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Exhibit 10.2
AGREEMENT TO LEASE
THIS AGREEMENT TO LEASE (this "Agreement") is entered into as of
the 19th day of November, 1997, by and between HOSPITALITY PROPERTIES TRUST, a
Maryland real estate investment trust ("HPT"), and CANDLEWOOD HOTEL COMPANY,
INC., a Delaware corporation ("Candlewood").
W I T N E S S E T H:
WHEREAS, pursuant to a Purchase and Sale Agreement, dated as of
the date hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Purchase Agreement"), by and among HPT and
Candlewood and certain of its wholly owned subsidiaries, HPT, either directly or
through a wholly owned subsidiary (such entity, "Landlord"), is planning to
acquire certain properties, as more particularly described in the Purchase
Agreement; and
WHEREAS, subject to and upon the terms and conditions set forth
in this Agreement, pursuant to a Lease Agreement in the form attached hereto as
Exhibit A (the "Lease"), HPT has agreed to lease or cause Landlord to lease to a
wholly owned subsidiary of Candlewood, ("Tenant"), and Candlewood has agreed to
cause Tenant to lease from Landlord, all of the Properties (this and other
capitalized terms used and not otherwise defined herein having the meanings
ascribed to such terms in the Purchase Agreement and/or the Lease);
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the mutual receipt
and legal sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in the Purchase
Agreement and/or the Lease.
2. AGREEMENT TO LEASE. Subject to and upon the terms and
conditions hereinafter set forth, on the initial Closing Date, Landlord and
Tenant shall each execute and deliver the Lease with respect to the Properties
acquired on such date and such date shall be the Commencement Date under the
Lease. On each Closing Date thereafter, Landlord and Tenant shall each execute
and deliver an amendment to the Lease with respect to the Properties acquired on
such date in the form attached hereto as Exhibit B (each an "Amendment").
3. MINIMUM RENT. The Minimum Rent payable under the Lease, as
amended by any Amendments, shall be, with respect to each Property, the amount
set forth in Exhibit C.
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4. REPRESENTATIONS OF TENANT, ETC. As an inducement to Landlord
to enter into the Lease and any Amendments, Candlewood shall cause Tenant to
represent and warrant to Landlord, as of each Closing Date, that:
(1) STATUS AND AUTHORITY OF TENANT, ETC. Tenant is a
corporation duly organized and validly existing under the laws of its state of
incorporation and has all requisite power and authority (corporate and other)
under the laws of such state and its respective charter documents to own its
property and assets, to enter into and perform its obligations under the Lease,
and any Amendments thereto, and to transact the business in which it is engaged
or presently proposes to engage. Tenant is duly qualified in each jurisdiction
in which the nature of the business conducted or to be conducted by it requires
such qualification, except where failure to do so could not reasonably be
expected to have a material adverse effect.
(2) CORPORATE ACTION OF TENANT, ETC. Tenant has taken all
necessary action (corporate or other) under its charter documents to authorize
the execution, delivery and performance of the Lease, as amended by any
Amendments, and the Lease, as so amended, constitutes the valid and binding
obligation and agreement of Tenant enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization or similar laws of
general application affecting the rights and remedies of creditors.
(3) NO VIOLATIONS OF OTHER AGREEMENTS, ETC. Neither the
execution and delivery of the Lease, as amended by any Amendments, by Tenant,
nor compliance with the terms and provisions thereof, will result in any breach
of the terms, conditions or provisions of, or conflict with or constitute a
default under, or result in the creation of any lien, charge or encumbrance upon
any property or assets of Tenant pursuant to the terms of any indenture,
mortgage, deed of trust, note, evidence of indebtedness, agreement or other
instrument to which Tenant may be a party or by which it or its property is
bound, or violate any provisions of laws, or any applicable order, writ,
injunction, judgment or decree of any court, or any order or other public
regulation of any governmental commission, bureau or administrative agency.
(4) JUDGMENTS; LITIGATION. There are no judgments
presently outstanding and unsatisfied against Tenant or any of its properties,
and none of Tenant or 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 materially and adversely affect Tenant, and no such material litigation or
proceeding is, to the knowledge of Tenant, threatened against Tenant, and, to
the knowledge of Tenant, no investigation looking toward such a proceeding has
begun or is contemplated.
(5) DISCLOSURE. To the knowledge of Tenant, neither this
Agreement nor any other document, certificate or statement furnished to HPT by
or on behalf of Tenant in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading. To the knowledge of Tenant, there is no fact or condition which
materially and adversely affects the business, operations, affairs, properties
or condition of Tenant which has not been set forth in this Agreement or in the
other documents, certificates or statements furnished to HPT in connection with
the transactions contemplated hereby.
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Tenant's liability with respect to the representations and
warranties set forth in this Agreement shall survive the Commencement Date.
5. REPRESENTATIONS OF LANDLORD. As an inducement to the Tenant to
enter into the Lease and any Amendments, HPT shall cause Landlord to represent
to Tenant, as of each Closing Date, that:
(1) STATUS AND AUTHORITY OF LANDLORD. Landlord is a
Maryland real estate investment trust duly organized, validly existing and in
trust good standing under the laws of the State of Maryland, and has all
requisite power and authority under the laws of such state and under its charter
documents to enter into and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. Landlord has duly qualified and
is in good standing as a trust or unincorporated business association in each
jurisdiction in which the nature of the business conducted by it requires such
qualification, except where failure to do so could not reasonably be expected to
have a material adverse effect.
(2) ACTION OF LANDLORD. Landlord has taken all necessary
action to authorize the execution, delivery and performance of the Lease, as
amended by any Amendments, and the Lease, as so amended, constitutes the valid
and binding obligation and agreement of Landlord, enforceable against Landlord
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.
(3) NO VIOLATIONS OF AGREEMENTS. Neither the execution,
delivery or performance of the Lease, as amended by any Amendments, by Landlord,
nor compliance with the terms and provisions hereof or thereof, will result in
any breach of the terms, conditions or provisions of, or conflict with or
constitute a default under, or result in the creation of any lien, charge or
encumbrance upon any property or assets of Landlord pursuant to the terms of any
indenture, mortgage, deed of trust, note, evidence of indebtedness or any other
agreement or instrument by which Landlord or its property is bound, or violate
any provisions of laws, or any applicable order, writ, injunction, judgment or
decree of any court, or any order or other public regulation of any governmental
commission, bureau or administrative agency.
(4) JUDGMENTS; LITIGATION. There are no judgments
presently outstanding and unsatisfied against Landlord or any of its properties,
and neither Landlord 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 materially and adversely affect Landlord, and no such material litigation
or proceeding is, to the knowledge of Landlord, threatened against Landlord,
and, to the knowledge of Landlord, no investigation looking toward such a
proceeding has begun or is contemplated.
Landlord's liability with respect to the representations and
warranties set forth in this Agreement shall survive the Commencement Date.
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6. ADDITIONAL TENANT OBLIGATIONS. On or before the Commencement
Date, Candlewood shall cause each of the following to be delivered to HPT (the
obligation of Landlord to enter into the Lease and any Amendments being subject
to such delivery):
(1) A security agreement with respect to all tangible
personal property owned by Tenant and used in connection with the operation of
the Properties leased on such date, such security agreement to create a first
lien and security interest in such property and to be otherwise in the form
attached hereto as Exhibit D;
(2) Such financing statements as Landlord may reasonably
require to perfect the interests and liens granted pursuant to the security
agreement described in paragraph (a) above;
(3) An assignment and security agreement with respect to
the FF&E Reserve, such assignment and security agreement to create a first lien
in the FF&E Reserve and to be otherwise in the form attached hereto as Exhibit
E;
(4) A stock pledge agreement with respect to all of the
issued and outstanding stock of Tenant, together with a stock power in blank,
such stock pledge and security agreement to create a first lien and security
interest in such shares and to be in the form attached hereto as Exhibit F; and
(5) A guaranty agreement with respect to Tenant's
obligations under the Lease, as amended by the Amendments, in the form attached
hereto as Exhibit G.
7. CONDITION PRECEDENT. The obligations of the parties hereunder
with respect to each Property shall be subject to the consummation of the
transactions contemplated by the Purchase Agreement with respect to such
Property.
8. NOTICES. All notices required or desired to be given hereunder
shall be given in the manner provided in Section 11.4 of the Purchase Agreement.
9. ASSIGNMENT. Candlewood shall not assign or transfer, directly
or indirectly, its rights under this Agreement without the prior written consent
of HPT, which consent may be given or withheld by HPT in HPT's sole discretion.
HPT shall not assign or transfer, directly or indirectly, its rights under this
Agreement other than to a wholly owned subsidiary of HPT without the prior
written consent of Candlewood, which consent may be given or withheld by
Candlewood in Candlewood's sole discretion.
10. DEFAULT.
(1) DEFAULT BY CANDLEWOOD. If Candlewood shall fail to
perform any of the covenants and agreements contained herein to be performed by
Candlewood and such failure continues for a period of ten (10) days after notice
thereof from HPT, HPT may terminate this Agreement and/or pursue any and all
remedies available to HPT at law or in equity, including, but not limited to, a
suit for specific performance or other equitable relief. A default by the
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Candlewood Parties under the Purchase Agreement shall be deemed a default by
Candlewood under this Agreement.
(b) DEFAULT BY HPT. If HPT shall fail to perform any of
the covenants and agreements contained herein to be performed by it and such
failure shall continue for a period of ten (10) days after notice thereof from
Candlewood, Candlewood may terminate this Agreement and/or pursue any and all
remedies available to Candlewood at law or in equity, including, but not limited
to, a suit for specific performance or other equitable relief. A default by the
Purchaser under the Purchase Agreement shall be deemed a default by HPT under
this Agreement.
11. EXPENSES. Tenant shall pay its and HPT's expenses incident to
the negotiation, preparation and carrying out of this Agreement, including,
without limitation, all reasonable fees and expenses of HPT's counsel. Tenant
shall also pay the cost of all recording fees, transfer fees and other like
costs and expenses incident to this Agreement.
12. PUBLICITY. The parties agree that no party shall, with
respect to this Agreement and the transactions contemplated hereby, contact or
conduct negotiations with public officials, make any public pronouncements,
issue press releases or otherwise furnish information regarding this Agreement
or the transactions contemplated to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, delayed or
conditioned, except as required by law or unless such action is taken based on
advice of counsel given in good faith. No party or its employees shall trade in
the securities of HPT or Candlewood until a public announcement of the
transactions contemplated by this Agreement has been made.
13. PERFORMANCE ON BUSINESS DAYS. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
14. APPLICABLE LAW, ETC. This Agreement shall be interpreted,
construed, applied and enforced in accordance with the laws of The Commonwealth
of Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts, regardless of (i) where
this Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or (iii)
where any breach of any provision of this Agreement occurs, or any cause of
action otherwise accrues; or (iv) where any action or other proceeding is
instituted or pending; or (v) the nationality, citizenship, domicile, principal
place of business, or jurisdiction of organization or domestication of any
party; or (vi) whether the laws of the forum jurisdiction otherwise would apply
the laws of a jurisdiction other than The Commonwealth of Massachusetts; or
(vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as is provided by law; and the parties consent
to the jurisdiction of said court or courts located in The
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Commonwealth of Massachusetts and to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
15. MODIFICATION OF AGREEMENT. No modification or waiver of any
provision of this Agreement, nor any consent to any departure by any party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the other, and such modification, waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any party in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
16. WAIVER OF RIGHTS. Neither any failure nor any delay on the
part of any party in exercising any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
right, power or privilege.
17. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby and this Agreement shall thereupon be reformed and construed and
enforced to the maximum extent permitted by laws.
18. ENTIRE CONTRACT. This Agreement, including all annexes and
exhibits hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and thereof and shall supersede and
take the place of any other instruments purporting to be an agreement of the
parties hereto relating to the transactions contemplated hereby, including,
without limitation, any letter of intent or commitment letter.
19. COUNTERPARTS; HEADINGS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but which,
when taken together, shall constitute but one instrument and shall become
effective as of the date hereof when copies hereof, which, when taken together,
bear the signatures of each of the parties hereto shall have been signed.
Headings in this Agreement are for purposes of reference only and shall not
limit or affect the meaning of the provisions hereof.
20. BINDING EFFECT. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
21. NONLIABILITY OF TRUSTEES, ETC. THE DECLARATION OF TRUST
ESTABLISHING HPT, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HOSPITALITY PROPERTIES TRUST"
REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF HPT SHALL BE HELD TO ANY
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PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, HPT. ALL PERSONS DEALING WITH HPT, IN ANY WAY, SHALL LOOK ONLY TO THE
ASSETS OF HPT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
IN WITNESS WHEREOF, HPT and Candlewood have executed this
Agreement under seal as of the date above first written.
HOSPITALITY PROPERTIES TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: President
CANDLEWOOD HOTEL COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. FIX
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Its: Executive Vice President
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