Exhibit 10.30
Lease Agreement between
CNL Hospitality Partners, LP and
WYN Orlando Lessee, LLC, dated June 1, 2000,
relating to the Wyndham Billerica
LEASE AGREEMENT
DATED AS OF May 31, 2000
BY AND BETWEEN
CNL HOSPITALITY PARTNERS, LP
A DELAWARE LIMITED PARTNERSHIP
AS LANDLORD,
AND
WYN ORLANDO LESSEE, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AS TENANT
Billerica
TABLE OF CONTENTS
Page
ARTICLE 1....................................................................
DEFINITIONS..................................................................
ARTICLE 2....................................................................
LEASED PROPERTY AND TERM.....................................................
2.1 Leased Property....................................................
2.2 Condition of Leased Property.......................................
2.3 Initial Term.......................................................
2.4 Extended Term......................................................
ARTICLE 3...................................................................
RENT 18
3.1 Rent...............................................................
3.2 Landlord Advances..................................................
3.3 Sales Tax..........................................................
3.4 Payment of Rent....................................................
3.5 Late Payment of Rent...............................................
3.6 Net Lease..........................................................
3.7 No Abatement of Rent...............................................
3.8 Minimum Rent Reserve...............................................
3.9 Security Deposit...................................................
3.10 Additional Rentals on Conversion Costs Earn-Outs...................
ARTICLE 4...................................................................
USE OF THE LEASED PROPERTY; CONFLICTING BUSINESS.............................
4.1 Permitted Use......................................................
4.2 Environmental Matters..............................................
4.3 Conflicting Businesses Prohibited..................................
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Page
4.4 Continuous Operations..............................................
4.5 Compliance With Restrictions, Etc..................................
4.6 Standard of Operation..............................................
4.7 Survival...........................................................
ARTICLE 5....................................................................
MAINTENANCE AND REPAIRS......................................................
5.1 Maintenance and Repair.............................................
5.2 Yield Up...........................................................
ARTICLE 6....................................................................
IMPROVEMENTS, ETC............................................................
6.1 Prohibition........................................................
6.2 Permitted Renovations..............................................
6.3 Additions, Expansions and Structural Alterations...................
6.4 Salvage............................................................
ARTICLE 7....................................................................
LANDLORD'S INTEREST NOT SUBJECT TO LIENS.....................................
7.1 Liens, Generally...................................................
7.2 Mechanics Liens....................................................
7.3 Contest of Mechanics Liens.........................................
7.4 Notices of Commencement of Construction............................
ARTICLE 8....................................................................
TAXES AND ASSESSMENTS........................................................
8.1 Obligation to Pay Taxes............................................
8.2 Tax Account........................................................
8.3 Permitted Contests.................................................
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Page
ARTICLE 9....................................................................
INSURANCE....................................................................
9.1 General Insurance Requirements.....................................
9.2 Waiver of Subrogation..............................................
9.3 General Provisions.................................................
9.4 Blanket Policy.....................................................
9.5 Indemnification of Landlord........................................
ARTICLE 10...................................................................
CASUALTY.....................................................................
10.1 Restoration and Repair.............................................
10.2 Insufficient Insurance Proceeds....................................
10.3 Escrow of Insurance Proceeds.......................................
10.4 Repairs............................................................
10.5 Abatement of Rent..................................................
10.6 Tenant's Property and Business Interruption Insurance..............
10.7 Restoration of Tenant's Property...................................
10.8 Waiver.............................................................
ARTICLE 11...................................................................
CONDEMNATION.................................................................
11.1 Total Condemnation, Etc............................................
11.2 Partial Condemnation; Temporary Condemnation.......................
11.3 Disbursement of Award..............................................
11.4 Abatement of Rent..................................................
11.5 Disputes...........................................................
ARTICLE 12...................................................................
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Page
DEFAULTS AND REMEDIES........................................................
12.1 Events of Default..................................................
12.2 Remedies on Default................................................
12.3 Application of Funds...............................................
12.4 Landlord's Right to Cure Tenant's Default..........................
12.5 Landlord's Lien....................................................
12.6 The Other Leases...................................................
12.7 Landlord's Default.................................................
12.8 Special Remedies for Landlord Funding Default......................
ARTICLE 13...................................................................
HOLDING OVER.................................................................
ARTICLE 14...................................................................
LIABILITY OF LANDLORD; INDEMNIFICATION.......................................
14.1 Liability of Landlord..............................................
14.2 Notice of Claim or Suit............................................
14.3 Limitation on Liability of Landlord................................
ARTICLE 15...................................................................
REIT REQUIREMENTS............................................................
ARTICLE 16...................................................................
SUBLETTING AND ASSIGNMENT SALE OF LEASED PROPERTY; LANDLORD'S RIGHT TO
ACQUIRE LEASEHOLD INTEREST; TRANSFERS BY LANDLORD............................
16.1 Transfers Prohibited Without Consent...............................
16.2 Indirect Transfer Prohibited Without Consent.......................
16.3 Adequate Assurances................................................
16.4 Change in Control of Wyndham.......................................
16.5 Sale of the Leased Property........................................
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Page
16.6 Landlord's Right to Acquire the Leasehold Interest................
16.7 Portfolio Assignment..............................................
16.8 Permitted Sublease................................................
16.9 Transfers by Landlord.............................................
16.10 Transfers of Interests in Landlord................................
ARTICLE 17...................................................................
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS...............................
17.1 Estoppel Certificates.............................................
17.2 Financial Statements..............................................
17.3 Records...........................................................
17.4 General Operations................................................
17.5 Quarterly Meetings................................................
ARTICLE 18...................................................................
LANDLORD'S RIGHT TO INSPECT..................................................
ARTICLE 19...................................................................
ALTERNATIVE DISPUTE RESOLUTION...............................................
19.1 Negotiation.......................................................
19.2 Arbitration.......................................................
ARTICLE 20...................................................................
HOTEL MORTGAGES..............................................................
20.1 Subordination.....................................................
20.2 Attornment........................................................
20.3 Rights of Mortgagees and Assignees................................
ARTICLE 21...................................................................
ADDITIONAL COVENANTS OF TENANT...............................................
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21.1 Conduct of Business..........................................
21.2 Additional Covenants of Tenant...............................
21.3 Tenant a Single Purpose Entity...............................
21.4 Distributions, Payments to Affiliated Persons, Etc...........
21.5 Compliance with Management Agreement.........................
ARTICLE 22.................................................................
MISCELLANEOUS..............................................................
22.1 Limitation on Payment of Rent................................
22.2 No Waiver....................................................
22.3 Remedies Cumulative..........................................
22.4 Severability.................................................
22.5 Acceptance of Surrender......................................
22.6 No Merger of Title...........................................
22.7 Tenant's Representations.....................................
22.8 Quiet Enjoyment..............................................
22.9 Recordation of Memorandum of Lease...........................
22.10 Notices......................................................
22.11 Construction; Nonrecourse....................................
22.12 Counterparts; Headings.......................................
22.13 Applicable Law, Etc..........................................
22.14 Right to Make Agreement......................................
22.15 Brokerage....................................................
22.16 No Partnership or Joint Venture..............................
22.17 Entire Agreement.............................................
22.18 Costs and Attorneys' Fees....................................
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22.19 Approval of Landlord.........................................
22.20 Successors and Assigns.......................................
22.21 Waiver of Jury Trial.........................................
22.22 Treatment of Lease...........................................
22.23 Landlord's Option to Acquire the Tenant's Personal Property;
Transfer of Licenses.........................................
22.24 Landlord's Representations...................................
22.25 Guaranty.....................................................
vii
EXHIBITS
EXHIBIT "A" - Permitted Encumbrances
EXHIBIT "B" - The Land
EXHIBIT "C" - Estoppel Certificate
EXHIBIT "D" - Memorandum of Lease
EXHIBIT "E" - Single Purpose Entity Requirements
EXHIBIT "F" - Property Expenses
EXHIBIT "G" - Tenant Equity Ownership
EXHIBIT "H" - Agreement of Guaranty
EXHIBIT "I" - The Proscribed Area
EXHIBIT "J" - Allocation of Minimum Rent Between Real
Property and Personal
EXHIBIT "K" - Letter of Credit
EXHIBIT "L" - Post Closing Due Diligence Undertakings
LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into as of this 31st day of May, 2000, by
and between CNL HOSPITALITY PARTNERS, LP, a Delaware Limited Partnership, as
landlord ("Landlord"), and WYN ORLANDO LESSEE, LLC, a Delaware Limited Liability
Company, as tenant ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord has heretofore acquired fee simple title to the Leased
Property (this and other capitalized terms used and not otherwise defined herein
having the meanings ascribed to such terms in ARTICLE 1); and
WHEREAS, Landlord wishes to lease the Leased Property to Tenant and Tenant
wishes to lease the Leased Property from Landlord, all subject to and upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
ARTICLE 1
DEFINITIONS
-----------
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, (a) the terms defined in this Article
and used in this Agreement shall have the meanings assigned to them in this
Article and include the plural as well as the singular, (b) all accounting terms
not otherwise defined herein shall have the meanings assigned to them in
accordance with GAAP and the Uniform System of Accounts, (c) all references in
this Agreement to designated "Articles," "Sections" and other subdivisions are
to the designated Articles, Sections and other subdivisions of this Agreement,
and (d) 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.
"Accessibility 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
accessibility for the disabled or handicapped, including, but not limited to,
any applicable provisions of The Architectural Barriers Act of 1968, The
Rehabilitation Act of 1973, The Fair Housing Act of 1988, The Americans With
Disabilities Act, the accessibility code(s), if any, of the State in which the
Leased Property is located, and all regulations and guidelines promulgated under
any all of the foregoing, as the same may be amended from time to time.
1
"Accounting Period" shall mean each four (4) week accounting period of
Tenant, corresponding to calendar months. If Tenant shall, for a bona fide
business reason, change its accounting period during the Term, appropriate
adjustments, if any, shall be made with respect to the timing of applicable
accounting and reporting requirements of this Agreement; provided, however, that
in no event shall any such change or adjustment alter the amount or frequency of
payment of Minimum Rent within any Fiscal Year, or alter the frequency of
payment of Percentage Rent to less than four (4) times within any Fiscal Year,
or otherwise increase or reduce any monetary obligation under this Agreement.
"Acquisition Properties" shall mean the Leased Property and the leased
property contemplated by that certain Lease Agreement of even date herewith
between Landlord and Tenant with respect to the Wyndham Denver Tech Center
Hotel.
"Additional Capital Investment" shall have the meaning given such term in
Section 5.1.3(c).
"Additional Charges" shall have the meaning given such term in Section
3.1.4.
"Affiliated Person" or "Affiliate" shall mean, with respect to any Person,
(a) any Person directly or indirectly Controlling, Controlled by or under common
Control with any such Person, (b) in the case of any such Person which is a
partnership, any partner in such partnership, (c) in the case of any such Person
which is a limited liability company, any member of such company, (d) in the
case of any such Person which is a corporation, any officer, director or
stockholder of such corporation, (e) 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) through (d), (f)
any other Person who is an officer, director, trustee or employee of, or partner
in, such Person or any Person referred to in the preceding clauses (a) through
(e) and (g) any other Person who is a member of, or trustee of any trust for the
benefit of, the Immediate Family of such Person or of any Person referred to in
the preceding clauses (a) through (f). Provided, however, a Person shall not be
deemed to be an Affiliated Person solely by virtue of the ownership of shares of
stock registered under the Securities Act of 1934, as amended, unless such
Person, as holder of such stock, is required to file a Schedule 13 D, pursuant
to Section 13(d) of such Act and Rule 13 d-1 promulgated thereunder.
"Agreement" shall mean this Lease Agreement, including all Exhibits hereto,
as it and they may be amended from time to time as herein provided.
"Amount Funded" shall mean the remainder of (a) all Minimum Rent paid
during each Accounting Period by Tenant pursuant to the terms of this Lease,
less (b) the total amount of Cash Available for Lease Payments during each such
Accounting Period derived from the Leased Property.
"Annual Operations Statement" shall have the meaning given such term in
Section 3.1.3.
2
"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 of any kind, including
without limitation, those relating to injury to, or the protection of (a) real
or personal property, (b) human health and safety (except those requirements
which, by definition, are solely the responsibility of employers), (c) the
Environment, including, without limitation, all valid and lawful requirements of
courts and other Government Agencies pertaining to reporting, licensing,
permitting, investigation, remediation and removal of underground improvements
(including, without limitation, treatment or storage tanks, or water, gas or oil
▇▇▇▇▇), or emissions, discharges, releases or threatened releases of Hazardous
Substances, chemical substances, pesticides, petroleum or petroleum products,
pollutants, contaminants or hazardous or toxic substances, materials or wastes
whether solid, liquid or gaseous in nature, into the Environment, or relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances, underground improvements
(including, without limitation, treatment or storage tanks, or water, gas or oil
▇▇▇▇▇), or pollutants, contaminants or hazardous or toxic substances, materials
or wastes, whether solid, liquid or gaseous in nature, or (d) Accessibility
Laws.
"Applicable Percentage" shall mean, with respect to any Accounting Period,
or portion thereof, (a) with respect to the period beginning on the Commencement
Date and ending on the last day of the twelfth (12th) full Accounting Period
next following the Commencement Date, three percent (3%) of Total Hotel Sales;
(b) with respect to the thirteenth (13th) through twenty-fourth (24th) full
Accounting Periods next following the Commencement Date, four percent (4%) of
Total Hotel Sales, and, (c) with respect to each Accounting Period thereafter,
five percent (5%) of Total Hotel Sales.
"Approved Reserve Estimate" shall have the meaning given such term in
Section 5.1.2(c).
"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 and/or Tenant, in connection with obtaining any such award).
"Beginning Index" shall mean the average Index published for each of the
twelve (12) months preceding the Commencement Date.
"Big Five Accounting Firms" shall mean Deloitte & Touche LLP, KPMG LLP,
Ernst & Young LLP, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and PricewaterhouseCoopers LLP, and their
lawful successors and assigns.
"Building Estimate" shall have the meaning given such term in Section
5.1.3(a).
"Business Day" shall mean any day other than Saturday, Sunday, or any other
day on which banking institutions in the State are authorized by law or
executive action to close.
3
"Calculation Period" shall mean each successive period of four (4)
consecutive Fiscal Quarters commencing with the first Fiscal Quarter following
the acquisition by Landlord of the Leased Property and the execution of this
Agreement.
"Capital Expenditure" shall mean any expenditure with respect to the Leased
Property treated as capital in nature in accordance with GAAP.
"Cash Available for Lease Payments" shall mean the remainder of (i) Total
Hotel Sales for the Leased Property during a given Shortfall Calculation Period,
less (ii) Property Expenses for the Leased Property for the same Shortfall
Calculation Period.
"CHC" shall mean CNL Hospitality Corp., a Florida corporation.
"CHP" shall mean CNL Hospitality Properties, Inc., a Maryland corporation.
"Claims" shall have the meaning given such term in Section 8.3.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act.
"Code" shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as amended
from time to time.
"Commencement Date" shall mean the date of this Agreement.
"Common Tenth Anniversary Date" shall mean the last day of the one hundred
twentieth (120) full Accounting Period following the Commencement Date of the
last of the Other Leases to be entered into by Landlord and Tenant.
"Company" shall have the meaning given such term in the recitals of this
Agreement.
"Condemnation" shall mean (a) the exercise of any governmental power with
respect to the Leased Property, whether by legal proceedings or otherwise, by a
Condemnor of its power of condemnation, (b) a voluntary sale or transfer of the
Leased Property by Landlord to any Condemnor, either under threat of
condemnation or while legal proceedings for condemnation are pending, or (c) a
taking or voluntary conveyance of all or part of the Leased Property, or any
interest therein, or right accruing thereto or use thereof, as the result or in
settlement of any Condemnation or other eminent domain proceeding affecting the
Leased Property, whether or not the same shall have actually been commenced.
"Condemnor" shall mean any public or quasi-public authority, or Person
having the power of Condemnation.
"Conflicting Business" shall have the meaning given such term in Section
4.3.
"Control" (including the correlative meanings of the terms "Controlling",
"Controlled by", and "under common control with") as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of such Person whether
through the ownership of voting securities, or other interests, by contract or
otherwise.
4
"Conversion Costs Earn-Out" shall have the meaning given such term in
Section 3.10.
"Default" shall mean any event or condition existing which with the giving
of notice and/or lapse of time would ripen into an Event of Default.
"Development Properties" shall mean those properties identified on EXHIBIT
"I" attached hereto.
"Disbursement Rate" shall mean as of the date of determination, (i) an
annual rate of interest equal to, 10.5% during the period from the Commencement
Date through the Common Tenth Anniversary Date and (ii) provided Landlord elects
to increase Minimum Rent as provided in Section 3.1 hereof, for the first Lease
Year of the Term following the Common Tenth Anniversary Date, 10.5% as increased
by that percentage equal to the positive change in the Extension Index preceding
such Lease Year over the Beginning Index, and for each Lease Year thereafter,
the applicable Disbursement Rate for the Lease Year prior to such Lease Year as
increased by that percentage equal to the positive change in the Extension Index
preceding such Lease Year over the Extension Index preceding the Lease Year
prior to such Lease Year.
"Distribution" shall mean (a) any declaration or payment of any dividend on
or in respect of any shares of any class of capital stock of Tenant, if Tenant
is a corporation, or any cash distributions in respect of any partnership
interests or membership interests in Tenant, if Tenant is a partnership or a
limited liability company, (b) any purchase, redemption, retirement or other
acquisition of any shares of any class of capital stock of Tenant, if Tenant is
a corporation, or any purchase, redemption, retirement or other acquisition of
any partnership or membership interests in Tenant, if Tenant is a partnership or
a limited liability company, (c) any other distribution on or in respect of any
shares of any class of capital stock of Tenant, if Tenant is a corporation, or
any other distribution in respect of any partnership interests or membership
interests in Tenant, if Tenant is a partnership or a limited liability company,
or (d) any return of capital to shareholders of Tenant, if Tenant is a
corporation, or any return of capital to partners of Tenant, if Tenant is a
partnership or a limited liability company.
"Entity" shall mean any corporation, general or limited partnership,
limited liability company, 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.
"Environment" shall mean soil, surface waters, ground waters, land,
streams, sediments, surface or subsurface strata and ambient air.
"Environmental Notice" shall have the meaning given such term in Section
4.2.2.
"Event of Default" shall have the meaning given such term in Section 12.1.
"Extended Terms" shall have the meaning given such term in Section 2.4.
5
"Extension Index" shall mean the average Index published for each of the
twelve (12) months preceding the Common Tenth Anniversary Date and for each of
the twelve (12) months preceding the commencement of each Lease Year following
the Common Tenth Anniversary Date.
"FAS" shall mean all items included within "Property and Equipment" under
the Uniform System of Accounts, including, but not limited to, linen, china,
glassware, tableware, uniforms and similar items, whether used in connection
with public space or guest rooms.
"FF&E" shall mean and refer to (a) all machinery, equipment, furniture,
furnishings, movable 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; and (b) the Fixtures.
"Fiscal Quarter" shall mean, with respect to the first, second and third
quarter of any Fiscal Year, Accounting Periods one (1) through three (3), four
(4) through six (6) and seven (7) through nine (9) respectively of such Fiscal
Year and, with respect to the fourth quarter of any Fiscal Year, Accounting
Periods ten (10) through thirteen (12) of such Fiscal Year.
"Fiscal Year" shall mean Tenant's Fiscal Year which as of the Commencement
Date ends at midnight on December 31 in each calendar year. Any partial Fiscal
Year between the Commencement Date and the commencement of the first full Fiscal
Year (except with respect to the payment of Minimum Rent as referenced in
paragraph 3.1.1 of this Agreement), shall constitute a separate Fiscal Year. A
partial Fiscal Year between the end of the last full Fiscal Year and the
termination of this Agreement shall also constitute a separate Fiscal Year. If
Tenant's Fiscal Year is changed in the future, appropriate adjustments to this
Agreement's reporting and accounting procedures shall be made; provided,
however, that no such change or adjustment shall alter the Term of this
Agreement or in any way reduce the distribution of Percentage Rent or other
payments due hereunder. Each full Fiscal Year shall consist of twelve Accounting
Periods.
"Fixtures" shall have the meaning given such term in Section 2.1(d).
"Force Majeure Event" means any circumstance which is not in the reasonable
control of Landlord or Tenant, caused by any of the following: strikes,
lockouts; acts of God; civil commotion; fire or any other casualty; governmental
action (including revocation or refusal to grant any required license or permit
where such revocation or refusal is not within the control of the party affected
thereby); or other similar cause or circumstance which is not in the reasonable
control of either party hereto. Neither lack of financing nor general economic
and/or market factors is a Force Majeure Event.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"Government Agencies" shall mean any legislative body, 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.
6
"Guarantor" shall mean Wyndham International, Inc., a Delaware corporation.
"Guaranty" shall mean that certain guaranty of Tenant's obligations
hereunder from Guarantor in favor of Landlord of even date herewith a copy of
what is attached hereto as EXHIBIT "H".
"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
(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.
7
"Hotel" shall mean the 210 room Wyndham Billerica Hotel located and
operated on the Land.
"Hotel Mortgage" shall mean any encumbrance placed upon the Leased Property
as referenced in ARTICLE 20.
"Immediate Family" shall mean, with respect to any individual, such
individual's spouse, parents, brothers, sisters, children (natural or adopted),
stepchildren, grandchildren, grandparents, parents-in-law, brothers-in-law,
sisters-in-law, nephews and nieces.
"Impositions" shall mean collectively, all taxes (including, without
limitation, all taxes imposed under the laws of the State, as such laws may be
amended from time to time, and all ad valorem, sales, use, lodging, casino,
single business, gross receipts, transaction, privilege, rent or similar taxes
as the same relate to or are imposed upon Landlord, Tenant or the business
conducted upon the Leased Property), assessments (including, without limitation,
all assessments for public improvements or benefit, whether or not commenced or
completed prior to the date hereof), special taxing district taxes and
indebtedness, 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 or any party claiming by, through or under Tenant, (including all
interest and penalties thereon due to any failure in payment by Tenant), which
at any time prior to, during or in respect of the Term hereof may be assessed or
imposed on or in respect of or be a lien upon (a) Landlord's interest in the
Leased Property, (b) the Leased Property or any part thereof or any rent
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Leased Property or the leasing or use of the Leased Property
or any part thereof by Tenant; provided, however, that nothing contained herein
shall be construed to require Tenant to pay (i) any tax based on net income, net
worth or capital imposed on Landlord, (ii) any net revenue tax of Landlord,
(iii) any transfer fee or other tax imposed with respect to the sale, exchange
or other disposition by Landlord, of the Leased Property or the proceeds
thereof, (iv) any single business, gross receipts tax, transaction privilege,
rent, or similar tax, 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 under this Agreement, (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 or (vii) any Impositions imposed as a result of a breach of covenant or
representation by Landlord in any agreement entered into by Landlord governing
Landlord's conduct or operation or as a result of the gross negligence or
willful misconduct of Landlord (the matters contemplated in items (i)-(vii) are
collectively referred to as the "Excluded Impositions").
"Indebtedness" shall mean all obligations, contingent or otherwise, which
in accordance with GAAP should be reflected on the obligor's balance sheet as
liabilities.
8
"Index" shall mean the Producer Price Index For Full Service Hotels and
Motels published by the Bureau of Labor Statistics of the United States
Department of Labor (June 1993=100). In the event such Producer Price Index
shall hereafter be converted to a different standard reference base or is
otherwise revised, any determinations to be made pursuant to the provisions of
this Agreement with reference to the Index shall be made with the use of such
different standard reference base, conversion factor, formula or table for
converting the Producer Price Index as may be published by the Bureau of Labor
Statistics, or, if said Bureau shall not publish the same, then with the use of
such different standard reference base, conversion factor, formula or table as
may be published by ▇▇▇▇▇▇▇▇-▇▇▇▇, Inc. or, failing such publication, by any
other nationally recognized publisher of similar statistical information. In the
event such Producer Price Index shall cease to be published, then, for purposes
of any determination to be made pursuant to the provisions of this Agreement
with reference to the Index, there shall be substituted for the Producer Price
Index such other index as Landlord and Tenant shall agree upon, and, if they are
unable to agree within 90 days after the Producer Price Index ceases to be
published, such matters shall be submitted to arbitration in accordance with the
provisions of ARTICLE 19.
"Initial Term" shall have the meaning given such term in Section 2.3.
"Institutional Lender" shall mean an insurance company, bank, trust
company, savings and loan association, pension and profit-sharing trust,
teacher's annuity fund, university, real estate investment trust, mortgage
company, credit company, investment banking firm, or any affiliate of any such
designated institution directly or indirectly controlling, controlled by or
under common control with such designated institution, which designated
institution and/or its affiliate is regularly engaged in the business of making,
purchasing, servicing, or acting as trustee for the holders of interest in,
loans.
"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.
"Inventories" shall mean "Inventories" as defined in the Uniform System of
Accounts, including, but not limited to, provisions in storerooms,
refrigerators, pantries and kitchens; beverages in wine cellars and bars; other
merchandise intended for sale; fuel; mechanical supplies; stationery; and other
expenses, supplies and similar items.
"Land" shall have the meaning given such term in Section 2.1(a).
"Landlord" shall have the meaning given such term in the preambles to this
Agreement and shall include its successors and assigns.
"Lease Year" shall mean any Fiscal Year during the Term and any partial
Fiscal Year at the beginning or end of the Term.
"Leased Improvements" shall have the meaning given such term in Section
2.1(b).
9
"Leased Intangible Property" shall mean all transferable or assignable (a)
governmental permits, including licenses and authorizations, required for the
construction, ownership and operation of the Leased Improvements, including
without limitation, certificates of occupancy, building permits, signage
permits, liquor licenses, site use approvals, zoning certificates, environmental
and land use permits and any and all necessary approvals from state of local
authorities and other approvals granted by any public body or by any private
party pursuant to a recorded instrument relating to such Leased Improvements or
the Land; and (b) certificates, licenses, warranties and guarantees and
contracts other than such permits, operating permits, certificates, licenses and
approvals which are to held by, or transferred to, the Tenant in order to permit
the Tenant to operate such Leased Improvements properly and in accordance with
the terms of this Lease.
"Leased Property" shall have the meaning given such term in Section 2.1.
"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, (b) all covenants,
agreements, declarations, restrictions and encumbrances contained in any
instruments at any time in force affecting the Leased Property or to which
Tenant has consented or required to be granted pursuant to Applicable Laws,
including those which may (i) require material repairs, modifications or
alterations in or to the Leased Property or (ii) in any way materially and
adversely affect the use and enjoyment thereof, but excluding any requirements
arising as a result of Landlord's status as a real estate investment trust, and
(c) Applicable Laws.
"Lien" shall mean any mortgage, security interest, deed of trust, 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 the obligor's general creditors.
"Major Capital Expenditures" shall have the meaning given such term in
Section 5.1.3(a).
"Management Agreement" shall mean that certain Management Agreement dated
of even date with this Agreement between Tenant and Manager, and any subsequent
Management Agreement entered into by Tenant and approved by Landlord in advance,
which Management Agreement shall be expressly junior and subordinate to this
Agreement and to Landlord's right, title, and interest hereunder.
"Manager" shall mean Wyndham Management corporation, a Delaware
corporation, a majority owned subsidiary of Wyndham, and any subsequent manager
approved by Landlord hereunder.
"Minimum Rent" shall mean annual rent as set forth in Section 3.1.1,
subject to prorations and adjustments as set forth in Section 3.1.1.
10
"Minimum Rent Reserve" shall mean the reserve established pursuant to
Section 3.8 hereof.
"Minimum Rent Coverage" shall mean the quotient, expressed as a ratio, of
(i) the Cash Available for Lease Payments during the Calculation Period divided
by the (ii) Minimum Rent paid under this Lease during such Calculation Period.
"Minor Alteration" shall have the meaning given such term in Section 6.2.
"Mortgagee" shall mean the holder of any Hotel Mortgage.
"Notice" shall mean a notice given in accordance with Section 22.10.
"Other Leases" shall mean, collectively any and all lease agreements
between Landlord and Tenant with respect to the Acquisition Properties and the
Development Properties which shall, if at all, be entered into on or before
December 31, 2001.
"Overdue Rate" shall mean, on any date, a per annum rate of interest equal
to the lesser of (a) fifteen percent (15%) or (b) the maximum rate then
permitted under applicable law.
"Parent" shall mean, with respect to any Person, any Person which directly,
or indirectly through one or more Subsidiaries or Affiliated Persons, (a) owns
fifty-one percent (51%) or more of the voting or beneficial interest in, or (b)
otherwise has the right or power (whether by contract, through ownership of
securities or otherwise) to control, such Person.
"Percentage Rent" shall have the meaning given such term in Section 3.1.2.
"Permitted Encumbrances" shall mean all rights, restrictions, and easements
of record set forth on Schedule "B" to the applicable owner's title insurance
policy issued to Landlord on the date hereof, plus any other such encumbrances
as may have been consented to in writing by Landlord from time to time.
"Permitted Use" shall mean any use of the Leased Property permitted
pursuant to Section 4.1.1.
"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.
"Portfolio Assignee" shall mean a Person other than an Affiliated Person
that is approved or deemed approved by Landlord as an assignee pursuant to a
Portfolio Assignment under Section 16.7.
"Portfolio Assignment" shall mean the assignment by Tenant and express
written assumption by Portfolio Assignee of all of Tenant's rights, title and
interests in this Agreement and the Other Leases pursuant to Section 16.7.
"Property Expenses" shall mean those expenses more particularly described
on EXHIBIT "F" attached hereto.
11
"Proscribed Area" shall have the meaning given such term in Section 4.3.
"Prohibited Mortgage" shall have the meaning given such term in Section
14.3.
"Purchase Agreement" shall mean the Purchase and Sale Agreement, dated as
of May __, 2000, by and between WII Denver Tech, LLC and PAH Billerica Realty
Company, LLC, as seller, CNL Hospitality Corp., as buyer, and Wyndham
International, Inc., as Wyndham, as the same may be amended from time to time.
"Rent" shall mean, collectively, the Minimum Rent, Percentage Rent and
Additional Charges.
"Reserve" shall have the meaning given such term in Section 5.1.2(a).
"Reserve Estimate" shall have the meaning given such term in Section
5.1.2(c).
"Reserve Expenditures" shall have the meaning given such term in Section
5.1.2(a).
"SEC" shall mean the Securities and Exchange Commission.
"Security Deposit" shall have the meaning given such term in Section 3.9.
"Shortfall Calculation Period" shall, mean each successive period of 12
consecutive Accounting Periods commencing with the first full Accounting Period
following the Commencement Date of this Lease.
"Single Purpose Entity" shall have the meaning given such term in EXHIBIT
"E" attached hereto.
"State" shall mean the State in which the Hotel is located.
"Subsidiary" shall mean, with respect to any Person, any Entity in which
such Person directly, or indirectly through one or more Subsidiaries or
Affiliated Persons, (a) owns fifty-one percent (51%) or more of the voting or
beneficial interest or (b) which such Person otherwise has the right or power to
control (whether by contract, through ownership of securities or otherwise).
"Successor Landlord" shall have the meaning given such term in Section
20.1.
"Tax Account" shall have the meaning given such term in Section 8.2.
"Tax Escrow Amount" shall have the meaning given such term in Section 8.2.
"Tenant" shall be the entity identified in the preamble to this Agreement,
a wholly owned, single purpose entity of Wyndham, and shall include its
successors and assigns expressly permitted hereunder.
12
"Tenant's Intangible Personal Property" shall mean Tenant's proprietary
intellectual property, software, manuals, procedures, processes and other
proprietary information used in connection with the Hotel and any rights to the
name "Patriot American Hospitality," "Patriot American," "Patriot" or any
derivative thereof; any rights to the name "Wyndham International," "Wyndham" or
any derivative thereof; or any rights to the names of any Parent, Subsidiaries
or Affiliated Persons of Patriot American Hospitality, Inc., Patriot American
Hospitality Partnership, L.P., Wyndham International, Inc., or Wyndham
International Operating Partnership, L.P., or any derivatives thereof; in each
case, including all rights, trademarks, service marks, trademark or service
marks registrations, trademark applications, copyrights, copyright registrations
and copyright applications.
"Tenant's Personal Property" shall mean all motor vehicles, Inventories,
FAS, and any other tangible personal property of Tenant, if any, acquired by
Tenant (but not leased) at its election and with its own funds on and after the
date hereof and located at the Leased Property or used in Tenant's business at
the Leased Property, working capital, bank account balances, software and other
miscellaneous supplies and consumables utilized in connection with the operation
of the Leased Property, and all modifications, replacements, alterations and
additions to such personal property installed at the expense of Tenant,
including, without limitation, Tenant's Intangible Personal Property.
"Term" shall mean, collectively, the Initial Term and, to the extent not
terminated pursuant to the provisions of Section 2.4, the Extended Terms, unless
sooner terminated pursuant to the provisions of this Agreement.
"Threshold" shall, for each Fiscal Quarter for the Leased Property, mean
(a) for the period commencing with the Commencement Date and ending on the
Common Tenth Anniversary Date, the sum of $3,420,750.00 representing 1/4 of the
proforma Total Hotel Sales in the first Lease Year of the Term of this Agreement
and the Other Lease for the other Acquisition Property (which sum shall be
appropriately increased as additional Other Leases are executed by Landlord and
Tenant) (the "Initial Threshold"); and (b) provided Landlord elects to increase
the Initial Threshold as provided hereafter, for the first Lease Year of the
Term following the Common Tenth Anniversary Date, the Initial Threshold, as
increased by that percentage equal to the positive change in the Extension Index
preceding such Lease Year, over the Beginning Index, and for each Lease Year
thereafter, the Threshold for the Lease Year prior to such Lease Year as
increased by that percentage equal to the positive change in the Extension Index
preceding such Lease Year over the Extension Index preceding the Lease Year
prior to such Lease Year. The Initial Threshold shall automatically increase as
provided above if the Landlord notifies the Tenant prior to the Common Tenth
Anniversary Date that Landlord has elected to increase the Minimum Rent as
referenced in subsection 3.1.1(d). If Landlord does not elect to increase
Minimum Rent as referenced in subsection 3.1.1(d), Landlord shall be deemed to
have elected not to increase the Initial Threshold as referenced herein and
shall be deemed to have elected to use the Initial Threshold as the Threshold
for the Term. Upon determining the adjusted Threshold for each applicable Lease
Year following the Common Tenth Anniversary Date, Landlord shall notify Tenant
of the amount of the Threshold applicable for each such Lease Year and the
amount for each Fiscal Quarter of such Lease Year. Provided, however, (x) in
determining the increase in the Threshold as contemplated in this paragraph, the
increase in the Index over each year between the Commencement Date and the
Common Tenth Anniversary Date shall be aggregated, provided that the Threshold
shall not be increased by more than three percent (3%) for any Lease Year
between the Commencement Date and the Common Tenth Anniversary Date,
notwithstanding any actual increase in the Index for such Lease Year in excess
of three percent (3%), and (y) the Threshold for each Lease Year following the
first Lease Year after the Common Tenth Anniversary Date shall not increase by
more than three percent (3%) over the Threshold for the prior Lease Year.
13
"Total Hotel Sales" shall mean, for the applicable period of time, all
gross revenues and receipts of every kind derived by or for the benefit of
Tenant or Manager from operating or causing the operation of the Leased Property
and all parts thereof, including, but not limited to: income from both cash and
credit transactions (after reasonable deductions for commissions paid to credit
card companies for credit transactions, bad debts and discounts for prompt or
cash payments and refunds), rental of rooms, stores, offices, meeting, exhibit
or sales space of every kind; license, lease and concession fees and rentals,
off premises catering, if any, and parking rental income from vending machines
and video machines, health club membership fees; food and beverage sales;
wholesale and retail sales of merchandise (other than proceeds from the sale of
furnishings, fixtures and equipment no longer necessary to the operation of the
Hotel, which, except with respect to Tenant's Personal Property, shall be
deposited in the Reserve), and service charges, to the extent not distributed to
employees at the Hotel as gratuities; provided, however, that Total Hotel Sales
shall not include the following: gratuities to Hotel employees; federal, state
or municipal excise, sales, occupancy, use or similar taxes collected directly
from patrons or guests or included as part of the sales price of any goods or
services; Awards or insurance proceeds; any proceeds from any sale of the Leased
Property or from the refinancing of any debt encumbering the Leased Property;
proceeds from the disposition of furnishings, fixture and equipment no longer
necessary for the operation of the Hotel; interest which accrues on working
capital of Tenant and amounts deposited in the Reserve; and gross receipts of
licensees, lessees and concessionaires if other than Tenant or an Affiliated
Person of Tenant.
"Total Rooms Revenue" shall mean, for the applicable period of time, all
gross revenues and receipts of every kind derived by Tenant or Manager from, or
attributable to or payable for, use or rental of guest rooms at the Hotel,
including, without limitation income from both cash and credit transactions
(after reasonable deductions for bad debts and discounts for prompt or cash
payments and refunds, rebates and credits), but excluding any sales or other
applicable taxes collected by Manager with regard to the rental of guest rooms
for transmittal to the appropriate taxing authority. Total Rooms Revenue shall
also include the proceeds from any business interruption insurance applicable to
loss of revenues due to the non-availability of guest rooms and for guaranteed
no-show revenue which is collected. Total Rooms Revenue shall be accounted for
in accordance with the Uniform System of Accounts.
"Uniform System of Accounts" shall mean A Uniform System of Accounts for
the Lodging Industry, Ninth Revised Edition, 1996, as published by the Hotel
Association of New York City, as the same may be further revised from time to
time.
"Unsuitable for Its Permitted Use" shall mean a state or condition of the
Leased Property such that following any damage, destruction or condemnation
involving the Leased Property, (a) the Leased Property cannot be operated as
mutually determined by Landlord and Tenant on a commercially practicable basis
for its Permitted Use, and (b) it cannot reasonably be expected to be restored
to substantially the same condition as existed before such damage, destruction
or condemnation and as is otherwise required by ARTICLE 10 and ARTICLE 11 within
eighteen(18) months following such damage or destruction. If Landlord and Tenant
cannot agree on whether the Leased Property can be operated on a commercially
practical basis for its Permitted Use, or whether the Leased Property can
reasonably be expected to be restored as provided in (b) of the preceding
sentence, such matter shall be resolved by arbitration pursuant to ARTICLE 19
hereof.
▇▇
"▇▇▇▇ ▇▇▇" shall mean Worker Adjustment Retraining and Notification Act.
"Work" shall have the meaning given such term in Section 10.4.
"Wyndham" shall mean Wyndham International, Inc., a Delaware Corporation.
"Wyndham Standards" shall mean standards in effect from time to time for
maintenance, operation and improvement of full service hotels comparable to the
Hotel which utilize the Wyndham name and which offer comparable quality, service
and amenities as the Hotel; provided such standards are applicable to at least
ten (10) comparable hotels to which such standards are applicable utilizing the
Wyndham name (the name and location of at least ten (10) comparable hotels shall
be provided by Wyndham to Landlord from time to time upon request of Landlord,
which request will not be made more often than yearly) and are reasonably
consistent with then current prudent operating standards applicable to the
operation, repair, maintenance, and condition of a full service hotel (including
a hotel of another brand) comparable in class, quality and standing as the
Hotel. Wyndham Standards shall not include standards which constitute an upgrade
of the Hotel or its quality, services and amenities to a different class of
hotel (such as, for example, an upgrade from current Wyndham hotel standards to
those of a Ritz Carlton or Four Seasons). The foregoing examples are
illustrations only of the types of changes the magnitude of which would
constitute an upgrade and are not necessarily intended to imply that any such
example defines the Hotel.
ARTICLE 2
LEASED PROPERTY AND TERM
------------------------
2.1 Leased Property. Upon and subject to the terms and conditions
hereinafter set forth, Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord all of Landlord's right, title and interest in and to all of the
following (collectively, the "Leased Property"):
(a) all those certain tracts, pieces and parcels of land, as more
particularly described in EXHIBIT "B", attached hereto and made a part
hereof (collectively, the "Land");
(b) the Hotel, 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 or hereafter situated upon the Land
(collectively, the "Leased Improvements");
15
(c) all easements, rights and appurtenances relating to the Land and
the Leased Improvements;
(d) all equipment, machinery, fixtures, and other items of personal
property, now or hereafter permanently affixed to or incorporated into
the Leased Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and
apparatus, sprinkler systems and fire and theft protection equipment,
all of which, to the maximum extent permitted by law, are hereby
deemed by the parties hereto to constitute real estate, together with
all replacements, modifications, alterations and additions thereto,
but specifically excluding all items included within the category of
Tenant's Personal Property (collectively, the "Fixtures");
(e) all machinery, equipment, furniture, furnishings, moveable walls
or partitions, computers or trade fixtures and other items of personal
property located on or in the Leased Improvements, and all
modifications, replacements, alterations and additions to such
property, except items, if any, included within the category of
Fixtures, and specifically excluding all items included within the
category of Tenant's Personal Property;
(f) all of the Leased Intangible Property; and
(g) any and all subleases of space (including any security deposits
held by Tenant pursuant thereto) in the Leased Improvements to
subtenants thereof.
2.2 Condition of Leased Property. Tenant acknowledges and agrees that the
Leased Property is and shall be leased by Landlord to Tenant and from Landlord
by Tenant in its present "as is" condition, subject to all faults and the
existing state of title and all applicable legal or governmental requirements,
and Landlord makes absolutely no representations or warranties whatsoever with
respect to the Leased Property or the condition thereof. Tenant acknowledges
that Landlord has not investigated and does not warrant or represent to Tenant
that the Leased Property is fit for the purposes intended by Tenant or for any
other purpose or purposes whatsoever, and Tenant acknowledges that the Leased
Property is to be leased to Tenant in its existing condition, i.e., "as-is", and
"where-is", without any representation or warranty as to habitability or fitness
for any particular purpose, on and as of the Commencement Date. Tenant further
acknowledges that all material permits, licenses and approvals required by any
governmental or quasi-governmental, body, department, commission, board, bureau,
instrumentality or officer, or otherwise appropriate with respect to the
construction, operation, leasing, maintenance or use of the Leased Property or
any part thereof, have been issued, are past all appeals periods and are valid
and in full force and effect and that no provision, condition or limitation of
any of the same has been breached or violated. Tenant further acknowledges that
during the Term of this Agreement, Tenant shall, except as otherwise expressly
provided in Section 5.1, be solely responsible for any and all actions, repairs,
permits, approvals and costs required for the rehabilitation, renovation, use,
occupancy and operation of the Leased Property in accordance with applicable
governmental requirements, foreseen or unforeseen, including, without
limitation, all governmental charges and fees, if any, which may be due or
payable to applicable authorities. In addition, and notwithstanding anything in
this Agreement to the contrary, Tenant hereby expressly acknowledges and agrees
to the Post Closing Due Diligence Undertaking set forth on EXHIBIT "L" attached
hereto. Tenant agrees that, by leasing the Leased Property, Tenant warrants
and represents that Tenant has examined and approved all things concerning the
Leased Property which Tenant deems material to Tenant's leasing, operation
and use of the Leased Property. Tenant further acknowledges and agrees that (a)
neither Landlord nor any agent of Landlord has made any representation or
warranty, express or implied, concerning the Leased Property or which have
induced Tenant to execute this Agreement and (b) any other representations and
warranties are expressly disclaimed by Landlord. The provisions of this Section
2.2 shall not limit or impair the obligations of Landlord under ARTICLE 5
hereof.
16
2.3 Initial Term. The initial term of this Agreement (the "Initial Term")
shall commence on the Commencement Date and shall terminate and expire at 11:59
p.m. on the day preceding the fifteenth anniversary of the Commencement Date,
i.e. May ___, 2015.
2.4 Extended Term. Provided that no Event of Default shall exist hereunder,
the Term of this Agreement shall be automatically extended for a first renewal
term of five (5) years (the "First Extended Term") unless Tenant shall give
Landlord Notice, in Tenant's sole and absolute discretion, not later than
eighteen (18) months prior to the scheduled expiration of the Initial Term, that
Tenant elects not to so extend the Term of this Agreement. Further, provided
that no Event of Default shall exist, the Term of this Agreement shall be
automatically further extended for a second renewal term of five (5) years (the
"Second Extended Term") unless Tenant shall give Landlord Notice, in the
Tenant's sole and absolute discretion, not later than eighteen (18) months prior
to the scheduled expiration of the First Extended Term, that Tenant elects not
to so further extent the Term of this Agreement. Further, provided that no Event
of Default shall exist, the Term of this Agreement shall be automatically
further extended for a third renewal term of five (5) years (the "Third Extended
Term") unless Tenant shall give Landlord Notice, in the Tenant's sole and
absolute discretion, not later than eighteen (18) months prior to the scheduled
expiration of the Second Extended Term, that Tenant elects not to so further
extend the Term of this Agreement. Time shall be of the essence with respect to
the giving of the Notices contemplated in this Section 2.4. (The First Extended
Term, the Second Extended Term, and the Third Extended Term are collectively
referred to as the "Extended Terms").
Each Extended Term shall commence on the day succeeding the expiration of
the Initial 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. In addition, notwithstanding anything in
this Agreement to the contrary, the Initial Term hereof and each Extended Term
hereof may only be extended if the initial term and each applicable extended
term of the Other Leases is also extended, it being the express understanding
and agreement of the Landlord and Tenant that the Term of this Agreement and the
term of each of the Other Leases shall run concurrently and that if the term of
any of the Other Leases, or the Term of this Agreement is not extended then
neither this Agreement nor the Other Leases shall be extended for any applicable
Extended Term. 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.
17
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 Percentage 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.
3.1.1 Minimum Rent. Subject to proration as set forth below, and
subject to increase as set forth hereinafter in this Section 3.1.1 and in
Section 5.1.4 and Section 10.2 hereof, Tenant shall pay as annual base rent for
the Leased Property ("Minimum Rent") as follows: (a) for the first full twelve
Accounting Periods during the Term the total sum of TWO HUNDRED NINE THOUSAND
ONE HUNDRED and NO/100 DOLLARS ($209,100.00) (First Year Minimum Rent); (b) for
Accounting Periods thirteen through twenty-four the total sum of TWO HUNDRED
FOURTEEN THOUSAND THREE HUNDRED TWENTY SEVEN AND 50/100 DOLLARS ($214,327.50)
(Second Year Minimum Rent ); (c) for each twelve Accounting Periods thereafter
through the Common Tenth Anniversary Date, the total sum of TWO HUNDRED NINETEEN
THOUSAND FIVE HUNDRED FIFTY FIVE AND NO/100 DOLLARS ($219,555.00) (Third Period
Minimum Rent ). For each Accounting Period commencing with the Common Tenth
Anniversary Date and continuing throughout the remainder of the Term, Minimum
Rent shall, at Landlord's option, be increased based upon increases in the Index
as hereafter provided or if Landlord does not elect to increase Minimum Rent
based upon changes in the Index as hereafter provided, Minimum Rent for the
remainder of the Term commencing with the Common Tenth Anniversary Date shall be
the rental equal to the Third Period Minimum Rent. Minimum Rent will be
allocated between the real property and tangible personal property and valued in
the manner contemplated in Section 15 with the initial allocation reflected on
EXHIBIT "J" attached hereto.
If Landlord elects to increase Minimum Rent based upon changes in the
Index, Landlord shall notify Tenant at least sixty (60) days prior to the Common
Tenth Anniversary Date of such election and if Landlord fails to so notify
Tenant of such election at least sixty (60) days prior to the Common Tenth
Anniversary Date Landlord shall have waived its right to increase Minimum Rent
as herein provided. In the event Landlord elects to increase Minimum Rent based
upon changes in the Index and so notifies Tenant, Minimum Rent for the first
Lease Year commencing with the Common Tenth Anniversary Date shall be increased
based upon increases in the Extension Index preceding the Common Tenth
Anniversary Date over the Beginning Index. In determining the increase in
Minimum Rent as contemplated in the preceding sentence, the increase in the
Index over each year between the Commencement Date and the Common Tenth
Anniversary Date (computed as herein contemplated) shall be aggregated, provided
Minimum Rent shall not be increased by more than three percent (3%) for any
Lease Year between the Commencement Date and the Common Tenth Anniversary Date,
notwithstanding any actual increase in the Index for such Lease Year in excess
of three percent (3%).
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Accordingly, Minimum Rent for the first Lease Year commencing with the
Common Tenth Anniversary Date shall be equal to the Third Period Minimum Rent
for the Lease Year preceding the Common Tenth Anniversary Date multiplied by a
fraction the numerator of which is the Extension Index preceding the Common
Tenth Anniversary Date and the denominator of which is the Beginning Index. For
each Lease Year after the first Lease Year commencing with the Common Tenth
Anniversary Date, Minimum Rent shall increase based upon increases in the
Extension Index preceding each Lease Year over the Extension Index preceding the
previous Lease Year. Thus, for example, the Minimum Rent for the third Lease
Year following the Common Tenth Anniversary Date shall be determined based upon
increases in the Extension Index preceding such third Lease Year over the
Extension Index preceding the second Lease Year following the Common Tenth
Anniversary Date. Accordingly, for each Lease Year following the first Lease
Year after the Common Tenth Anniversary Date, Minimum Rent in effect for the
Lease Year preceding each such Lease Year shall be multiplied by a fraction the
numerator of which is the Extension Index preceding such Lease Year and the
denominator of which is the Extension Index preceding the Lease Year prior to
such Lease Year.
If Landlord notifies Tenant prior to the Common Tenth Anniversary Date of
its election to so increase Minimum Rent as provided above, Percentage Rent
shall be adjusted and determined based upon increases in the Threshold as
contemplated in this Agreement. Upon determining the adjusted Minimum Rental for
each such Lease Year, Landlord shall notify Tenant of the amount of adjusted
Minimum Rent due for such Lease Year. If such notice is not provided prior to
the commencement of such Lease Year, Tenant shall pay any increased amount of
Minimum Rent due for the first month(s) of such Lease Year with the first
Minimum Rent payment due after receipt of Landlord's notice. Provided, however,
Minimum Rent shall not be increased by more than three percent (3%) in any Lease
Year following the first Lease Year after the Common Tenth Anniversary Date.
Tenant shall pay Minimum Rent to Landlord in equal installments in advance,
on the first (1st) Business Day of each Accounting Period. Accordingly, (a) for
the first full twelve Accounting Periods, First Year Minimum Rent, together with
applicable sales and use and other taxes thereon (but not any Excluded
Impositions) shall be due and payable to Landlord by Tenant on the First
Business Day of each such Accounting Period; (b) for each of Accounting Periods
thirteen through twenty four, Second Year Minimum Rent, together with all
applicable sales, use and other taxes thereon (but not any Excluded Impositions)
shall be due and payable by Tenant to Landlord on the first Business Day of each
such Accounting Period; (c) for each Accounting Period thereafter through the
Common Tenth Anniversary Date, Third Period Minimum Rent, together with all
applicable sales, use and other taxes thereon (but not any Excluded Impositions)
shall be due and payable by Tenant to Landlord on the first Business Day of each
such Accounting Period; and (d) for each Accounting Period thereafter Minimum
Rent in the amount determined by Landlord as aforesaid, together with all
applicable sales, use and other taxes thereon (but not any Excluded Impositions)
shall be due and payable by Tenant to Landlord on the first day of each
Accounting Period. Provided, however, that the first payment of Minimum Rent
shall be payable on the Commencement Date. Further, if applicable, the first
payment of Minimum Rent and the last payment of Minimum Rent shall be prorated
on a per diem basis provided, however, that for purposes of Minimum Rent, any
prorated payment for any partial Accounting Period prior to the first full
Accounting Period shall be prorated based upon the Minimum Rent payable for the
first full twelve Accounting Periods and any prorated Rent at the end of the
Term shall be prorated based upon Minimum Rent payable for each Accounting
Period after the thirty sixth Accounting Period.
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3.1.2 Percentage Rent. In addition to, and not in lieu of, Minimum Rent,
Tenant shall pay to Landlord at the times and in the manner provided in Section
3.1.3 a sum ("Percentage Rent") equal to ten percent (10%) of the aggregate
Total Hotel Sales for the Acquisition Properties and the Development Properties
in excess of the aggregate Thresholds for all such properties. The Percentage
Rent payable hereunder shall be prorated among the Leased Property and the
leased properties contemplated by the Other Leases based on each such property's
Total Hotel Sales in excess of the Threshold for such property in relation to
the aggregate Total Hotel Sales in excess of the aggregate Thresholds for the
Acquisition Properties and Development Properties; provided, however, for the
first Lease Year of the Term hereof or the term of any of the Other Leases, no
Percentage Rent shall be payable.
3.1.3 Payment of Percentage Rent. Installments of Percentage Rent for
each Fiscal Year or portion thereof shall be calculated and paid each Fiscal
Quarter in arrears. Tenant shall within thirty (30) days after the end of each
Fiscal Quarter of the Term hereof submit to Landlord (a) an unaudited (but
certified by a duly authorized officer or managing member of Tenant) statement
showing a detailed breakdown of the calculation of Percentage Rent for that
Fiscal Quarter and Fiscal Year-to-date on a cumulative basis, and (b) the
applicable Percentage Rent payment due and owing (if any) for the Leased
Property for that Fiscal Quarter. Installments of Percentage Rent due with
respect to the Leased Property for each Fiscal Quarter shall be equal to the
Percentage Rent for the Leased Property for all Fiscal Quarters elapsed during
the applicable Fiscal Year less amount previously paid with respect thereto by
Tenant. If the Percentage Rent for such elapsed Fiscal Quarters as shown on the
last quarterly statement is less than the amount previously paid with respect
thereto by Tenant, the amount of such difference shall be offset against Rent
next coming due under this Lease. Such payment of Percentage Rent shall be paid
by Tenant to Landlord together with and in the same manner as the installment of
Minimum Rent due on such date. Percentage Rent for any partial Fiscal Quarter in
the final Fiscal Year shall be prorated proportionately. Tenant's obligation to
pay Percentage Rent for the Fiscal Quarter which includes the date of
termination of this Agreement shall survive the termination hereof.
Tenant shall, no later than 90 days following the end of each Fiscal Year
during the Term hereof furnish to Landlord for such Fiscal Year a complete
statement (the "Annual Operations Statement") certified by an independent
certified public accountant who is actively engaged in the practice of his
profession and who is experienced in hotel accounting and approved by Landlord,
which approval shall not be unreasonably withheld or delayed, (which Statement
shall also be certified either by an officer, partner or managing member in
Tenant), setting forth, with respect to such Fiscal Year in reasonable detail
the Total Hotel Sales in respect of such Fiscal Year together with copies of
statements from the Manager with respect to the Leased Property as to its
operations therein including without limitation, all expenses incurred and
income derived by it. If the Annual Operations Statement for any Fiscal Year
indicates that the aggregate of the installment payments theretofore made with
respect to such Fiscal Year pursuant to this Section 3.1.3 exceeds the
Percentage Rent due for such Fiscal Year, Landlord shall credit such overpayment
together with interest thereon determined as set forth below in this paragraph
against the next installment or installments of Minimum Rent falling due (or
will pay the amount of such overpayment, together with such interest, to Tenant
if this Agreement shall have terminated other than by reason of Tenant's
default, or if Landlord so elects to do so). If, on the other hand, the Annual
Operations Statement indicates that the aggregate of the installment payments
theretofore made with respect to such Fiscal Year is less than the Percentage
Rent due for such Fiscal Year then Tenant shall pay the balance or excess, as
the case may be, together with interest thereon determined as set forth below in
this paragraph, to Landlord concurrently with the submission of the Annual
Operations Statement. Interest shall accrue on payments pursuant to this
paragraph at the Disbursement Rate from the date when first due and payable
until the date when the adjusted amount is fully credited or paid (as the case
may be), in the manner as set forth above.
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Notwithstanding the foregoing, Landlord at its own expense, except as
provided hereinbelow, shall have the right, exercisable by Notice to Tenant
given within 270 days after receipt of the applicable Annual Operations
Statement, by its accountants or representatives, to commence within such 270
day period an audit of the information set forth in such Annual Operations
Statement and, in connection with such audit, to examine all of Tenant's books
and records with respect thereto (including supporting data and sales and excise
tax returns); provided, however, if Landlord reasonably believes Tenant has
intentionally misrepresented Total Hotel Sales on any such Annual Operations
Statement, the said 270 day period shall commence to run on the date Landlord
obtains credible evidence that Tenant has intentionally misrepresented Total
Hotel Sales on any such Annual Operations Statement, which credible evidence
must be obtained, if at all, within three (3) calendar years following the date
such Annual Operation Statement has been furnished by Tenant. If Landlord does
not commence an audit within such 270 day period, such Annual Operations
Statement shall be deemed to be accepted by Landlord as correct. Landlord shall
use commercially reasonable efforts to complete any such audit as soon as
practicable. If such audit discloses a deficiency in the payment of Percentage
Rent, Tenant shall forthwith pay to Landlord the amount of the deficiency,
together with interest at the Disbursement Rate from the date such payment
should have been made to the date of payment therefore. If such deficiency is
more than three percent (3%) of the Total Hotel Sales reported by Tenant for
such Fiscal Year, and as a result Landlord did not receive at least ninety-five
percent (95%) of the Percentage Rent payable with respect to such fiscal year,
Tenant shall also pay the costs of such audit and examination. Any proprietary
information obtained by Landlord with respect to Tenant pursuant to the
provisions of this Section or any other provision of this Agreement shall be
treated as confidential, except that such information may be used, subject to
appropriate confidentiality safeguards, in any litigation between or involving
the parties and except further that Landlord may disclose such information to
its prospective lenders, provided that Landlord shall direct such lenders to
maintain such information as confidential. The obligations of Tenant and
Landlord contained in this Section shall survive the expiration or earlier
termination of this Agreement.
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3.1.4 Additional Charges. In addition to the Minimum Rent and
Percentage Rent payable hereunder, Tenant shall pay to the appropriate parties
and discharge as and when due and payable hereunder the following (collectively,
"Additional Charges"):
(a) Impositions. Tenant shall pay or cause to be paid all Impositions
required to be paid pursuant to ARTICLE 8.
(b) Utility Charges. Tenant shall be liable for and shall promptly pay
directly to the utility company all charges and fees (together with
any applicable taxes or assessments thereon) prior to delinquency for
water, gas, electricity, air conditioning, heat, septic, sewer, refuse
collection, telephone and any other utility charges, impact fees, or
similar items in connection with the use or occupancy of the Leased
Property. Landlord shall not be responsible or liable in any way
whatsoever for the quality, quantity, impairment, interruption,
stoppage, or other interference with any utility service, including,
without limitation, water, air conditioning, heat, gas, electric
current for light and power, telephone, or any other utility service
provided to or serving the Leased Property. No interruption,
termination or cessation of utility services shall relieve Tenant of
its duties and obligations pursuant to this Agreement, including,
without limitation, its obligation to pay all Rent as and when the
same shall be due hereunder.
(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 arising in connection with the
Leased Property except those obligations expressly assumed by Landlord
pursuant to the provisions of this Agreement or expressly stated not
to be an obligation of Tenant pursuant to this Agreement.
3.2 Landlord Advances. If Landlord shall make any expenditure for which
Tenant is responsible or liable under this Agreement, or if Tenant shall become
obligated to Landlord under this Agreement for any sum other than Minimum Rent
or Percentage Rent as hereinabove provided, Landlord shall provide no less than
five (5) days Notice thereof to Tenant and the amount thereof together with
interest thereon at the Overdue Rate from the date advanced by Landlord, if
advanced, shall be deemed to constitute Additional Charges and shall be due and
payable by Tenant to Landlord, together with all applicable sales or other taxes
thereon (but not any Excluded Impositions), if any, simultaneously with the next
succeeding monthly installment of Minimum Rent after such five (5) day period or
at such other time as may be expressly provided in this Agreement for the
payment of the same.
3.3 Sales Tax. In addition to the Rent and any other sums or amounts
required to be paid by Tenant to Landlord pursuant to the provisions of this
Agreement and subject to any qualifications and exclusions in the definition of
Impositions, Tenant shall also pay to Landlord, simultaneously with such payment
of such Rent or other sums or amounts, the amount of any applicable sales, use,
excise or similar or other tax on any such Rent or other sums or amounts so paid
by Tenant to Landlord, whether the same be levied, imposed or assessed by any
federal entity or by the State in which the Leased Property is located or any
other county or municipal governmental entity or agency in such State (but not
any Excluded Impositions). Any such sales, use, excise or similar or other taxes
shall be paid by Tenant to Landlord or the appropriate Governmental Agency at
the same time that each of the amounts with respect to which such taxes are
payable are paid by Tenant to Landlord. Landlord shall upon written request by
Tenant provide to Tenant on an annual basis such reasonable information as shall
be necessary to enable Tenant to pay such tax. If Tenant pays any such tax
directly to an appropriate Government Agency, Tenant shall, upon request,
promptly provide Landlord appropriate evidence of the same.
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3.4 Payment of Rent. Except as otherwise expressly provided herein, each of
the foregoing amounts of Rent and other sums shall be paid without demand and
without deduction, set-off, claim or counterclaim of any nature whatsoever which
Tenant may have or allege to have against Landlord, and all such payments shall,
upon receipt by Landlord, be and remain the sole and absolute property of
Landlord. All such Rent and other sums shall be paid in legal tender of the
United States at the address to which notices to Landlord are to be given or to
such other party or to such other address as Landlord may designate from time to
time by written notice to Tenant. If Landlord shall at any time accept any such
Rent or other sums after the same shall become due and payable, such acceptance
shall not excuse a delay upon subsequent occasions, or constitute or be
construed as a waiver of any of Landlord's rights here-under. Nothing contained
in this Section 3.4, Section 3.6 or in any other similar provisions of this
Lease shall be deemed to prohibit Tenant from bringing a separate action or
compulsory counterclaim against Landlord for Landlord's breach of this Lease.
3.5 Late Payment of Rent. If Tenant fails to make any payment of Rent on or
before the fifth day after the date such payment is due and payable, such past
due payment shall bear interest at the Overdue Rate. Such interest shall
constitute Additional Charges and shall be due and payable with the next
installment of Rent due hereunder.
3.6 Net Lease. Landlord and Tenant acknowledge and agree that both parties
intend that this Agreement shall be and constitute what is generally referred to
in the real estate industry as a "triple net" or "absolute net" lease, such
that, except as otherwise expressly provided in this Agreement, Tenant shall be
obligated hereunder to pay all costs and expenses incurred with respect to, and
associated with, the Leased Property and all personal property thereon and
therein and the business operated thereon and therein, including, without
limitation, all taxes and assessments, utility charges, lease payments on leased
personal property, insurance costs, service agreement fees and costs,
maintenance costs and repair, replacement and restoration expenses (all as more
particularly herein provided) and all costs and expenses for, under and with
respect to the Management Agreement together with any and all other assessments,
charges, costs and expenses of any kind or nature whatsoever related to, or
associated with, the Leased Property and the business operated thereon and
therein, other than Landlord's financing costs and expenses and related debt
service and Excluded Impositions; provided, however, that Landlord shall
nonetheless be obligated to pay Landlord's personal income taxes with respect to
the Rents and other amounts received by Landlord under this Agreement. Except as
expressly herein provided, Landlord shall bear no cost or expense of any type or
nature with respect to, or associated with, the Leased Property. Except to the
extent otherwise expressly provided in this Agreement, it is agreed and intended
that Rent payable hereunder by Tenant shall be paid without notice, demand,
23
counterclaim, set-off, deduction or defense and without abatement, suspension,
deferment, diminution or reduction and that Tenant's obligation to pay Rent
throughout the Term and any applicable Extended Term is absolute and
unconditional and the obligations and liabilities of Tenant hereunder shall in
no way be released, discharged or otherwise affected for any reason, including
without limitation by: (a) any defect in the condition, merchantability, design,
quality or fitness for use of the Leased Property or any part thereof, or the
failure of the Leased Property to comply with Applicable Laws, including any
inability to occupy or use the Leased Property by reason of such non-compliance;
(b) any damage to, removal, abandonment, salvage, loss, condemnation, theft,
scrapping or destruction of or any requisition or taking of the Leased Property
or any part thereof, or any environmental condition on the Leased Property or
any property in the vicinity of the Leased Property; (c) any restriction,
prevention or curtailment of or interference with any use of the Leased Property
or any part thereof, including any lawful eviction; (d) any defect in title to
or rights to the Leased Property or any lien on such title or rights to the
Leased Property; (e) any change, waiver, extension, indulgence or other action
or omission or breach in respect of any obligation or liability of or by any
Person; (f) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceedings relating to Tenant or any
other Person (other than Landlord) or any action taken with respect to this
Agreement by any trustee or receiver of Tenant or any other Person (other than
Landlord) or by any court, in any such proceedings; (g) any right or claim that
Tenant has or might have against any Person, including, without limitation,
Landlord (other than a monetary default), or any vendor, manufacturer or
contractor of or for the Leased Property; (h) any failure on the part of
Landlord or any other Person to perform or comply with any of the terms of this
Agreement, or of any other agreement; (i) any invalidity, unenforceability,
rejection or disaffirmance of this Agreement by operation of law or otherwise
against or by Tenant or any provision hereof; (j) the impossibility of
performance by Tenant or Landlord, or both; (k) any action by any court,
administrative agency or Government Agencies; (l) any interference, interruption
or cessation in the use, possession or quiet enjoyment of the Leased Property or
otherwise; or (m) any other occurrence whatsoever whether similar or dissimilar
to the foregoing, whether foreseeable or unforeseeable, and whether or not
Tenant shall have notice or knowledge of any of the foregoing; provided,
however, that the foregoing shall not apply or be construed to restrict Tenant's
rights in the event of any act or omission by Landlord constituting gross
negligence or willful misconduct. Except as specifically set forth in this
Agreement, this Agreement shall be noncancellable by Tenant for any reason
whatsoever and except as expressly provided in this Agreement, Tenant, to the
extent now or hereafter permitted by Applicable Laws, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Agreement or to any diminution, abatement or reduction of Rent payable
hereunder. Except as specifically set forth in this Agreement, under no
circumstances or conditions shall Landlord be expected or required to make any
payment of any kind hereunder or have any obligations with respect to the use,
possession, control, maintenance, alteration, rebuilding, replacing, repair,
restoration or operation of all or any part of the Leased Property, so long as
the Leased Property or any part thereof is subject to this Agreement, and except
as specifically set forth in this Agreement, Tenant expressly waives the right
to perform any such action at the expense of Landlord pursuant to any law.
3.7 No Abatement of Rent. Except as otherwise specifically provided in this
Agreement, no abatement, diminution or reduction (a) of Rent, charges or other
compensation, or (b) of Tenant's other obligations hereunder shall be allowed to
Tenant or any person claiming under Tenant, under any circumstances or for any
reason whatsoever and to the maximum extent permitted by law, Tenant hereby
waives the application of any local or state statutes, land rules, regulations
or ordinance providing to the contrary.
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3.8 Minimum Rent Reserve. In addition to any other security for Tenant's
performance as may be contemplated by this Agreement, Tenant shall establish a
cash reserve for the Acquisition Properties in the aggregate amount of
$1,000,000.00, which may be used for reimbursement to Tenant of any Amount
Funded hereunder and under the Lease for the other Acquisition Property and
except as herein otherwise provided, for no other purpose. Such cash reserve
shall be placed in an interest bearing investment account selected by Tenant.
Such account shall be maintained in Landlord's name in a bank selected by
Landlord and approved by Tenant, which approval will not be withheld if the bank
selected is an FDIC Member and maintains at least Twenty Million and 00/100
Dollars ($20,000,000.00) in assets and shall not be under any regulatory orders
from any federal or state banking authorities. If during the Term such bank
shall not meet the foregoing criteria the reserve shall be moved to another bank
mutually agreed to by Landlord and Tenant. All interest earned on such cash
reserve shall be the property of Tenant and accrued interest shall be paid to
Tenant on a monthly basis. Such required cash reserve shall exist and be used to
reimburse Tenant for any Amount Funded by Tenant hereunder in Rent and except as
herein otherwise provided, for no other purpose Tenant shall have no obligation
to replenish such cash reserve.
In lieu of the million dollar cash reserve as aforesaid, Tenant may, at
Tenant's option deliver to Landlord a letter of credit in the amount of One
Million and NO/100 Dollars ($1,000,000.00) as security for Tenant's performance
hereunder. Such letter of credit shall be irrevocable and transferable, shall be
payable at "sight" issued by a bank selected by Tenant and approved by Landlord,
(which approval will not be withheld if the bank selected is an FDIC Member and
maintains at least Twenty Million and NO/100 Dollars ($20,000,000.00) in assets
and shall not be under any regulatory orders from any federal or state banking
authorities) and naming Landlord, as beneficiary and shall be substantially in
the form of EXHIBIT "K" attached hereto. Such letter of credit shall be for a
term of no less than one (1) year and shall state on its face that it
automatically renews by one (1) year periods, upon the respective expiration
date set forth therein and upon each anniversary of such date thereafter,
unless sixty (60) days prior to such expiration date or prior to any anniversary
of such date the bank issuing the letter of credit notifies Landlord in writing
by certified or registered mail or by Federal Express or other expedited
overnight courier service that it elects not to renew the letter of credit, or
Tenant notifies Landlord that it shall replace such letter of credit with a new
letter of credit meeting the requirements herein, in which event, so long as the
Acquisition Properties have not achieved the coverage ratio hereafter
specified, Tenant shall, within forty five (45) days thereafter (but in any
event no later than fifteen (15) days prior to the expiration date of such
letter of credit) deliver to Landlord a new letter of credit effective upon the
expiration date of the expiring letter of credit from a bank mutually agreed to
by Landlord and Tenant, and on the same terms of such expiring letter of credit
with a term of no less than one (1) year; provided, that the amount of the new
letter of credit shall be equal to One Million and NO/100 Dollars
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($1,000,00.00) less any Amount Funded by Tenant hereunder for Rent. If Landlord
shall receive notice from the bank issuing such letter of credit that it intends
not to renew the letter of credit and Tenant fails to deliver a replacement
letter of credit as aforesaid, then Landlord shall be entitled to immediately
draw upon the expiring letter of credit. In the event that the bank which issues
the letter of credit shall not meet the foregoing criteria, then Landlord shall
be entitled to draw on the letter of credit if after ten (10) days written
notice to Tenant that the bank does not meet the foregoing criteria, Tenant
fails either to replace such letter of credit with a cash deposit of equal
amount or provide a substitute letter of credit from a bank mutually agreed to
by Landlord and Tenant. The term of the letter of credit shall, in any event,
not expire until thirty (30) days following the date that the Acquisition
Properties achieve the coverage ratio hereafter specified or the Amount Funded
by Tenant exceeds the amount of the original letter of credit at which time the
letter of credit shall be returned to Tenant.
Following payment of Minimum Rent hereunder by Tenant as required herein,
Tenant shall on or before the fifteenth (15th) day of each Accounting Period
deliver or cause to be delivered to Landlord a statement reflecting the Amount
Funded, if any, by Tenant for the immediately preceding Accounting Period. Upon
approval of such statement, Landlord shall, if Tenant has delivered a cash
reserve, cause a sum of money equal to the Amount Funded by Tenant as reflected
on such statement, to be released from the cash reserve and delivered to Tenant.
If Tenant has delivered a letter of credit, there shall be no partial draws on
the letter of credit for any Amount Funded. Notwithstanding the foregoing, in
the event that Minimum Rent is not paid when due hereunder, Landlord may
withdraw from the cash reserve the Minimum Rent due and owing to Landlord.
Further, upon the occurrence of an Event of Default, Landlord may withdraw the
entire cash reserve. In the event that Minimum Rent is not paid when due
hereunder and Tenant has delivered to Landlord a letter of credit as aforesaid,
Landlord may make a partial draw on the letter of credit for the amount of such
unpaid Minimum Rent, and the terms of the letter of credit shall expressly
authorize and provide for such partial draw, provided the amount of any such
draw shall not exceed the face amount of the then existing letter of credit less
all Amounts Funded by Tenant prior to the date such Minimum Rent is due and
after the date the current letter of credit was delivered. Further, upon the
occurrence of an Event of Default, Landlord may draw on the letter of credit and
retain from the proceeds thereof, the face amount thereof less all Amounts
Funded by Tenant prior to the occurrence of the Event of Default and after the
date the current letter of credit was delivered (it being understood that all
proceeds of the letter of credit equal to the Amount Funded by Tenant after the
date the current letter of credit was delivered shall be promptly delivered to
Tenant). In addition, such reserve shall exist and be held by Landlord, to the
extent of funds therein, until such time as the aggregate Total Hotel Sales for
the Acquisition Properties during any rolling six (6) month period less
aggregate Property Expenses for such Acquisition Properties incurred and paid
during each such six (6) month period, divided by total Minimum Rent paid for
the Acquisition Properties during such six (6) month period results in a
quotient, expressed as a ratio, of 1.05 or greater. At such time, Landlord shall
cause the balance remaining in the cash reserve, if any, plus accrued and unpaid
interest thereon, if any, to be paid to Tenant. For purposes of the Minimum Rent
Reserve, Property Expenses for the Leased Property shall include the payment of
a management fee equal to three percent (3%) of Total Hotel Sales and the
funding of the Reserve.
3.9 Security Deposit. As security for the faithful performance and
compliance by Tenant of the terms, covenants and conditions hereof on Tenant's
part to be performed and complied with, the Tenant shall, in connection with
Tenant's execution of this Agreement, deposit with Landlord the sum of
$1,254,600.00 (The "Security Deposit"). Such Security Deposit shall not be
26
considered an advance payment of rental or a measure of Landlord's damages in
case of default by Tenant and in Landlord's sole discretion, may be held or
invested by Landlord and any interest accruing thereon shall be the sole
property of Landlord. Such Security Deposit may be commingled by Landlord and
held in any account of Landlord. Landlord shall have the right to use the
Security Deposit as it sees fit, including the right to apply any part or all of
the Security Deposit to cure any default of the Tenant hereunder and if Landlord
does so apply the Security Deposit against a default, Tenant shall, upon demand,
deliver to and deposit with Landlord a sum of money equal to the amount so
applied, so that Landlord shall have the full Security Deposit on hand at all
times during the Term of this Lease. Upon the expiration of the Term of this
Lease, provided no Event of Default exists, the Security Deposit or the portion
of such Security Deposit then in Landlord's possession after application of any
portion thereof to a default hereunder by Tenant, shall be returned to Tenant.
The Landlord shall have the right to apply any part of the Security Deposit to
cure any default of the Tenant without thereby waiving any of Landlord's rights
hereunder with respect to a default by Tenant.
In the event of a sale, assignment, lease or hypothecation of the Leased
Property subject to this Lease to a purchaser or assignee permitted herein, the
Landlord shall have the right to transfer the Security Deposit to the purchaser
or assignee and if such permitted purchaser or assignee expressly assumes
Landlord's obligations under this Agreement, the Landlord shall thereupon be
released by Tenant from all liability for the return of the Security Deposit and
the Tenant shall look solely to the purchaser or the assignee for the return of
the Security Deposit, and it is agreed that this provision shall apply to every
transfer or assignment made of the Security Deposit to every permitted purchaser
or assignee. The Security Deposit shall not be mortgaged, assigned, pledged or
encumbered by the Tenant, except Tenant's rights thereto may be assigned in
connection with an assignment of Tenant's interest expressly permitted in this
Agreement.
3.10 Additional Rentals on Conversion Costs Earn-Outs. In the event that
pursuant to the terms of paragraph 3e of the Purchase Agreement (which paragraph
3e survived the Closing of the Purchase Agreement), a Seller thereunder earns
and is entitled to Conversion Cost Earn-Out with respect to the Leased Property
(as contemplated and defined in the Purchase Agreement), at such time as such
Conversion Cost Earn-Out is, in fact paid to a Seller under the Purchase
Agreement, Minimum Rent due hereunder shall concurrently therewith be increased
by an amount necessary to provide a per annum yield on such Conversion Cost
Earn-Out so paid with respect to the Leased Property equal to the Disbursement
Rate in the same manner as if the Minimum Rent were to be increased based upon
funding by Landlord for Major Capital Expenditures pursuant to Section 5.1.3(c)
hereof.
ARTICLE 4
USE OF THE LEASED PROPERTY; CONFLICTING BUSINESS
------------------------------------------------
4.1 Permitted Use.
4.1.1 Permitted Use. Tenant covenants and agrees that it shall,
throughout the Term of this Agreement, continuously use and occupy (subject to
any condemnation or casualty) the Leased Property solely and exclusively as a
hotel for the accommodation of hotel guests, with appropriate amenities for the
27
same and for permitted subleases as contemplated in ARTICLE 16 hereof and for no
other purpose without interruption except for minimum necessary interruptions in
respect to portions of the Leased Property for periods provided herein for
repairs, renovations, replacements and rebuilding all of which shall be carried
out pursuant to, and in accordance with the applicable provisions of this
Agreement, (the foregoing being referred to as the "Permitted Use"). In
addition, except as provided in Section 16.8, without the prior written consent
of the Landlord, which will not be unreasonably withheld, no Affiliated Person
of Tenant may be a subtenant or concessionaire in the Leased Property and any
sublease or concession agreement with an Affiliated Person shall be on "arms
length", commercially reasonable terms. 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 not take, or
subject to Landlord complying with its obligations under ARTICLE 5, 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.
4.1.2 Necessary Approvals. Tenant shall proceed with all due diligence
and exercise commercially reasonable efforts to obtain and maintain all
approvals necessary to use and operate, for its Permitted Use, the Leased
Property and the Hotel located thereon under applicable law. Landlord shall at
no cost or liability to Landlord reasonably cooperate with Tenant in this
regard, limited to executing all applications and consents required to be signed
by Landlord in order for Tenant to obtain and maintain such approvals.
4.1.3 Lawful Use, Etc. Tenant shall not 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 commit or, subject to Landlord complying with
its obligations under ARTICLE 5, suffer to be committed any waste on the Leased
Property, or in the Hotel, nor shall Tenant cause or permit any
unlawful nuisance thereon or therein. Tenant shall not 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) might 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.
4.1.4 Compliance with Legal/Insurance Requirements. Subject to ARTICLE
5 and Section 8.3 hereof, Tenant shall at all times at its sole cost and
expense, keep and maintain the Leased Property in compliance with all Legal
Requirements. Tenant agrees to give Landlord Notice of any notices, orders or
other communications relating to Legal Requirements affecting the Leased
Property which is or are enacted, passed, promulgated, made, issued or adopted,
a copy of which is served upon, or received by, Tenant, or a copy of which is
posted on or fastened or attached to the Leased Property, within ten (10)
business days after service, receipt, posting, fastening or attaching. At the
same time, the Tenant will inform Landlord as to the work or steps which Tenant
proposes to do or take in order to comply therewith.
4.2 Environmental Matters.
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4.2.1 Restriction on Use, Etc. Except as permitted by Applicable Laws,
Tenant shall at all times during the Term keep the Leased Property free of
Hazardous Substances. Neither Tenant nor any of its employees, agents, invitees,
licensees, contractors, guests, or subtenants (if permitted) shall use,
generate, manufacture, refine, treat, process, produce, store, deposit, handle,
transport, release, or dispose of Hazardous Substances in, on or about the
Leased Property or the groundwater thereof, in violation of any federal, state
or municipal law, decision, statute, rule, ordinance or regulation currently in
existence or hereafter enacted or rendered.
Tenant shall not discharge or permit to be discharged into any septic
facility or sanitary sewer system serving the Leased Property any toxic or
hazardous sewage or waste other than that which is permitted by Applicable Laws.
Any Hazardous Substances which are produced or generated in connection with the
use or operation of the Leased Property shall be handled and disposed of as
required by and in compliance with all Applicable Laws, or shall be pre-treated
to the level of domestic wastewater for the type of business contemplated by
this Agreement prior to discharge into any septic facility or sanitary sewer
system serving the Leased Property.
4.2.2 Discovery of Hazardous Substances, Etc. 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, Tenant shall take all actions and incur any and all expenses, as may
be reasonably necessary and as may be required by any Government Agencies: (i)
to treat, contain, remove or otherwise dispose of all Hazardous Substances from,
on and about the Leased Property, (ii) to 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. Tenant shall promptly: (a)
upon receipt of notice or knowledge, notify Landlord in writing of any material
change in the nature or extent of Hazardous Substances at, on or about the
Leased Property, (b) transmit to Landlord a copy of any Community Right to Know
report which is required to be filed by Tenant with respect to the Leased
Property pursuant to ▇▇▇▇ Title III or any other Applicable Laws, (c) transmit
to Landlord copies of any citations, orders, notices or other governmental
communications received by Tenant or its agents or representatives with respect
to environmental matters (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 risk of
any violation of any Applicable Law and/or presents a risk of any material cost,
expense, loss or damage, (d) 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: (i) Tenant
shall contest the same in good faith and by appropriate proceedings in
accordance with Applicable Laws and (ii) the right to use and the value of the
Leased Property is not materially and adversely affected thereby. Provided,
further, that in the event Hazardous Substances are discovered on the Leased
Property and the presence thereof is not due to Tenant's negligent acts or
willful misconduct, the costs of removal and remediation thereof shall be a
Major Capital Expenditure as contemplated in Section 5.1.3 hereof.
4.2.3 Indemnity. Tenant shall protect, indemnify and hold harmless the
Landlord, its successors or assigns with respect to this Agreement for, from and
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against any and all debts, liens, claims, causes of action, administrative
orders or notices, costs, fines, penalties or expenses (including, without
limitation, reasonable attorney's fees and expenses) imposed upon, incurred by
or asserted against Landlord resulting from, either directly or indirectly, the
presence or release during the Term 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 Laws due to Tenant's
negligent acts or willful misconduct. Landlord agrees to protect, indemnify and
hold harmless the Tenant and its permitted successors or assigns with respect to
this Agreement 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 attorneys' fees and expenses) imposed
upon, incurred by or asserted against Tenant resulting from the presence 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
Applicable Laws due to the gross negligence or willful misconduct of Landlord.
This duty 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 laws. Upon Notice from Landlord, Tenant shall undertake the
defense, at its sole cost and expense, of its indemnification duties set forth
herein and upon Notice from Tenant, Landlord shall undertake the defense at its
sole cost and expense of its indemnification duties set forth herein.
4.3 Conflicting Businesses Prohibited. Landlord and Tenant hereby recognize
and acknowledge: (a) that the Minimum Rent and the Percentage Rent payable by
Tenant to Landlord under this Agreement have been established at the levels
specified in this Agreement upon the premise and with the expectation that
Percentage Rent will constitute a material part of the total rents payable by
Tenant to Landlord under this Agreement, (b) that the expectation of receiving
Percentage Rent constitutes a material consideration for Landlord's willingness
to execute this Agreement and thereby lease and demise the Leased Property to
Tenant, and (c) that the operation, development, management, franchising or
ownership by Tenant, Wyndham or an Affiliated Person of Tenant or Wyndham, of
another full service hotel of the same brand contemplated herein or any Wyndham
Garden Hotel (such hotel being referred to herein as a "Conflicting Business")
within the area designated on EXHIBIT "I" attached hereto and by this reference
made a part hereof (the "Proscribed Area") will tend to result in a decrease in
the amount of Total Rooms Revenue which would otherwise reasonably be expected
to be made upon, within and from the Leased Property and thereby result in a
reduction of the Percentage Rent which would otherwise be payable by Tenant to
Landlord pursuant to this Agreement in the absence of the operation of a
Conflicting Business by Tenant or any such Affiliated Person of Tenant or
Wyndham within the Proscribed Area. Accordingly, Tenant on behalf of itself and
its Affiliated Persons, and Wyndham and Manager (who have joined in the
execution of this Lease to acknowledge the restriction herein), agree that
subject to any qualifications in EXHIBIT "I", during the Term of this Agreement
neither Tenant, Wyndham, Manager nor any Affiliated Person of Tenant, Wyndham
or Manager shall open, develop, operate, manage, franchise, own, lease or
have any other interest in a Conflicting Business within the Proscribed Area.
In the event of a breach of this covenant, Landlord shall have the right to
pursue any remedy at law available to Landlord, including injunctive relief.
Further, Tenant agrees that Tenant's sole business shall be to lease and
operate, and Tenant shall not incur any expenses or liability related to
any business or activity other than leasing and operating, the Leased Property,
the other Acquisition Property and the Development Properties, and other
premises owned or hereinafter owned by Landlord or its Affiliated Persons and
leased to Tenant pursuant to terms acceptable to Landlord and Tenant.
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4.4 Continuous Operations. Tenant shall continuously operate the Leased
Property and maintain sufficient skilled staff and employees, and maintain
adequate levels and quality of Tenant's Personal Property to operate the Leased
Property as herein required at its sole cost and expense throughout the entire
Term of this Agreement.
4.5 Compliance With Restrictions, Etc. Subject to Tenant's right to contest
in accordance with Section 8.3 of this Agreement, Tenant, at its expense, shall
comply with all restrictive covenants and other title exceptions affecting the
Leased Property and shall comply with and perform all of the obligations set
forth in the same to the extent that the same are applicable to the Leased
Property or to the extent that the same would, if not complied with or
performed, impair or prevent the continued use, occupancy and operation of the
Leased Property for the purposes set forth in this Agreement. Further, in
addition to Tenant's payment obligations under this Agreement, Tenant shall,
subject to Section 8.1 hereof, pay all sums charged, levied or assessed under
any restrictive covenant, declaration, reciprocal easement agreement or other
title exceptions, equipment leases, leases and all other agreements affecting
the Leased Property promptly as the same become due and shall, upon Landlord's
written request, promptly furnish Landlord evidence of payment thereof, provided
any such charges, levies or assessments may, at the option of Tenant, be paid in
installments (whether or not interest shall accrue on the unpaid balance of any
such assessment), and Tenant may exercise the option to have the same paid in
installments over the maximum amount of time permitted for installment payments
thereof. With respect to any personal property which is leased by Tenant (other
than Tenant's Personal Property), Tenant acknowledges and agrees that all such
leases must be approved by Landlord in advance and if entered into prior to the
Commencement Date hereof, must be approved by Landlord and expressly assumed by
Tenant. In addition, all such leases shall by their terms be expressly
subordinate to this Lease, shall not have a term which extends beyond the Term
hereof, and shall expressly provide that the Landlord shall have the option,
upon the expiration or earlier termination of this Lease, to assume any such
lease or to terminate the same or require the owner of such leased personal
property to immediately remove the same from the Leased Property.
4.6 Standard of Operation. Throughout the Term of this Agreement, Tenant
shall continuously operate the Leased Property as a first-class hotel in full
compliance with the terms hereof and of the Management Agreement and in
conformity with Wyndham Standards. Tenant shall endeavor and use good faith
efforts to maximize gross operating profit for the Leased Property. Tenant shall
further provide, or cause to be provided, all group services, facilities and
benefits generally available to Wyndham Hotels of a similar type operated
elsewhere by Wyndham. Tenant may, at its option and at its expense, engage a
manager for the Leased Property, including the Manager; provided however, that
any manager, including Manager, and any management agreement for the Leased
Property, including the Management Agreement shall be subject to Landlord's
prior approval and any management agreement, including the Management Agreement,
shall be subordinate to this Agreement in all respects (and accordingly all
management fees shall be subordinate to rent hereunder) and shall terminate and
expire, if not sooner, upon the expiration or earlier termination of this
Agreement. The terms of Section 22.19 are not applicable to Landlord's approval
herein.
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4.7 Survival. As to conditions which exist prior to the expiration or
sooner termination of this Agreement, the provisions of this Section 4.2 shall
survive the expiration or sooner termination of this Agreement for a period of
one (1) year after such expiration or termination and shall thereafter terminate
and be of no further force and effect and no action may be brought after the
expiration of such one (1) year period under Section 4.2.
ARTICLE 5
MAINTENANCE AND REPAIRS
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5.1 Maintenance and Repair.
5.1.1 Tenant's Obligations. Tenant shall, at its sole cost and expense
(except as expressly provided in Sections 5.1.2 and 5.1.3 and except as the same
may be limited in the event of any casualty or condemnation as set forth in
Section 10.2 and Section 11.2), keep the Leased Property (including, without
limitation, the roof, plumbing systems, electric systems and HVAC systems) and
all private roadways, sidewalks and curbs located thereon in good order and
repair, and subject to Landlord's obligations under Section 5.1.3 hereof (to the
extent applicable), shall promptly 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 and whether or not necessitated by wear, tear, obsolescence or defects,
latent or otherwise, and shall use all reasonable precautions to prevent waste,
damage or injury. All repairs shall be made in a good, workmanlike manner,
consistent with the industry standards for like hotels in like locales, in
accordance with all Legal Requirements relating to any such work. In addition,
Tenant shall also, at its sole cost and expense, put, keep, replace and maintain
Tenant's Personal Property in good repair and in good, safe and substantial
order, howsoever the necessity or desirability for repairs may occur, and
whether or not necessitated by wear, tear, obsolescence or defects. Tenant shall
further at all times maintain the Leased Property, including the grounds and
landscaping, in an aesthetically pleasing manner.
5.1.2 Reserve.
(a) Subject to the terms of this Section 5.1.2, Tenant shall establish
an interest bearing reserve account (the "Reserve") in a bank
designated by Landlord. The Bank designated by Landlord shall have a
Minimum of Twenty Million and 00/100 ($20,000,000.00) in assets and
shall not be under any regulatory orders from any federal or state
banking authorities. If during the Term, such bank shall not meet the
foregoing criteria the Reserve shall be moved to another bank mutually
agreed to by Landlord and Tenant. All interest earned on the Reserve
shall be added to and remain a part of the Reserve. Both Tenant and
Landlord shall be signatories on the Reserve, provided only one
signature shall be required to withdraw funds and Landlord agrees that
so long as no Event of Default exists hereunder, Landlord shall not be
required to sign on any checks and Landlord shall not withdraw any
funds from such account. Such account shall not include or contemplate
"overdraft protection" and Tenant shall not request or attempt to draw
or draft any funds which are not actually on deposit in such account.
The purpose of the Reserve is to cover the cost of the following,
(which costs payable out of the Reserve shall include, with respect to
any cost item, any customary market-rate supervisory fee, and any
other fee commonly referred to as "purchasing fees", charged by
Tenant, Manager or any Affiliated Person for services rendered in
connection herewith) to the extent carried out in accordance with this
Agreement (collectively, "Reserve Expenditures"):
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(i) Replacements, renewals and additions to the furniture,
furnishings, fixtures and equipment at the Hotel (but excluding
Tenant's Personal Property); and
(ii) Repairs, renovations, renewals, additions, alterations,
improvements or replacements and maintenance to the Leased Property,
including without limitation, to maintain the Leased Property in
conformity with Wyndham Standards, all of which are routine and 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.
(b) Commencing with the Commencement Date and continuing throughout
the Term, Tenant shall on the last day of each Accounting Period
during the Term, transfer into the Reserve an amount equal to the
Applicable Percentage for such Accounting Period. At the time Tenant
provides Landlord the documentation described in Section 3.1.3, Tenant
shall also deliver to Landlord a statement setting forth the total
amount of deposits made to and expenditures from the Reserve for the
preceding Fiscal Year.
(c) On or before the Commencement Date (with respect to the first
partial Fiscal Year), and December 1 of each Fiscal Year thereafter,
Tenant shall prepare an estimate (the "Reserve Estimate") of Reserve
Expenditures anticipated during the ensuing Fiscal Year and shall
submit such Reserve Estimate to Landlord for its review and approval.
Such Reserve Estimate shall reflect by line item the projected budget
for Reserve Expenditures for the Leased Property and assumptions on
the basis of which such line items were prepared in narrative form if
necessary, and shall include separate budget items for all projected
expenditures for replacements, substitutions and additions to Tenant's
Personal Property (which expenditures shall be made by Tenant using
its own funds and not the Reserve). Tenant shall provide to Landlord
reasonable additional detail, information and assumptions used in the
preparation of the Reserve Estimate as requested by Landlord. Tenant
shall review the Reserve Estimate with Landlord, and subject to
Landlord's approval, (which approval shall not be withheld for (i)
Tenant's Personal Property, or (ii) Reserve Expenditures required by
Legal Requirements), (for purposes hereof the expenditures
contemplated in subsection (ii) shall be deemed included in the
Approved Reserve Estimate as hereafter referenced and any dispute as
to whether such expenditure is required by Legal Requirements will be
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resolved pursuant to ARTICLE 19 hereof) Tenant shall implement such
Reserve Estimate for the successive Fiscal Year (during which it
shall, if approved by Landlord, be referred to as the "Approved
Reserve Estimate"). Landlord shall have the right to disapprove any
expenditures to be provided for in the Reserve Estimate in its
reasonable discretion, except as otherwise provided herein. However,
if Landlord disapproves any expenditure, Landlord shall notify Tenant
in reasonable detail of the reasons for such disapproval. If any such
expenditure disapproved by Landlord is, in Tenant's reasonable
judgment, necessary to comply with Wyndham Standards, Tenant shall
notify Landlord of such fact and Landlord shall approve the same or
such dispute as to whether such expenditure is reasonably necessary to
comply with Wyndham Standards will be resolved pursuant to ARTICLE 19
hereof. Further, Landlord's approval of any expenditure pursuant to
the Reserve Estimate shall not be, or be deemed to be, an assumption
by Landlord of any liability in connection with the expenditures made.
Pending resolution by Landlord and Tenant (and not by arbitration,
except with respect to expenditures required for Legal Requirements
and Wyndham Standards as aforesaid) of any dispute regarding a
proposed Reserve Expenditure, the specific disputed item of the
Reserve Estimate shall be suspended and replaced for the Fiscal Year
in question by an amount equal to the lesser of (a) that proposed by
Tenant for such Fiscal Year or (b) such budget item for the Fiscal
Year prior thereto. Tenant shall not make any expenditures from the
Reserve, except those included in the Approved Reserve Estimate, nor
shall Tenant deviate from the Approved Reserve Estimate 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 or imminent danger of civil or criminal liability. Provided,
however, in the event the actual cost of any approved Reserve
Expenditure is less than the budgeted amount therefor contained in the
Approved Reserve Estimate, Tenant may apply such savings without
Landlord's approval to other approved Reserve Expenditures contained
in the Approved Reserve Estimate so long as the aggregate actual
Reserve Expenditures in any given Lease Year does not exceed the
aggregate Reserve Expenditures contained in the Approved Reserve
Estimate for such Lease Year. Upon the expiration or earlier
termination of this Agreement, funds in the Reserve and all property
purchased with funds in the Reserve shall be paid, granted and
assigned to Landlord as Additional Charges.
(d) Tenant shall, consistent with the Approved Reserve Estimate, from
time to time make Reserve Expenditure from the Reserve as it
reasonably deems necessary in accordance with Section 5.1.2(a) and
(c). Tenant shall provide to Landlord, within thirty (30) days after
the end of each Accounting Period, an itemized statement setting forth
Reserve Expenditures made to date during the Fiscal Year and shall
also provide all other necessary invoices and supporting documentation
reasonably necessary for Landlord to account for and verify the
Reserve Expenditures.
(e) All funds in the Reserve, all interest earned thereon and all
property purchased with funds from the Reserve shall be and remain the
property of Landlord. Following expiration or earlier termination of
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this Agreement and payment in full on all contracts entered into prior
to such expiration or termination for work to be done or furniture,
furnishings, fixtures and equipment to be supplied in accordance with
this Section 5.1.2 out of the Reserve, control over the Reserve shall
be transferred from Tenant to Landlord.
(f) It is understood and agreed that the Reserve pursuant to this
Agreement shall be maintained and used solely in connection with the
Leased Property. To the extent the funds in the Reserve are permitted
hereunder to be used by Tenant to maintain the Leased Property,
Landlord agrees that except upon the occurrence and during the
continuance of an Event of Default hereunder, Landlord will not
interfere with the use of such funds by Tenant for such purpose.
(g) If Landlord wishes to grant a security interest in or create
another encumbrance on the Reserve in connection with a Hotel
Mortgage, all or any part of the existing or future funds therein, or
any general intangible in connection therewith, Tenant agrees that it
will, from time to time, execute such reasonable documentation as may
be requested by Landlord and any Mortgagee to assist Landlord and such
Mortgagee in establishing or perfecting its security interest in
Landlord's interest in the Reserve; provided, however, that (i) no
such documentation shall contain an amendment or modification of any
of the provisions of this Agreement; and (ii) the instrument granting
such security interest or creating such other encumbrance shall
expressly provide that such security interest or encumbrance is
subject to the rights of Tenant with respect to the Reserve as set
forth herein. It is understood and agreed that during the Term the
Reserve may not be applied against debts secured by a Hotel Mortgage,
nor shall any 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 Mortgagee and then
only in accordance with the terms of this Agreement.
5.1.3 Major Capital Expenditures.
(a) On or before the Commencement Date (with respect to the first
partial Fiscal Year) and December 1 of each Fiscal Year thereafter,
Tenant shall deliver to Landlord, for Landlord's approval, a detailed
line-item estimate (the "Building Estimate") of the expenses necessary
for repairs, alterations, improvements, renewals, replacements and
additions, all of which are non-routine or major, to the Leased
Improvements which are not covered under Section 5.1.2(a) and which
are normally capitalized under GAAP (which expenses shall include,
with respect to any cost item, any customary market-rate supervisory
fee, and any other fee commonly referred to as "purchasing fees",
charged by Tenant, Manager or any Affiliated Person for services
rendered in connection herewith) such as repairs, alterations,
improvements, renewals, replacements and additions to the structure,
the exterior facade, the mechanical, electrical, heating, ventilating,
air conditioning, plumbing and vertical transportation elements of the
Leased Improvements ("Major Capital Expenditures") which Major Capital
Expenditures Tenant believes should be made to the Leased
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Property for the following Lease Year, together with estimates of
professionals and other appropriate backup. Major Capital Expenditures
shall also include all costs associated with any removal or
remediation of Hazardous Substances (except those treated at Tenant's
sole cost and expense under Section 5.1.4(b) and referenced in Section
4.2). Except as provided in paragraph 5.1.3(b) below, Tenant
acknowledges the provisions of Section 22.19 shall not be applicable
to this Section 5.1.3 and any Major Capital Expenditures not approved
by Landlord shall not be made. In addition, any such approval shall
not constitute Landlord's agreement that the repairs, alterations,
improvements, renewals, replacements and additions giving rise to a
Major Capital Expenditure or the plans and specifications therefore
are or will be in compliance with Applicable Laws nor shall such
approval constitute the assumption by Landlord of any liability in
connection with the said repairs, alterations, improvements, renewals,
replacements and additions contemplated thereby.
(b) In the event Major Capital Expenditures are required (i) as a
result of any law, ordinance, regulation or order of any Government
Agency or are otherwise required for the continued safe and orderly
operation of the Leased Property, (ii) due to an emergency threatening
the Leased Property, its guests, invitees or employees, (iii) if the
continuation of a given condition will subject Tenant or Landlord to
civil or criminal liability, Landlord agrees that it will not withhold
its consent. If Major Capital Expenditures are required to comply with
Wyndham Standards, Landlord agrees it will not withhold its consent.
Any dispute regarding whether Major Capital Expenditures (i.e. for
which Landlord has withheld its consent) are required under this
subparagraph (b) shall be resolved pursuant to ARTICLE 19 hereof.
(c) The cost of all approved Major Capital Expenditures shall be borne
by Landlord in accordance with the provisions of Section 5.1.4 and
upon Landlord's funding of the same, Minimum Rent shall be increased
as provided hereinafter in this Section 5.1.3(c). Provided, however,
the cost of all approved Major Capital Expenditures may, upon request
of Tenant and approval of Landlord (which will not be unreasonably
withheld), be funded out of the Reserve, so long as such funding will
not materially and adversely affect the 3-year budgeted Reserve. Any
such Major Capital Improvement will have a material adverse effect on
the 3-year budgeted Reserve if such capital improvement was not
contemplated during the Term and decreases such 3-year budgeted
Reserve by more than 7.5% of the 3-year budgeted Reserve. To the
extent Tenant does not request such funding out of the Reserve or such
funding is not permitted as described above, Landlord and Tenant
acknowledge and agree that in the event that funding is necessary for
Major Capital Expenditures and Landlord is obligated under this
Agreement to fund the same, Landlord shall provide the funds required
for such expenditures ("Additional Capital Investment") and Minimum
Rent shall be increased by the amount necessary to provide a per annum
yield on the Additional Capital Investment equal to the Disbursement
Rate.
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5.1.4 Landlord's Funding Obligations.
(a) Landlord shall not, under any circumstances, be required to build
or rebuild any improvement on the Leased Property, 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, to
maintain the Leased Property in any way, or, except as provided in
Section 5.1.2, Section 5.1.3 or in any Landlord indemnity obligation
provision in this Agreement, to make any expenditure whatsoever with
respect thereto. 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 non-responsibility under any mechanic's lien laws now or hereafter
existing. In addition, in connection with any expenditure which
Landlord has agreed to make or as provided in this Agreement may be
obligated to make for Major Capital Expenditures or for any other
reason hereunder, Landlord may, at its option, require, prior to the
advancement of any such funds, (i) approval of plans and
specifications by an architect reasonably satisfactory to Landlord,
(ii) general contractors' estimates, (iii) architect's certificates,
(iv) unconditional lien waivers of general contractors, (v) evidence
of approval by all Governmental Agencies and other regulatory bodies
whose approval is required, (vi) deposit by Tenant of any sums which
may be required by Tenant in connection with the same, and (vii) such
other customary terms as Landlord or any Mortgagee may reasonably
require. In addition, all funds to be disbursed by Landlord hereunder
shall be subject to the following additional conditions to
disbursement: (viii) funds shall specifically be requested by Tenant
pursuant to written requisitions and substantiation therefor on AIA
Forms G702 and G703 (or on such other forms as may be reasonably
acceptable to Landlord) accompanied by appropriate lien waivers,
receipts and other documentation to support the same; (ix) funds will
be disbursed no more frequently than monthly; (x) ten percent (10%) of
each approved payment to the contractor shall be retained by Landlord
until completion of the work by such contractor and receipt of final
contractor's affidavits, lien waivers and other documentation
acceptable to Landlord and customary in connection with disbursements
from lenders to borrowers and (xi) such other customary conditions as
may be reasonably required by Landlord.
(b) If, at any time, funds from the Reserve shall be insufficient or
are reasonably projected by Tenant to be insufficient for necessary
and permitted expenditures for Reserve Expenditures included in an
Approved Reserve Estimate, or if funding is necessary for approved or
deemed approved Major Capital Expenditures (other than costs related
to Hazardous Substances under Section 4.2 resulting from Tenant's
negligent acts, or willful misconduct, which costs shall be Tenant's
sole cost and expense), Tenant may, at its election, give Landlord
Notice thereof, which Notice shall set forth, in reasonable detail,
the nature of the required or permitted action and the estimated cost
thereof. If within ten (10) Business Days after such Notice, all
requirements to disbursement as referenced in Section 5.1.4(a) and
Section 6.2 (if applicable) have been satisfied, Landlord shall
disburse such required funds to Tenant (or, at Landlord's option,
directly to the Manager or any other Person performing the required
work) and, upon such disbursement by Landlord, the Minimum Rent shall
be adjusted as provided in Section 5.1.3(c).
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5.2 Yield Up. Tenant shall, on or before the last day of the Term or upon
the sooner termination thereof, including pursuant to Section 16.6 hereof,
peaceably and quietly surrender and deliver to Landlord the Leased Property,
including, without limitation, all Leased Improvements and FF&E and all
additions thereto and replacements thereof made from time to time during the
Term, in substantially the same condition in which the Leased Property was in on
the Commencement Date, except as repaired, rebuilt, restored, altered, or added
to and in accordance with the provisions of this Agreement, reasonable wear and
tear excepted (and except casualty damage, in the event this Agreement is
terminated as a result thereof as provided herein, and condemnation), and free
and clear of all liens and encumbrances other than the Permitted Encumbrances.
In addition, subject to Section 22.23 hereof, upon Landlord's request, Tenant
shall assign to Landlord, or cause Manager to assign to Landlord, all of the
Tenant's or Manager's right, title and interest in and to all contracts, leases,
permits and other agreements pertaining to the use, operation, maintenance or
repair of the Leased Property other than Tenant's Intangible Personal Property
and contracts for goods and services that apply generally to hotels owned or
managed by Wyndham or its Affiliates on a national basis (the "National
Contracts").
ARTICLE 6
IMPROVEMENTS, ETC.
------------------
6.1 Prohibition. Except for Major Capital Expenditures contemplated in
Section 5.1.3, and a Minor Alteration as hereinafter expressly provided in
Section 6.2, and except as may be the subject of a line item in the Approved
Reserve Estimate, no portion of the Leased Property shall be demolished, removed
or structurally or materially altered by Tenant in any manner whatsoever without
the prior written consent and approval of Landlord, which is not subject to
Section 22.19 and may be withheld by Landlord in its sole and absolute
discretion. Provided, however, if any proposed demolition removal or
non-structural alteration shall be undertaken by Tenant at Tenant's sole cost
and expense, Landlord will not unreasonably withhold its approval of the same
and in connection therewith Tenant shall comply with the terms of Section 6.2(a)
through (g). Notwithstanding the foregoing, however, Tenant shall be entitled
and obligated to undertake all alterations to the Leased Property required by
any Applicable Laws, including, without limitation, any alterations required by
any Accessibility Laws, and, in such event, Tenant shall also comply with the
provisions of Section 6.2 below.
6.2 Permitted Renovations. Landlord acknowledges that certain minor,
non-structural alterations and renovations may be undertaken by Tenant at
Tenant's expense (and not out of the Reserve) from time to time which Tenant may
be obligated under the Management Agreement to perform, or to comply with
Wyndham Standards (a "Minor Alteration"). Landlord hereby agrees that Tenant
shall be entitled to perform such Minor Alteration on or about the Leased
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Improvements; provided, however, that the cost of the same shall not exceed
$5,000.00 and the same shall not weaken or impair the structural strength or
integrity of the Leased Improvements, nor, materially alter the exterior design
or appearance or the interior design or appearance of the lobby, materially
impair the use of any of the service facilities located in, or fundamentally
affect the character or suitability of, the Leased Improvements for hotel
purposes or materially lessen or impair their value, and provided further, that
in connection with any such permitted renovation, the following conditions shall
be met, to wit:
(a) Before the commencement of any such work, plans and specifications
therefor or a detailed itemization thereof prepared by a licensed
architect approved by Landlord or other design professional, of Tenant
or Wyndham, appropriate under the circumstances and approved by
Landlord and Tenant shall be furnished to Landlord for its review and
approval, which approval will not be unreasonably withheld or delayed.
Such approval shall not constitute Landlord's agreement that the plans
and specification are in compliance with Applicable Laws or an
assumption by Landlord of any liability in connection with the
renovation work contemplated thereby.
(b) Before the commencement of any Minor Alteration, (or any work
funded by Reserve Expenditures, or Major Capital Expenditures), Tenant
shall obtain the approval thereof by all Governmental Agencies having
or claiming jurisdiction of or over the Leased Property, and with any
public utility companies having an interest therein. In connection
with any Minor Alteration (or any work funded by Reserve Expenditures
or Major Capital Expenditures), Tenant shall comply with all Legal
Requirements and Applicable Laws, of all other Governmental Agencies
having or claiming jurisdiction of or over the Leased Property and of
all their respective departments, bureaus and offices, and with the
requirements and regulations, if any, of such public utilities, or the
insurance underwriting board or insurance inspection bureau having or
claiming jurisdiction, or any other body exercising similar functions,
and of all insurance companies then writing policies covering the
Leased Property or any part thereof.
(c) Each Minor Alteration (and all work funded by Reserve Expenditures
and Major Capital Expenditures) will be performed in a good and
workmanlike manner and in accordance with the plans and specifications
therefor approved by Landlord, the terms, provisions and conditions of
this Agreement and all Applicable Laws.
(d) Landlord shall have the right to inspect any Minor Alteration (and
all work funded by Reserve Expenditures and Major Capital
Expenditures) at all times during normal working hours and to maintain
at the Leased Property for that purpose (at its own expense) such
inspector(s) as it may deem necessary so long as such inspections do
not unreasonably interfere with Tenant's work (but Landlord shall not
thereby assume any responsibility for the proper performance of the
work in accordance with the terms of this Agreement, nor any liability
arising from the improper performance thereof).
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(e) Each such Minor Alteration (and all work funded by Reserve
Expenditures and Major Capital Expenditures) shall be performed free
of any liens on Landlord's fee simple interest in, or Tenant's
leasehold interest in, the Leased Property, except for liens resulting
from Landlord's failure to fund a Major Capital Expenditure.
(f) Upon substantial completion of any Minor Alteration (and all work
funded by Reserve Expenditures and Major Capital Expenditures), Tenant
shall procure a certificate of occupancy, if applicable, from the
appropriate governmental authorities or otherwise verifying the
substantial completion thereof.
(g) No Minor Alteration or other alteration approved under Section 6.1
hereof shall be made which would tie in or connect any portion of the
Leased Improvements with any other improvements on property adjacent
to the Leased Property, except as may be required by the Permitted
Encumbrances. In addition, Tenant shall not finance and shall direct
Manager not to finance the cost of any Minor Alteration or other
alteration contemplated and approved under Section 6.1 hereof by the
granting of a lien on or security interest in the Leased Property or
Tenant's interest therein without the prior written consent of
Landlord, which consent may be withheld by Landlord in Landlord's sole
discretion.
(h) Tenant shall, and hereby agrees to, indemnify and save and hold
Landlord and each Affiliated Person of Landlord harmless from and
against and reimburse Landlord for any and all loss, damage, cost,
liability, fee and expense (including, without limitation, reasonable
attorney's fees based upon services rendered at hourly rates) incurred
by or asserted against Landlord which is occasioned by or results,
directly or indirectly, from any construction or renovation activities
conducted upon the Leased Property, whether or not the same is caused
by, or is the fault of Tenant or any agent, employee, Manager,
contractor, subcontractor, laborer, supplier, materialman or any other
third party; but Tenant shall not be obligated to indemnify Landlord
from any loss as aforesaid caused by Landlord's gross negligence or
willful misconduct or failure to fund any Reserve Expenditure included
within an Approved Reserve Estimate or any Major Capital Expenditure
as required in this Agreement.
6.3 Additions, Expansions and Structural Alterations. Except as expressly
permitted in this Agreement, Tenant shall not construct and erect any additions
to or expansions of the Leased Improvements, or perform any alterations of a
structural nature whatsoever; it being understood that Tenant may do so only
with the prior written consent and approval of Landlord, which consent and
approval may be withheld by Landlord in its sole and absolute discretion and may
be conditioned upon the payment by Tenant to Landlord of all reasonable third
party costs incurred by Landlord in evaluating the same.
6.4 Salvage. Other than Tenant's Personal Property, all materials which are
scrapped or removed in connection with the making of repairs, alterations,
improvements, renewals, replacements and additions pursuant to ARTICLE 5 shall
be disposed of by Tenant and the net proceeds thereof, if any, shall be
deposited in the Reserve.
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ARTICLE 7
LANDLORD'S INTEREST NOT SUBJECT TO LIENS
----------------------------------------
7.1 Liens, Generally. Tenant shall not, directly or indirectly, create or
cause to be imposed, claimed or filed upon the Leased Property, or Tenant's
assets, properties or income or any portion thereof, or upon the interest of
Landlord therein, any Lien of any nature whatsoever, except liens on the Leased
Property caused by Landlord's funding default under Section 5.1.4(b). If,
because of any act or omission of Tenant, any such Lien shall be imposed,
claimed or filed by any party whosoever or whatsoever, Tenant shall, at its sole
cost and expense, cause the same to be promptly (and in no event later than
thirty (30) days following receipt of notice of such Lien) paid and satisfied in
full or otherwise promptly discharged of record (by bonding or otherwise) and
Tenant shall indemnify and save and hold Landlord harmless from and against any
and all costs, liabilities, suits, penalties, claims and demands whatsoever, and
from and against any and all reasonable attorney's fees, at both trial and all
appellate levels, resulting or on account thereof and therefrom. In the event
that Tenant shall fail to comply with the foregoing provisions of this Section
7, Landlord shall have the option, but not the obligation, of paying, satisfying
or otherwise discharging (by bonding or otherwise) such Lien and Tenant agrees
to reimburse Landlord, upon demand and as Additional Charges, for all sums so
paid and for all costs and expenses incurred by Landlord in connection
therewith, together with interest thereon, until paid.
7.2 Mechanics Liens. Landlord's interest in the Leased Property shall not
be subjected to Liens of any nature by reason of Tenant's construction,
alteration, renovation, repair, restoration, replacement or reconstruction of
any improvements on or in the Leased Property, or by reason of any other act or
omission of Tenant (or of any person claiming by, through or under Tenant)
including, but not limited to, mechanics' and materialmen's liens, except liens
on the Leased Property caused by Landlord's funding default under Section
5.1.4(b). All persons dealing with Tenant are hereby placed on notice that such
persons shall not look to Landlord or to Landlord's credit or assets (including
Landlord's interest in the Leased Property) for payment or satisfaction of any
obligations incurred in connection with the construction, alteration,
renovation, repair, restoration, replacement or reconstruction thereof by or on
behalf of Tenant. Tenant has no power, right or authority to subject Landlord's
interest in the Leased Property to any mechanic's or materialmen's lien or claim
of lien. If a Lien, claim of lien or an order for the payment of money shall be
imposed against the Leased Property on account of work performed, or alleged to
have been performed, for or on behalf of Tenant or any party claiming by, under
or through Tenant, Tenant shall, within thirty (30) days after written notice of
the imposition of such Lien, claim or order, cause the Leased Property to be
released therefrom by the payment of the obligation secured thereby or by
furnishing a bond or by any other method prescribed or permitted by law. If a
Lien is released, Tenant shall thereupon furnish Landlord with a written
instrument of release in form for recording or filing in the appropriate office
of land records of the County in which the Leased Property is located, and
otherwise sufficient to establish the release as a matter of record.
7.3 Contest of Mechanics Liens. Tenant may, at its option, contest the
validity of any Mechanics Lien or claim of lien if Tenant shall have first
posted an appropriate and sufficient bond in favor of the claimant or paid the
appropriate sum into court, if permitted by and in strict compliance with
Applicable Laws, and thereby obtained the release of the Leased Property from
41
such Mechanics Lien or claim of lien. If judgment is obtained by the claimant
under any Mechanics Lien or claim of lien, Tenant shall pay the same immediately
after such judgment shall have become final and the time for appeal therefrom
has expired without appeal having been taken. Tenant shall, at its own expense,
using counsel reasonably approved by Landlord, diligently defend the interests
of Tenant and Landlord in any and all such suits; provided, however, that
Landlord may, nonetheless, at its election and expense, engage its own counsel
and assert its own defenses, in which event Tenant shall cooperate with Landlord
and make available to Landlord all information and data which Landlord deems
necessary or desirable for such defense.
7.4 Notices of Commencement of Construction. If required by the laws of the
State, prior to commencement by Tenant of any work on the Leased Property which
shall have been previously permitted and approved by Landlord as provided in
this Agreement, Tenant shall record or file a notice of the commencement of such
work or similar notice required by Applicable Laws (the "Notice of
Commencement") in the land records of the County in which the Leased Property
are located, identifying Tenant as the party for whom such work is being
performed, stating such other matters as may be required by Applicable Laws and
requiring the service of copies of all notices, Liens or claims of lien upon
Landlord. Any such Notice of Commencement shall clearly reflect that the
interest of Tenant in the Leased Property is that of a leasehold estate and
shall also clearly reflect that the interest of Landlord as the fee simple owner
of the Leased Property shall not be subject to mechanics or materialmen's liens
on account of the work which is the subject of such Notice of Commencement. A
copy of any such Notice of Commencement shall be furnished to and approved by
Landlord prior to the recording or filing thereof, as aforesaid.
ARTICLE 8
TAXES AND ASSESSMENTS
---------------------
8.1 Obligation to Pay Taxes. Throughout the entire Term, Tenant shall bear,
pay and discharge as Additional Charges and not later than the last day on which
payment may be made without penalty or interest, all Impositions, and each and
every installment thereof which shall or may during the Term hereof be charged,
laid, levied, assessed, or imposed upon, or arise in connection with, the use,
occupancy or possession of the Leased Property or any part thereof. Upon
payment, Tenant shall promptly furnish to Landlord official receipts or other
satisfactory proof evidencing such payment. Further, with respect to the Fiscal
Year in which the Term commences, and any tax period or year prior to the
Commencement Date (if different than a Fiscal Year), Tenant shall be obligated
to pay or cause to be paid, and shall pay or cause to be paid, all Impositions
for such entire Fiscal Year (or tax year) notwithstanding the date this
Agreement commences. If any refund (including penalties, interest and charges
paid by Tenant) shall be due from any taxing authority in respect of any
Impositions paid by Tenant (including as a result of a permitted contest by
Tenant), the same shall be paid to and retained by Tenant.
Notwithstanding the foregoing, Tenant shall have the right, after prior
written notice to Landlord, to contest at its own expense the amount and
validity of any Impositions by appropriate proceedings under Applicable Laws
conducted in good faith and with due diligence and to postpone or defer payment
thereof, provided and so long as:
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(a) Such proceedings shall operate to suspend the collection of such
Imposition from Tenant or the Leased Property;
(b) Neither the Leased Property nor any part thereof would be in
immediate danger of being forfeited or lost by reason of such
proceedings, postponement or deferment; and
(c) In the case of any Imposition affecting the Leased Property which
might be or become a Lien, encumbrance or charge upon or result in any
forfeiture or loss of the Leased Property or any part thereof, or
which might result in loss or damage to Tenant or Landlord, Tenant,
prior to the date such Imposition would become delinquent, shall have
furnished Landlord with security satisfactory to Landlord, which
security shall be deemed satisfactory if Tenant provides a bond in the
amount of such contested amount, plus applicable costs, interest and
other charges, or a cash deposit in the amount of such contested
amount plus applicable costs, interest and other charges, in a bank,
as trustee, and account designated by Landlord and, in the event that
such security is furnished, Landlord shall not have the right during
the period of the contest to pay, remove or discharge the Imposition.
8.2 Tax Account. In the event Tenant fails to timely pay any Imposition
required to be paid by Tenant pursuant to Section 8.1, subject to permitted
contest as set forth above, after Notice and failure to cure within ten (10)
days after delivery of such Notice, Landlord shall have the right, by written
notice to Tenant effective as of the date of such notice, to require Tenant to
pay or cause to be paid into a separate account (the "Tax Account") to be
established by Tenant with a lending institution selected by Landlord which is
an FDIC Member and maintains at least Twenty Million and 00/100 Dollars
($20,000,000.00) in assets and shall not be under any regulatory orders from any
federal or state banking authorities (which Tax Account shall not be removed
from such lending institution without the express prior approval of Landlord),
and which Landlord may draw upon, a reserve amount sufficient to discharge the
obligations of Tenant under Section 8.1 hereof with respect to Impositions for
the applicable Fiscal Year as and when they become due and any interest or
penalties due to late or non-payment as provided below (such amounts, the "Tax
Escrow Amount"). If during the Term the lending institution selected by Landlord
shall not meet the foregoing criteria, the Tax Account shall be moved to another
lending institution mutually agreed to by Landlord and Tenant. Provided,
however, that Landlord shall provide to Tenant Notice of non-payment as
contemplated in the initial clause of this Section 8.2 only one time during the
Term hereof and in the event of any subsequent failure to timely pay any
Imposition required to be paid by Tenant pursuant to Section 8.1, the only
Notice from Landlord to Tenant
43
shall be the Notice to pay the reserve amount into the Tax Account the sums
referenced in the immediately preceding sentence. If Tenant does not establish,
and pay into the Tax Account as required herein within ten (10) days from the
date of Landlord's notice, Tenant shall, be in default hereunder. Within ten
(10) days after receipt of Landlord's notice, Tenant shall deposit into the Tax
Account an amount equal to the product of (i) one twelfth of the Tax Escrow
Amount times (ii) the number of months, including the current month, that have
elapsed in the tax period(s) for the Impositions. During each month commencing
with the first full calendar month following the receipt of said notice from
Landlord, Tenant shall deposit into the Tax Account one twelfth of the Tax
Escrow Amount so that as each installment of Impositions becomes due and
payable, there are sufficient funds in the Tax Account to pay the same. If the
amount of such Impositions have not been definitively ascertained by Tenant at
the time when any such monthly deposit is to be paid, Landlord shall require
payment of the Tax Escrow Amount based upon the amount of Impositions paid for
the preceding year, subject to adjustment as and when the amount of such
Impositions are ascertained by Tenant. The Tax Escrow Amount in the Tax Account
shall be and constitute additional security for the performance of Tenant's
obligations hereunder and shall be subject to Landlord's security interest
therein and shall to the extent of funds in escrow, be used to pay Impositions
when due and Tenant shall fund any deficiency in the Tax Account upon Notice
from Landlord. Landlord and Tenant shall execute such documentation as may be
necessary to create and maintain Landlord's security interest in the Tax
Account. Tenant's funding of the Tax Account as required herein shall be deemed
satisfaction of Tenant's obligation to pay the Impositions subject to the Tax
Account pursuant to Section 8.1 hereof.
8.3 Permitted Contests. In addition to Tenant's right to contest mechanics
liens as contemplated in Section 7.3, Tenant shall have the right to contest the
amount or validity of any Imposition, Legal Requirement, Insurance Requirement,
Environmental Notices, Lien, attachment, levy, encumbrance, charge or claim
(collectively, "Claims") as to the Leased Property, pursuant to Applicable Laws
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 Hotel Mortgage (Landlord agreeing that any such Hotel Mortgage
shall permit Tenant to exercise the rights granted pursuant to this ARTICLE 8)
or result in or reasonably be expected to result in a lien attaching to the
Leased Property, unless such lien is fully bonded or is otherwise secured to the
reasonable satisfaction of Landlord, (c) no part of the Leased Property nor any
Rent therefrom shall be in any immediate danger of sale, forfeiture, attachment
or loss, and (d) Tenant shall indemnify and hold harmless Landlord from and
against any cost, claim, damage, penalty or reasonable expense, including
reasonable attorneys' fees, incurred by Landlord in connection therewith or as a
result thereof. Landlord agrees to join in any such proceedings if required
legally to prosecute such contest, provided that Landlord shall not thereby be
subjected to any liability therefor (including, without limitation, for the
payment of any costs or expenses in connection therewith) unless Tenant agrees
by agreement in form and substance reasonably satisfactory to Landlord, to
assume and indemnify Landlord with respect to the same. Tenant shall be entitled
to any refund of any Claims and such charges and penalties or interest thereon
which have been paid by Tenant or paid by Landlord to the extent that Landlord
has been fully reimbursed by Tenant. If Tenant shall fail (x) to pay or cause to
be paid any Claims when finally determined, (y) to provide reasonable security
therefor, or (z) to prosecute or cause to be prosecuted any such contest
diligently and in good faith, Landlord may, upon reasonable Notice to Tenant
(which notice shall not be required if Landlord shall reasonably determine that
the same is not practicable), pay such charges, together with interest and
penalties due with respect thereto, and Tenant shall reimburse Landlord
therefor, upon demand, the full amount thereof, plus interest at the Overdue
Rate, as Additional Rent.
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ARTICLE 9
INSURANCE
---------
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,
comply with all Insurance Requirements and keep the Leased Property and all
property located therein or thereon, insured against the risks and in the
amounts as follows:
(a) "All-risk" property insurance (and to the extent applicable,
Builder's Risk Insurance) on the Improvements and all items of
business personal property, including but not limited to signs,
awnings, canopies, gazebos, fences and retaining walls, and all FAS,
including without limitation, insurance against loss or damage from
the perils under "All Risk" (Special) form, including but not limited
to the following: fire, windstorm, sprinkler leakage, vandalism and
malicious mischief, water damage, explosion of steam boilers, pressure
vessels and other similar apparatus, and other hazards generally
included under extended coverage, all in an amount equal to one
hundred percent (100%) of the replacement value of the Leased Property
(excluding excavation and foundation costs), business personal
property and FAS, without a co-insurance provision, and shall include
an Agreed Value endorsement and a Law and Ordinance endorsement;
(b) Ordinance or Law Coverage with limits of not less than the Leased
Property for Coverage A (Loss to the undamaged portion of the
building), limits not less than $500,000.00 for Coverage B (Demolition
Cost Coverage), and limits not less than $500,000.00 for Coverage C
(Increased Cost of Construction Coverage);
(c) Business income insurance to be written on Special Form (and on
Earthquake and Flood forms if such insurance for those risks is
required and available through commercial insurance markets) including
Extra Expense, without a provision for co-insurance, including an
amount sufficient to pay at least twelve (12) months of Rent for the
benefit of Landlord, as its interest may appear, and at least twelve
(12) months of net operating income less Rent for the benefit of
Tenant:
(d) Occurrence form comprehensive general liability insurance,
including bodily injury and property damage, liquor liability, fire
legal liability, contractual liability and independent contractor's
hazard and completed operations coverage in an amount not less than
$1,000,000.00 per occurrence/$2,000,000.00 aggregate;
(e) Umbrella coverage which shall be on a following form for the
General Liability, Automobile Liability, Employers' Liability, and
Liquor Liability, with limits of not less than $50,000,000.00 per
occurrence/aggregate;
45
(f) Flood insurance in an amount and in such form and substance and
with such limits and deductibles as are satisfactory to Landlord (if
any improvements located on the Leased Property are located in whole
or in part within an area identified as an area having special flood
hazards under the National Flood Insurance Program);
(g) Worker's compensation coverage for all persons employed by Tenant
on the Leased Property with statutory limits, and Employers' Liability
insurance in an amount of at least $1,000,000.00 per accident/disease;
(h) To the extent applicable, business auto liability insurance,
including owned, non-owned and hired vehicles for combined single
limit of bodily injury and property damage of not less than
$1,000,000.00 per occurrence;
(i) To the extent applicable, garage keepers legal liability insurance
covering both comprehensive and collision-type losses with a limit of
liability in an amount not less than $1,000,000.00 per occurrence; and
(j) Earthquake insurance, if the Leased Property is currently, or at
any time in the future, located within a Major or Limited (Minor to
Moderate) Damage Earthquake Disaster Area, as defined by Landlord's
Insurer and/or Mortgagee, in amount, and in such form and substance
and with such limits and deductibles as are satisfactory to Landlord.
(k) Such additional insurance as may be reasonably required, from time
to time, by any of the Permitted Encumbrances, or by Landlord
(including, without limitation, insurance requirements in the
Management Agreement, any mortgage, security agreement or other
financing permitted hereunder and then affecting the Leased Property,
as well as any declaration, ground lease or easement agreement
affecting the Leased Property), or any Hotel Mortgagee, provided the
same is customarily carried by a majority of comparable high quality
lodging properties in the area.
9.2 Waiver of Subrogation. Landlord and Tenant agree that with respect to
any property loss which is covered by insurance then being carried by Landlord
or Tenant, respectively, the party carrying such insurance and suffering said
loss releases the other of and from any and all claims with respect to such loss
(to the extent such loss is fully recovered by payment of insurance proceeds);
and they further agree that their respective insurance companies shall have no
right of subrogation against the other on account thereof.
9.3 General Provisions. The Hotel's allocated chargeback/deductible for
general liability insurance and workmen's compensation insurance shall not
exceed $100,000.00 unless such greater amount is approved by both Landlord and
Tenant. The Hotel's property insurance deductible shall not exceed $250,000.00
unless such greater amount is approved by both Landlord and Tenant, or if a
higher deductible for high hazard risks (i.e., wind or flood) is mandated by the
insurance carrier. All insurance policies pursuant to this ARTICLE 9 shall be
issued by insurance carriers having a general policy holder's rating of no less
than A-/VII in Best's latest rating guide, and shall contain clauses or
46
endorsements to the effect that (a) Landlord shall not be liable for any
insurance premiums thereon or subject to any assessments thereunder, and (b) the
coverages provided thereby will be primary and any insurance carried by any
additional insured shall be excess and non-contributory to the extent of the
indemnification obligation pursuant to Section 9.5 below. All such policies
described in Sections 9.1 shall name Landlord, CHC, CHP, and any Mortgagee as
additional insureds, loss payees, or mortgagees, as their interests may appear.
All loss adjustments shall be payable as provided in ARTICLE 10. Tenant shall
deliver certificates thereof to Landlord prior to their effective date (and,
with respect to any renewal policy, prior to the expiration of the existing
policy), which certificates shall state the nature and level of coverage
reported thereby, as well as the amount of the applicable deductible. Upon
Landlord's request, duplicate original copies of said policies if provided by
Tenant, shall be delivered to Landlord and its Mortgagee by Tenant. All such
policies shall provide Landlord (and any 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 and certificates to
Landlord or any Mortgagee at the times required, Landlord shall have the right,
but not the obligation, subject to the provisions of Section 12.4, 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.
9.4 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 and approved by Landlord.
9.5 Indemnification of Landlord. Except as expressly provided herein,
notwithstanding the existence of any insurance provided for herein and without
regard to the policy limits of any such insurance, Tenant shall protect,
indemnify and hold harmless Landlord for, from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and reasonable
expenses (including, without limitation, reasonable attorneys' fees), to the
maximum extent permitted by law, imposed upon or incurred by or asserted against
Landlord by reason of: (a) any accident, injury to or death of persons or loss
of or damage to property of third parties occurring on or about the Leased
Property or adjoining sidewalks or rights of way during the Term; and (b) any
failure on the part of Tenant or any Person claiming under Tenant to perform or
comply with any of the terms of this Agreement during the Term; and (c) any
litigation, proceeding or claim resulting from or relating to any such failure
to perform or comply to which Landlord is made a party; provided, however, that
Tenant's obligations hereunder shall not apply to any liability, obligation,
claim, damage, penalty, cause of action, cost or expense arising from the gross
negligence or willful misconduct of Landlord, its employees, agents, contractors
or invitees, Landlord's failure to fund under Section 5.1.4(b) or Landlord's
breach 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 that Landlord shall unreasonably withhold or delay its
consent, Tenant shall not be liable pursuant to this Section 9.5 for any
incremental increase in costs or expenses resulting therefrom. The obligations
of Tenant under this Section 9.5 are in addition to (but shall not include) the
obligations set forth in Section 4.2 and shall survive the termination of this
Agreement for a period of three (3) years and shall thereafter terminate and be
of no further force and effect and no action may be brought under this Section
9.5 after the expiration of such period.
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ARTICLE 10
CASUALTY
--------
10.1 Restoration and Repair. If during the Term the Leased Property shall
be totally or partially destroyed and thereby rendered Unsuitable for Its
Permitted Use, Tenant shall give Landlord prompt Notice thereof. Either Landlord
or Tenant may, by the giving of Notice thereof to the other party within ninety
(90) days after such casualty occurs, terminate this Agreement, whereupon, this
Agreement shall terminate and Landlord shall be entitled to retain the insurance
proceeds payable on account of all such damage to the Leased Property and if
Tenant elects to terminate this Agreement as hereinabove provided, Tenant shall
pay to Landlord the amount of any deductible. If Landlord elects to terminate
this Agreement as hereinabove provided, Tenant shall not be obligated to pay to
Landlord the amount of any deductible. Tenant further expressly acknowledges,
understands and agrees that in the event that the Agreement is terminated as
aforesaid, Landlord may settle any insurance claims with respect to the Leased
Property and Tenant shall, upon request of Landlord, cooperate in any such
settlement. If during the Term, the Leased Property and/or Leased Improvements
and/or FF&E shall be destroyed or damaged in whole or in part by fire, windstorm
or any other cause whatsoever, but the Leased Property is not rendered
Unsuitable for Its Permitted Use, Tenant shall give Landlord immediate Notice
thereof and Tenant shall, subject to the provisions of Section 10.2, Section
10.3 and Section 10.4 below, repair, reconstruct and replace the Leased
Improvements and FF&E, or the portion thereof so destroyed or damaged, at least
to the extent of the value and character thereof existing immediately prior to
such occurrence including any alterations required to be made by any
governmental body, county or city agency, (which Tenant acknowledges may
increase the replacement value of the Leased Improvements which Tenant will then
be required to insure) due to any changes in code or building regulations. All
such restoration work shall be started as promptly as practicable and diligently
completed at Tenant's sole cost and expense. Tenant shall, however, immediately
take such action as is necessary to assure that the Leased Property (or any
portion thereof), does not constitute a nuisance or otherwise present or
constitute a health or safety hazard.
10.2 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 this ARTICLE 10, Tenant shall promptly 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). In the
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event Tenant shall elect not to pay 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, that in
such event, upon any disbursement by Landlord thereof, the Minimum Rent shall be
increased in the manner contemplated for Major Repairs as provided in Section
5.1.3(c) hereof as if such disbursement were a Major Capital Expenditures. 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 10.1. It is expressly understood and agreed, however, that
notwithstanding anything in this Agreement to the contrary, in the event this
Agreement is terminated as contemplated in this Section 10.2, Tenant shall be
strictly liable and solely responsible for the amount of any deductible.
10.3 Escrow of Insurance Proceeds. In the event of a casualty resulting in
a loss to the Leased Improvements and/or FF&E in an amount greater than ONE
HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00), (as determined by an
architect, engineer or other design professional approved by Landlord), and
provided this Lease is not terminated as provided in Section 10.1 hereof, the
proceeds of all insurance policies maintained by Tenant for and with respect to
the Leased Property shall be deposited in Landlord's and Tenant's name in an
escrow account at a bank or other financial institution designated by Landlord,
and shall be used by Tenant for the repair, reconstruction or restoration of the
Leased Improvements and/or FF&E to their original condition. Such proceeds shall
be disbursed periodically by Landlord upon certification of the architect,
engineer or other design professional approved by Landlord and having
supervision of the work that such amounts are the amounts paid or payable for
the repair, reconstruction or restoration. Tenant shall, at the time of
establishment of such escrow account and from time to time thereafter until said
work shall have been completed and paid for, furnish Landlord with adequate
evidence acceptable to Landlord that at all times the undisbursed portion of the
escrowed funds, together with any funds made available by Tenant or Landlord as
applicable and required in this Agreement, is sufficient to pay for the repair,
reconstruction or restoration in its entirety. Tenant shall obtain, and make
available to Landlord, receipted bills and, upon completion of said work, full
and final waivers of lien. In the event of a casualty resulting in a loss
payment for the Leased Improvements in an amount equal to or less than
$100,000.00, the proceeds shall be paid to Tenant, and shall be applied towards
repair, reconstruction and restoration. Any and all loss adjustments with
respect to losses to the Leased Property payable hereunder shall require the
prior written consent of Landlord. All salvage resulting from any risk covered
by insurance shall belong to Tenant, provided any rights to the same have been
waived by the insurer. In addition, notwithstanding anything in this Agreement
to the contrary in connection with a casualty contemplated in this Section 10.3,
Tenant shall be strictly liable and solely responsible for the amount of any
deductible and shall pay for all repairs, reconstruction or alterations up to
the full amount of such deductible (and provide evidence of such payment to
Landlord by documentation reasonably acceptable to Landlord) before any
insurance proceeds are used for repairs, reconstruction or alterations.
10.4 Repairs. In the event Tenant is required to restore the Leased
Property pursuant to Section 10.1, Tenant shall 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
49
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, the Landlord shall advance the
insurance proceeds during the repair and restoration period so as to permit
payment for the cost of any such restoration and repair. Any such advances shall
be made not more than monthly within ten (10) Business Days after Tenant submits
to Landlord a written requisition and substantiation therefor on AIA Forms G702
and G703 (or on such other form or forms as may be reasonably approved by
Landlord). Landlord may require, at its option, prior to advancement of said
insurance proceeds and other amounts: (i) approval of plans and specifications
by an architect or other design professional satisfactory to Landlord
appropriate under the circumstances and approved by Landlord and Tenant (which
approval shall not be unreasonably withheld or delayed), (ii) general
contractors' estimates, (iii) architect's certificates, (iv) unconditional lien
waivers of general contractors, if available, (v) evidence of approval by all
Government Agencies and other regulatory bodies whose approval is required, and
(vi) such other customary terms as a Mortgagee or Landlord may reasonably
require.
10.5 Abatement of Rent. Unless terminated pursuant to this Section, this
Agreement shall remain in full force and effect and Tenant's obligation to make
all payments of Rent and to pay all the 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 or rent loss insurance obtained by Tenant hereunder). The
provisions of this Section 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, Tenant hereby waives the application of any local or
state statute, law, rule, regulation or ordinance in effect during the Term
which provides for such a contingency.
10.6 Tenant's Property and Business Interruption Insurance. Notwithstanding
any provision herein to the contrary, all insurance proceeds payable by reason
of any loss of or damage to any of Tenant's Personal Property and the business
interruption insurance maintained for the benefit of Tenant shall be paid to
Tenant.
10.7 Restoration of Tenant's Property. If Tenant is required to restore the
Leased Property as hereinabove provided, Tenant shall either (i) restore all
alterations and improvements made by Tenant and Tenant's Personal Property, or
(ii) 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.
10.8 Waiver. Tenant hereby waives any statutory rights of termination which
may arise by reason of any damage or destruction of the Leased Property.
ARTICLE 11
CONDEMNATION
------------
11.1 Total Condemnation, Etc. If the whole of the Leased Property shall be
taken or condemned for any public or quasi-public use or purpose, by right of
eminent domain or by purchase in lieu thereof, or if any portion of the Leased
Property shall be so taken or condemned such that the Leased Property is
rendered Unsuitable For Its Permitted Use, then this Agreement and the Term
hereof shall cease and terminate (without prejudice to Landlord's and Tenant's
respective rights to an award under Section 11.3 below), as of the date on which
the condemning authority takes possession and all Rent shall be paid by Tenant
to Landlord up to that date or refunded by Landlord to Tenant if Rent has
previously been paid by Tenant beyond that date.
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11.2 Partial Condemnation; Temporary Condemnation. If a portion of the
Leased Property is taken and such taking does not render the Leased Property
Unsuitable For Its Permitted Use, then the Tenant shall, utilizing condemnation
proceeds paid to Landlord from the condemning authority, promptly restore the
remaining portion or portions thereof to a condition comparable to their
condition at the time of such taking or condemnation, less the portion or
portions lost by the taking, and this Agreement shall continue in full force and
effect except that the Rent payable hereunder shall, if necessary, be equitably
adjusted to take into account the portion or portions of the Leased Property
lost by the taking. Any dispute as to the equitable adjustment of Rent shall be
resolved by arbitration pursuant to ARTICLE 19 hereof.
In the event of any temporary Condemnation of the Leased Property or any
portion thereof 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 Rent and 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 hereof, whether to pay 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, restore the
Leased Property to the condition that existed immediately prior to such
condemnation, in full compliance with 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. Notwithstanding
Section 11.3 below, Tenant shall apply any proceeds of the Award that have not
been used to fulfill Tenant's obligations under this Agreement (including
payment of Rent) during such period of temporary condemnation to so restore the
Leased Premises; provided, in the event such remaining amount of the Award is
not sufficient to cover the costs of completing such restoration, Landlord
agrees to fund such shortfall as an approved Major Capital Expenditure and
Minimum Rent shall be increased in the manner contemplated pursuant to Sections
5.1.3 and 5.1.4. For purposes of this Section 11.2, a Condemnation shall be
deemed to be a temporary Condemnation if title is not, and is not intended to
be, or sought to be, permanently taken by the condemning authority, but rather,
only the right to use and occupy is taken by the condemning authority with the
intent that the condemning authority (or its designated user or occupant) will
return the right to use and occupy after the period of such temporary taking.
11.3 Disbursement of Award. The entire Award for the Leased Property or the
portion or portions thereof so taken shall be apportioned between Landlord and
Tenant as follows: (a) if this Agreement terminates due to a taking or
condemnation, Landlord shall be entitled to the entire Award; provided, however,
that any portion of the Award expressly allocable or made for the taking of
Tenant's leasehold interest in the Leased Property, loss of business during the
remainder of the Term, and the taking of Tenant's Personal Property shall be the
51
sole property of and payable to Tenant and in the event no such express
allocation for the taking of Tenant's leasehold interest is made, Landlord and
Tenant agree to determine the same by an appraisal of the parties respective
interests in the Leased Property, and of Tenant's Personal Property, by an
appraiser mutually acceptable to Landlord and Tenant, and any such portion of
the Award allocated to Tenant by such appraiser shall be the property of and
payable to Tenant, and (b) if this Agreement does not terminate due to such
taking or condemnation, Tenant shall be entitled to the Award to the extent
required for restoration of the Leased Property, and Landlord shall be entitled
to the balance of the Award not applied to restoration except for any portion of
the Award for taking Tenant's Personal Property. In any condemnation
proceedings, Landlord and Tenant shall each seek its own Award in conformity
herewith, at its own expense. If this Agreement does not terminate due to a
taking or condemnation, Tenant shall, with due diligence, restore the remaining
portion or portions of the Leased Property in the manner hereinabove provided.
In such event, the proceeds of the Award to be applied to restoration shall be
deposited with a bank or financial institution designated by Landlord as if such
Award were insurance proceeds, and the amount so deposited will thereafter be
treated in the same manner as insurance proceeds are to be treated under Section
10.3 of this Agreement until the restoration has been completed and Tenant has
been reimbursed for all the costs and expenses thereof. Landlord's obligation
under this Section 11.3 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 Mortgagee;
otherwise each such 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 Mortgagee to Landlord. If during the last two (2) years
of the Term, such funds are not collected or released this Lease shall
terminate. If the Award is insufficient to pay for the restoration or Landlord
does not collect the Award, and the Lease is not in the last two (2) years of
the Term, Section 10.2 shall govern any insufficiency of the Award to pay for
restoration of the Leased Property (including the termination rights set forth
therein) to the same extent as if the Award were insurance proceeds; provided,
however, if Landlord thereafter collects the Award, and Tenant or Landlord
elects to fund any deficiency as contemplated in Section 10.2, either (i) the
amount of the Award equal to such insufficiency funded by Tenant shall be
delivered to Tenant in the event Tenant funded such insufficiency pursuant to
Section 10.2 hereof, or (ii) Landlord shall keep the Award and Minimum Rent
shall be reduced to the extent the amount of the Award covers such insufficiency
in the event Landlord had funded such insufficiency as a Major Capital
Expenditure pursuant to Section 10.2.
11.4 Abatement of Rent. Other than as specifically provided in this
Agreement, this Agreement shall remain in full force and effect and Tenant's
obligation to make all payments of Rent and to pay all other charges as and when
required under this Agreement shall remain unabated during the Term
notwithstanding any Condemnation involving the Leased Property. The provisions
of this ARTICLE 11 shall be considered an express agreement governing any
Condemnation involving the Leased Property and, to the maximum extent permitted
by law, no local or State statute, law, rule, regulation or ordinance in effect
during the Term which provides for such a contingency shall have any application
in such case.
11.5 Disputes. If Landlord and Tenant cannot agree in respect of any
matters to be determined under this Article, a determination shall be requested
of the court having jurisdiction over the taking or condemnation; provided,
however, that if said court will not accept such matters for determination, such
matters shall be resolved by arbitration pursuant to ARTICLE 19 hereof.
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ARTICLE 12
DEFAULTS AND REMEDIES
---------------------
12.1 Events of Default. Each of the following events shall be an Event of
Default hereunder by Tenant and shall constitute a breach of this Agreement:
(a) If Tenant shall fail to pay, (i) when due, any Minimum Rent or
Percentage Rent, or portion thereof and such failure shall continue
for a period of five (5) days, or (ii) any Additional Charges when due
and payable hereunder or any other sum due to Landlord from Tenant
hereunder, within ten (10) days after receipt of Notice thereof from
Landlord;
(b) If Tenant shall violate or fail to comply with or perform any
other term, provision, covenant, agreement or condition to be
performed or observed by Tenant under this Agreement, and such
violation or failure shall continue for a period of thirty (30) days
after Notice thereof from Landlord; provided, however, that if such
default is susceptible of cure but such cure cannot be accomplished
with diligent and continuous efforts within such period of time, and
if, in addition, Tenant commences to cure or cause to be cured such
default within such period of time and thereafter prosecutes the
curing of such default with diligence and continuous efforts, such
thirty (30) day period of time shall be extended to such period of
time as may be necessary to cure such default with diligence and
continuous efforts not to exceed however, an additional ninety (90)
days.
(c) Except for a "change of control of Wyndham" (as defined in Section
16.4 hereof) as to which only the provisions of Section 16.4 shall
apply, and except as otherwise expressly authorized under Section
16.4, if any assignment, transfer, sublease or encumbrance shall be
made or deemed to be made that is in violation of the provisions of
this Agreement, or if Tenant shall cease to be a majority owned direct
or indirect subsidiary of Wyndham.
(d) If Tenant shall cease the actual and continuous operation of the
business contemplated by this Agreement to be conducted by Tenant upon
the Leased Property (and such cessation is not the result of casualty,
condemnation, or other event of force majeure, renovation or
restoration or is not otherwise permitted by Landlord or is not the
result of a legal requirement or during an emergency, but Tenant shall
not thereby be relieved of its obligation to pay Rent as required
herein, except as may be expressly provided herein); or if Tenant
shall vacate, desert or abandon the Leased Property; or if the Leased
Property or Leased Improvements are used or are permitted to be used
for any purpose, or for the conduct of any activity, not permitted by
this Agreement except as a result of temporary Condemnation.
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(e) If, at any time during the Term of this Agreement, Tenant shall,
or Guarantor shall during the term of the Guaranty, file in any court,
pursuant to any statute of either the United States or of any State, a
petition in bankruptcy or insolvency, or for reorganization or
arrangement, or for the appointment of a receiver or trustee of all or
any portion of Tenant's property, including, without limitation, its
leasehold interest in the Leased Property, or if Tenant shall make an
assignment for the benefit of its creditors or petitions for or enters
into an arrangement with its creditors.
(f) If, at any time during the Term of this Agreement, there shall be
filed against Tenant or Guarantor (prior to the expiration of the
Guaranty by its terms) in any courts pursuant to any statute of the
United States or of any State, a petition in bankruptcy or insolvency,
or for reorganization, or for the appointment of a receiver or trustee
of all or a portion of Tenant's property, including, without
limitation, its leasehold interest in the Leased Property or of all or
substantially all of Guarantor's Property, and any such proceeding
against Tenant or Guarantor shall not be dismissed within ninety (90)
days following the commencement thereof.
(g) If Tenant's leasehold interest in the Leased Property or any
property therein shall be seized under any levy, execution, attachment
or other process of court where the same shall not be vacated or
stayed on appeal or otherwise within thirty (30) days thereafter, or
if Tenant's leasehold interest in the Leased Property is sold by
judicial sale and such sale is not vacated, set aside or stayed on
appeal or otherwise within thirty (30) days thereafter.
(h) If Tenant shall default under any Management Agreement beyond any
applicable cure period for or concerning the Leased Property.
(i) If an Event of Default shall occur under and as defined in any of
the Other Leases.
(j) If a final unappealable determination is made by applicable State
authorities of the revocation or limitation of any material license,
permit, certification or approval required for the lawful operation of
the Leased Property in accordance with its Permitted Use or there
occurs the loss or material limitation of any material license,
permit, certification or approval under any other circumstances and
Tenant is required to cease its operation of the Leased Property in
accordance with its Permitted Use at the time of such revocation, loss
or limitation except as a result of casualty, condemnation or other
event of force majeure, renovation or restoration (but Tenant shall
not thereby be relieved of its obligation to pay Rent as required
herein, except as may be expressly provided herein).
12.2 Remedies on Default. If any Event of Default hereinabove specified
shall occur, Landlord, at any time thereafter, shall have and may exercise any
of the following rights and remedies:
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(a) Landlord may, pursuant to written notice thereof to Tenant,
terminate this Agreement and, peaceably or pursuant to appropriate
legal proceedings, re- enter, retake and resume possession of the
Leased Property for Landlord's own account and, for Tenant's breach of
and default under this Agreement, recover immediately from Tenant any
and all rents and other sums and damages due and payable at the time
of such termination, including, without limitation, (i) all Rent and
other sums, charges, payments, costs and expenses then due and payable
by Tenant to Landlord hereunder, (ii) all reasonable costs and
expenses of Landlord in connection with the recovery of possession of
the Leased Property, including reasonable attorney's fees based upon
services rendered at hourly rates and court costs, and (iii) all
reasonable costs and expenses of Landlord in connection with any
reletting or attempted reletting of the Leased Property or any part or
parts thereof, including, without limitation, brokerage fees,
advertising costs, reasonable attorney's fees based upon services
rendered at hourly rates and the reasonable cost of any alterations or
repairs or tenant improvements which may be reasonably required to so
relet the Leased Property, or any part or parts thereof. In addition,
in the event Landlord elects to terminate this Agreement, upon
Landlord's request, Tenant agrees to assign to Landlord or to cause
Manager to assign to Landlord all contracts, leases, permits and other
agreements entered into by Tenant or Manager with respect to the
operation, maintenance, use or repair of the Leased Property other
than Tenant's Intangible Personal Property, the Management Agreement,
and National Contracts.
(b) Landlord may, pursuant to any prior notice required by law, and
without terminating this Agreement, peaceably or pursuant to
appropriate legal proceedings, re-enter, retake and resume possession
of the Leased Property for the account of Tenant, make such
alterations of and repairs and tenant improvements to the Leased
Property as may be reasonably necessary in order to relet the same or
any part or parts thereof and relet or attempt to relet the Leased
Property or any part or parts thereof for such term or terms (which
may be for a term or terms extending beyond the Term of this
Agreement), at such rents and upon such other terms and provisions as
Landlord, in its sole discretion, may deem advisable. If Landlord
takes possession and control of the Leased Property and operates the
same, Tenant shall, for so long as Landlord is actively operating the
Leased Property, have no obligation to operate the Leased Property. If
Landlord relets or attempts to relet the Leased Property, Landlord
shall at its sole discretion determine the terms and provisions of any
new lease or sublease and whether or not a particular proposed new
tenant or sublessee is acceptable to Landlord. Provided, however, such
reletting shall be on fair market terms if to an Affiliate of
Landlord. Upon any such reletting, all rents received by the Landlord
from such reletting shall be applied as follows: (a) first, to the
payment of all reasonable costs and expenses of recovering possession
of the Leased Property, (b) second, to the payment of any reasonable
costs and expenses of such reletting, including brokerage fees,
advertising costs, reasonable attorney's fees and the cost of any
alterations and repairs reasonably required for such reletting; (c)
third, to the payment of any indebtedness, other than Rent, due
hereunder from Tenant to the Landlord, (d) fourth, to the payment of
all Rent and other
55
sums due and unpaid hereunder, and (e) fifth, the residue, if any,
shall be held by the Landlord and applied in payment of future Rents
as the same may become due and payable hereunder. If the rents
received from such reletting during any period shall be less than that
required to be paid during that period by the Tenant hereunder, Tenant
shall promptly pay any such deficiency to the Landlord and failing the
prompt payment thereof by Tenant to Landlord, Landlord shall
immediately be entitled to institute legal proceedings for the
recovery and collection of the same. Such deficiency shall be
calculated and paid at the time each payment of rent shall otherwise
become due under this Agreement, or, at the option of Landlord, at the
end of the Term of this Agreement. No such re-entry, retaking or
resumption of possession of the Leased Property by the Landlord for
the account of Tenant shall be construed as an election on the part of
Landlord to terminate this Agreement unless a written notice of such
intention shall be given to the Tenant or unless the termination of
this Agreement be decreed by a court of competent jurisdiction.
Notwithstanding any such re-entry and reletting or attempted reletting
of the Leased Property or any part or parts thereof for the account of
Tenant without termination, Landlord may at any time thereafter, upon
written notice to Tenant, elect to terminate this Agreement or pursue
any other remedy available to Landlord for Tenant's previous breach of
or default under this Agreement.
(c) Landlord may, (i) without re-entering, retaking or resuming
possession of the Leased Property, ▇▇▇ for all Rent and all other
sums, charges, payments, costs and expenses due from Tenant to
Landlord hereunder as they become due under this Agreement or (ii) at
Landlord's option, terminate this Agreement and re-enter, retake and
resume possession of the Leased Premises, and in addition to any Rent
then due and owing, Tenant shall pay to Landlord an amount equal to
the present value (discounted at the rate of ten and a half (10.5%)
per annum) of the excess, if any, of the Rent, as well as all other
sums, charges, payments, costs and expenses which would be payable
hereunder by Tenant to Landlord. from the date of such termination
(assuming that, for the purpose 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 (12)
calendar months, or if less than twelve (12) 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 (excluding unexercised renewal
options) 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. Regardless
of the foregoing remedy under this subparagraph (c), Landlord shall
not be required to relet the Leased Property nor exercise any other
right granted to Landlord pursuant to this Agreement.
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(d) Landlord may, in addition to any other remedies provided herein,
enter upon the Leased Property or any portion thereof and take
possession of (i) any and all of Tenant's Personal Property, if any
(other than items of Tenant's Intangible Personal Property), (ii)
Tenant's books and records necessary to operate the Leased Property,
and (iii) the Reserve and all the bank accounts concerning, or
established for, the Leased Property, without liability for trespasses
or conversion (Tenant hereby waiving any right to notice or hearing
prior to such taking of possession by Landlord) and sell the same by
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 (other than items of Tenant's Intangible Personal Property),
if any, unless otherwise prevented by law. Unless otherwise provided
by law and without intending to exclude any other manner of giving
Tenant reasonable notice, the requirement of reasonable notice shall
be met if such notice is given at least ten (10) days before the date
of sale. The proceeds from any such disposition, less all expenses
incurred in connection with the taking of possession, holding and
selling of any of such property (including reasonable attorneys' fees
based upon services rendered at hourly rates) shall be credited
against Rent which is due hereunder.
(e) In addition to the remedies hereinabove specified and enumerated,
Landlord shall have and may exercise the right to invoke any other
remedies allowed at law or in equity as if the remedies of re-entry,
unlawful detainer proceedings and other remedies were not herein
provided including, but not limited to, the right to ▇▇▇ for and
otherwise recover from Tenant any damages occasioned by or resulting
from any abandonment of the Leased Property or other breach of, or
default under this Agreement. Accordingly, the mention in this
Agreement of any particular remedy shall not preclude Landlord from
having or exercising any other remedy at law or in equity. In
addition, any provision of this Agreement to the contrary
notwithstanding, no provision of this Agreement shall delay or
otherwise limit Landlord's right to seek injunctive relief or Tenant's
obligation to comply with any such injunctive relief.
12.3 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.
12.4 Landlord's Right to Cure Tenant's Default. If an Event of Default
shall exist hereunder, Landlord may, but have no obligation to, after notice to
Tenant and a reasonable time to perform after such notice (or without notice if,
in Landlord's reasonable opinion, an emergency exists) perform the same for the
account and at the expense of Tenant. If, at any time and by reason of such
Event of Default, Landlord is compelled to pay, or elects to pay, any sum of
money or do any act which will require the payment of any sum of money (other
than the cost of any Major Capital Expenditures or Reserve Expenditures
contained in an Approved Reserve Estimate which Landlord has agreed to pay
hereunder as expressly contemplated in Section 5.1.3 and 5.1.4(b) hereof), or is
compelled to incur any expense in the enforcement of its rights hereunder or
otherwise, such sum or sums, together with interest thereon at the Overdue Rate
shall be deemed Additional Charges hereunder and shall be repaid to Landlord by
Tenant promptly when billed therefor, and Landlord shall have all the same
rights and remedies in respect thereof as Landlord has in respect of the rents
herein reserved.
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12.5 Landlord's Lien. Landlord shall have at all times during the Term of
this Agreement, a valid lien for all rents and other sums of money due or
becoming due hereunder from Tenant, upon all goods, wares, merchandise,
inventory, furniture, fixtures, equipment, vehicles and other tangible personal
property and effects of Tenant situated in or upon the Leased Property,
including Tenant's Personal Property but excluding items of Tenant's Intangible
Personal Property, and such property shall not be removed from the Leased
Property except in accordance with the terms of this Agreement without the
approval and consent of Landlord until all arrearages in rent as well as any and
all other sums of money then due to Landlord hereunder shall first have been
paid and discharged in full. Upon the occurrence and during the continuance of
any Event of Default by Tenant, Landlord may, in addition to any other remedies
provided herein or by law, enter upon the Leased Property and take possession of
any and all goods, wares, merchandise, books and records, inventory, furniture,
fixtures, equipment, vehicles and other tangible personal property and effects
of Tenant situated in or upon or with respect to the Leased Property, including
Tenant's Personal Property but excluding items of Tenant's Intangible Personal
Property, without liability for trespass or conversion, and sell the same at
public or private sale, with or without having such property appraised, at which
Landlord or its assigns may purchase any of the same and apply the proceeds
thereof, less any and all expenses connected with the taking of possession and
sale, as a credit against any sums due from Tenant, and Tenant agrees to pay any
deficiency forthwith. If Landlord takes possession and control of the Leased
Property and operates the same, Tenant shall for so long as Landlord is actively
operating the Leased Property, have no obligation to operate the Leased
Property. Alternatively, the lien hereby granted may be foreclosed in the manner
and form provided by law for foreclosure of security interests or in any other
manner and form provided by law. The statutory lien for rent, if any, is not
hereby waived and the express contractual lien herein granted is in addition
thereto and supplementary thereto. Tenant agrees to execute and deliver to
Landlord from time to time during the Term of this Agreement such financing
statements as may be required by Landlord in order to perfect the Landlord's
lien provided herein or by Applicable Laws. Tenant further agrees that during an
Event of Default or the pendency of any event or circumstance which, with the
passage of time may become an Event of Default under Section 12.1(a), Tenant
shall not make any distributions to its shareholders, partners, members or other
owners and any such distributions shall be subordinate to Landlord's claim for
Rent and other sums hereunder.
12.6 The Other Leases. As referenced in this Agreement, Landlord and Tenant
are, contemporaneously with, or subsequent to, the execution of this Agreement,
entering into the Other Leases. It is the express agreement and understanding of
Landlord and Tenant that this Agreement and the Other Leases are and shall be
cross defaulted and cross collateralized such that (a) an Event of Default
under, and/or termination of, this Agreement or any of the Other Leases shall be
and constitute an Event of Default under and, at Landlord's option exercised by
written notice, immediately effect a termination of, the Other Leases and this
Agreement, respectively and (b) any security or collateral given by Tenant
hereunder and under the Other Leases, including the Security Deposit and Minimum
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Rent Reserve, may be taken by Landlord to cure any Event of Default under this
Agreement or any of the Other Leases. Provided, however, if this Agreement is
terminated by either Landlord or Tenant as a result of a casualty pursuant to
Sections 10.1 and 10.2 or condemnation under ARTICLE 11, such termination shall
not constitute or require a termination of the Other Leases and such Other
Leases shall survive the termination of this Agreement under Sections 10.1 and
10.2 or condemnation under ARTICLE 11. Further, it is the express agreement,
intent and understanding of the Landlord and Tenant that (x) this Agreement and
the Other Leases are not severable; and (y) in the event that Tenant shall file
for, or there shall be filed against Tenant, bankruptcy, insolvency or a similar
arrangement or proceeding, this Agreement and the Other Leases shall be and
remain cross defaulted and considered one Lease and may not be severed or
assumed separately in any such proceedings, it being the express agreement and
intent of Landlord and Tenant that either all of this Agreement and the Other
Leases shall be rejected by any receiver or trustee in any such proceedings or
all of said Leases shall be assumed by any such receiver or trustee.
12.7 Landlord's Default. Subject to Landlord's right to dispute its
obligations in accordance with the terms of this Agreement, if Landlord shall
default in the performance or observance of any of its covenants or obligations
set forth in 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 (subject to Section 20.3
hereof and provided, that if such non-monetary default is susceptible of cure,
but such cure cannot be accomplished with diligence and continuous efforts
within such period of time, and, if in addition, Landlord commences to cure or
cause to be cured such default within such period of time and thereafter
prosecutes the curing of such default with diligence and continuous efforts,
such period of time shall be extended to such period of time as may be necessary
to cure such default with diligence and continuous efforts not to exceed,
however, an additional ninety (90) days, Tenant may declare the occurrence of a
"Landlord Default" by giving Notice of such declaration to Landlord and to such
Hotel Mortgagee. Thereafter, Tenant may (but shall have no obligation to) 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
from the date Landlord receives Tenant's invoice, at the Overdue Rate. Except as
otherwise expressly provided in this Agreement to the contrary, 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 by arbitration as contemplated in ARTICLE 19 hereof;
provided, however, that in the event of any such adverse determination, Landlord
shall pay to Tenant interest on any disputed fine at the Disbursement Rate from
the date demand of such funds is made by Tenant until the date of final adverse
determination and, thereafter, at the Overdue Rate until paid.
12.8 Special Remedies for Landlord Funding Default.
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In the event of any Landlord Default arising solely under Section 5.1.4(b),
Tenant shall have the right, in Tenant's sole discretion, in addition to all
other remedies of Tenant hereunder, to exercise any one or more of the following
remedies:
(a) Tenant may fund the deficient amounts and offset the aggregate
amount thereof, plus interest thereon from the date of funding at the
Overdue Rate, against any Rent payable by Tenant subsequent to the
date of advance by Tenant pursuant to this Agreement until recouped;
or
(b) Tenant may terminate this Agreement whereupon any portion of the
Minimum Rent Reserve then remaining and any unapplied balance of the
Security Deposit and shall be refunded to Tenant and Tenant may pursue
its damages, if any, available at law or in equity for such breach.
ARTICLE 13
HOLDING OVER
------------
If Tenant or any other person or party shall remain in possession of the
Leased Property or any part thereof following the expiration of the Term or
earlier termination of this Agreement without an agreement in writing between
Landlord and Tenant with respect thereto, the person or party remaining in
possession shall be deemed to be a tenant at sufferance, and during any such
holdover, the Rent payable under this Agreement by such tenant at sufferance
shall be double the rate or rates in effect immediately prior to the expiration
of the Term or earlier termination of this Agreement. In no event, however,
shall such holding over be deemed or construed to be or constitute a renewal or
extension of this Agreement.
ARTICLE 14
LIABILITY OF LANDLORD; INDEMNIFICATION
--------------------------------------
14.1 Liability of Landlord. Landlord and its Affiliates shall not be liable
to Tenant, its employees, agents, invitees, licensees, customers, clients,
family members or guests for any damage, injury, loss, compensation or claim,
including, but not limited to, claims for the interruption of or loss to
Tenant's business, based on, arising out of or resulting from any cause
whatsoever (other than Landlord's gross negligence or willful misconduct or
Landlord's breach of this Agreement), including, but not limited to: (a) repairs
to any portion of the Leased Property; (b) interruption in Tenant's use of the
Leased Property; (c) any accident or damage resulting from the use or operation
(by Landlord, Tenant or any other person or persons) of any equipment within the
Leased Property, including without limitation, heating, cooling, electrical or
plumbing equipment or apparatus; (d) the termination of this Agreement by reason
of the condemnation or destruction of the Leased Property in accordance with the
provisions of this Agreement; (e) any fire, robbery, theft, mysterious
disappearance or other casualty; (f) the actions of any other person or persons;
and (g) any leakage or seepage in or from any part or portion of the Leased
Property, whether from water, rain or other precipitation that may leak into, or
flow from, any part of the Leased Property, or from drains, pipes or plumbing
fixtures in the Leased Improvements. Any goods, property or personal effects
stored or placed by the Tenant or its employees in or about the Leased Property
including Tenant's Personal Property, shall be at the sole risk of the Tenant.
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14.2 Notice of Claim or Suit. Tenant shall promptly notify Landlord of any
claim, action, proceeding or suit instituted or threatened against Tenant or
Landlord of which Tenant receives notice or of which Tenant acquires knowledge.
In the event Landlord is made a party to any action for damages or other relief
against which Tenant has indemnified Landlord, as aforesaid, Tenant shall at its
own expense using counsel reasonably approved by Landlord, diligently defend
Landlord, pay all costs in such litigation or, at Landlord's option, and
expense, Landlord may nonetheless engage its own counsel in connection with its
own defense or settlement of said litigation in which event Tenant shall
cooperate with Landlord and make available to Landlord all information and data
which Landlord deems necessary or desirable for such defense.
14.3 Limitation on Liability of Landlord. Provided, Landlord does not
encumber the Leased Property with a Prohibited Mortgage as referenced in Section
20 hereof, in the event Tenant is awarded a money judgment against Landlord,
Tenant's sole recourse for satisfaction of such judgment shall, except as
otherwise provided hereinafter in this Section 14.3 and in Section 20.2, be
limited to execution against the Landlord's interest in the Leased Property,
including the Minimum Rent Reserve, the Security Deposit and the Reserve and any
proceeds from the disposition thereof. Further, in no event shall any partner,
member, officer, director, stockholder or shareholder of Landlord or any partner
thereof or Affiliated Person or Subsidiary thereof, be personally liable for the
obligations of Landlord hereunder. Provided, however, in the event that Landlord
shall sell, transfer or dispose of the Leased Property, the Security Deposit,
Minimum Rent Reserve or the Reserve, at a time when Tenant has a money judgment
against Landlord (or has so notified Landlord of a claim by Tenant against
Landlord hereunder which may give rise to a money judgment) and shall disburse
the proceeds of such sale, transfer or disposition to any partner, member,
officer, director, stockholder or shareholder of Landlord or any partner thereof
or Affiliated Person or Subsidiary thereof, Landlord shall be personally liable
to the extent of the proceeds so disbursed to any of such parties.
ARTICLE 15
REIT REQUIREMENTS
-----------------
Tenant understands that, in order for Landlord to qualify as a real estate
investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"), certain requirements (the "REIT Requirements") must be satisfied.
The parties intend that amounts to be paid by Tenant hereunder and received or
accrued, directly or indirectly, by Landlord with respect to the Leased Property
(including any rents attributable to personal property that is leased with
respect thereto) will qualify as "rents from real property" (within the meaning
of Code Section 856(d). Further, neither party will take any action or suffer
any condition to exist that would cause any amount received by the Landlord
under this Agreement to fail to qualify as such. Consistent with this intent,
the parties agree that:
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15.1 "Rents attributable to any personal property" leased to the Tenant
cannot exceed fifteen percent (15%) of the total Rent received or accrued by
Landlord under this Agreement for any Fiscal Year of the Landlord. Consistent
therewith, the average of the adjusted tax bases of the personal property
(within the meaning set forth in Section 1.512(b)-1(c)(3)(ii) of the applicable
Treasury Regulations) that is leased to Tenant with respect to the Leased
Property at the beginning and end of a Fiscal Year cannot exceed fifteen percent
(15%) of the average of the aggregate adjusted tax bases of the real and
personal property comprising such Leased Property that is leased to Tenant under
this Agreement at the beginning and end of such Fiscal Year (the "REIT Personal
Property Limitation"). If Landlord reasonably anticipates that the REIT Personal
Property Limitation will be exceeded with respect to the Leased Property for any
Fiscal Year, Landlord shall notify Tenant, and Landlord and Tenant shall
negotiate in good faith the purchase by Tenant of items of personal property
anticipated by Landlord to be in excess of the REIT Personal Property
Limitation. Provided, however, that Tenant's responsibility to purchase such
personal property will be offset by Landlord in some mutually agreeable manner.
15.2 Tenant cannot sublet the Leased Property or any portion of it, or
enter into any similar arrangement, on any basis such that the rental or other
amounts paid by the sublessee thereunder would be based, in whole or in part, on
either (a) the net income or profits derived by the business activities of the
sublessee or (b) any other formula such that any portion of the Rent paid by
Tenant to Landlord would fail to qualify as "rent from real property" within the
meaning of Section 856(d) of the Code and regulations promulgated thereunder.
15.3 Anything to the contrary in this Agreement notwithstanding, Tenant
shall not sublease the Leased Property to, or enter into any similar arrangement
with, any person in which Landlord owns, directly or indirectly, a ten percent
(10%) or more interest, within the meaning of Section 856(d)(2)(B) of the Code,
and any such action shall be deemed void ab initio. At Tenant's request,
Landlord shall disclose such persons.
15.4 Anything to the contrary in this Agreement notwithstanding, neither
party shall take, or permit to take, any action that would cause Landlord to
own, directly or indirectly, a ten percent (10%) or greater interest in the
Tenant within the meaning of Section 856(d)(2)(B) of the Code, and any similar
or successor provision thereto, and any such action shall be deemed void ab
initio.
15.5 Any services provided by, or on behalf of, Landlord will not prevent
any amounts received or accrued from qualifying as "rents from real property"
(within the meaning of Section 856(d)(2) or Section 512(b)(3) of the Code).
ARTICLE 16
SUBLETTING AND ASSIGNMENT SALE OF LEASED PROPERTY; LANDLORD'S RIGHT TO ACQUIRE
------------------------------------------------------------------------------
LEASEHOLD INTEREST; TRANSFERS BY LANDLORD
-----------------------------------------
16.1 Transfers Prohibited Without Consent. Except as provided in Section
16.7 and Section 16.8 hereof, Tenant shall not, without the prior written
consent of Landlord, in each instance, sell, assign, sublease or otherwise
transfer this Agreement, or Tenant's interest in the Leased Property, in whole
or in part, or any rights or interest which Tenant may have under this
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Agreement. Further, Tenant shall not grant or permit any lien or encumbrance on
or security interest in Tenant's interest in this Agreement or the Leased
Property. The consent of Landlord to a sale or an assignment, transfer or
subletting shall in no event be construed to relieve Tenant or such assignee
from the obligation of obtaining the express consent in writing of Landlord to
any further sale, assignment, transfer, or subletting. In addition: (a) any such
sale, assignment, transfer or subletting must be authorized under the Management
Agreement and (b) the proposed purchaser, transferee, assignee, or sublessee of
all or substantially all or a material portion of the Leased Property, must be a
Single Purpose Entity as defined on EXHIBIT "F" hereto (i) who has a verifiable
net worth (determined in accordance with generally accepted accounting
principles) of not less than the Rent due and payable for the Fiscal Year
immediately preceding such proposed sale or transfer; (ii) who, if required by
the terms thereof, is approved by Manager under the Management Agreement; (iii)
who has not been convicted of a felony and is known to have not engaged in
criminal activity or other activity involving moral turpitude (including
any Affiliate of such Person); (iv) who does not, as its primary business,
own, lease or operate any casino or gambling facility (including any Affiliate
of such Person or entity); (v) who does not own or operate a distillery,
winery or brewery or distributorship of alcoholic beverages if such leasing,
ownership or operation might reasonably impair the ability of Tenant, or its
Affiliates to obtain or retain any alcoholic beverage license for the Leased
Property; (vi) who does not own or operate a hotel or other facility proscribed
in Section 4.3 hereof; (vii) who has experience in the management of first class
hotels; (viii) who shall not be a Person in which Landlord, directly or
indirectly, owns a ten percent (10%) or greater interest within the meaning of
Section 856(d)(2)(B) of the Code or any similar or successor provision thereof;
and (ix) who shall be in conformance with and shall conform and comply with the
requirements of Section 15 hereof. In addition, any such approved assignee
shall expressly assume this Agreement by an agreement in recordable form, an
original executed counterpart of which shall be delivered to Landlord prior to
any assignment of the Agreement. Any assignment, transfer, sublease or
encumbrance in violation of this Article shall be voidable at Landlord's option.
In addition to the foregoing, for so long as Landlord or any Affiliated Person
of 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 or any portion thereof on any basis such that the
rental to be paid by any sublessee thereunder would be based, in whole or in
part, on either (x) the income or profits derived by the business activities by
such sublessee, or (y) 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 865(d) of the Internal Revenue Code, or any similar or successive
provisions thereto.
16.2 Indirect Transfer Prohibited Without Consent. A sale, assignment,
pledge, transfer, exchange or other disposition in a single transaction or in a
series of transactions of (a) the stock of Tenant or any general partner of
Tenant or any managing member interest of Tenant or (b) any interest of a
partner or partners or a member or members of Tenant which results in a change
or transfer of management or Control of Tenant, or (c) a merger, consolidation
or other combination of Tenant with another entity which results in a change or
transfer of management or Control or effective Control of Tenant, shall be
deemed an assignment hereunder and shall be subject to Section 16.1 hereof. For
purposes hereof, exchange or transfer of management or Control or effective
Control, shall mean a transfer of 50% or more of the economic benefit of, or
Control of, any such entity.
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16.3 Adequate Assurances. Without limiting any of the foregoing provisions
of this Article, if, pursuant to the U.S. Bankruptcy Code, as the same may be
amended from time to time, Tenant is permitted to assign or otherwise transfer
its rights and obligations under this Agreement in disregard or violation of the
restrictions contained in this Article, the assignee shall be deemed to agree to
provide adequate assurance to Landlord (a) that any Percentage Rent shall not
decline substantially after the date of such assignment, (b) of the continued
use of the Leased Property solely in accordance with the Permitted Use thereof,
(c) of the continuous operation of the business in the Leased Property in strict
accordance with the requirements of ARTICLE 4 hereof, and (d) of such other
matters as Landlord may reasonably require at the time of such assignment and
assumption. Without limiting the generality of the foregoing, adequate assurance
shall include the requirement that any such assignee shall have a net worth
(exclusive of good will) of not less than the aggregate of the Rent due and
payable for the previous Fiscal Year. Such assignee shall expressly assume this
Agreement by an agreement in recordable form, an original counterpart of which
shall be delivered to Landlord prior to an assignment of this Agreement.
Any approval of such successor Tenant shall not affect or alter Landlord's
approval rights of each manager of the Leased Property.
16.4 Change in Control of Wyndham. Landlord and Tenant expressly
acknowledge and agree that each of the Acquisition Properties and the
Development Properties, including the Leased Property, shall and must be
operated as a first class full service Hotel under the "Wyndham" Brand.
Notwithstanding anything to the contrary contained in this Agreement, the
parties further acknowledge and agree that so long as Wyndham's stock is
publicly traded on a national securities exchange (including NASDAQ or over the
counter exchanges) and Tenant remains under the Control of Wyndham as a majority
owned direct or indirect subsidiary, a change in the ownership or Control of
Wyndham shall not be or constitute a transfer prohibited hereunder. Provided,
however, that a "change in control of Wyndham" shall require the prior written
consent of Landlord which consent may be granted or withheld by Landlord in its
sole and absolute discretion. For purposes of this Section 16.4 "change in
control of Wyndham" shall mean any direct or indirect transfer of ownership
(including transfers of the kind generally referenced in Section 16.2 hereof)
which causes either (a) Wyndham and the Tenant not to be under common Control
(unless Landlord has given consent to a Portfolio Assignment under Section 16.7)
or (b) Wyndham stock to be no longer publicly traded on a national securities
exchange (including NASDAQ or over the counter exchanges). In the event of a
change in control of Wyndham to which Landlord has not given its consent (if
required hereunder) of this Section 16.4, Landlord shall have as its sole
remedy, the right (x) to terminate this Agreement and all rights and interests
of Tenant hereunder by Notice to Tenant given with six (6) months after Landlord
is provided written Notice of such change in control, and (y) upon such
termination, to retain the Security Deposit.
16.5 Sale of the Leased Property. Landlord and Tenant acknowledge and agree
that at any time after the fifth anniversary of the last to be executed of this
Agreement or any of the Other Leases, Landlord shall have the right to sell the
Leased Property free and clear of this Agreement and the Management Agreement,
provided that Landlord shall pay to Wyndham in cash twenty-five percent (25%) of
any net gain that Landlord receives from the sale of the Leased Property net of
64
the usual and customary selling expenses paid to third parties which are not
Affiliated Persons of Landlord and computed against a basis equal to the
purchase price under the Purchase Agreement. Provided, however, Landlord may
only exercise the right to sell a Leased Property if (a) the net operating
income for the twenty-four (24) Accounting Periods preceding the sale has been
less than 1.05 times the Minimum Rent for the Leased Property to be sold and (b)
the Leased Property is achieving less than one hundred percent (100%) REVPAR
penetration (as defined in the Uniform System of Accounts) in its competitive
set (or ninety-five percent (95%) REVPAR penetration in the case where a
Marriott Hotel is in the competitive set) for the twenty-four (24) months
preceding the proposed sale, as determined by an independent third party. Any
dispute as to whether the foregoing conditions are met shall be resolved by
arbitration pursuant to ARTICLE 16 hereof. In the event that Landlord elects to
sell Leased Property as herein contemplated, Landlord shall notify Tenant of
such sale and Tenant or its designee, shall have a period of thirty (30) days in
which to submit an offer to acquire the Leased Property from Landlord. Such
offer must contemplate a Closing within sixty (60) days of the date of such
offer. In the event that the Landlord in its sole discretion rejects Wyndham's
offer, Landlord may sell the Leased Property to any other Person that is not an
Affiliate of Landlord on terms acceptable to Landlord in its sole discretion.
Provided, however, the purchase price may not be less than the purchase price of
Tenant's offer, and provided further, the closing shall not occur prior to sixty
(60) days (or such longer period required by law to enable Tenant and Manager to
comply with Applicable Laws concerning the termination of employment and related
issues, including the WARN Act and COBRA) following the acceptance of such third
party offer and notice thereof to Tenant.
16.6 Landlord's Right to Acquire the Leasehold Interest. Notwithstanding
anything herein or in the Other Leases to the contrary, Landlord shall have the
right, to be exercised, if at all, at any time during the first five (5) years
of the Term hereof, upon sixty (60) days prior Notice to Tenant, to (a) require
Tenant to transfer its entire leasehold estate in one or more of the Acquisition
Properties and the Development Properties, including the Leased Property, to a
subsidiary of Landlord and to require Wyndham to join in and consent to any such
transfer or (b) to require Wyndham to transfer its entire interest in the Tenant
to a subsidiary of Landlord. In consideration of either of the above transfers
of interest, Landlord shall pay to Tenant the fair market value of the Tenant's
leasehold estate as of the date of Landlord's Notice to Tenant, which shall be
deemed to be the net present value of the projected annual Tenant's Operating
Income (as hereinafter defined) for the next succeeding twenty (20) years of the
Term (assuming, for the purposes hereof, the exercise of renewal options to
extend the Term out for such 20 years) (the "Fair Market Value"). If the parties
cannot agree to the Fair Market Value within ten (10) days of receipt by Tenant
of Landlord's Notice hereunder, then the Landlord may retain at Landlord's
expense an independent appraiser to determine the Fair Market Value. If the
Tenant disagrees with the determination of the Landlord's appraiser, then Tenant
may retain within ten (10) days following receipt by Tenant of Notice of such
determination, at Tenant's expense, a separate independent appraiser to
determine the Fair Market Value. If the Landlord disagrees with the
determination of the Tenant's appraiser, the Landlord's and the Tenant's
appraiser shall mutually select a third independent appraiser with like
qualifications to determine the Fair Market Value (the cost of such third
appraise shall be split between the Landlord and Tenant). If either Landlord or
Tenant disagrees with the determination of the third appraiser, the Fair Market
Value shall be resolved by taking the average determination of all three
appraisers; provided, however, the computation of such average shall not include
any determination by an appraiser that is greater or lesser than five percent
(5%) from the "middle" determination falling between the highest and lowest
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determinations. If both the highest and lowest determinations are more than five
percent (5%) greater or lesser than, as the case may be, the middle
determination, both such determinations shall be excluded and the middle
determination shall be the determination used by the parties to resolve the
dispute. If Landlord does not agree with the Fair Market Value, Landlord will
have no obligation to acquire the Tenant's leasehold interest, notwithstanding
delivery of Notice to such effect hereunder, but if Landlord elects not to so
acquire Tenant's leasehold interest, Landlord will reimburse Tenant for the fees
and expenses of Tenant's appraiser, if any. As used herein, "Tenant's Operating
Income" shall equal for any Fiscal Year, Total Hotel Sales less the sum of (a)
Property Expenses (adjusted to reflect all fees payable under the Management
Agreement including base fees, trade name fees and incentive fees), and (b) Rent
payable to the Landlord. In the event this Agreement is transferred to the
Landlord pursuant to this Section 16.6, Landlord will take an assignment of the
Management Agreement previously approved by Landlord and then in
effect, return the Security Deposit and Minimum Rent Reserve (if applicable) to
Wyndham, release Wyndham of any of its obligations or responsibilities under its
Guaranty and release Tenant of any and all further obligations hereunder.
16.7 Portfolio Assignment. Notwithstanding anything contained in Section
16.1 hereof to the contrary, at any time, commencing with the expiration or
earlier termination of the Guaranty but not prior thereto, and subject to and
contingent upon Manager being the Manager as hereafter referenced, Tenant shall
have the right to collectively transfer this Agreement and the Other Leases but
not less than all of such Leases to a Portfolio Assignee pursuant to a Portfolio
Assignment. A Portfolio Assignment shall operate to release Tenant from all of
Tenant's obligations to Landlord which accrue or arise from and after the date
of such assignment under this Agreement and the Other Leases so long as
Portfolio Assignee expressly assumes such obligations of Tenant by an agreement
in recordable form approved by Landlord, which approval will not be unreasonably
withheld, and an original executed counterpart of which is delivered to Landlord
prior to the Portfolio Assignment. Tenant shall not make a Portfolio Assignment
without the prior written consent of Landlord; provided that Landlord shall not
withhold its consent to a Portfolio Assignment that meets all of the following
conditions at the time of the proposed Portfolio Assignment: (a) the Guaranty
shall no longer be in effect, (b) the Portfolio Assignee shall satisfy the
criteria set forth in clauses (i) and (iii) through (ix), inclusive, of Section
16.1(b), (c) Manager shall be the manager and the Management Agreement shall
contain no less economically favorable terms to Tenant than the current
Management Agreement, and (d) the brand name under which the Hotels shall be
operated shall be the "Wyndham" brand. Any disputes as to whether any of the
foregoing conditions are satisfied or otherwise with respect to the Landlord's
consent to the Portfolio Assignment shall be resolved by arbitration pursuant to
ARTICLE 19 hereof.
16.8 Permitted Sublease. Notwithstanding the foregoing, Tenant may, in each
instance after notice to Landlord, sublease or license space at the Leased
Property for a newsstand, gift shop, cell phone antennas, parking garage, health
club, bar or commissary purposes or similar concessions in furtherance of the
Permitted Use so long as such subleases or licenses do not demise, in the
aggregate, in excess of one thousand (1,000) square feet, will not violate any
Legal Requirements or Insurance Requirements, and Tenant shall provide or cause
to be provided such additional insurance coverage applicable to the activities
to be conducted in such subleased space as Landlord and any Mortgagee may
reasonably require.
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16.9 Transfers by Landlord. Landlord agrees that Landlord shall not,
without the prior written consent of Tenant, transfer or convey the Leased
Property to any Person which (a) is not a Person in which Landlord or any
Affiliated Person of Landlord owns and holds, directly or indirectly, a
Controlling interest and does not have sufficient financial resources to fulfill
Landlord's obligations hereunder; (b) has been convicted of a felony or is known
to have engaged in criminal activity or other activities involving moral
turpitude (including any Affiliate of such Person); (c) as its primary business
owns, leases or operates any casino or gambling facility (including any
Affiliate of such Person); (d) does not recognize Tenant's rights and assume
Landlord's obligations under this Agreement; (e) owns or has an equity interest
in a hotel brand, trade name, system or chain which consists of at least twenty
(20) hotels prior to, or on the date of, or contemporaneously with, or as a
result of the transfer of the Leased Property or (f) owns or operates a
distillery, winery, or brewery or distributorship of alcoholic beverages, if
such leasing, ownership or operation might reasonably impair the ability of
Tenant or its Affiliates to obtain or retain any alcoholic beverage license for
the Leased Property. Notwithstanding anything contained herein to the contrary,
Landlord shall not be relieved of its obligations hereunder in the event
Landlord transfers or conveys the Leased Property to an Affiliate of Landlord.
For purposes of this ARTICLE 16, a Person that is described in subparagraph
(a-f) above is referred to as a "Competitor". For purposes of this Section 16.9,
a Person that owns and has equity interest in a hotel brand, trade name, system
or chain merely as a franchisee or a mere passive investor and has no control or
influence over the business of the brand at issue, such as a mere limited
partner in a partnership, a mere shareholder in a corporation or a mere payee of
royalties based on a prior sale transaction, shall not be deemed to be a
Competitor. In addition, for purposes of this Section 16.9, a Person shall not
be deemed to be a Competitor under subparagph (e) above solely by virtue of (x)
the ownership of hotels, either directly or indirectly through a Subsidiary or
Affiliated Person or (y) holding a Mortgage or Mortgages secured by one or more
hotels. Otherwise, Landlord may transfer the Leased Property, or any portion
thereof or interest therein, to any Person without the consent of, but upon not
less than sixty (60) days prior Notice to, Tenant. Within five (5) days
following any request by Tenant, Landlord shall provided Tenant such any
information concerning the proposed transferee's financial condition,
affiliations, ownership, business interests, and operations that may be
reasonably necessary or appropriate in order for Tenant to determine if such
proposed transfer is consistent with the above provisions. The consent of Tenant
to a transfer as required herein shall in no event be construed to relieve
Landlord from the obligation of obtaining the express consent in writing of
Tenant to any subsequent transfer requiring Tenant's consent as provided herein.
In the event that Landlord transfers or conveys the Leased Property to any
Person in violation of this Section 16.9, Tenant shall have the right upon
thirty (30) days prior notice to the Landlord, given within six (6) months after
such transfer or conveyance, to terminate this Lease and to pursue its damages,
if any, available at law or in equity for such breach against Landlord and the
transferee. If Tenant does not provide such notice within said six (6) month
period, Tenant's right to terminate as provided in the preceding sentence shall
be waived with respect to the transfer or conveyance giving rise to such right.
16.10 Transfers of Interests in Landlord. Landlord agrees that a
Controlling interest in Landlord shall not be sold, assigned, transferred or
otherwise disposed of, for value or otherwise, voluntary or involuntary, by
merger, operation of law or otherwise, in a single transaction or a series of
transactions, to any Person (other than a Person in which Landlord or an
Affiliated Person of Landlord owns and holds, directly or indirectly, a
Controlling interest) that is a Competitor. If a Controlling interest in
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Landlord is sold, assigned, transferred or otherwise disposed of in violation of
the foregoing sentence, Tenant shall have the right upon thirty (30) days prior
Notice to Landlord, given within six (6) months after such transfer, to
terminate this Lease and to recover from Landlord as its damages for such
breach, the sum of $1,254,600.00. Provided, however, the provisions of this
Section 16.10 shall not apply to any transfer of interests in CHP, directly or
indirectly, or in any Entity that has an interest in CHP, directly or
indirectly, so long as CHP is a publicly traded company (whether or not such
interests are traded on a public stock exchange), nor shall the provisions of
this Section 16.10 apply to any transfer of interests in Landlord, directly or
indirectly (or in any Entity that has an interest in Landlord, directly or
indirectly), to any Person which is not an Affiliated Person of Landlord or CHP,
if and so long as CHP is a publicly traded company (whether or not such
interests are traded on a public stock exchange) and such transfer does not
result in or entail, directly or indirectly, either concurrent with the transfer
or subsequent thereto, CHP or a wholly-owned Subsidiary of CHP no longer
continuing to possess the sole power, as the sole general partner of Landlord,
to direct or cause the direction of the management and policies of Landlord,
whether such cessation of power occurs by contract, by conversion of the general
partner interest of CHP or its wholly-owned Subsidiary in Landlord to a limited
partner interest, by conversion of Landlord to a corporation or other Entity, or
otherwise. Provided, further, however, if the Leased Property is transferred to
an Affiliate of Landlord and such Affiliate sells, assigns, transfers or
otherwise disposes of a Controlling interest in such Affiliate to a Competitor,
the same shall be deemed to be a sale, assignment, transfer or disposition for
which Tenant's written consent is required under Section 16.9.
ARTICLE 17
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
----------------------------------------------
17.1 Estoppel Certificates. Tenant and Landlord shall from time to time,
within fifteen (15) days after request by the other party, and without charge,
give an Estoppel Certificate in the form (or substantially the form) attached
hereto as EXHIBIT "C" and containing such other matters as may be reasonably
requested by the other party to any person, firm or corporation specified
by such other party.
17.2 Financial Statements. Throughout the Term of this Agreement, Tenant
shall prepare and deliver to Landlord and Mortgagee, at or prior to the end of
each Accounting Period during the Term hereof, a profit and loss statement and
operating balance sheet showing the results of the operation of the Leased
Property for the immediately preceding Accounting Period and for the Fiscal Year
to date. Tenant shall provide Landlord and Mortgagee with a complete financial
statement which shall be delivered prior to the end of the next following
Accounting Period, in the form customarily provided in the industry and approved
in advance by the Landlord, and which shall: (a) be taken from the books and
records maintained by Tenant and its manager in the form specified herein; (b)
follow the general form set forth in the Uniform System of Accounts; and (c)
indicate variances from budgeted results for each line item against the approved
budget for the Leased Property for such Fiscal Year. The aforesaid profit and
loss statement, operating balance sheet and financial statements shall be
accompanied by an Officer's Certificate which, for purposes hereof shall mean a
Certificate of any Officer of Tenant (or such Officer's designee), duly
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authorized, which such Officer shall certify (a) that such statements have been
properly prepared in accordance with the Uniform System of Accounts and are
true, correct and complete in all material respects and fairly present the
consolidated financial condition of the Tenant at and as of the dates thereof
and the results of its operations for the period covered thereby, and (b) that
no Event of Default has occurred and is continuing hereunder. Tenant shall
deliver to Landlord and Mortgagee within ninety (90) days after the end of each
Fiscal Year, a profit and loss statement, balance sheet and statement of cash
flow certified by an independent certified public account, with a Big Five
Accounting Firm who is actively engaged in the practice of his profession (which
statement shall also be certified by an officer or partner in Tenant) together
with copies of all reports and communications furnished to Tenant's manager,
showing results from the operation of the Leased Property during such Fiscal
Year, and reasons for material variations from the approved budget for such
year. Tenant shall also deliver to Landlord at Landlord's expense at any time
and from time to time, upon not less than twenty (20) days notice from Landlord,
any financial statements or other financial reporting information required to be
filed by Landlord with the SEC 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. Any disputes concerning the contents of such statements or any
accounting matter thereunder shall be determined by the approved independent
certified public account providing such statement. The financial statements
required herein are in addition to the statement required under Section 3.1.3
hereof.
17.3 Records. Tenant shall keep and maintain at all times in accordance
with generally accepted accounting principles, consistently applied, and the
Uniform System of Accounts (separate and apart from its other books, records and
accounts) complete and accurate up-to-date books and records adequate to reflect
clearly and correctly the results of operations of the Leased Property, on an
accrual basis, including but not limited to, each calculation of Percentage
Rent. Such books and records shall be kept and maintained at the Leased Property
or Tenant's principal or regional office. Landlord or its representatives shall
have, at all reasonable times during normal business hours, reasonable access,
on reasonable advance notice, to examine and copy the books and records. Such
books and records shall be available for at least three (3) years after the
applicable quarterly calculation of Percentage Rent for Landlord's inspection,
copying, review and audit at Landlord's expense during reasonable business hours
and for the purpose of verifying the accuracy of Tenant's calculation of
Percentage Rent.
17.4 General Operations. In addition to the Reserve Estimate and the
Building Estimate, Tenant shall furnish to Landlord, on or before December 1 of
each Fiscal Year proposed annual budgets in a form consistent with the then
standards for the same brand of hotels as the Hotel setting forth projected
income and costs and expenses projected to be incurred by Tenant in managing,
leasing, maintaining and operating the Hotel during the following Fiscal Year.
17.5 Quarterly Meetings. At Landlord's request, Tenant shall make the
Tenant's property management team available to meet with Landlord at the Hotel
or Tenant's principal place of business on a quarterly basis to discuss the
Reserve Estimate, the Building Estimate, the annual budgets and any other items
related to the operation of the Hotel which Landlord wishes to discuss. Tenant
agrees to give good faith consideration to any suggestions or requests that
Landlord may have.
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ARTICLE 18
LANDLORD'S RIGHT TO INSPECT
---------------------------
Landlord, Mortgagee and their agents shall have the right to enter upon the
Leased Property or any portion thereof at any reasonable time upon not less than
twenty four hours prior telephonic notice to Tenant to inspect the same,
including but not limited to, the operation, sanitation, safety, maintenance and
use of the same, or any portions of the same and to assure itself that Tenant is
in full compliance with its obligations under this Agreement (but Landlord and
Mortgagee shall not thereby assume any responsibility for the performance of any
of Tenant's obligations hereunder, nor any liability arising from the improper
performance thereof). In making any such inspections, neither Landlord nor
Mortgagee shall unduly interrupt or interfere with the conduct of Tenant's
business.
ARTICLE 19
ALTERNATIVE DISPUTE RESOLUTION
------------------------------
19.1 Negotiation. Any and all disputes or disagreements to which the terms
of Section 22.19 are applicable and any other matters to be resolved by
arbitration as expressly provided for in this Agreement, shall be resolved
through good-faith negotiations or, at the election of either party, if the
dispute is not so resolved within 30 days after Notice from either party
commencing such negotiations, through binding arbitration conducted in
accordance with Section 19.2.
19.2 Arbitration. With respect to any such matter to be submitted to
arbitration, Landlord and Tenant shall mutually designate and select any Big
Five Accounting Firm with a hospitality division of which Landlord, Tenant or an
Affiliated Person of either is not a client to serve as arbitrator of such
dispute, within fifteen (15) days after written demand for arbitration is
received or sent by Landlord. In the event no nationally recognized accounting
firm satisfying such qualifications is designated by Landlord and Tenant or
available and willing to serve as arbitrator, the arbitrator shall be appointed
by the American Arbitration Association from among the members of its panel who
are qualified and who have experience in resolving matters of a nature similar
to the matter to be resolved by arbitration. In any event a single arbitrator
shall be designated and shall resolve the dispute. The arbitrator's decision
shall be binding on all parties and shall not be subject to further review or
appeal except as otherwise allowed by applicable law. Upon failure of either
party to comply with the arbitrator's decision, the arbitrator shall be
empowered at the request of the other party to order such compliance by the
non-complying party and to supervise or arrange for the supervision of the
non-complying party to comply with the arbitrator's decision, all at the expense
of the non-complying party. To the maximum extent possible, the arbitrator and
the parties, and the American Arbitration Association, if applicable, shall take
any action necessary to ensure that the arbitration shall be concluded within
ninety (90) days following such dispute. The fees and expenses of the arbitrator
shall be shared equally by the Landlord and the Tenant. Unless otherwise agreed
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to in writing by the parties or required by the arbitrator or the American
Arbitration Association, if applicable, arbitration proceedings hereunder shall
be conducted in the state where the Leased Property is located. Notwithstanding
formal rules of evidence, each party may submit such evidence as each party
deems appropriate to support its position and the arbitrator shall have access
to and the right to examine all books and records of Landlord and Tenant
regarding the Leased Property during such arbitration.
ARTICLE 20
HOTEL MORTGAGES
---------------
20.1 Subordination. This Agreement, Tenant's interest hereunder and
Tenant's leasehold interest in and to the Leased Property are, and are hereby
agreed by Tenant to be, and are hereby made, and shall be junior, inferior,
subordinate and subject in right, title, interest, lien, encumbrance, priority
and all other respects to any mortgage or mortgages and security interests
(other than a Prohibited Mortgage), now or hereafter in force and effect upon or
encumbering the Leased Property, or any portion thereof, and to all collateral
assignments by Landlord to any third party or parties of any of Landlord's
rights under this Agreement or the rents, issues and profits thereof or
therefrom as security for any liability or indebtedness, direct, indirect or
contingent, of Landlord to such third party or parties, and to all future
modifications, extensions, renewals, consolidations and replacements of, and all
amendments and supplements to, any such mortgage, mortgages or assignments, and
upon recording of any such mortgage, mortgages or assignments, the same shall be
deemed to be prior in dignity, lien and encumbrance to this Agreement, Tenant's
interest hereunder and Tenant's leasehold interest in and to the Leased Property
irrespective of the dates of execution, delivery or recordation of any such
mortgage, mortgages or assignments (such mortgages, mortgages, security
interests, assignments, modifications, extensions, renewals, amendments,
supplements and replacement (but not a Prohibited Mortgage) being a "Hotel
Mortgage"). Provided, however, Tenant shall have first received from the
Mortgagee a Subordination and Non- Disturbance Agreement in recordable form (a
"Non-Disturbance Agreement"), in form and content reasonably acceptable to
Landlord, Tenant and the holder or such Hotel Mortgage (the "Mortgagee"), which
shall be executed by Mortgagee and Tenant, which provides that notwithstanding
any default by Landlord under such Hotel Mortgage or any foreclosure thereof,
and provided an Event of Default on the part of Tenant is not then in existence
and continuing, Tenant's possession of the Leased Property and rights and
obligations under this Agreement shall not be affected by such Hotel Mortgage or
by such default or foreclosure and this Agreement shall not be terminated other
than in accordance with its terms. This Section shall be self-operational after
delivery and recordation of the Non- Disturbance Agreement and no further
instruments of subordination shall be required. If any Mortgagee or nominee or
designee of any Mortgagee shall succeed to the rights of Landlord under this
Agreement (any such person a "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 subject to and in accordance with Section 20.2, 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 as
contemplated in Section 20.2 hereof (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. The foregoing Agreement shall be binding on any Successor Landlord.
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Provided, however, Landlord shall not enter into a Hotel Mortgage with any
Mortgagee that is not an Institutional Lender and the aggregate sum of all debt
secured by Hotel Mortgage(s) will not exceed seventy percent (70%) of the fair
market value of the Leased Property as determined at the time of such loan (and
any Hotel Mortgage(s) which does not meet the foregoing criteria shall be a
"Prohibited Mortgage"). Tenant acknowledges and agrees that notwithstanding the
foregoing automatic subordination, if Landlord or Mortgagee shall request that
Tenant execute and deliver any further instrument or agreement of subordination
of this Agreement or Tenant's interest hereunder or Tenant's leasehold interest
in the Leased Property to any such Hotel Mortgage, in confirmation or
furtherance of or in addition to the foregoing subordination provisions of this
Section, Tenant shall promptly execute and deliver the same to the requesting
party if reasonably acceptable to Tenant and the same does not alter any
provisions of this Agreement. Further, Tenant agrees that it will, from time to
time, execute such documentation as may be requested by Landlord and any
Mortgagee (a) to assist Landlord and such Mortgagee in establishing or
perfecting any security interest in Landlord's interest in the Reserve and the
funds therein; and (b) to facilitate or allow Landlord to encumber the Leased
Property as herein contemplated. If, within thirty (30) days following Tenant's
receipt of a written request by Landlord or the holder or proposed holder of any
such Hotel Mortgage, Tenant shall wrongfully fail or refuse or shall wrongfully
have not executed any such further instrument or agreement of subordination,
Tenant shall be in breach and default of its obligation to do so and of this
Agreement and Landlord shall be entitled thereupon to exercise any and all
remedies available to Landlord pursuant to this Agreement or otherwise provided
by law.
20.2 Attornment. Except as hereinafter provided in this Section 20.2,
Tenant shall and hereby agrees to attorn, and be bound under all of the terms,
provisions, covenants and conditions of this Agreement, to any Successor
Landlord under this Agreement for the balance of the Term of this Agreement
remaining at the time of the succession of such interest to such Successor
Landlord. In particular, in the event that any proceedings are brought for the
foreclosure of any Hotel Mortgage, Tenant shall attorn to the purchaser at any
such foreclosure sale and recognize such purchaser as a Successor Landlord under
this Agreement. Tenant agrees that neither the purchaser at any such foreclosure
sale nor the foreclosing Mortgagee (other than a Mortgagee that is an Affiliate
of Landlord) shall (a) have any liability for any act or omission of Landlord
occurring or arising prior to the earlier of the date of the foreclosure sale or
the date such Mortgagee takes possession of the Leased Property, (b) be
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) be subject to any counterclaim, offsets or defenses
which Tenant may have as a claim against Landlord occurring or arising prior to
the earlier of the date of the foreclosure sale or the date Mortgagee takes
possession of the Leased Property, or (d) be bound by any advance rents which
may have been paid by Tenant to Landlord for more than the current period in
which such rents come due; provided, however, that notwithstanding the
provisions of Section 14.3 hereof, the Landlord shall be personally liable and
responsible to Tenant for the matters set forth in (a) through (d) above to the
extent such purchaser at any foreclosure sale or the foreclosing Mortgagee is
not liable or responsible for, bound by, or subject to any such matters as
provided in this sentence. The Tenant's obligation and agreement to attorn to a
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Successor Landlord as provided herein shall exist so long as such Successor
Landlord (w) recognizes Tenant's rights under this Agreement, (x) is not a
Person which is an Affiliated Person of Tenant, (y) is not a Person or an
Affiliated Person of a Person which owns or has an equity interest in a hotel
brand, trade name, system or chain which is comprised of at least twenty (20)
hotels and (z) shall have sufficient financial resources to fulfill Landlord's
obligations hereunder. Provided, however, a Person that owns and has an equity
interest in a hotel brand, trade name, system or chain merely as a franchisee or
a mere passive investor that has no control or influence over the business of
the brand at issue, such as a mere limited partner in a partnership, a mere
shareholder in a corporation or a mere payee of royalties based on a prior sale
transaction, may be a Successor Landlord. In the event Tenant is not required to
attorn to a Successor Landlord as provided herein, Tenant may terminate this
Agreement and pursue damages against such Successor Landlord.
20.3 Rights of Mortgagees and Assignees. At the time of giving any notice
of default to Landlord, Tenant shall mail or deliver to any Mortgagee, a copy of
any such default notice in accordance with the terms of the Non-Disturbance
Agreement. No notice of default or termination of this Agreement by Tenant shall
be effective until each Mortgagee shall have been furnished a copy of such
notice by Tenant. In the event Landlord fails to cure any default by it under
this Agreement, the Mortgagee shall have, at its option, a period of thirty (30)
days after expiration of any cure period of Landlord within which to remedy such
default of Landlord or to cause such default to be remedied (including any
interest owed thereon by Landlord.) In the event that the Mortgagee elects to
cure any such default by Landlord, then Tenant shall accept such performance on
the part of such Mortgagee as though the same had been performed by Landlord,
and for such purpose Tenant hereby authorizes any Mortgagee to enter upon the
Leased Property to the extent necessary to exercise any of Landlord's rights,
powers and duties under this Agreement. If, in the event of any non-monetary
default by Landlord which is reasonably capable of being cured by a Mortgagee,
the Mortgagee promptly commences and diligently pursues to cure the default,
then Tenant will not terminate this Agreement or cease to perform any of its
obligations under this Agreement so long as the Mortgagee is, with due
diligence, engaged in the curing of such default.
ARTICLE 21
ADDITIONAL COVENANTS OF TENANT
------------------------------
21.1 Conduct of Business. Tenant shall not engage in any business other
than the leasing and operation of the Leased Property and activities incidental
thereto 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 existence
and its rights and licenses necessary to conduct such business.
21.2 Additional Covenants of Tenant. In addition to the other covenants and
representations of Tenant herein and in this Agreement, Tenant hereby covenants,
acknowledges and agrees that Tenant shall:
(a) Not guaranty any obligation of any Person;
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(b) Pay or cause to be paid prior to delinquency (and subject to
Tenant's right to contest), all lawful claims for labor and rents with
respect to the Leased Property;
(c) Pay or cause to be paid prior to delinquency (and subject to
Tenant's right to contest), all trade payables;
(d) So long as an Event of Default exists, not declare, order, pay or
make, directly or indirectly, any distributions or any payments to any
members or Affiliated Persons as to Tenant, including payments in the
ordinary course of business and payments pursuant to a Management
Agreement with any Affiliate except for reimbursable expenses incurred
by and payable to such Affiliate Manager in order to operate the
Leased Property (but such reimbursable expenses shall expressly
exclude any management fees, base incentive or otherwise);
(e) Except as otherwise permitted by this Agreement, not sell, lease
(as lessor or sublessor), transfer or otherwise dispose of or abandon,
all or any material portion of its assets or business to any Person,
or sell, lease, transfer or otherwise dispose of or abandon any of
Tenant's Personal Property, provided, however, Tenant may dispose of
portions of Tenant's Personal Property which have become inadequate,
obsolete, worn-out, unsuitable, undesirable or unnecessary, provided
substitute equipment or fixtures owned by Tenant having equal or
greater value and utility have been provided if the same are deemed
necessary to the proper operation of the Hotel in Tenant's good faith
business judgment.
(f) Except for liabilities incurred in the ordinary course of
business, not create, incur, assume or guarantee, or permit to exist
or become or remain liable directly or indirectly upon, any
Indebtedness except Indebtedness of Tenant to Landlord (or, if
unsecured and expressly subject and subordinate to the terms of this
Agreement and Landlord's interest hereunder, and payable solely out of
excess cash flow after payment of all Rent hereunder, to Tenant's
partners or Affiliated Persons).
(g) In addition to the foregoing, except as otherwise provided in the
Agreement, Tenant shall provide and maintain throughout the Term, all
of Tenant's Personal Property as shall be necessary in order to
operate the Leased Property in compliance with applicable Legal
Requirements and Insurance Requirements and otherwise in accordance
with customary practices in the industry for the Permitted Use.
(h) Tenant shall, to the extent not delivered to Landlord prior to the
execution of this Agreement, deliver to Landlord within thirty (30)
days after receipt of or after modification thereof, copies of all
licenses authorizing Tenant to operate the Leased Property for its
Permitted Use.
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21.3 Tenant a Single Purpose Entity. Tenant represents, agrees and warrants
that Tenant is, and throughout the Term will remain, a Single Purpose Entity as
described and contemplated on Error! Reference source not found. hereof.
21.4 Distributions, Payments to Affiliated Persons, Etc. Tenant shall not
declare, order, pay or make, directly or indirectly, any Distribution if, at the
time of such proposed action, or immediately after giving effect thereto, any
Event of Default shall exist.
21.5 Compliance with Management Agreement. Tenant shall comply with and
perform and/or observe all material terms and provisions of the Management
Agreement to be complied with or performed by Tenant. Tenant shall not enter
into any modifications or amendments of the Management Agreement; nor, except as
otherwise expressly set forth in this Agreement, surrender, cancel or terminate
the same prior to the expiration thereof, without Landlord's prior written
consent; nor shall Tenant enter into any extension or replacement of the
Management Agreement or elect to reduce or extend the term of the Management
Agreement without Landlord's prior written consent; nor shall Tenant increase or
consent to the increase of the amount of any management fees under the
Management Agreement or waive or release any of its material rights and remedies
under the Management Agreement. Tenant shall further enforce in all material
respects the performance and observance by Manager to be performed and/or
observed by Manager under the Management Agreement. In addition, in no event
will the term of any Management Agreement extend beyond the Term hereof, as
extended pursuant to Section 2.4. In addition to the obligations contained
herein, Tenant agrees to promptly deliver to Landlord (a) copies of all notices
provided by the Manager and under the Management Agreement concerning notices of
default, notices of changes or modifications to the Leased Property and the
like, and (b) from time to time upon request, evidence acceptable to Landlord
that Tenant has paid to Manager, all sums due from Tenant to Manager, under the
Management Agreement. The terms of Section 22.19 shall not be applicable to this
Section 21.5.
Tenant further acknowledges and agrees that Tenant shall indemnify and hold
Landlord harmless from and against any and all loss, damage, injunctions,
obligations, suits, actions, fines, penalties, claims, demands, costs and
expenses of any kind and nature resulting or arising directly or indirectly from
Tenant's default under the Management Agreement.
ARTICLE 22
MISCELLANEOUS
-------------
22.1 Limitation on Payment of Rent. All agreements between Landlord and
Tenant herein are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of Rent, or otherwise, shall the
Rent or any other amounts payable to Landlord or Tenant under this Agreement
exceed the maximum permissible under applicable law, the benefit of which may be
asserted by Landlord or 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 or Tenant
should ever receive as fulfillment of such provision such an excessive amount,
then, ipso facto, the amount which is excessive shall be repaid to Tenant or
applied to the reduction of the installment(s) of Minimum Rent next due and not
to the payment of such excessive amount or shall be repaid to Landlord, as
applicable. This provision shall control every other provision of this Agreement
and any other agreements between Landlord and Tenant.
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22.2 No Waiver. No release, discharge or waiver of any provision hereof
shall be enforceable against or binding upon Landlord or Tenant unless in
writing and executed by Landlord or Tenant, as the case may be. Neither the
failure of Landlord or Tenant to insist upon a strict performance of any of the
terms, provisions, covenants, agreements and conditions hereof, nor the
acceptance of any Rent by Landlord with knowledge of a breach of this Agreement
by Tenant in the performance of its obligations hereunder, or the following of
any practice or custom at variance with the terms hereof, shall not be deemed or
constitute a waiver of any rights or remedies that Landlord or Tenant may have
or a waiver of any subsequent breach or default in any of such terms,
provisions, covenants, agreements and conditions or the waiver of the right to
demand exact compliance with the terms hereof.
22.3 Remedies Cumulative. To the maximum extent permitted by law, each
legal, equitable or contractual right, power and remedy of Landlord, 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 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 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.
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22.7 Tenant's Representations.
In addition to the any other representation or warranty set forth herein
and as an inducement to Landlord to enter into this Agreement, Tenant hereby
represents and warrants to Landlord as follows:
(a) Tenant is a single purpose, limited liability company duly
organized and validly existing and in good standing under the laws of
the State of Delaware. Tenant has all requisite power and authority
under the laws of the State of Delaware and the laws of the State of
Colorado and Massachusetts and its charter documents to enter into and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. Tenant is duly authorized to
transact business in any jurisdiction in which the nature of the
business conducted by it requires such qualification.
(b) Tenant has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, and upon the execution and
delivery of this Agreement and any document to be delivered by Tenant,
prior to the date hereof, such document shall constitute the valid and
binding obligation and agreement of Tenant, enforceable against Tenant
in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the rights and remedies
of creditors and except to the extent that the availability of
equitable relief may be subject to the discretion of the court before
which any proceeding may be brought.
(c) Except as disclosed on EXHIBIT "I", there are no judgements
presently outstanding and unsatisfied against Tenant or any of its
properties, and neither Tenant nor any of its properties are involved
in any material litigation at law or in equity or any proceeding
before any court, or by or before any governmental or administrative
agency, which litigation or proceeding could reasonably be expected to
materially adversely affect Tenant, and no such material litigation
or proceeding is, to the knowledge of Tenant, threatened against
Tenant and no investigation looking toward such a proceeding has begun
or is contemplated.
(d) In the reasonable opinion of Tenant, the Leased Property and the
Leased Improvements therein are adequately furnished and contain
adequate FF&E and inventory consistent with the amount of FF&E and
inventory which is customarily maintained in a hotel of the type and
character of the Leased Property as otherwise required to operate the
Leased Property in a manner contemplated by this Agreement and in
compliance with the Management Agreement and all Legal Requirements.
If, from and after the Commencement Date, Tenant acquires an interest
in any items of tangible personal property (other than motor vehicles)
on, or in connection with the Leased Property which belong to anyone
other than Tenant, Tenant shall require the agreement 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 any assumption of management or operation of the
Leased Property by Landlord or its designee.
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(e) During the Term of this Agreement, except as approved in writing
by Landlord, and except for those nights when all rooms in the Leased
Property are sold, Tenant shall not, either directly or indirectly,
for itself, or through, or on behalf of, or in connection with any
Person, knowingly and in bad faith divert or attempt to divert any
business or customer of the Leased Property to any competitor, by
direct or indirect inducement or otherwise, in an effort or with the
goal to reduce Percentage Rent due hereunder.
(f) All employees of Tenant are solely employees of Tenant, Manager or
an Affiliated Person thereof and not Landlord. Tenant is not
Landlord's agent for any purpose in regard to Tenant's employees or
otherwise. Tenant shall, commencing as of, and with the Commencement
Date, be liable and responsible for all claims by or related to the
employees of the Leased Property. Further, Tenant expressly
acknowledges and agrees that Landlord does not exercise any direction
or control over the employment policies or employment decisions of
Tenant.
(g) Tenant's equity is directly and (if applicable) indirectly owned
as shown on EXHIBIT "G". Tenant shall submit to Landlord within ninety
(90) days after the end of each Fiscal Year during the Term of this
Agreement, a list of all partners of the Tenant (being a limited
partnership), and the respective interests in Tenant held by each of
such partners as of the end of each Fiscal Year. If Tenant is a
corporation, or if any partner of Tenant is a corporation (other than
Wyndham), Tenant shall submit to Landlord within ninety (90) days
after the end of each Fiscal Year during the Term of this Agreement, a
list of all shareholders and the respective interests of Tenant (or
such corporate partner) held by each of such shareholders as of the
end of each Fiscal Year. In addition, if Tenant is a limited liability
company, Tenant shall submit to Landlord within 90 days after the end
of each Fiscal Year during the Term of this Agreement, a list of
all members and the respective interests in Tenant held by each member
as of the end of each Fiscal Year.
22.8 Quiet Enjoyment. Landlord covenants and agrees that so long as no
Event of Default exists hereunder, Tenant shall and may peacefully and quietly
have, hold and occupy the Leased Property free of any interference from Landlord
or any Person claiming by, through or under Landlord; subject, however, and
nevertheless to the terms, provisions and conditions of this Agreement and the
Permitted Encumbrances.
22.9 Recordation of Memorandum of Lease. At either party's option, a short
form memorandum of this Agreement, in the form attached hereto as EXHIBIT "D"
shall be recorded or filed among the appropriate land records of the County in
which the Leased Property is located, and Tenant shall pay the transfer and all
recording costs associated therewith. In the event of a discrepancy between the
provisions of this Agreement and such short
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form memorandum thereof, the provisions of this Agreement shall prevail. Upon
and in connection with the expiration or earlier termination of this Agreement,
Tenant agrees to execute a termination of the memorandum of this Agreement for
recordation among the public records of the County in which the Leased Property
is located. In the event that Tenant fails or refuses to execute such
termination of the memorandum of this Agreement within fifteen (15) days
following the delivery of such document to Tenant, Landlord may record a notice
of termination of the memorandum of this Agreement without the joinder and
execution by Tenant, but Tenant shall not be precluded from providing notice of
a dispute as to such expiration or early termination by recording a notice of
such dispute without the joinder and execution by Landlord.
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
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:
CNL Hospitality Partners, LP
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Senior Vice President of Finance and Administration
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ and ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
if to Tenant to:
WYN ORLANDO LESSEE, LLC
c/o Wyndham International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Akin, Gump, Strauss, Hower & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇, P.C.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to
time and at any time during the term of this Agreement to change their
respective addresses effective upon receipt by the other parties of
such notice and each shall have the right to specify as its address
any other address within the United States of America.
22.11 Construction; Nonrecourse. Except as otherwise expressly provided in
this Agreement, all claims against, and liabilities of, Tenant or Landlord
arising prior to any date of termination or expiration of this Agreement with
respect to the Leased Property shall survive such termination or expiration.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated except by an instrument in writing signed by all the
parties hereto. All the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Each term or provision of this Agreement to be
performed by Tenant shall be construed as an independent covenant and condition.
Time is of the essence with respect to the exercise of any rights of Tenant or
Landlord under this Agreement, including, without limitation, obligations for
the payment of money. Except as otherwise set forth in this Agreement, any
obligations of Tenant or Landlord arising prior to the expiration or sooner
termination of this Agreement (including without limitation, any monetary,
repair and indemnification obligations) shall survive the expiration or sooner
termination of this Agreement. In addition, (a) solely with respect to Landlord,
nothing contained in this Agreement shall be construed to create or impose any
liabilities or obligations and no such liabilities or obligations shall be
imposed on any of the shareholders, beneficial owners, direct or indirect,
officers, directors, trustees, employees or agents of Landlord for the payment
or performance of the obligations or liabilities of Landlord hereunder; and (b)
solely with respect to Tenant, except pursuant to the Guaranty, nothing
contained in this Agreement shall be construed to create or impose any
liabilities or obligations and no such liabilities or obligations shall be
imposed on any of the shareholders, beneficial owners, direct or indirect,
officers, directors, trustees, employees or agents of Tenant for the payment or
performance of the obligations or liabilities of Tenant hereunder.
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22.12 Counterparts; Headings. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but which, when taken
together, shall constitute but one instrument and shall become effective as of
the date hereof when copies hereof, which, when taken together, bear the
signatures of each of the parties hereto shall have been signed. Captions and
headings in this Agreement are for purposes of reference only and shall in no
way define, limit or describe the scope or intent of, or otherwise affect, the
provisions of this Agreement.
22.13 Applicable Law, Etc. This Agreement shall be governed by, and
construed in accordance with, the laws of the State in which the Leased Property
is located.
22.14 Right to Make Agreement. Each party warrants, with respect to itself,
that neither the execution and delivery of this Agreement, nor the compliance
with the terms and provisions hereof, shall violate any provision of any law, or
any judgment, writ, injunction, order or decree of any court or Governmental
Authority; nor result in or constitute a breach or default under or the creation
of any lien, charge or encumbrance upon any of its property or assets under, any
indenture, mortgage, deed of trust, contract, other commitment or restriction to
which it is a party or by which it is bound; nor require any consent, vote or
approval which has not been given or taken, or at the time of the transaction
involved shall not have been given or taken. Each party covenants that it has
and will continue to have throughout the term of this Agreement and any
extensions thereof, the full right to enter into this Agreement and perform its
obligations hereunder.
22.15 Brokerage. Landlord and Tenant hereby represent and warrant to each
other that they have not engaged, employed or utilized the services of any
business or real estate brokers, salesmen, agents or finders in the initiation,
negotiation or consummation of the business and real estate transaction
reflected in this Agreement. On the basis of such representation and warranty,
each party shall and hereby agrees to indemnify and save and hold the other
party harmless from and against the payment of any commissions or fees to or
claims for commissions or fees by any real estate or business broker, salesman,
agent or finder resulting from or arising out of any actions taken or agreements
made by them with respect to the business and real estate transaction reflected
in this Agreement.
22.16 No Partnership or Joint Venture. Landlord shall not, by virtue of
this Agreement, in any way or for any purpose, be deemed to be a partner of
Tenant in the conduct of Tenant's business upon, within or from the Leased
Property or otherwise, or a joint venturer or a member of a joint enterprise
with Tenant.
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22.17 Entire Agreement. This Agreement contains the entire agreement
between the parties and, except as otherwise provided herein, can only be
changed, modified, amended or terminated by an instrument in writing executed by
the parties. It is mutually acknowledged and agreed by Landlord and Tenant that
there are no verbal agreements, representations, warranties or other
understandings affecting the same; and that Landlord and Tenant each hereby
waive, as a material part of the consideration hereof, all claims against the
other for rescission, damages or any other form of relief by reason of any
alleged covenant, warranty, representation, agreement or understanding not
contained in this Agreement. This Agreement shall not be changed, amended or
modified except by a written instrument executed by Landlord and Tenant.
22.18 Costs and Attorneys' Fees. If either party shall bring an action to
recover any sum due hereunder, or for any breach hereunder, and shall obtain a
judgment or decree in its favor, the court may award to such prevailing party
its reasonable costs and reasonable attorney's fees based upon services rendered
at hourly rates, specifically including reasonable attorney's fees based upon
services rendered at hourly rates incurred in connection with any appeals
(whether or not taxable as such by law) and in any bankruptcy action, including,
without limitation, those incurred in seeking relief from the automatic stay, in
dealing with the assumption or rejection of this Agreement, in any adversary
proceeding, and in the preparation and filing of any proof of claim.
22.19 Approval of Landlord. Whenever the approval or consent to or of
Landlord is referred to or is a condition precedent to the taking of any action
by Tenant, unless otherwise provided herein, such consent or approval shall not
be unreasonably withheld or delayed, and the failure of Landlord to notify
Tenant that it does not give its consent or approval within thirty (30) days
after receipt of any request shall be deemed to constitute such consent or
approval. If Landlord notifies Tenant that it does not approve or consent to the
taking of any action, such notice shall specify the reasons for not consenting
or approving and what conditions would, if satisfied enable Landlord to consent
to or approve such action. Whenever Tenant is required under this Agreement to
do, obtain or maintain anything to meet the satisfaction or judgement of
Landlord, the satisfaction or judgement of Landlord must be reasonable; provided
Landlord shall be deemed reasonably satisfied as to such act unless Landlord
provides Tenant Notice within thirty (30) days after such act specifying in
detail the reasons for such dissatisfaction and what conditions would, if
satisfied, cause Landlord to become reasonably satisfied. The foregoing
provision of this Section shall not apply in any instance where the provisions
of this Agreement expressly state that the provisions of this Section do not
apply or where the provisions of this Agreement expressly state that such
consent, approval or satisfaction are subject to the sole and absolute
discretion or judgement of Landlord, and in each such instance Landlord's
approval or consent may be unreasonably withheld or unreasonable satisfaction or
judgement may be exercised by Landlord.
22.20 Successors and Assigns. The agreements, terms, provisions, covenants
and conditions contained in this Agreement shall be binding upon and inure to
the benefit of Landlord and Tenant and, to the extent permitted herein, their
respective successors and assigns.
22.21 Waiver of Jury Trial. TENANT AND LANDLORD HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAWS, THE RIGHT EITHER OF THEM OR THEIR HEIRS, PERSONAL
REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION PROCEEDINGS OR COUNTERCLAIM, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, THE RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO LANDLORD'S
ACCEPTING THIS LEASE.
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22.22 Treatment of Lease. Landlord and Tenant each agree to treat this
Agreement as a true lease for tax purposes and as an operating lease for
generally accepted accounting principles.
22.23 Landlord's Option to Acquire the Tenant's Personal Property; Transfer
of Licenses. Upon the expiration or early termination of this Agreement, the
Landlord shall have the right and option to acquire all of Tenant's Personal
Property but not Tenant's Intangible Personal Property (which shall remain the
exclusive property of Tenant) then in place or utilized at or within the Leased
Property for the then book value thereof. Provided, Landlord's right to acquire
the Tenant's Personal Property as herein provided shall be in addition to and
not in lieu of Landlord's rights with respect to Tenant's Personal Property as a
result of a default hereunder by Tenant. Upon the expiration or earlier
termination of this Agreement other than as a result of an Event of Default,
Landlord shall purchase from Tenant at cost the Tenant's Personal Property then
in existence, but not Tenant's Intangible Personal Property (which shall remain
the exclusive property of Tenant). Further, upon the expiration or sooner
termination of this Agreement, Tenant shall use commercially reasonable efforts
to transfer and assign to Landlord or its designee or assist Landlord or its
designee in obtaining, any contracts, licenses, permits, development rights,
trade names, telephone exchange numbers identified with the Leased Property,
approvals and certificates and all other transferable intangible property,
excluding Tenant's Intangible Personal Property and National Contracts,
miscellaneous rights, benefits and privileges of any kind or character with
respect to the Leased Property, useful or required for the then operation of the
Leased Property.
22.24 Landlord's Representations. Landlord hereby represents and warrants
to Tenant as follows:
(a) Landlord is a Limited Partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware.
Landlord has all requisite power and authority under the laws of the
State of Delaware and its charter documents to enter into and perform
its obligations under this Agreement and to consummate the
transactions contemplated hereby. Landlord is duly authorized to
transact business in any jurisdiction in which the nature of the
business conducted by it requires such qualification.
(b) Landlord has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and upon the
execution and delivery of any document to be delivered by Landlord,
prior to the date hereof, such document shall constitute the valid and
binding obligation and agreement of Landlord, enforceable against
Landlord in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws of general application affecting the rights and
remedies of creditors and except to the extent that the availability
of equitable relief may be subject to the discretion of the court
before which any proceeding may be brought.
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22.25 Guaranty. In order to further secure Tenant's obligation hereunder.
Guarantor has agreed to provide, and shall provide a Guaranty of this Lease, the
form of which Guaranty is attached hereto as EXHIBIT "H" and by this reference
made a part hereof. The original Guaranty shall be executed by the
Guarantor in connection with the execution of this Agreement. The Guarantor has
further joined in executing this Lease for the sole purpose of acknowledging its
agreement to provide the Guaranty. Guarantor expressly acknowledges and
agrees that Tenant is a wholly owned Affiliate of Guarantor and accordingly,
Guarantor will benefit from Tenant's entering into this Agreement.
[SIGNATURES APPEAR ON NEXT PAGE]
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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:
CNL HOSPITALITY PARTNERS, LP,
a Delaware Limited Partnership
By: CNL Hospitality GP Corporation,
a Delaware corporation
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------
TENANT:
WYN ORLANDO LESSEE, LLC
a Delaware limited liability company
By: Wyn Orlando Lessee Manager Corp.
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
GUARANTOR:
WYNDHAM INTERNATIONAL, INC.
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
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JOINDER OF WYNDHAM MANAGEMENT CORPORATION, AS MANAGER
Wyndham Management Corporation, as Manager of the Leased Property, hereby
joins in the execution of this Agreement as Manager for the purpose of
acknowledging and agreeing to the restrictions and limitations set forth in the
Agreement regarding the subordinate position of Manager, the Management
Agreement and management fees under the Management Agreement to this Agreement
(subject to Manager's right to receive reimbursables under Section 21.2(d)) and
regarding the operation by Manager of a Conflicting Business within the
Proscribed Area.
WYNDHAM MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
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JOINDER OF WYNDHAM INTERNATIONAL, INC.
Wyndham hereby joins in the execution of this Agreement for the
purposes of acknowledging and agreeing to the terms of Sections 16.5 and 16.6.
Wyndham International, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
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