HOTEL LEASE Between CHATEAU LOUISIANE, INC. and THE ROYAL ORLEANS, INC. Dated December 12, 1967
Exhibit
10.14
HOTEL LEASE
Between
CHATEAU
LOUISIANE, INC.
and
THE
ROYAL ORLEANS, INC.
Dated
December
12, 1967
TABLE OF
CONTENTS
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Section
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Page
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1.
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Use
of Premises
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3
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2.
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Basic
Rent
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3
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3.
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Percentage
Rent and Net Profits
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6
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4.
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Adjustments
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10
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5.
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Options
to Extend
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10
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6.
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Net
Rental
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13
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7.
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Construction
and Costs of Hotel and Furnishings
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13
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8.
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Maintenance
of Furnishings
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16
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9.
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Taxes
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16
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10.
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Apportionment
upon Termination
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17
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11.
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Tenant's
Right to Contest
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17
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12.
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Maintenance
of Premises
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17
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13.
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Xxxxxxxxxxxxxxx
xx Xxxxxxxx
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00
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00.
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Assignment
and Subletting
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20
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15.
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Covenant
of Quiet Possession
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20
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16.
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Landlord
May Inspect
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20
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17.
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Parties
Not Partners
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20
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18.
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Remedies
on Default
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21
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19.
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Amendments
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23
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20.
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Tenant
Holding Over
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23
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21.
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Fire
and Other Insurance
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23
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22.
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Damage
or Destruction by Fire, etc.
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24
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23.
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Condemnation
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26
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24.
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Mortgages
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26
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25.
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Alterations
by Tenant
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26
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26.
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Surrender
on Termination
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27
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27.
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Arbitration
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27
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28.
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Successors
and Assigns
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27
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29.
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Notices
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27
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30.
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Covenant
to Perform
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28
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Guaranty
by Hotel Corporation of America
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28
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LEASE
BY
CHATEAU
LOUISIANE, INC.
IN
FAVOR OF
THE
ROYAL ORLEANS, INC.
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UNITED STATES OF AMERICA
STATE OF LOUISIANA
PARISH OF ORLEANS
CITY OF NEW ORLEANS
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BE IT
KNOWN that on this 12th day of the month of December in the year one thousand,
nine hundred and sixty-seven,
BEFORE
ME, XXXXXXXXXXX X. XXXXXXXX, XX., a Notary Public, duly commissioned, qualified
and sworn, within and for the Parish of Orleans, State of Louisiana, therein
residing, and in the presence of the witnesses hereinafter named and
undersigned:
PERSONALLY
CAME AND APPEARED:
CHATEAU
LOUISIANE, INC. (hereinafter called "Landlord"), a Louisiana corporation, herein
represented by Xxxxxx X. Xxxxxxxx, its duly authorized Vice President, herein
appearing by virtue of resolution of the Directors of said Corporation duly
adopted at a meeting held at the office of the Corporation at its domicile in
the City of New Orleans, on the 7th day of December, 1967, a certified copy of
which is hereunto annexed; and
THE ROYAL
ORLEANS, INC. (hereinafter called "Tenant"), a Louisiana corporation, herein
represented by Xxxxx X. Xxxxxxxx, its duly authorized Vice President, therein
appearing by virtue of resolution of the Directors of said Corporation duly
adopted at a meeting held at an office of the Corporation in the City of New
York, on the 21st day of November, 1967, a certified copy of which is hereunto
annexed,
WHO
DECLARED that the Landlord represents that it is the owner of the following
described property, to-wit:
A certain
piece or portion of ground, together with all of the improvements thereon, and
all of the rights, ways, privileges, servitudes, advantages and appurtenances
thereunto belonging or in anywise appertaining, situated in the Second Municipal
District of the City of New Orleans, Louisiana, in Square 64, bounded by
Bourbon, Conti, Royal and Bienville Streets, comprising the entire frontage of
said Square 64 on Bourbon Street, and being composed of lots formerly designated
as lots 1, 2, 16 and 88, another lot 2 and lot X, of a former alley fronting on
Xxxxx Street, and of ten unnumbered and undesignated lots, which piece or
portion of ground, according to a survey of Adloe Xxx, Jr. & Associates,
dated April 13, 1962, recertified June 7, 1963, a print of which is annexed to
an act passed before Xxxxx X. Xxxxxxx, Xx., Notary Public, on June 10, 1963,
measures 325 feet, 6 inches and 2 lines (325 feet, 11 inches and 5 lines, as per
title) in frontage on Bourbon Street running from the corner of Bourbon and
Bienville Streets to the corner of Bourbon and Xxxxx Streets, thence 231 feet, 3
inches and 1 line in frontage on Xxxxx Street running from said corner of Conti
and Bourbon Streets in the direction of Royal Street, thence on a line parallel
to Royal Street and running from said point on Xxxxx Street in the direction of
Bienville Street a first depth of 116 feet, 6 inches and 4 lines, thence
narrowing on a line parallel to Xxxxx Street and running from the direction of
Royal Street in the direction of Xxxxxxx Xxxxxx 00 feet, 2 inches and 5 lines,
thence on a line parallel to Royal Street and running from the direction of
Xxxxx Street a second depth of 208 feet, 9 inches and 7 lines to Bienville
Street, thence from said point on Bienville Street 193 feet and 2 lines (192
feet, 3 inches and 3 lines, as per title) in frontage on Bienville Street to the
corner of Bienville and Bourbon Streets, and which piece or portion of ground,
according to a survey of Xxxxxxxx, Xxxx & Associates, dated October 3, 1967,
a print of which is hereunto annexed for reference, measures 325 feet, 8 inches
and 2 lines in frontage on Bourbon Street running from the corner of Bourbon and
Bienville Streets to the corner of Bourbon and Xxxxx Streets, thence 230 feet, 8
inches and 7 lines in frontage on Xxxxx Street running from said corner of Conti
and Bourbon Streets in the direction of Royal Street, thence on a line parallel
to Royal Street running from said point on Xxxxx Street in the direction of
Bienville Street a first depth of 116 feet, 8 inches and 6 lines, thence
narrowing on a line parallel to Xxxxx Street and running from the direction of
Royal Street in the direction of Xxxxxxx Xxxxxx 00 feet, 2 inches and 5 lines,
thence on a line parallel to Royal Street and running from the direction of
Xxxxx Street a second depth of 207 feet, 11 inches and 4 lines to Bienville
Street, thence from said point on Bienville Street 192 feet, 4 inches and 3
lines in frontage on Bienville Street to the corner of Bienville and Bourbon
Streets. Being the same property acquired by Chateau Louisiane, Inc.
from The French Quarter Corporation by act passed before the undersigned Notary
Public of even date herewith.
1
AND the
said Appearers did further declare that the Landlord, for and in consideration
of the rent reserved and of the covenants and agreements herein contained on the
part of the Tenant to be kept, observed, and performed, has demised and leased,
and by these presents does demise and lease unto the Tenant, for the term
hereinafter stated, the above described property, together with the hotel to be
constructed thereon as described in Exhibit A annexed hereto, the said property,
including the said hotel, being herein referred to as the "demised
premises".
TO HAVE
AND TO HOLD the premises hereby demised unto the Tenant for a term of
twenty-five years from the "Date of Commencement" as hereinafter defined. The
Date of Commencement shall be the first day of the calendar month next
succeeding the expiration of ninety days after completion of construction of the
hotel as hereinafter set forth.
AND the
said Appearers did further declare that their contract of lease with respect to
the above described premises does read in words and figures as follows,
to-wit:
1.
During the continuance of this lease, the demised premises may be
occupied and used only for general hotel purposes and such other purposes as are
normally and usually incident to such business. Tenant covenants and agrees that
it will operate the demised premises during each day of this lease in a lawful
manner as a first class hotel to be known under such name as shall be selected
by Tenant with Landlord's approval which approval shall not be unreasonably
withheld, abiding by all laws, rules and regulations applicable to the demised
premises.
2
2. (a)
Tenant shall pay to Landlord, at such place in the United States as Landlord may
designate from time to time by notice to Tenant in writing, as rental for the
demised premises, an annual net rental (hereinafter called the "Basic Rent"),
computed nevertheless on a monthly basis in accordance with the provisions of
subparagraph (b). Basic Rent shall be payable in monthly installments
in advance on the first day of each calendar month, commencing on the Date of
Commencement, and the amount of Basic Rent payable for any fraction of a
Calendar Month between the first day of the Calendar Month in which termination
of this lease occurs and the date of such termination shall be a pro rata
portion of the full amount of Basic Rent which would otherwise be payable for
the full Calendar Month in which the date of termination occurs. As used in this
lease, the term "lease year" means a calendar year commencing January 1 and
wholly included within the term of this lease, and the term "fractional year"
means that portion of a calendar year between the Date of Commencement and
December 31 next following and that portion of a calendar year between January 1
of the year in which this lease terminates and the date of
termination.
(b) Basic
Rent shall be:
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(i)
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for
each of the first 180 calendar months of the term of this lease, $833.33;
plus
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(ii)
(A)
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for
each calendar month from the Date of Commencement through the thirty-sixth
full calendar month after the date of this lease,
$9,333.33;
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(B)
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for
143 calendar months commencing upon the expiration of the period described
in (A) above, $16,500, followed by one payment in the amount of the then
remaining interest and principal on the note or notes of Landlord in favor
of The French Quarter Corporation of even date herewith in the aggregate
initial principal amount of $1,600,000;
plus
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(iii)
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throughout
the primary term of this lease, an amount equal to the principal and
interest payments due by Landlord pursuant to its first mortgage
indebtedness to The Equitable Life Assurance Society of the United States
(hereinafter sometimes called "Equitable") attributable to the demised
premises. The amount of rent due pursuant to this subparagraph (iii) shall
be determined at the time of the advance of funds by Equitable following
the Date of Commencement, and the indebtedness attributable to the demised
premises shall be the difference between the principal amount of the
mortgage note then executed by Landlord and Royal St. Louis, Inc., and the
then unpaid principal balance of the note described in the Act of Mortgage
by Royal St. Louis, Inc., to Equitable dated May 27, 1965, recorded in
M.O.B. 2071, folio 666. The rent payable pursuant to this subparagraph
(iii) shall be payable monthly beginning on the first day of the calendar
month next succeeding the advance of funds by Equitable as described
above, and each monthly payment shall consist
of
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(A)
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for
each of the 180 months next succeeding such advance of funds by Equitable,
an amount equal to one-twelfth (1/12) of eight and nine-tenths per cent
(8.9 % ) of the first mortgage indebtedness attributable to the demised
premises;
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3
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(B)
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for
each month during the remainder of the primary term, an amount equal to
one-twelfth (1/12) of thirteen and eighty-four one-hundredths per cent
(13.84%) of forty-four and nine-tenths per cent (44.9%) of the first
mortgage indebtedness attributable to the demised
premises.
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Upon the
expiration of the primary term, Tenant shall pay Landlord an amount equal to the
product of the monthly rent pursuant to subpart (B) of this subparagraph (iii)
times the difference between the number of months for which such rental has in
fact been paid and 120. Landlord covenants that the amount of the first mortgage
indebtedness attributable to the demised premises shall not be less than
$12,000,000, and that the entire proceeds thereof shall have been used for the
purposes set forth in Section 7 hereof, or to replace interim borrowings
previously used for such purposes. In the event that the advance of funds by
Equitable contemplated herein does not take place prior to April 1, 1970, then
in lieu of the other payments required pursuant to this subparagraph (iii),
Tenant shall pay Landlord monthly the sum of $83,840, and shall pay on April 1,
1970, the additional sum of $83,840 for each month from the Date of Commencement
through the month of March, 1970;
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(iv)
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for
each of the first 60 calendar months of the term of this lease, an amount
equal to one-twelfth of the annual interest and amortization payments
required to be made by the Landlord in repayment of any borrowings by
Landlord (other than borrowings described in the succeeding subparagraph
(v) ) for any of the purposes set forth in Section 7 hereof, provided that
the aggregate principal amount of such loans shall not exceed $1,500,000
and the annual rate of interest thereon shall not exceed 7-1/4%;
plus
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(v)
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for
each calendar month of the term of this lease, an amount equal to eight
and one-third tenths of one percent (.833-1/3%) of the total funds
advanced to Landlord by Royal St. Louis, Inc. for any of the purposes set
forth in Section 7 hereof prior to the Date of Commencement, whether such
funds are advanced as contributions to the Landlord's capital or as loans;
plus
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(vi)
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in
the event that Tenant's Net Profits during any lease year exceed 1.66
times Basic Rent for such lease year, then on the first day of May next
succeeding such lease year and on May 1 of the next two years, Tenant
shall pay additional Basic Rent of $116,666.67. Only three such payments
of additional Basic Rent shall be required, but all three payments shall
be due without regard to Tenant's Net Profits subsequent to the lease year
during which such Net Profits exceeded 1.66 times Basic
Rent.
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The
parties each agree, upon request from the other, to execute from time to time a
written instrument setting forth the dollar amounts of rent as determined
pursuant to the provisions of the foregoing subparagraphs (iii), (iv), and (v),
in order that the same may be relied upon by any then existing or prospective
creditor of either of them, and by any prospective successor to the interest of
either of them. Anything in this lease to the contrary notwithstanding, the
Basic Rent shall in no event be less than: $1,310,000.00 for the first year of
the term of this lease; $1,396,000.00 for each of the next twelve years of the
term of this lease; $1,198,000.00 for each of the next two years of the term of
this lease; and $855,700.00 for each of the last ten years of the term of this
lease; provided, however, that the provisions of this paragraph shall not apply
in the event that the advance of funds by Equitable contemplated herein does not
take place prior to April 1, 1970.
4
3.
In addition to the Basic Rent, Tenant shall pay with respect
to each lease year of the original twenty-five year term hereof, as additional
rent, the Percentage Rent as herein defined and herein called "Percentage
Rent".
(a)
Percentage Rent with respect to each lease year shall be a sum equal
to 20% of the "Net Profits", (as hereinafter defined) derived by the Tenant from
the operation of the demised premises for such lease year up to an amount equal
to 1.66 times Basic Rent for such lease year, plus 40% of any Net Profits in
excess of 1.66 times Basic Rent for such lease year. The payments provided for
in this subparagraph (a) are subject to refunds and credits as set forth in
subparagraphs (b) and (c).
(b)
If in any lease year, Tenant shall sustain a Net Loss, and if Tenant shall have
paid any Percentage Rent with respect to the next preceding lease year, Tenant
shall be entitled to a refund from Landlord in an amount equal to (i) the amount
of such Net Loss or (ii) the Percentage Rent paid with respect to such next
preceding lease year or (iii) the largest amount which, after giving effect to
such refund, will not reduce the total of all prior payments on account of
Percentage Rent since the commencement of the term of the lease below a sum
equal to 20% of the aggregate Net Profit computed for the period from the
commencement of the term to the end of the lease year in which said Net Loss
occurred, whichever of (i), (ii) or (iii) is the smallest.
(c)
If in any lease year or years, Tenant shall sustain a Net Loss, then, to the
extent that such Net Losses are not refunded as provided in subparagraph (b)
above, the same shall be accumulated and carried forward as a credit against and
deduction from Net Profits thereafter earned. No Percentage Rent shall be
payable with respect to any subsequent Net Profits until the aggregate of such
subsequent Net Profits exceeds the accumulated Net Losses carried forward. If
the Landlord's interest in this sublease shall, by reason of foreclosure of any
mortgage given by Landlord to The Equitable Life Assurance Society of the United
States, pass to anyone other than Landlord, then thereafter, instead of
refunding Net Losses as provided in subparagraph (b) above, the same shall be
accumulated and carried forward and applied as a credit and deduction from
Percentage Rent thereafter payable hereunder. Nothing in this or the preceding
subparagraph shall give to the Tenant any right to a refund of or credit against
the Basic Rent before the 90th day following the last day of such lease year;
and not later than such 90th day the Tenant, in addition to such payment, shall
furnish the Landlord with a report by independent public accountants, who may be
the independent public accountants regularly retained by the Tenant setting
forth (i) the Net Profit or Net Loss for the preceding lease year, (ii) any
refund or credit claimed by Tenant under the provisions of subdivisions (b) and
(c) above, and (iii) the amount of any Percentage Rent payable with respect to
such lease year; which report shall be in such detail as will reasonably
disclose the basis on which the determination was made.
Should
this lease terminate before the end of any lease year, the Net Profit or Net
Loss for such lease year to the date of such termination shall be determined in
the manner hereinabove provided on a pro rata basis and the Percentage Rent or
refund, if any, payable hereunder based on such determination for the period
ending with such termination shall be paid within 90 days thereafter. Similarly,
the Net Profit or Net Loss for the period from the Date of Commencement to the
first day of January next succeeding shall be determined for such period on a
pro rata basis, and the Percentage Rent, if any, with respect to such period
shall be paid within 90 days after the expiration of such period. In the event
that Tenant exercises its option to extend this lease at the conclusion of the
primary term pursuant to the provisions of Section 5 (a) hereof, then a
computation of Net Profit or Net Loss shall be made both for the fractional year
(if any) at the conclusion of the primary term and for any fractional year at
the beginning of the first extended term; and a similar computation shall be
made with respect to any fractional year (s) arising at the expiration of one
extended term and the commencement of the succeeding extended term, unless the
same rental formula (as set forth in Section 5 (b) hereof) applies to both the
term then expiring and the term then commencing.
5
The
Tenant shall furnish the Landlord with a balance sheet and statement of profit
and loss of the Tenant and of Hotel Corporation of America, in each case
certified by independent public accountants, such report to be furnished within
150 days after the end of the respective fiscal years of said
corporations.
(e)
"Net Profit" and "Net Loss" for any lease year shall
mean respectively the net earnings or net loss, as the case may be, derived by
the Tenant from the operation of the demised premises for such lease year, after
deducting from gross revenue for such lease year (i) all amounts (including
Basic Rent but excluding Percentage Rent) payable by the Tenant which have
accrued during such lease year pursuant to any of the terms and conditions of
this lease and (ii) all other amounts paid or incurred during such lease year on
account of costs and expenses relating to the operation of the demised premises
and the hotel, including but not limited to any amounts incurred or accrued for
pre-opening expenses (which shall be treated as having been incurred on the Date
of Commencement), insurance premiums, repairs, replacements, maintenance,
alterations, depreciation or amortization but without any deductions for taxes
based on or measured by Tenant's income or for corporate franchise taxes or for
interest.
All
salaries, fees or compensation for services rendered exclusively for the benefit
of the leased hotel shall be wholly deductible in determining "Net Profit" or
"Net Loss". Should Tenant operate the demised premises in affiliation with other
establishments, there may be included in the costs and expenses a share of the
salaries, fees or compensation for services rendered for the benefit of the
hotel and such other establishments and a pro-rata share of the costs and
expenses of procurement, advertising, sales and central office expenses of the
group, which share shall be a sum equal to 3% of Tenant's gross revenues from
the demised premises. All travelling expenses of the Tenant or its executives or
employees in connection with the operation of the hotel shall, however, be
included in the costs and expenses.
There
shall be taken into account in determining Net Profit or Net Loss for any lease
year, any income adjustments (including refunds or credits in respect of amounts
previously deducted in computing Net Profit or Net Loss) made in such lease year
although applicable to income of a prior lease year. If any such income
adjustments are made after the termination of the lease, they shall be accounted
for as if made immediately prior to such termination.
6
(f)
Tenant covenants and agrees that it will keep accurate books
and records of all income, costs and expenses of the demised premises, including
all income from sub-rentals by it in connection with the operation of the Hotel
or incident thereto, in accordance with generally accepted principles of
accounting customary in the hotel business; and not later than twenty working
days after the end of each month a written report, which need not be audited,
showing in reasonable detail the income and expenses for the month so ended
shall be made and delivered to Landlord. Said reports shall be delivered and
received subject to the annual reports by independent public accountants to be
delivered pursuant to subparagraph (d) above.
Tenant
agrees, upon request of Landlord in writing, to give Landlord's agents or any
certified public accountant employed by Landlord access at all reasonable times
during normal working hours to the books and records of Tenant in relation to
its business at the demised premises and to permit Landlord's agents or such
certified public accountant to examine and audit the same. Any such examination
and/or audit shall be at the sole expense of Landlord provided that if such
examination and/or audit by a certified public accountant employed by Landlord
correctly results in a variance in Landlord's favor of 10% or more in the
Percentage Rent theretofore submitted to Landlord by Tenant, then the cost of
such examination and/or audit shall be borne by Tenant.
4.
Adjustments between Landlord and Tenant as of the Date of
Commencement and as of the date of termination of this lease for taxes on any
real or personal property, premiums on insurance policies, and other charges,
expenses, rents, receipts and receivables shall be pro-rated. Such adjustments
shall likewise be taken into account in determining the results of operations
for the first and last years of the term for the purpose of calculating
Percentage Rent.
5.
(a) Tenant, if not in default in the
performance of its obligations hereunder, shall have the option to extend the
term of this lease for an additional period of ten years from the expiration of
the original term; and if it shall have exercised said option, Tenant shall have
an additional option to extend the term for an additional ten years from the
expiration of the first ten year extension period; and if it shall have
exercised said second option, Tenant shall have an additional option to extend
the term for an additional ten years from the expiration of the second ten year
extension period, but without any further option of extension. Should Tenant
elect to exercise its option to extend the lease, it shall give Landlord written
notice of such election not later than one year before the end of the original
twenty-five year term, in the case of the first option, and not later than one
year prior to the end of the first extended term in the case of the second
option, and not later than one year prior to the end of the second extended term
in the case of the third option.
(b) Should
Tenant exercise its first option to extend the term, then in lieu of the Basic
Rent and Percentage Rent as above provided, there shall be payable with respect
to each lease year during the first extended term either (i) a sum each year
equal to 6631% of the Net Profits for such year but not less than $300,000.00
per an:- num (herein called Formula A) , or (ii) a sum each year equal to 75% of
the Net Profits for such year but without any minimum annual rent (herein called
Formula B). Not later than 18 months prior to the end of the original
twenty-five year term, Landlord shall notify Tenant in writing whether it elects
to have rental payments made during the first option period on the basis of
Formula A or Formula B and such election shall be binding on Landlord and
Tenant. If Landlord does not so notify Tenant within the period above provided,
then the determination of whether Formula A or Formula B shall be applicable
during the first extended period shall be made by Tenant in its notice of
exercise of the first option to extend. Should Tenant exercise its second option
to extend the term, then in lieu of Basic Rent and Percentage Rent as herein
provided and in lieu of the rent which was payable during the first extended
period, there shall be payable with respect to each lease year during the second
extended term either Formula A or Formula B as hereinabove provided. Not later
than 18 months prior to the end of the first extended term, Landlord shall
notify Tenant in writing whether it elects to have rental payments made during
the second option period on the basis of Formula A or Formula B and such
election shall be binding on Landlord and Tenant. If Landlord does not so notify
Tenant within the period above provided, then the determination of whether
Formula A or Formula B shall be applicable during the second extended period
shall be made by Tenant in its notice of exercise of the second option to
extend. Should Tenant exercise its third option to extend the term, then in lieu
of Basic Rent and Percentage Rent as herein provided and in lieu of the rent
which was payable during the prior extended periods, there shall be payable with
respect to each lease year during the third extended term either Formula A or
Formula B as hereinabove provided. Not later than 18 months prior to the end of
the second extended term, Landlord shall notify Tenant in writing whether it
elects to have rental payments made during the third option period on the basis
of Formula A or Formula B and such election shall be binding on Landlord and
Tenant. If Landlord does not so notify Tenant within the period above provided,
then the determination of whether Formula A or Formula B shall be applicable
during the third extended period shall be made by Tenant in its notice of
exercise of the third option to extend.
7
(c)
Net Profits for Formula A or Formula B shall be computed and
reports furnished in the same manner as provided in Section 3 hereof; provided,
however, that (i) the sums payable to Landlord shall not constitute an expense
for the purpose of computing Net Profits, (ii) the provisions of Sections 3 (b)
and 3 (c) shall apply during the extended term (s) only during such periods when
Formula A is in effect, and then only to the extent of any rent paid or payable
in excess of the minimum payments required to be made by Tenant, and (iii)
during the extended term (s), Tenant shall not, without Landlord's consent,
which shall not be unreasonably withheld, in any one lease year expend more than
Two (2% ) Per Cent of revenues for furniture and equipment and for structural
repairs, alterations and remodeling of the demised premises.
In the
event that this lease terminates during or following any 'extended term, and
Tenant's expenditures for furnishings and equipment and for structural repairs,
alterations and remodeling of the demised premises during the three (3) years
immediately preceding such termination shall have been less than Two (2% ) Per
cent of the revenues of the demised premises for such three (3) year period,
then Tenant shall pay to Landlord, within 90 days following such termination,
Twenty-five (25% ) Per Cent of the difference between the amounts so expended by
Tenant and Two (2% ) Per Cent of such revenues.
6.
The rentals hereinbefore provided to be paid by
Tenant hereunder, whether during the original or any extended term, shall be net
to the Landlord; and in addition thereto, Tenant shall pay, as the same become
due and payable, all expenses and other charges applicable to the demised
premises, including taxes, assessments and other governmental charges, general
and special, ordinary and extraordinary, of every kind and nature, which may be
levied, assessed or imposed upon the demised premises or any improvements
thereon, and charges of every character arising from the operation of the hotel
and incidental operations on the demised premises; provided, however, that
nothing herein contained shall be deemed to impose on Tenant any obligations
with respect to any of Landlord's income taxes, corporate franchise taxes or
inheritance taxes or any taxes which do not directly relate to the property or
its operation.
8
7.
(a) Landlord agrees at its cost and
expense to construct on the demised premises a first class hotel of
approximately 489 rooms, as described in the construction contract passed by act
before the undersigned Notary Public of even date herewith between Landlord and
Xxxxx X. Xxxx Company, and costing not more than $16,000,000. In the event that
the total cost of construction is less than $16,000,000, Landlord shall pay the
difference between the total cost of construction and $16,000,000 to Tenant, to
the extent expended by Tenant, for the reimbursement of (i) Tenant's pre-opening
expenses and (ii) Tenant's cost of stocking the hotel on the demised premises
with consumable inventory. In the event that the total cost of construction is
greater than $16,000,000, then Tenant shall pay such excess to Landlord, and
shall be permitted to amortize any sum so paid over a period of the first ten
lease years, together with interest at the rate of 6% per annum on the
unamortized portion, such amortization and interest to be treated as an expense
in the calculation of Net Profits in computing Percentage Rent. Payments made
pursuant to the provisions of this paragraph shall be due on the Date of
Commencement, or on such later date as statements therefor may be
submitted.
Such
costs of construction shall include only items which under generally accepted
principles of accounting are properly includible in the costs of construction,
including without limiting the generality of the foregoing, all sums paid or
payable by Landlord pursuant to its agreement with The French Quarter
Corporation dated September 21, 1967, as amended, with respect to the
acquisition of the demised premises (other than (i) interest accruing subsequent
to the Date of Commencement and (ii) payment of the debentures referred to in
Exhibit N to said agreement) , the cost of furnishing and equipping the demised
premises, the cost of interim financing, commitment fees of Equitable Life
Assurance Society of the United States, soil testing, travel and entertainment
expenses, auditing expense, promotional and public relations expense,
preliminary drawings, brochures and photographs, legal expense, premiums on
necessary bonds and, up to $24,000, any amounts becoming due to Xxxxxx X.
Xxxxxxxx for services in connection with the acquisition, leasing, financing,
and construction of the demised premises prior to the Date of Commencement. Any
expenses for the above-enumerated purposes which were expended prior to the
execution of this lease shall be properly includible in costs of construction.
Within six months after the Date of Commencement, Landlord shall furnish Tenant
with a detailed written statement of such construction costs signed by a
responsible officer of the Landlord.
Landlord
agrees, upon request of Tenant in writing, to give Tenant's agents or any
certified public accountant employed by Tenant access at all reasonable times to
Landlord's books and records in relation to the costs of construction and to
permit Tenant's agents and/or such certified public accountant to examine and/or
audit the same. Any such examination and/or audit shall be at the sole expense
of the Tenant provided that if such examination and/or audit by a certified
public accountant employed by Tenant correctly results in a variance in Tenant's
favor of 10% or more in the costs of construction theretofore submitted to
Tenant by Landlord, then the cost of such examination and/or audit shall be
borne by Landlord.
9
(b)
Landlord agrees to commence the work
of construction promptly upon the execution of this lease, and thereafter to
continue such work of construction in a diligent and expeditious manner and
complete the same not later than 427 days following the date of this lease (as
extended for any of the causes enumerated in paragraph (e) of this Section 7),
all in accordance with the plans and specifications aforesaid and the terms
hereof.
(c)
The Landlord shall provide all furniture,
appliances, linens, carpets, draperies, silverware, china, glassware, kitchen
utensils, fixtures and movable equipment for the bars, kitchen, restaurants,
butcher and bakery shops, pantries and other movable fixtures and equipment
required for the operation of the hotel, (herein called "furnishings and
equipment"), together with air conditioning, including refrigeration and kitchen
air conditioning. The furnishings and equipment to be supplied and installed by
Landlord shall be purchased by Landlord pursuant to the Specifications of
Tenant; such specifications shall be subject to the approval of Landlord, which
approval Landlord agrees not to unreasonably withhold.
(d)
Completion of construction for the purpose of fixing the
Date of Commencement shall be deemed to occur on the date certified by the
individual construction supervisor as the first day the hotel is furnished and
available for occupancy and operation, provided all required governmental
certificates and permits permitting occupancy shall have been obtained. The
Tenant may occupy the demised premises from the time of completion to the Date
of Commencement; such occupancy shall be on all the terms hereof except the
payment of rent; provided, however, that if the Tenant commences to do business
prior to the Date of Commencement, it shall pay a pro rata portion of the Basic
Rent for the period it does business prior to the Date of
Commencement.
(e)
Performance of the obligation of the Landlord to diligently
construct the hotel and to provide the furnishings and equipment may be excused
for the period or aggregate of periods during which the same is delayed by
strikes, boycotts, weather, shortages of materials, supplies or labor, war,
governmental restrictions, other cause or causes, or force majeure beyond the
control of Landlord.
(f)
Landlord warrants that the hotel will be constructed in accordance with all
applicable building and zoning laws and requirements of insurance underwriters.
Acceptance by the Tenant of the demised premises shall not relieve Landlord of
responsibility for faulty materials or workmanship and Landlord will remedy any
defects due thereto and pay for any damage resulting therefrom which shall
appear within a period of one year from the completion of construction;
provided, however, that in the event of foreclosure under the mortgage to be
granted by Landlord to The Equitable Life Assurance Society of the United States
or in the event of a deed being executed to the holder of the Mortgage Note
secured by said mortgage in lieu of foreclosure, the transferee of the property
at foreclosure or under said deed shall be under no obligation to remedy such
defects or pay for any damage resulting therefrom except to the extent that such
defects shall be remedied, or damage resulting therefrom satisfied, out of
insurance proceeds or from a recovery by said transferee from , any party other
than Tenant. The provisions of this subparagraph (f) shall not be deemed waived
or cancelled by any other provisions of this lease relating to the operation or
maintenance of the demised premises or any indemnity or otherwise by the Tenant.
Tenant shall be subrogated [to all] rights of warranty of Landlord against
contractors and suppliers of the leased premises, and Landlord agrees to execute
any instruments that may be required to evidence such
subrogation.
10
8.
Tenant shall at its own expense maintain all of the
furnishings and equipment in first class condition, replacing the same when
necessary for such purpose, (except where prevented from so doing by material or
labor shortages, strikes, war restrictions or governmental restrictions), the
cost whereof shall be deductible as an expense in computing Net Profit
hereunder. All furnishings installed in the demised premises by Tenant, whether
as replacements or additions, shall forthwith become the property of Landlord
and a portion of the property leased to Tenant.
9.
During the term hereof, the Tenant covenants and agrees to pay and
discharge or cause to be discharged, as additional rent reserved hereby, when
the same may become due and payable, all taxes, including all charges for water
and sewer rents, that may be assessed upon said demised premises or any part
thereof, including furniture, furnishings, fixtures and equipment located
therein, and any building or improvements at any time situated thereon, in
respect of any period included within the term of this lease, whether the said
taxes shall be levied, assessed or imposed for city, county, state or federal
purposes, and also all special assessments for improvements which may hereafter
be due and payable against said demised premises during the period aforesaid,
and will from time to time exhibit to the Landlord on request evidence
satisfactory to it of such payments within thirty days after the same shall have
become due and payable, and in any event before the time when any penalty would
attach for non-payment of the same.
10.
Upon termination of the lease there shall be an apportionment of all such taxes
or assessments between Landlord and Tenant.
11.
The Tenant shall have the right (but not the obligation) in its own name
or in the name of the Landlord, to contest or review by legal proceedings or in
such other manner as it may deem suitable (which, if instituted, shall be
conducted diligently) any such tax, assessment, or charges. The legal
proceedings herein referred to may include appropriate appeals from any
judgments, decrees or orders and certiorari proceedings and appeals from orders
therein, but all such proceedings shall be begun without undue delay after the
imposition or levying of any contested items and shall be prosecuted to final
adjudication with due diligence. In the event of any reduction, cancellation or
discharge, the Tenant shall pay the amount that shall be finally levied or
assessed or adjudicated to be due and payable on any such item, and any refund
shall belong to Tenant. If demanded by Landlord, provision shall be made by
adequate bond or in other manner satisfactory to the Landlord for the payment of
such claim or demand in the event the contest should prove unsuccessful, and for
the protection of the Landlord and any mortgagee of the demised premises from
all cost, loss, liability or damage resulting from any such contest and to
assure the Landlord against tax sale or forfeiture.
12.
(a) The Tenant will at all times keep and maintain the demised
premises and all buildings and improvements at any time situated thereon in good
rentable order and condition, reasonable wear and tear excepted, and shall take
good care of the personal property used in connection with the operation
thereof, renewing, repairing and supplementing the same as may be necessary in
the proper conduct of the hotel (except where unavailable due to circumstances
beyond the Tenant's control). Tenant shall at its own expense pay for all
utilities furnished to the demised premises during the term of this lease as the
same shall become due and payable.
11
(b)
During each period of three lease years
during the original term only of this lease, Tenant covenants to expend upon the
demised premises, the building and fixtures therein, and the furniture,
furnishings, equipment, trade fixtures and other chattel property of every kind,
nature and description located and used in the conduct of the hotel business
therein, for repairs, decoration and redecoration, replacements, renewals,
alterations, additions, and/or improvements, whether by way of capital
improvements or otherwise, not less than the sum of $600,000.00, inclusive both
of such expenditures through direct labor on Tenant's payroll for carpenters,
masons, electricians and other craftsmen and employees, and of such expenditures
made through independent contractors or subcontractors, and/or also through the
purchase and acquisition of materials and of any such chattel property and
installation thereof. If the Tenant should be prevented or prohibited by
government regulations or controls, unavoidable casualty, strike, civil
commotion, war, or other force majeure from making such expenditures or any part
thereof, then the period during which the Tenant is so prevented shall be added
to the period during which such expenditure would otherwise by this provision be
required to be made.
Each such
three-year period is herein referred to as a Triennial Period. If at the end of
any Triennial Period during the original term of this lease Tenant shall not so
have expended the full amount of $600,000.00 as aforesaid, Tenant shall within
90 days thereafter deposit the deficiency with The Equitable Life Assurance
Society of the United States, as escrow agent, who shall at any time during the
term of this lease make the amounts so deposited available to Tenant to be
applied by Tenant towards the cost of making structural repairs or alterations
to the demised premises which Tenant may desire to make and upon the expiration
of the term of this lease, any amounts not so applied shall be retained by
Landlord as additional rent.
Should
the original term of this lease terminate less than three years after the
expiration of any Triennial Period, Tenant's obligation under this subdivision
(b) shall be proportionately reduced.
(c)
The Tenant will neither commit nor permit waste
upon the demised premises, and will use the buildings situated on the premises
to maintain and operate a first class hotel, and shall not use or suffer or
permit any person or party to use said premises or any buildings upon said
premises for any use' or purpose in violation of the laws of Louisiana, or of
the United States, or in violation of any lawful ordinance of the City of New
Orleans, or in violation of any valid enactment or order of any duly constituted
authority having jurisdiction over the same and will comply with all ordinances
and orders in respect of the demised premises.
13.
(a) Tenant covenants and agrees to
protect, save and keep Landlord harmless and indemnified against and from, any
loss, claims, penalties, costs, damages, expenses, or judgments arising from
injury or damage to any person (including employees, subtenants, patrons and
invitees of Tenant), or due to any failure of Tenant, its agents, employees or
subtenants to keep, fulfill or perform any of the covenants, agreements,
undertakings, obligations and conditions contained in this lease on the part of
Tenant to be kept, fulfilled and performed, or due to any use, occupancy,
management, operation or possession by the Tenant of the demised
premises.
12
During
the term of this lease and any extension thereof, Landlord shall be held
harmless by Tenant from any and all liability or claims for damages to any
person or property arising from the operation of or in or upon the demised
premises or the sidewalks immediately adjoining the same, including Tenant's
agents, invitees, employees, and its and their property; and Tenant agrees to
pay any and all attorneys' fees, costs, expenses, losses and damages that
Landlord may incur because of the failure, if any, of Tenant to fulfill the
covenants and agreements set out herein.
(b)
Tenant shall, during the term of this lease and
any extension thereof, keep in full force and effect a policy or policies of
public liability and elevator liability insurance with respect to the demised
premises and the business therein operated by Tenant in which both Landlord and
Tenant shall be named as parties covered thereby and in which the limits of the
liability shall not be less than $200,000.00 for one person and $1,000,000.00
for more than one person in any single accident, and not less than $300,000.00
for property damage. Tenant shall also maintain Workmen's Compensation Insurance
in such amount as is usually carried by persons engaged in the same or similar
business.
14.
Neither this lease nor the term hereby demised nor
any part thereof shall at any time be assigned or transferred by the Tenant
without the prior written consent of the Landlord which the Landlord agrees not
to unreasonably withhold, nor without such consent shall the same be encumbered
or mortgaged by the Tenant, which consent the Landlord agrees not to
unreasonably withhold; provided, however, that without the consent of Landlord,
the Tenant may assign this lease to any corporation with which the Tenant may
hereafter merge or consolidate, or to any corporation the majority of whose
outstanding voting stock is owned or controlled by the Tenant, if such assignee
shall assume in writing, all of the terms and provisions of this lease. The
Tenant may, however, sublet any room or rooms in the hotel and may also sublet
the stores and other space in the buildings not used for hotel purposes, but
shall not otherwise make any sub-lease without the Landlord's consent which
Landlord agrees not to unreasonably withhold. Notwithstanding anything contained
in this paragraph, the right of the Tenant to assign or sublet is expressly
subject to the condition that in any and all such events, the Tenant and Hotel
Corporation of America as guarantor shall continue to remain liable upon all of
the terms and provisions of this lease, including the provisions for the payment
of rent and for the other payments provided for herein. No sub-lease shall be
made for a term extending beyond the expiration of the term of this lease and
any extension thereof.
15.
The Landlord covenants and agrees with the Tenant that
it has full power and authority to make this lease and that upon the Tenant's
paying said rent, and performing all the covenants and conditions aforesaid on
the Tenant's part to be observed and performed, the Tenant shall and may
peaceably and quietly have, hold and enjoy the premises hereby demised, for the
term aforesaid.
16
Landlord and Landlord's mortgagee shall have the right
to enter upon the demised premises at all reasonable times during normal
business hours for the purpose of inspection.
17.
It is understood that the parties hereto are neither
partners nor engaged in a joint undertaking; that neither party has any
authority to act for or in behalf of the other and that they are distinct
entities in every way; and that the relationship hereby created is solely that
of Landlord and Tenant.
13
18.
(1) In case default be made by Tenant at any
time in the due payment of any installment of Basic Rent or in the due payment
of any Percentage Rent or other sum payable by Tenant to Landlord under the
provisions hereof, and such default shall continue for a period of thirty days,
or (2) a petition for voluntary or involuntary bankruptcy or for a respite or
for the appointment of a receiver or syndic or for a reorganization shall be
filed by or with respect to Tenant and not dismissed within 60 days following
the filing thereof, or (3) there shall be a default by The Royal Orleans, Inc.
pursuant to its lease from Royal St. Louis, Inc. dated October 14, 1957, (as
amended and as the same may hereafter be amended) the result of which default is
to permit Royal St. Louis, Inc. to enforce the remedies specified in Section 18
of said agreement and Royal St. Louis, Inc., does in fact terminate said lease,
or (4) if default shall be made by Tenant in the due observance and performance
of any other covenant, condition, or stipulation herein agreed by Tenant to be
by it observed or performed, and such default shall continue for a period of
thirty days after written notice by Landlord to Tenant detailing the particulars
of such default and requiring it to make good any such last mentioned default,
then and in any such event described in (1), (2), (3), or (4) hereinabove,
Landlord at any time thereafter shall have the full right, at its election, upon
giving thirty days written notice of such election, and provided Tenant is still
in default at the end of such thirty day period, to enter in, into and upon the
demised premises and take possession of the same together with all buildings and
improvements thereon, and from the time of such entry this lease shall become
void and of no effect, and Landlord may enter upon, take possession, hold and
retain the said premises and all buildings and improvements thereon as of its
first or former estate, and this lease shall be forfeited to Landlord, and
Landlord may bring suit for and collect all the rents, taxes, assessments,
charges, liens, penalties and damages, including damages to Landlord by reason
of such breach or default on the part of Tenant which shall have accrued up to
the time of such entry, or the Landlord may, if it elects so to do, with or
without entering the premises, re-lease the same upon the best terms and
conditions which it may be able to procure, and Tenant shall be obligated to pay
Landlord all damages which it may sustain by reason of Tenant's default,
including the difference between the rents obtainable upon a re-lease and the
rents herein provided for, together with reasonable attorneys' fees and other
costs. If the Landlord does not re-lease the premises, or if the Landlord does
relet and deficiencies accrue or arise, it may demand and xxx for the rent
payable under this lease as the same accrues from time to time and at one or
more times, together with reasonable attorneys' fees and other costs. The
foregoing provisions are cumulative and without prejudice to any remedy which
might otherwise be had under the law of Louisiana for arrears of rent or
breaches of covenant, or any lien to which the Landlord may be entitled.
Provided, however, that any mortgagee of any interest under this lease, or any
trustee under any mortgage or deed of trust of any interest under this lease,
may avoid forfeiture of this lease as herein provided by satisfying and curing,
prior to the expiration of the applicable period of grace aforesaid at the
termination of which the right of forfeiture may be exercised by the Landlord,
the default consequent whereon such right of forfeiture shall
accrue.
Such
default, if of a character which cannot be satisfied or cured within the period
of grace provided therefor, shall be deemed satisfied or cured within such
period if, within such period, Tenant commences to cure or satisfy the same and
continues the same with due diligence and expedition until such default is
satisfied or cured.
14
In the
event of a dispute between Landlord and Tenant as to whether or not Tenant is in
default in the due observance or performance of any covenant, condition or
stipulation herein agreed by Tenant to be by it observed or performed, or in the
due payment of any sum payable by Tenant to Landlord under the provisions
hereof, either party may apply for arbitration of such dispute in the manner
hereinafter provided.
Nothing
herein contained shall be construed to prevent Tenant from contesting any action
which it believes to be illegal, and pending the final outcome of such action,
Tenant shall not be considered in default hereunder. If demanded by Landlord,
provision shall be made by adequate bond or in other manner satisfactory to the
Landlord for the payment of such claim or demand in the event the contest should
prove unsuccessful, and for the protection of the Landlord from all costs, loss,
liability or damage resulting from any such contest.
19.
No alteration, change, amendment or modification
of any kind or character shall be made in the terms, conditions, covenants and
agreements contained herein, except by an instrument and in writing executed by
both parties.
20.
If Tenant remains in possession of the
demised premises after the expiration of this lease or any extension thereof and
without the execution of a new lease, it shall be deemed to be occupying said
premises as a Tenant from month to month subject to all of the conditions,
provisions and obligations of this lease so far as the same are applicable to a
month to month tenancy.
21.
Tenant shall at all times maintain fire and
extended coverage insurance in approved insurance companies, licensed to do
business in Louisiana, on the hotel building, furnishings, and equipment in an
amount equal to the full replacement value thereof and also as required by the
terms of any mortgage to which this lease is subject, provided, however, that
Tenant shall not be required to insure in any amounts in the aggregate exceeding
the full replacement value of the property insured; provided, further, however,
that provision shall be made for the application of the proceeds of the
insurance to the repair, replacement or reconstruction of the insured property;
provided, further, that such mortgage may provide that if at the time of receipt
by the trustee of any insurance proceeds the mortgagor is in default in the
performance of any of its obligations thereunder, so much only of such insurance
proceeds as may be necessary to bring the mortgage payments up to date without
acceleration shall be paid to the mortgagee; provided, further, that any
mortgage which may be given to obtain interim financing for the construction of
the hotel may provide that the insurance proceeds be payable to the mortgagee up
to the sum necessary to satisfy the indebtedness to it, and that any surplus
over such amount shall be payable to Landlord and Tenant as their interests may
appear. In the event that any insurance proceeds are paid to any mortgagee and
if at the time Tenant be not in default hereunder, Landlord shall make an
equivalent amount available for the costs of repair, replacement or
reconstruction of the damaged property. All such policies shall be made payable
to and deposited with a trustee as may be required by the terms of the Equitable
Life Assurance Society mortgage above mentioned, otherwise held by Landlord.
Premiums for such insurance shall be an expense in computing Net Profits
hereunder. Tenant shall comply with all requirements and regulations necessary
to keep all such insurance fully in force. Tenant shall also maintain war damage
insurance when and if the same is obtainable from governmental sources or in the
regular market at reasonable rates.
15
Tenant
shall also maintain rent insurance in a sum equal to one year's Basic Rent the
premiums for which shall be an expense in computing Net Profits hereunder,
policies for which shall be by approved insurance companies licensed to do
business in Louisiana and shall be delivered to the Landlord.
22.
If any building or buildings or improvements
standing or erected on the demised premises and/or any furniture, furnishings,
fixtures or equipment located on or used in connection with the demised premises
shall be destroyed or damaged by fire or any other casualty covered by
insurance, the Landlord, shall cause the restoration or rebuilding thereof and
shall apply the proceeds of any insurance to such restoration or rebuilding; in
the event the insurance proceeds shall be insufficient to pay the cost of such
restoration or rebuilding in full, the Tenant shall supply the deficiency. If
there is any balance of insurance proceeds remaining after such restoration or
rebuilding, such balance shall subject, however, to the rights of the
mortgagees, if any, belong to the Tenant. Payments made by or to Tenant as
specified in the two preceding sentences shall be considered as expenses or
revenues of Tenant for the purpose of computing Net Profits. The Basic Rent, the
Percentage Rent, and all other payments due from the Tenant to the Landlord
shall xxxxx to the extent and in the proportion that the demised premises cannot
be used by the Tenant for hotel purposes during such period as may be required
for such repair and restoration.
In the
event that the building is damaged or destroyed to the extent of 50% or more of
its then value by an uninsurable peril such as flood or war damage, the Landlord
shall have the option either to declare this lease terminated, or to proceed
with reasonable diligence to reconstruct the building or repair the damage, as
the case may be, at Landlord's cost and expense. In the event that such damage
is less than 50% of the then value, the Landlord shall repair the damage if
requested by Tenant and if Tenant shall agree to pay its proportionate share of
the cost of such repair. Such proportionate share shall be determined by the
relative values of the fee and of the leasehold estate then remaining unexpired,
to be determined by agreement of the parties, or if they are unable to agree, by
arbitration. In the events aforestated, the Tenant shall be entitled to a
proportionate abatement of the rental during the period of reconstruction or
repair on an equitable basis.
Should
fewer than three years remain of the term hereby demised, or of any extended
term, at the time of such destruction or of any damage required to be restored
or rebuilt by Landlord as above provided, Landlord may give notice to Tenant of
its election not to restore or rebuild, in which event this lease shall
terminate unless within ninety days after such notice, Tenant, if it shall have
an unexercised option to extend this lease as provided in paragraph 5 hereof,
gives notice of exercise of such option, in which event Landlord's obligation as
hereinabove set forth to restore or rebuild shall remain in full force and
effect. In the event of termination of this lease as provided in this paragraph,
Tenant shall have no responsibility with respect to any deficiency in insurance
proceeds as provided in the first paragraph of this Section 22.
At the
time that the Landlord gives notice as above provided to the Tenant of its
intention not to restore or rebuild, it shall set forth in such notice the
rental formula (Formula A or Formula B) which it desires to have applicable in
the event the Tenant should elect to extend the lease, if such rental formula
has not been previously elected. If Landlord does not so designate the formula,
Tenant shall designate one of such formulas in its notice of election to extend
the lease.
16
23.
In the event of the condemnation of any essential portion of
the demised premises, this lease shall terminate. An essential portion of the
demised premises shall be deemed to have been taken when the remaining portion
could not be efficiently operated for hotel purposes. In the event that the
portion taken by condemnation does not prevent the efficient operation of the
remainder for hotel purposes, the lease shall not terminate and the rent to be
paid shall be subject to proportionate reduction, which if not agreed upon by
the parties, shall be determined by arbitration in the manner hereinafter
provided. The Landlord shall, in such case, at its sole cost and expense, cause
the remaining portion to be enclosed so as to make an architectural unit of the
portion of the premises not so taken by condemnation so as to make the same
usable and satisfactory for hotel purposes.
Any
condemnation award covering the land or building and furnishings and equipment
shall belong entirely to the Landlord and any condemnation award for loss of
business shall belong to the Tenant.
In the
event the use of the demised premises or a portion thereof, as distinct from the
fee, is taken by Governmental authority on a temporary basis, this lease shall
not be terminated or modified thereby, but shall continue in full force and
effect and the rights of the parties shall be construed as if the Tenant had
executed a sublease with Landlord's consent to the public
authority.
24.
The parties take note of that certain collateral
mortgage by Landlord and Royal St. Louis, Inc., passed by act of even date
herewith before the undersigned Notary Public to secure a promissory note in the
principal amount of $12,100,000, which mortgage may be placed of record prior to
recordation of this lease. Tenant agrees, upon the request of Landlord from time
to time, to intervene in any mortgage executed by Landlord for the sole purpose
of mortgaging Tenant's interest in the name of the hotel operated on the leased
premises, and Tenant's interest in any property thereon used for the operation
of such hotel.
25.
The Tenant shall have the right from time to time during
the term of this lease to make such alterations, additions or improvements in or
to the demised premises as it shall deem advisable, the cost whereof shall be
deducted in the year incurred in determining Net Profits hereunder. The cost of
ordinary repairs shall be a proper deduction in determining Net Profits. The
cost of structural repairs shall be paid for by the Tenant, and the amount
required for the annual amortization of such cost shall be included as a
deductible expense in the determination of Net Profits. There shall be no
abatement of rent during the time required for the making of any structural
repairs or changes.
26.
Upon the termination or expiration of this lease,
Tenant shall surrender to Landlord the demised premises in good condition and
repair, ordinary wear and tear and injury by fire or other casualty or by acts
of God excepted.
17
27.
In the event of any dispute between Landlord and Tenant
as to any provision of this lease, such dispute shall be settled by arbitration
by three arbitrators under the rules then obtaining of the American Arbitration
Association.
28.
The covenants, conditions and agreements contained in
this lease shall bind and inure to the benefit of Landlord and Tenant and
respective heirs, distributees, executors, administrators, successors and,
except as otherwise provided in this lease, their assigns.
29.
Notice, wherever provided for herein, shall
be in writing and be given either by personal service or by registered mail at
the address below specified of the party to whom such notice is to be given,
unless a different address has been furnished by such person to the person
giving such notice, in which case the latter address shall be used:
With
respect to Landlord, to:
Chateau
Louisiane, Inc.
x/x
Xxxxxx X. Xxxxxxxx
0000
National Bank of Xxxxxxxx Xxxxxxxx
Xxx
Xxxxxxx, Xxxxxxxxx 00000
With
respect to Tenant, to the Tenant at the demised premises, with a copy
to:
Hotel
Corporation of America
000
Xxxxxxxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention: Office
of the Secretary
Upon
written request of the other the parties hereby obligate themselves to send a
copy of any notice to any mortgagee of the demised premises.
30.
This lease is granted and accepted upon the
foregoing terms, covenants and conditions, all of which in accordance with the
provisions thereof each of the parties hereto expressly covenants and agrees to
perform and observe.
AND NOW
TO THESE PRESENTS comes HOTEL CORPORATION OF AMERICA, a New York corporation
represented by Xxxxx X. Xxxxxx its Secretary, duly authorized by virtue of
resolutions adopted at a meeting of the Board of Directors of said corporation
held in New York City, on the 11th day of December 1967, a certified copy of
which is annexed hereto, who declared that HOTEL CORPORATION OF AMERICA, as the
owner of all of the issued and outstanding capital stock of The Royal Orleans,
Inc., in consideration for and as an inducement to Landlord entering into the
above and foregoing lease, does hereby guarantee to Landlord and to Landlord's
successors and assigns the full performance and observation of all of the
covenants, conditions, and agreements herein provided to be performed and
observed by Tenant, and expressly agrees that the validity of this agreement and
the obligations of HOTEL CORPORATION OF AMERICA hereunder shall in no way be
terminated, affected, or impaired by reason of the assertion by Landlord against
Tenant of any of the rights or remedies reserved to Landlord pursuant to the
provisions hereof. Said HOTEL CORPORATION OF AMERICA expressly waives notice of
default except as provided herein, and agrees that it shall remain liable in
solido with Tenant and that such liability shall continue in full force and
effect as to any amendment or modification of this instrument and during any
renewal or extension provided for herein.
18
THUS DONE
AND PASSED in duplicate originals at my office in the City of New Orleans in the
presence of Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxxx, competent witnesses and
me, Notary, after due reading of the whole.
|
WITNESSES:
|
CHATEAU
LOUISIANE, INC.
|
||||
|
/s/ Xxxxxxx X. Xxxxxx
|
By /s/ Xxxxxx X. Xxxxxxxx
|
||||
|
Xxxxxxx
X. Xxxxxx
|
Xxxxxx
X. Xxxxxxxx
|
||||
| Vice President |
|
||||
|
/s/ Xxxxxx X.
Xxxxxxxxx
|
THE
ROYAL ORLEANS, INC.
|
||||
|
Xxxxxx
X. Xxxxxxxxx
|
|||||
|
By /s/
|
Xxxxx X. Xxxxxxxx
|
||||
|
Xxxxx
X. Xxxxxxxx
|
|||||
| Vice President |
|
||||
|
HOTEL
CORPORATION OF AMERICA
|
|||||
|
By /s/
|
Xxxxx X. Xxxxxx
|
||||
|
Xxxxx
X. Xxxxxx.
|
|||||
| Secretary |
|
||||
|
/s/ Xxxxxxxxxxx X. Xxxxxxxx,
Xx.
|
|||
|
Xxxxxxxxxxx
X. Xxxxxxxx, Xx.
|
|||
| Notary Public |
|
||
| [SEAL] | |||
20
