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EXHIBIT 10.61
Four Seasons - Houston
FIRST AMENDMENT TO LEASE AGREEMENT
This FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into effective as of the 31st day of December, 1998, between COI HOTEL
GROUP, INC., a Texas corporation ("Lessee") and CRESCENT REAL ESTATE EQUITIES
LIMITED PARTNERSHIP, a Delaware limited partnership ("Lessor").
RECITALS:
WHEREAS, Lessor and Lessee entered into that certain Lease Agreement
dated as of September 22, 1997 (the "Lease"), pursuant to which Lessee leased
from Lessor a hotel facility and related assets located in Xxxxxx County, Texas,
and known as the "Four Seasons - Houston" (hereinafter called the "Leased
Property"); and
WHEREAS, Lessor and Lessee agreed that if Lessor made substantial
capital investments in the Leased Property, the Lease would be amended to
increase the amount of rental payable thereunder and Lessor has made substantial
capital investment in the Leased Property; and
WHEREAS, Lessor and Lessee mutually desire to quantify the value of
working capital associated with the Leased Property and transferred from Lessor
to Lessee upon the commencement of the term of the Lease and to evidence their
mutual understanding and agreement of the value of working capital associated
with the Leased Property to be redelivered to Lessor by Lessee at the expiration
or earlier termination of the Lease; and
WHEREAS, Lessor and Lessee desire to amend the Lease to increase the
rental payable thereunder, to evidence their understanding regarding working
capital and to make certain other amendments thereto as hereinafter provided.
AGREEMENT:
NOW THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged by the parties hereto, the
parties hereby agree as follows:
1. Definitions. Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Lease.
2. Amendments to Lease. The Lease is hereby amended as follows:
a. Section 4.1 of the Lease is hereby modified to
increase the Base Rent, effective as of January 1, 1999 by the amount
of $1,000,000 per Lease Year. Accordingly, the annual Base Rent payable
under the Lease as of January 1, 1999 is as follows:
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Year Amount
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1999 $6,131,620.00
2000 $6,463,200.00
2001 $6,563,200.00
2002 $6,663,200.00
2003 $6,863,200.00
2004 $6,963,200.00
2005 $7,263,200.00
2006 $7,463,200.00
2007 $7,463,200.00
b. The definition of Management Agreement in the Lease
is modified to mean that certain Amended and Restated Houston Center
Hotel and Residential Management Agreement dated as of September 22,
1997 between Four Seasons Hotels Limited and Crescent Real Estate
Equities Limited Partnership.
c. The period is deleted at the end of the next to last
sentence of Section 4.2(d) of the Lease and the following clause is
inserted after the words "from Lessee": "; provided, in no event shall
Lessor be required to refund any portion of the Guaranteed Percentage
Rent (as hereinafter defined) previously paid by Lessee to Lessor."
d. A new subsection (g) is inserted at the end of
Section 4.2 of the Lease, which shall read in its entirety as follows:
(g) Anything in this Lease to the contrary
notwithstanding, eighty-five percent (85%) of the Percentage
Rent payable in any quarter during the term of this Lease
(herein called the "Guaranteed Percentage Rent") shall not be
subject to adjustment under Section 4.2(d) or Section 4.2(f)
hereof.
e. A new Section 7.10 is added to the Lease, to read in
its entirety as follows:
Section 7.10. Working Capital. At the commencement of
the term of this Lease, there existed working capital
pertaining to the Leased Property (the "Working Capital") in
the initial aggregate positive balance of $372,984.00 (the
"Initial Working Capital Balance"). Within thirty (30) days
after the date of expiration or earlier termination of this
Lease, Lessor and Lessee will work together in good faith to
determine the balance of Working Capital as of such date (the
"Ending Working Capital Balance"). If the Ending Working
Capital Balance is less than the Initial Working Capital
Balance, Lessee shall pay over to Lessor cash in the amount of
such deficiency, within thirty (30) days of such
determination. If the Ending Working Capital Balance exceeds
the Initial
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Working Capital Balance, Lessor shall pay over to Lessee cash
in the amount of such excess within thirty (30) days of such
determination. Additionally, both the Initial Working Capital
Balance and the Ending Working Capital Balance shall be
calculated without the inclusion of any "in circulation"
operating or consumable supplies ("In-Circulation Supplies").
Both Lessee and Lessor agree that the In-Circulation Supplies
represent items in use which Lessee does not include on its
balance sheet as of the Commencement Date. Lessee and Lessor
further agree that although no accounting value has been
placed on In-Circulation Supplies, such supplies have value
and Lessee agrees to have reasonable amounts of In-Circulation
Supplies on hand in a quantity and quality customary for a
property such as the Leased Property.
3. General Provision regarding Working Capital. Notwithstanding
any other provision of the Lease which is to the contrary or which is not
consistent with Section 2.e above, including without limitation, Section 7.4(a)
and Section 38.1(d) of the Lease, Lessor and Lessee agree that Section 2.e above
represents the general business terms under which Lessee has taken over the
In-Circulation Supplies and working capital of the Leased Property and the
general terms under which Lessee will return In-Circulation Supplies and working
capital to Lessor at the expiration or earlier termination of the Lease.
4. Modification Supersedes. Except as modified hereby, the Lease
remains in full force and effect, with no other modifications thereto. If there
arises by virtue of this Amendment any conflict between any provision of this
Amendment and any provision of the Lease, the provisions hereof shall supersede
any such conflicting provision of the Lease, but only to the extent of such
conflict, and all of the provisions of the Lease are hereby modified as
necessary so as to be consistent with the terms of this Amendment.
5. Successors and Assigns. This Amendment shall be binding upon
and shall inure to the benefit of Lessor and Lessee and their respective
successors and permitted assigns.
6. Multiple Counterparts. This Amendment may be executed in
multiple counterparts, each of which is to be deemed an original for all
purposes, and in making proof of this Amendment it shall not be necessary to
produce more than one (1) counterpart hereof. A facsimile or similar
transmission of a counterpart signed by a party hereto will be regarded as
signed by such party for purposes hereof.
7. Captions. The captions, headings and arrangements used in this
Amendment are for convenience only and do not in any way affect, limit, amplify
or otherwise modify the terms and provisions hereof.
8. Representations of Lessee. Lessee represents and warrants to
Lessor that (i) Lessee is the sole legal and beneficial owner of the leasehold
estate under the Lease and (ii) Lessee has the
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full power and authority to enter into this Amendment without the joinder or
consent of any other party.
9. Representations of Lessor. Lessor represents and warrants to
Lessee that Lessor has the full power and authority to enter into this
Amendment.
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IN WITNESS WHEREOF, the parties have duly executed this Amendment to be
effective as of the day and year first above written.
LESSOR:
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP, a Delaware limited partnership
By: Crescent Real Estate Equities, Ltd.,
a Delaware corporation, General Partner
By:
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Name:
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Title:
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LESSEE:
COI HOTEL GROUP, INC., a Texas corporation
By:
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Name:
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Title:
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CONSENT OF GUARANTOR
The undersigned, as the guarantor of the obligations of the Lessee
under the Lease, as defined in the First Amendment to Lease Agreement (the
"Amendment") to which this Consent is attached, (a) acknowledges and consents to
the terms of the foregoing First Amendment, (b) agrees that the execution and
delivery of the Amendment and any other documents in connection therewith will
in no way change or modify the undersigned's obligations under the guaranty
executed by the undersigned in connection with the Lease, and (c) acknowledges
and confirms that such guaranty is in full force and effect and there are no
claims, counterclaims, offsets or defenses to such guaranty.
EXECUTED as of the 31st day of December, 1998.
CRESCENT OPERATING, INC., a Delaware
corporation
By:
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Name:
--------------------------------
Title:
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