning, maintaining and
operating the Hotel during the next succeeding Fiscal Year; and
(c) Promptly after receipt or sending thereof, copies of all
notices given or received by Tenant under the Management Agreement.
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ARTICLE 18
LANDLORD'S RIGHT TO INSPECT
Tenant shall permit, and shall direct the Manager to permit, Landlord
and its authorized representatives to inspect the Leased Property during usual
business hours upon not less than twenty-four (24) hours' notice and to make
such repairs as Landlord is permitted or required to make pursuant to the terms
of this Agreement, provided that any inspection or repair by Landlord or its
representatives will not unreasonably interfere with Tenant's use and operation
of the Leased Property and further provided that in the event of an emergency,
as determined by Landlord in its reasonable discretion, prior Notice shall not
be necessary.
ARTICLE 19
LEASEHOLD MORTGAGES
19.1 Leasehold Mortgages Authorized. Notwithstanding anything to the
contrary contained herein, on one or more occasions, without Landlord's prior
consent, Tenant may grant one or more Leasehold Mortgages on its leasehold
interest in the Leased Property and security interests in Tenant's rights to
the Retained Funds, the FF&E Reserve and Tenant's Personal Property
(collectively, the "Leasehold Estate") to one or more Lending Institutions to
secure Indebtedness permitted hereunder.
19.2 Notices to Landlord. Promptly upon the granting of any
Leasehold Mortgage, Tenant or the applicable Leasehold Mortgagee shall give
Notice thereof to Landlord, such notice to identify the name and address of the
Leasehold Mortgagee and to be accompanied by a copy of the applicable Leasehold
Mortgage, as recorded. In the event of a change of address of a Leasehold
Mortgagee or of any amendment to or assignment of a Leasehold Mortgage, Tenant
or the applicable Leasehold Mortgagee shall promptly provide notice of such new
address, amendment or assignment to Landlord, together with a copy of each such
amendment or assignment.
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19.3 Cure by Leasehold Mortgagee. Any Leasehold Mortgagee shall have
the right, at any time during the Term hereof, while this Agreement is in full
force and effect:
(a) To do any act required by Tenant hereunder, and all such
acts done or performed shall be effective as to prevent a forfeiture of
Tenant's rights hereunder as if the same had been done or performed by
Tenant; and
(b) To rely on the security afforded by the Leasehold Estate,
and to acquire and to succeed to the interest of Tenant hereunder by
foreclosure, whether by judicial sale, by power of sale contained in any
security instrument, or by assignment of leasehold interest given in
lieu of foreclosure, and thereafter convey or assign title to the
Leasehold Estate so required to any other person, firm or corporation.
If the Leasehold Mortgagee or Tenant shall have furnished, in writing,
to Landlord a request for Notice of any Event of Default, in the event of any
Event of Default by Tenant, Landlord will not terminate this Lease by reason of
such Event of Default if the Leasehold Mortgagee shall, prior to the expiration
of the applicable cure period, cure any monetary Event of Default or, if such
Event of Default cannot be cured by the payment of money, provide Landlord with
a written undertaking, in form and substance satisfactory to Landlord, to
perform all covenants and obligations of Tenant under this Agreement upon
foreclosure and, thereafter, such Leasehold Mortgagee shall proceed in a timely
and diligent manner to accomplish the foreclosure of the Leasehold Estate.
19.4 Landlord Estoppel Certificates. Landlord agrees, from time to
time, to provide to any Leasehold Mortgagee, promptly after written request
therefor, an estoppel certificate substantially in the form of Exhibit E or
otherwise in such form as any Leasehold Mortgagee may reasonably request.
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ARTICLE 20
HOTEL MORTGAGES
20.1 Landlord May Grant Liens. Without the consent of Tenant,
Landlord may, subject to the terms and conditions set forth in this Section
20.1, from time to time, directly or indirectly, create or otherwise cause to
exist any lien, encumbrance or title retention agreement ("Encumbrance") upon
the Leased Property, or any portion thereof or interest therein, whether to
secure any borrowing or other means of financing or refinancing.
Notwithstanding anything to the contrary set forth in Section 20.2, any such
Encumbrance shall include the right to prepay (whether or not subject to a
prepayment penalty) and shall provide (subject to Section 20.2) that it is
subject to the rights of Tenant under this Agreement.
20.2 Subordination of Lease. Subject to Section 20.1 and this
Section 20.2, this Agreement, any and all rights of Tenant hereunder, are and
shall be subject and subordinate to any ground or master lease, and all
renewals, extensions, modifications and replacements thereof, and to all
mortgages and deeds of trust, which may now or hereafter affect the Leased
Property or any improvements thereon and/or any of such leases, whether or not
such mortgages or deeds of trust shall also cover other lands and/or buildings
and/or leases, to each and every advance made or hereafter to be made under
such mortgages and deeds of trust, and to all renewals, modifications,
replacements and extensions of such leases and such mortgages and deeds of
trust and all consolidations of such mortgages and deeds of trust. This
section shall be self-operative and no further instrument of subordination
shall be required provided that Tenant has received a nondisturbance and
attornment agreement from each Superior Mortgagee, consistent with the
provisions of this Section 20.2 and otherwise in form and substance reasonably
satisfactory to Tenant, the benefits of which agreement shall also extend to
any Leasehold Mortgagee. In confirmation of such subordination, Tenant shall
promptly execute, acknowledge and deliver any instrument that Landlord, the
lessor under any such lease or the holder of any such mortgage or the trustee
or beneficiary of any deed of trust or any of their respective successors in
interest may reasonably request to evidence such subordination. Any lease to
which this Agreement is, at the time referred to, subject and
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subordinate is herein called "Superior Lease" and the lessor of a Superior
Lease or its successor in interest at the time referred to, is herein called
"Superior Landlord" and any mortgage or deed of trust to which this Agreement
is, at the time referred to, subject and subordinate, is herein called
"Superior Mortgage" and the holder, trustee or beneficiary of a Superior
Mortgage is herein called "Superior Mortgagee". Tenant shall have no
obligations under any Superior Lease or Superior Mortgage other than those
expressly set forth in this Section 20.2.
If any Superior Landlord or Superior Mortgagee or the nominee or
designee of any Superior Landlord or Superior Mortgagee shall succeed to the
rights of Landlord under this Agreement (any such person, "Successor
Landlord"), whether through possession or foreclosure action or delivery of a
new lease or deed, or otherwise, such Successor Landlord shall recognize
Tenant's rights under this Agreement as herein provided and Tenant shall attorn
to and recognize the Successor Landlord as Tenant's landlord under this
Agreement and Tenant shall promptly execute and deliver any instrument that
such Successor Landlord may reasonably request to evidence such attornment
(provided that such instrument does not alter the terms of this Agreement),
whereupon, this Agreement shall continue in full force and effect as a direct
lease between the Successor Landlord and Tenant upon all of the terms,
conditions and covenants as are set forth in this Agreement, except that the
Successor Landlord (unless formerly the landlord under this Agreement or its
nominee or designee) shall not be (a) liable in any way to Tenant for any act
or omission, neglect or default on the part of any prior Landlord under this
Agreement, (b) responsible for any monies owing by or on deposit with any prior
Landlord to the credit of Tenant (except to the extent actually paid or
delivered to the Successor Landlord), (c) subject to any counterclaim or setoff
which theretofore accrued to Tenant against any prior Landlord, (d) bound by
any modification of this Agreement subsequent to such Superior Lease or
Mortgage, or by any previous prepayment of Minimum Rent or Additional Rent for
more than one (1) month in advance of the date due hereunder, which was not
approved in writing by the Superior Landlord or the Superior Mortgagee thereto,
(e) liable to Tenant beyond the Successor Landlord's interest in the Leased
Property and the rents, income, receipts, revenues, issues and profits issuing
from the Leased Property, (f) responsible for the performance of any work to be
done by the
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Landlord under this Agreement to render the Leased Property ready for occupancy
by Tenant (subject to Landlord's obligations under Section 5.1.2(b) or with
respect to any insurance or Condemnation proceeds), or (g) required to remove
any Person occupying the Leased Property or any part thereof, except if such
person claims by, through or under the Successor Landlord. Tenant agrees at
any time and from time to time to execute a suitable instrument in confirmation
of Tenant's agreement to attorn, as aforesaid and Landlord agrees to provide
Tenant with an instrument of nondisturbance and attornment from each such
Superior Mortgagee and Superior Landlord in form and substance reasonably
satisfactory to Tenant. Nothing contained in this Section 20.2 shall relieve
Landlord from any liability to Tenant under this Agreement following the
exercise of remedies by a Superior Mortgagee.
20.3 Notice to Mortgagee and Superior Landlord. Subsequent to the
receipt by Tenant of Notice from Landlord as to the identity of any Hotel
Mortgagee or Superior Landlord under a lease with Landlord, as ground lessee,
which includes the Leased Property as part of the demised premises and which
complies with Section 20.1 and 20.2 (which Notice shall be accompanied by a
copy of the applicable mortgage or lease), no notice from Tenant to Landlord as
to the Leased Property shall be effective unless and until a copy of the same
is given to such Hotel Mortgagee or Superior Landlord at the address set forth
in the above described Notice, and the curing of any of Landlord's defaults by
such Hotel Mortgagee or Superior Landlord shall be treated as performance by
Landlord.
ARTICLE 21
ADDITIONAL COVENANTS OF TENANT
21.1 Prompt Payment of Indebtedness. Tenant shall (a) pay or cause
to be paid when due all payments of principal of and premium and interest on
Tenant's Indebtedness for money borrowed and shall not permit or suffer any
such Indebtedness to become or remain in default beyond any applicable grace or
cure period, (b) pay or cause to be paid when due all lawful claims for labor
and rents with respect to the Leased Property, (c) pay or cause to be paid when
due all trade payables and (d) pay or cause to be paid
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when due all other of Tenant's Indebtedness upon which it is or becomes
obligated, except, in each case, other than that referred to in clause (a), to
the extent payment is being contested in good faith by appropriate proceedings
in accordance with Article 8 and if Tenant shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP, if appropriate,
or unless and until foreclosure, distraint sale or other similar proceedings
shall have been commenced.
21.2 Conduct of Business. Tenant shall not engage in any business
other than the leasing and operation of the Collective Leased Properties and
shall do or cause to be done all things necessary to preserve, renew and keep
in full force and effect and in good standing its corporate or partnership
existence, as applicable, and its rights and licenses necessary to conduct such
business.
21.3 Maintenance of Accounts and Records. Tenant shall keep true
records and books of account of Tenant in which full, true and correct entries
will be made of dealings and transactions in relation to the business and
affairs of Tenant in accordance with GAAP, where applicable, Tenant shall apply
accounting principles in the preparation of the financial statements of Tenant
which, in the judgment of and the opinion of its independent public
accountants, are in accordance with GAAP, where applicable, except for changes
approved by such independent public accountants. Tenant shall provide to
Landlord either in a footnote to the financial statements delivered under
Section 17.2 which relate to the period in which such change occurs, or in
separate schedules to such financial statements, information sufficient to show
the effect of any such changes on such financial statements.
21.4 Notice of Litigation, Etc. Tenant shall give prompt Notice to
Landlord of any litigation or any administrative proceeding to which it may
hereafter become a party of which Tenant has notice or actual knowledge which
involves a potential uninsured liability equal to or greater than Two Hundred
Fifty Thousand Dollars ($250,000) or which, in Tenant's reasonable opinion, may
otherwise result in any material adverse change in the business, operations,
property, prospects, results of operation or condition, financial or other, of
Tenant. Forthwith upon Tenant obtaining knowledge of any Default, Event of
Default
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or any default or event of default under any agreement relating to Indebtedness
for money borrowed in an aggregate amount exceeding, at any one time, Two
Hundred Fifty Thousand Dollars ($250,000), or any event or condition that would
be required to be disclosed in a current report filed by Tenant on Form 8-K or
in Part II of a quarterly report on Form 10-Q if Tenant were required to file
such reports under the Securities Exchange Act of 1934, as amended, Tenant
shall furnish Notice thereof to Landlord specifying the nature and period of
existence thereof and what action Tenant has taken or is taking or proposes to
take with respect thereto.
21.5 Indebtedness of Tenant. Tenant shall not create, incur, assume
or guarantee, or permit to exist, or become or remain liable directly or
indirectly upon, any Indebtedness except the following:
(a) Indebtedness of Tenant to Landlord;
(b) Indebtedness of Tenant for Impositions, to the extent that
payment thereof shall not at the time be required to be made in
accordance with the provisions of Article 8;
(c) Indebtedness of Tenant in respect of judgments or awards
(i) which have been in force for less than the applicable appeal period
and in respect of which execution thereof shall have been stayed pending
such appeal or review, or (ii) which are fully covered by insurance
payable to Tenant, or (iii) which are for an amount not in excess of
$250,000 in the aggregate at any one time outstanding and (x) which have
been in force for not longer than the applicable appeal period, so long
as execution is not levied thereunder or (y) in respect of which an
appeal or proceedings for review shall at the time be prosecuted in good
faith in accordance with the provisions of Article 8, and in respect of
which execution thereof shall have been stayed pending such appeal or
review;
(d) unsecured borrowings of Tenant from its Affiliated Persons
which are by their terms expressly subordinate pursuant to a
Subordination Agreement to the payment and performance of Tenant's
obligations under this Agreement;
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(e) Indebtedness for purchase money financing in accordance
with Section 21.9(a) and other operating liabilities incurred in the
ordinary course of Tenant's business;
(f) Deferred fees to the Manager as provided in the Management
Agreement, provided that such fees shall be, from and after the
occurrence of a Default or Event of Default, subordinate to all amounts
owing to Landlord; or
(g) Indebtedness of any Affiliated Persons as to Tenant
secured by a Leasehold Mortgage or otherwise guaranteed by Tenant.
21.6 Financial Condition of Tenant. Tenant shall at all times
maintain Tangible Net Worth (except as provided in the last clause of this
sentence) in an amount at least equal to the aggregate of one year's Minimum
Rent payable pursuant to this Agreement and the Other Leases in effect from
time to time; it being expressly understood and agreed that the sum of the
Retained Funds (as defined in the Purchase Agreement) may for such purpose be
counted as equity at the full amount thereof if such amounts are contributed to
Tenant.
21.7 Distributions, Payments to Affiliated Persons, Etc. Tenant
shall not declare, order, pay or make, directly or indirectly, any
Distributions or any payment to any Affiliated Person of Tenant (including
payments in the ordinary course of business and payments pursuant to management
agreements with any such Affiliated Person) or set apart any sum or property
therefor, or agree to do so, if, at the time of such proposed action, or
immediately after giving effect thereto, any Event of Default shall exist.
21.8 Prohibited Transactions. Tenant shall not permit to exist or
enter into any agreement or arrangement whereby it engages in a transaction of
any kind with any Affiliated Person as to Tenant, except on terms and
conditions which are commercially reasonable or as otherwise described in
Wyndham's draft prospectus for its initial public offering or as provided in
Section 21.5.
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21.9 Liens and Encumbrances. Except as permitted by Section 7.1,
Article 19 and Section 21.5, Tenant shall not create or incur or suffer to be
created or incurred or to exist any Lien on this Agreement or any of Tenant's
assets, properties, rights or income, or any of its interest therein, now or at
any time hereafter owned, other than:
(a) Security interests securing the purchase price of
equipment or personal property whether acquired before or after the
Commencement Date; provided, however, that (i) such Lien shall at all
times be confined solely to the asset in question and (ii) the aggregate
principal amount of Indebtedness secured by any such Lien shall not
exceed the cost of acquisition or construction of the property subject
thereto;
(b) Permitted Encumbrances; and
(c) As permitted pursuant to Article 19 and Section 21.5.
21.10 Merger; Sale of Assets; Etc. Except as otherwise permitted by
this Agreement, Tenant shall not (i) sell, lease (as lessor or sublessor),
transfer or otherwise dispose of, or abandon, all or any material portion of
its assets (including capital stock) or business to any Person, (ii) merge into
or with or consolidate with any other Entity, or (iii) sell, lease (as lessor
or sublessor), transfer or otherwise dispose of, or abandon, any personal
property or fixtures or any real property; provided, however, that,
notwithstanding the provisions of clause (iii) preceding, Tenant may dispose of
equipment or fixtures which have become inadequate, obsolete, worn-out,
unsuitable, undesirable or unnecessary, provided substitute equipment or
fixtures having equal or greater value and utility (but not necessarily having
the same function) have been provided.
ARTICLE 22
MISCELLANEOUS
22.1 Limitation on Payment of Rent. All agreements between Landlord
and Tenant herein are hereby expressly limited so that
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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 law, the
benefit of which may be asserted by Tenant as a defense, and if, from any
circumstance whatsoever, fulfillment of any provision of this Agreement, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law, or if from any circumstances Landlord
should ever receive as fulfillment of such provision such an excessive amount,
then, ipso facto, the amount which would be excessive shall be applied to the
reduction of the installment(s) of Minimum Rent next due and not to the payment
of such excessive amount. This provision shall control every other provision
of this Agreement and any other agreements between Landlord and Tenant.
22.2 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.
22.3 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.
22.4 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
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invalid, illegal or ineffective, and this Agreement shall be construed as if
such invalid, illegal or ineffective provisions had never been contained
therein.
22.5 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.
22.6 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.
22.7 Conveyance by Landlord. If Landlord or any successor owner of
all or any portion of the Leased Property shall convey all or any portion of
the Leased Property in accordance with the terms hereof other than as security
for a debt, and the grantee or transferee of such of the Leased Property shall
expressly assume all obligations of Landlord hereunder arising or accruing from
and after the date of such conveyance or transfer, Landlord or such successor
owner, as the case may be, shall, provided such successor owner shall have a
Tangible Net Worth of not less than Fifty Million ($50,000,000) Dollars
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.
22.8 Quiet Enjoyment. Provided that no Event of Default shall have
occurred and be continuing, Tenant shall peaceably and quietly have, hold and
enjoy the Leased Property for the Term, free of hindrance or molestation by
Landlord or anyone claiming by, through or under Landlord, but subject to (a)
any Encumbrance permitted under Article 20 or otherwise permitted to be created
by Landlord hereunder provided that the holder of such
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Encumbrance has, to the extent appropriate, executed a nondisturbance agreement
pursuant to Section 20.2 or a subordination agreement in form and substance
reasonably acceptable to Tenant, (b) all Permitted Encumbrances, (c) liens as
to obligations of Landlord that are either not yet due or which are being
contested in good faith and by proper proceedings, provided the same do not
materially interfere with Tenant's ability to operate the Hotel and (d) liens
that have been consented to in writing by Tenant. Except as otherwise provided
in this Agreement, no failure by Landlord to comply with the foregoing covenant
shall give Tenant any right to cancel or terminate this Agreement or ▇▇▇▇▇,
reduce or make a deduction from or offset against the Rent or any other sum
payable under this Agreement, or to fail to perform any other obligation of
Tenant hereunder.
22.9 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.
22.10 Notices.
(a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same
shall be delivered either in hand, by telecopier with written
acknowledgment of receipt, or by mail or Federal Express or similar
expedited commercial carrier, addressed to the recipient of the notice,
postpaid and registered or certified with return receipt requested (if
by mail), or with all freight charges prepaid (if by Federal Express or
similar carrier).
(b) All notices required or permitted to be sent hereunder
shall be deemed to have been given for all purposes of this Agreement
upon the date of acknowledged receipt, in the case of a notice by
telecopier, and, in all other cases, upon the date of receipt or
refusal, except
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that whenever under this Agreement a notice is either received on a day
which is not a Business Day or is required to be delivered on or before
a specific day which is not a Business Day, the day of receipt or
required delivery shall automatically be extended to the next Business
Day.
(c) All such notices shall be addressed,
if to Landlord to:
Hospitality Properties Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
if to Tenant to:
Wyndham Hotels and Resorts
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
Locke, Purnell, Rain, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and
their respective successor and assigns shall have the right from time to
time and at any time during the term
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of this Agreement to change their respective addresses effective upon
receipt by the other parties of such notice and each shall have the
right to specify as its address any other address within the United
States of America.
22.11 Trade Area Restriction. Neither Tenant nor any of its
Affiliated Persons shall own, build, franchise, manage or operate any Wyndham
Garden hotel within the designated area on Exhibit D, at any time during the
Term; it being expressly understood and agreed that hotels other than Wyndham
Garden hotels (e.g. full service hotels or resort hotels) are not subject to
the foregoing restriction.
22.12 Construction. Anything contained in this Agreement to the
contrary notwithstanding, all claims against, and liabilities of, Tenant or
Landlord arising prior to any date of termination or expiration of this
Agreement with respect to the Leased Property shall survive such termination or
expiration. In no event shall Landlord be liable for any consequential damages
suffered by Tenant as the result of a breach of this Agreement by Landlord.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
to be charged. All the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Each term or provision of this Agreement to be
performed by Tenant shall be construed as an independent covenant and
condition. Time is of the essence with respect to the provisions of this
Agreement. Except as otherwise set forth in this Agreement, any obligations of
Tenant (including without limitation, any monetary, repair and indemnification
obligations) and Landlord shall survive the expiration or sooner termination of
this Agreement. Whenever it is provided in this Agreement that Tenant shall
direct the Manager to take any action, Tenant shall not be deemed to have
satisfied such obligation unless Tenant shall have exhausted all applicable
rights and remedies of Tenant as "Owner" under the Management Agreement.
22.13 Counterparts; Headings. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but which,
when taken together, shall constitute but one instrument and shall become
effective as of the date hereof when copies hereof, which, when taken together,
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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.
22.14 Applicable Law, Etc. This Agreement shall be interpreted,
construed, applied and enforced in accordance with the laws of the State
applicable to contracts between residents of the State which are to be
performed entirely within the State, regardless of (i) where this Agreement is
executed or delivered; or (ii) where any payment or other performance required
by this Agreement is made or required to be made; or (iii) where any breach of
any provision of this Agreement occurs, or any cause of action otherwise
accrues; or (iv) where any action or other proceeding is instituted or pending;
or (v) the nationality, citizenship, domicile, principal place of business, or
jurisdiction of organization or domestication of any party; or (vi) whether the
laws of the forum jurisdiction otherwise would apply the laws of a jurisdiction
other than the State; or (vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State as is provided by law; and the parties consent to the jurisdiction of
said court or courts located in the State and to service of process by
registered mail, return receipt requested, or by any other manner provided by
law.
22.15 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
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right to enter into this Agreement and perform its obligations hereunder.
22.16 Nonrecourse. Nothing contained in this Agreement shall be
construed to impose any liabilities or obligations on Wyndham or any of its
shareholders for the payment or performance of the obligations or liabilities
of Tenant under this Agreement.
22.17 Confidentiality. Except to prospective lenders and purchasers
or as may be required by law, the SEC or any securities and exchange
commission, Landlord shall not disclose any of Tenant's confidential or
proprietary information to any Person.
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IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date above first written.
LANDLORD:
HPTWN CORPORATION
By:
---------------------------------
Its:
----------------------
TENANT:
GARDEN HOTEL ASSOCIATES TWO LP
By: Garden Hotel Partners LP,
General Partner
By: Garden Hotel Corporation
No. 2, General Partner
By:
---------------------------------
Its:
----------------------
96
EXHIBIT A
Annual Minimum Rent
$_______ which is allocated as follows:
Portion of Annual
Portion of Annual Minimum Minimum Rent Allocated
Rent Allocated to Leased to Leased Personal
Property and Leased Property and Leased
Year Intangible Property Intangible Property
1996
1997
1998
1999
2000 and beyond All 0
97
EXHIBIT B
Other Leases
[See attached copy.]
98
EXHIBIT C
The Land
[See attached copy.]
99
EXHIBIT D
Restricted Trade Area
[See attached copy.]
100
EXHIBIT E
Form of Landlord Estoppel Certificate
[See attached copy.]