Exhibit 10.08
FORM OF OFFICE SUBLEASE
by and between
Choice Hotels Franchising, Inc.
a Delaware corporation (to be
renamed Choice Hotels International, Inc.)
"Subtenant"
and
Choice Hotels International, Inc.
a Delaware corporation (to be
renamed Sunburst Hospitality Corporation)
"Sublessor"
at
10720, 10750, and 00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
OFFICE SUBLEASE
This Sublease is entered into this ___ day of ___________________, 1997, by and
between Choice Hotels International, Inc., a Delaware corporation (to be renamed
Suburst Hospitality Corporation) ("Sublessor") and Choice Hotels Franchising
Inc., a Delaware corporation (to be renamed Choice Hotels International, Inc.)
("Subtenant").
RECITALS
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WHEREAS, Sublessor entered into a lease agreement with Manor Care, Inc.
("Manor Care") for certain office space located at 10720, 10750 and 00000
Xxxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxxxx 00000 (the "Property") a copy which is
attached hereto and made a part of this Sublease as Exhibit "A", and referred to
as the Master Lease.
WHEREAS, Sublessor is implementing a restructuring of itself in which,
among other things, it will is distribute to its shareholders all of the common
stock of Subtenant, pursuant to a Distribution Agreement dated as of
______________, 1997, between Sublessor and Subtenant as a result of which
Sublessor and Subtenant will be separate publicly traded corporations.
WHEREAS, Sublessor and Subtenant occupy office space together in the
Property, pursuant to the Master Lease, and desire to provide in this Sublease
for the continuing occupancy by Subtenant, after said stock distribution, of
certain office premises.
WHEREAS, Sublessor and Subtenant each have determined that the rental and
other terms and conditions of this Sublease are commercially reasonable, based
upon market conditions in the Silver Spring, Maryland area.
WHEREAS, Sublessor desires to sublease to Subtenant and Subtenant desires
to sublease from Sublessor a portion of the Property consisting of 74,074
rentable square feet in 00000 Xxxxxxxx Xxxx and _______ rentable square feet in
00000 Xxxxxxxx Xxxx (the "Demised Premises").
WHEREAS, the parties desire to enter into this Sublease defining their
respective rights, duties, and liabilities relating to the Demised Premises.
NOW, THEREFORE, WITNESSETH, in consideration of the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and SUBJECT ENTIRELY
TO THE TERMS, DEFINITIONS, AND CONDITIONS OF THE MASTER LEASE, unless
hereinafter specifically altered, Sublandlord and Subtenant hereby agree as
follows:
1. LEASE OF PREMISES: Sublessor hereby leases to Subtenant and Subtenant
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hereby leases from Sublessor the Demised Premises subject to terms and
conditions of this Sublease.
2. PROVISIONS CONSTITUTING SUBLEASE: This Sublease is subject to all the
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terms and conditions of the Master Lease, except as set forth in this
Sublease. Subtenant shall assume and perform the non-monetary
obligations of Sublessor as lessee in the Master Lease, to the extent
the terms and conditions are applicable to the Demised Premises, and pay
rent as set forth in Section Four of this Sublease. All defined terms in
this Sublease shall have the same meaning as set forth in the Master
Lease, except as set forth therein. Neither Sublessor or Subtenant shall
commit or permit to be committed on the Demised Premises any act or
omission that shall violate any term or condition of the Master Lease or
breach the terms of the Master Lease or cause the Master Lease to be
terminated.
3. LEASE TERM AND POSSESSION: The term of the Sublease shall commence on
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______________ and shall terminate on April 30, 1999. Subtenant shall be
given possession of the Demised Premises immediately upon execution of
this Sublease.
4. RENT: Subtenant shall pay to Manor Care under the Master Lease for the
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Demised Premises an amount equal to 1/12th of the Annual Base Rent (as
hereinafter defined) in advance, without demand, deduction, counterclaim
or offset, and without relief from valuation and appraisement laws or
any other deduction for any reason whatsoever, on or before the first
day of each and every calendar month during the terms of this Sublease;
provided, however, that if the Commencement Date shall be on a day other
than the first day of the calendar month or the expiration date shall be
a day other than the last day of the calendar month, the monthly rental
installment for such first or last fractional month shall be prorated on
the basis of the number of days during the month this Sublease was in
effect in relation to the total number of days in such month.
Annual Base Rent for each Lease Year shall be calculated in accordance
with the following formula:
Annual Base Rent = (Sublessor and Manor Care Occupancy Percentage) x
(Operating Expenses-Third Party Rental Income)
Capitalized terms shall have the meanings given to them in the Master
Lease.
At Manor Care's sole discretion, at any time and from time to time
during the term of this Sublease upon written notice to Subtenant, Manor
Care may elect that instead of using the aforesaid formula to calculate
Annual Base Rent, Annual Base Rent shall be the number of square feet of
space in the Demised Premises times the "Alternate Rent" as hereinafter
defined. The Alternate Rent shall be the annual fair market rental value
per square foot for the premises in their "as is" condition for the
remaining Lease Term, as reasonably determined by lessor based
on quoted rental rates at comparable office buildings in the Silver
Spring, Maryland area. Should Manor Care so elect, the parties will
enter into an amendment to this Sublease establishing the new Annual
Base Rent and providing that Subtenant shall pay its pro rata share
(based on the ratio of the number of square feet in the Demised Premises
to the number of square feet in the Property) of increases in real
estate taxes and operating expenses over a base year, with the terms
"real estate taxes", "operating expenses," and "base year" being defined
consistent with the definitions of such terms in leases of space in the
Complex (as defined in the Master Lease) to tenants unrelated to the
Manor Care.
5. USE: The Premises shall be used for general office uses and for no other
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purposes without the prior, express, written consent of Sublessor and
Manor Care.
6. ASSIGNMENT AND SUBLETTING: Subtenant will not assign this Sublease or
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further sublet all or any part of the Demised Premises without the prior
written consent of Sublessor (and the consent of the Manor Care, if
required under the terms of the Master Lease), which consent may be
withheld in Sublessor's sole and unfettered discretion.
7. INDEMNIFICATION: Subtenant agrees to defend, indemnify, and hold
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Sublessor harmless from and against any and all claims arising or
alleged to arise as a result of the occupancy or use of the Demised
Premises, including common areas and other areas appurtenant to the
Demised Premises, by Subtenant, its employees, agents, contractors or
subcontractors.
Sublessor agrees to defend, indemnify, and hold Subtenant harmless from
and against any and all claims arising or alleged to arise from any act
or omission of sublessor, its employees, agents, contractors, or
subcontractors.
8. ADDITIONAL RENT: Subtenant shall pay to Manor Care all charges for
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additional rent or operating expenses attributable to the Demises
Premises as specified in the Master Lease. Payment shall be made in
advance on the first day of each calendar month of the term of this
Sublease without deduction, offset, prior notice, or demand in lawful
money of the United States.
9. ATTORNMENT: If the Master Lease terminates Subtenant will, if requested,
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attorn to Manor Care and recognize Manor Care as Sublessor under this
Sublease.
10. NOTICES: All notices, demands, or other writings in this Sublease
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provided to be given or made or sent, or which may be given or made or
sent, by either party to the other, shall be deemed to have been fully
given or made or sent when made in writing and hand delivered or
deposited in the United States mail, registered and postage prepaid,
and addressed as follows:
TO SUBLESSOR: 00000 Xxxxxxxx Xxxx
0xx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Attn: General Counsel
TO SUBTENANT: 00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Attn: General Counsel
TO LESSOR UNDER MASTER LEASE AGREEMENT:
Manor Care, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel (Re: Real Estate)
The address to which any notice, demand, other writing may be given or
made or sent to any party as above-provided may be changed by written
notice given by the party as above-provided.
11. GOVERNING LAWS: It is agreed that this Sublease shall be governed by,
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construed, and enforced in accordance with the laws of the State of
Maryland.
12. ENTIRE AGREEMENT: This Sublease shall constitute the entire agreement
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between the parties. Any prior understanding or representation of any
kind preceding the date of this Sublease shall not be binding upon
either party except to the extent incorporated in this Sublease.
13. ATTACHMENTS: The following Attachments are attached hereto and made a
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part hereof.
Exhibit A: Master Lease
Exhibit B: Rules and Regulations
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
properly executed and sealed the day and year first above written.
ATTEST: SUBLESSOR
CHOICE HOTELS INTERNATIONAL, INC.
(To be renamed SUNBURST HOSPITALITY
CORPORATION)
By:
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Title:
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ATTEST: SUBTENANT:
CHOICE HOTELS INTERNATIONAL, INC.
(To be renamed SUNBURST HOSPITALITY
CORPORATION)
By:
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Title:
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Manor Care, Inc., lessor of the above Demised Premises held by tenant under the
Master Lease executed on November 1, 1996, hereby consents to the above
Sublease.
ATTEST: MANOR CARE, INC.
By:
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Name:
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Title:
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Dated:
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