EXHIBIT 10.1
INDEMNITY
September 20, 1999
Promus Hotels, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: General Counsel
Loan: $26,625,000
Borrower: Apple Suites, Inc.
Premises: Homewood Suites located at 0000 Xxxxxxxx
Xxxxx, Xxxx Xxxxx, Xxxxxxxx
Dear Sirs:
Except to the extent of any existing liability of you and/or
your affiliates for Corrective Work with respect to Hazardous Materials
currently in, on or under the Property, for good and valuable consideration in
hand received, the undersigned, and if there are two or more signers, each of
us, hereby jointly and severally covenants and agrees for your benefit, in
addition to, and not in limitation of, any other rights and remedies available
to you at law or in equity, as follows:
1. Definitions: The following terms shall be defined as set forth below.
(a) Corrective Work: The removal, relocation, elimination,
remediation or encapsulation of Hazardous Materials from all
or any portion of the Property and (to the extent provided in
Subparagraph 2(b) hereof) surrounding areas and, to the extent
thereby required, the reconstruction and rehabilitation of the
Property pursuant to, and in compliance with, Governmental
Requirements;
(b) Governmental Requirements: Any present and future (i) federal,
state or local laws, rules or regulations and (ii) judicial or
administrative interpretation thereof, including any judicial
or administrative orders or judgments;
(c) Hazardous Materials: (i) Asbestos and polychlorinated
biphenyls and (ii) hazardous or toxic materials, wastes and
substances which are defined, determined or identified as such
(including petroleum
products if they are defined, determined or identified as
such) in, or subject to, any Governmental Requirements, in
each case in amounts in violation of applicable Governmental
Requirements;
(d) Indemnified Losses: Incurred damages, losses, liabilities,
costs and expenses of Corrective Work, including, without
limitation, obligations, penalties, fines, impositions, fees,
levies, lien removal or bonding costs, claims, litigation,
demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses (including, without limitation,
attorneys' and experts' reasonable fees and disbursements) of
any kind and nature whatsoever, including interest thereon;
(e) Loan Documents: The documents comprising the total
documentation pertaining to the Loan indicated above made to,
or for the benefit of, the above-named Borrower, including,
without limitation, and as applicable, any loan agreement,
building loan or construction loan agreement, note, mortgage,
deed of trust, security agreement, assignment of leases and
rents, any guaranty or guaranties (whether of payment and/or
performance), pledge agreement, commitments, letters of
credit, assignment of partnership interests, and all other
instruments and documents evidencing, securing, or collateral
to, the Loan;
(f) Property: The land more particularly described in Exhibit A
hereto attached and as indicated above, together with the
buildings, improvements, structures and betterments now or
hereafter existing thereon or thereunder.
2. (a) Except as hereinafter limited in Paragraph 9 and Subparagraphs
2(b) and 2(c), the undersigned covenant and agree, at their sole cost
and expense, to indemnify, protect and save you harmless against and
from any and all Indemnified Losses which may at any time be imposed
upon, incurred by or asserted or awarded against you arising from, out
of, attributable to or by reason of, the:
(i) nonperformance or delayed performance and completion of
Corrective Work; or
(ii) enforcement of this Indemnity or the assertion by the
undersigned of any defense to its obligations hereunder (except
the successful defense of actual performance not subject to
further appeal);
whether the Indemnified Losses arise before, during or after,
enforcement of the remedies and rights available to you under the Loan
Documents, including the acquisition of title to all or any portion of
the Property by
you or your successors or affiliates (as such terms are defined in
Paragraph 8(a) hereof).
(b) The Indemnified Losses shall not extend to the costs of Corrective
Work pertaining to surrounding areas if the applicable Hazardous
Materials did not originate from any portion of the Property, unless
the removal of the Hazardous Materials from the surrounding areas by
Borrower is necessitated by Governmental Requirements.
(c) If you, or any of your successors or affiliates, take
(i) title to the Property at a foreclosure sale, at a sale
pursuant to a power of sale under a mortgage or deed of trust, or
by deed in lieu of foreclosure, or by exercise of other remedial
rights; or
(ii) possession, custody and control of the Property as a
mortgagee-in-possession or through court designated receiver and
Xxxxxxxx, and its successors or affiliates, never reacquire such
possession, custody and control,
then the Indemnified Losses shall not include or apply to Hazardous
Materials which are initially placed on, in or under all or any
portion of the Property at any time thereafter.
3. (a) So long as Borrower is in possession, custody and control of the
Property you agree that prior to the undertaking of Corrective Work by
you, the Borrower or the undersigned may at their sole cost and
expense contest the Governmental Requirements and/or perform any
Corrective Work, provided that at all times all of the following
conditions are continuously satisfied in full:
(i) no uncured event of default (other than as related to the
Hazardous Materials involved in such contest or Corrective Work)
exists under any of the Loan Documents;
(ii) you (and your agents, officers, directors, servants,
employees, contractors and shareholders) shall not be subject to
any criminal or other penalties, fines, costs or expenses, by
reason of such contest or Corrective Work or any delays in
connection therewith;
(iii) unless the undersigned has instituted a contest as permitted
hereunder with respect to any Corrective Work, the undersigned
shall commence the Corrective Work promptly after obtaining actual
knowledge of the Hazardous Materials on, in, under or affecting
the Property or any surrounding areas, but at least fifteen (15)
days prior to commencement of such Corrective Work, submit to you
in conformity with your reasonable requirements (which
requirements may not create conditions which violate Governmental
Requirements), reasonably detailed plans for such Corrective Work
complying with Governmental Requirements. If, within said fifteen
(15)-day period, you, in your reasonable judgment, reject such
plans, the undersigned shall promptly submit revised plans
conforming to your reasonable requirements to you for your
approval. If within fifteen (15) days from your receipt of the
original plans, or revised plans, you fail to approve or reject
such original plans, or revised plans, as the case may be, the
same shall be deemed accepted by you. All Corrective Work shall be
performed in compliance with such approved original or revised
plans;
(iv) a contest, if instituted, shall be instituted promptly after
the undersigned, or Borrower, obtains actual knowledge of an
action, suit, proceeding, or governmental order or directive which
asserts any obligation or liability affecting all or any portion
of the Property, or Borrower or any of the undersigned and
diligently prosecuted until a final judgment is obtained;
(v) Corrective Work shall be instituted promptly following an
unsuccessful nonappealable completion of the contest and shall be
diligently prosecuted until the Hazardous Materials involved in
the contest are removed, relocated, encapsulated and/or disposed
of as required by the Governmental Requirements;
(vi) the undersigned shall notify you within ten (10) days after
commencement of such contest or Corrective Work and shall render
to you a written monthly report detailing the progress thereof
including such information as you shall reasonably request; and
(vii) if you are named in any action or proceeding as a necessary
party or as a party defendant relating to matters covered by this
Indemnity, you agree to utilize counsel designated by the
undersigned, subject to your right of approval, not to be
unreasonably withheld or delayed. If you are not named in any such
action or proceeding, you, at your expense, shall have the right
(but not the obligation) to join in any action or proceeding in
which the undersigned or Borrower contests any Governmental
Requirements.
So long as all of such conditions are continuously satisfied, you
agree that you will not enter into any settlement agreement binding
upon the undersigned, or Borrower, without their prior consent, which
consent will not be unreasonably withheld or delayed.
(b) Promptly after the receipt by you of written notice of any demand
or claim or the commencement of any action, suit or proceeding in
respect of any of the Indemnified Losses, you shall notify the
undersigned thereof in writing, but the failure by you promptly to
give such notice shall not relieve the undersigned of any of their
obligations under this Indemnity, except to the extent of prejudice to
any defense to such Indemnified Losses resulting from such delay.
4. The liability of the undersigned under this Indemnity shall in no way
be limited or impaired by (a) any amendment or modification of the
Loan Documents; (b) any extensions of time for performance required by
any of the Loan Documents; (c) any sale, assignment or foreclosure
pursuant to the Loan Documents or any sale or transfer of all or any
part of the Property; (d) any exculpatory provision in any of the Loan
Documents limiting your recourse to the Property or to any other
security, or limiting your rights to a deficiency judgment against
Borrower, or the undersigned; (e) the accuracy or inaccuracy of any
representations or warranties made to you under the Loan Documents;
(f) the release of Borrower or any other person from performance or
observance of any of the agreements, covenants, terms or conditions
contained in any of the Loan Documents by operation of law, your
voluntary act, or otherwise; (g) the release or substitution, in whole
or in part, of any security for the note or other evidence of debt
issued pursuant to the Loan Documents; (h) your failure to record or
file any of the Loan Documents (or your improper recording or filing
of any thereof) or to otherwise perfect, protect, secure or insure any
security interest or lien given as security for the note or other
evidence of indebtedness under the Loan Documents, (i) any other
action or circumstance whatsoever which constitutes, or might be
construed to constitute, a legal or equitable discharge or defense of
Borrower or others for their obligations under any of the Loan
Documents or of the undersigned for their obligations under this
Indemnity or (j) the invalidity, irregularity or unenforceability, in
whole or in part, of any of the Loan Documents; and in any of such
cases, whether with or without notice to Borrower or the undersigned
and with or without consideration.
5. The undersigned (a) waive any right or claim of right to cause a
marshalling of the undersigned's assets or to cause you to proceed
against any of the security for the Loan Documents before proceeding
under this Indemnity or to cause you to proceed against the
undersigned in any particular order; (b) agree that any payments
required to be made hereunder shall become due on demand; (c) waive
and relinquish all rights and remedies accorded by applicable law to
indemnitors or guarantors, except any rights of subrogation which the
undersigned may have, provided that (i) the indemnity provided for
hereunder shall neither be contingent upon the existence of any such
rights of subrogation nor subject to any claims or defenses whatsoever
which may be asserted in connection with the enforcement or attempted
enforcement of such
subrogation rights including, without limitation, any claim that such
subrogation rights were abrogated by any of your acts, and (ii) the
undersigned postpone and subordinate (A) the exercise of any and all
of their rights of subrogation to your rights against the undersigned
under this Indemnity and (B) any rights of subrogation to any
collateral securing the Loan until the Loan shall have been paid in
full.
6. No delay on your part in exercising any right, power or privilege
under any of the Loan Documents shall operate as a waiver of any such
privilege, right or power.
7. Any one or more of the undersigned, or any other party liable upon or
in respect of this Indemnity or the Loan, may be released from
liability (in whole or in part) under this Indemnity or the Loan
Documents without affecting the liability hereunder of any of the
undersigned not so released.
8. (a) This Indemnity shall be binding upon the undersigned and their
respective heirs, personal representatives, successors and assigns and
shall inure to the benefit of and, where applicable, shall be binding
upon, you and your successors and affiliates, which acquire all or any
part of the Property by any sale, assignment or foreclosure under the
Loan Documents, by deed or other assignment in lieu of foreclosure, or
otherwise, including if you, or such successor, affiliate or
participant, is the successful bidder at a foreclosure or other
remedial sale. For purposes of this Indemnity your (i) "successors"
shall mean successors by merger, consolidation or acquisition of all
or a substantial part of your assets and business and (ii)
"affiliates" shall mean your parent, if any, or its successors as
above defined and any direct or indirect subsidiary or affiliate of
your parent or its successors as above defined.
(b) Except as provided in Subparagraph 8(a) above, the obligations of
the undersigned under this Indemnity shall not inure to the benefit of
(i) any other purchaser of the Property at a foreclosure sale or a
sale pursuant to a power of sale or other remedial rights under the
Loan Documents or (ii) any subsequent holder of the Loan Documents
unless such holder is your successor, affiliate or participant as
hereinabove defined.
9. (a) Except as provided in Subparagraph 9(b) hereof, this Indemnity
shall terminate and be of no further force and effect upon payment in
full by Borrower or guarantor of all principal, interest and other
sums and costs evidenced or secured by the Loan Documents, provided
that at the time of such full payment neither you, nor your successors
or affiliates, have, at any time, or in any manner, through exercise
of their remedial rights under the Loan Documents, participated in the
management or control of, taken possession of, or title to, the
Property or any portion thereof, whether by foreclosure, deed in lieu
of foreclosure, sale under power of sale pursuant to the Loan
Documents, or otherwise.
(b) Notwithstanding Subparagraph 9(a) above, the undersigned agree
that this Indemnity shall continue after full payment of the Loan with
respect to:
(i) litigation or administrative claims involving Indemnified
Losses pertaining to Hazardous Materials covered by this Indemnity
pending at the date of payment in full of the Loan, and
(ii) reasonable costs and expenses (including experts' and
attorneys' fees and disbursements) incurred or expended by you in
(A) enforcing Subparagraph 2(a)(ii) of this Indemnity or (B) any
litigation, arbitration, administrative claims or matters relating
to any Indemnified Losses subsequently arising within four (4)
years after the date of such full payment (hereinafter called
("Subsequent Claims") involving Hazardous Materials on, in or
under the Property, or if covered by this Indemnity, any
surrounding areas, but the undersigned's obligation under this
Indemnity as to Subsequent Claims is hereby limited and shall not
extend to payment of any monetary awards or damages against you
but only to the costs and expenses above mentioned. You agree to
utilize counsel designated by the undersigned (whether or not the
undersigned are also parties defendant in such matters) subject to
your right of approval, not to be unreasonably withheld or
delayed.
10. This Indemnity shall continue to be effective, or be reinstated
automatically, as the case may be, if at any time payment, in whole or
in part, of any of the obligations indemnified against hereby is
rescinded or otherwise must be restored or returned by you (whether as
a preference, fraudulent conveyance or otherwise) upon or in
connection with the insolvency, bankruptcy, dissolution, liquidation
or reorganization of Borrower, any of the undersigned or any other
person, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for,
Borrower, any of the undersigned or any other person or for a
substantial part of Xxxxxxxx's, any of the undersigned's or any of
such other person's property, as the case may be, or otherwise, all as
though such payment had not been made. Each of the undersigned further
agrees that in the event any such payment is rescinded or must be
restored or returned, all costs and expenses (including, without
limitation, legal fees and expenses) incurred by you or on your behalf
in defending or enforcing such continuance or reinstatement, as the
case may be, shall constitute costs of enforcement which are covered
by each of the undersigned's indemnification obligations under this
Indemnity.
11. Each of the undersigned represents and covenants to you that:
(i) if a corporation, partnership, venture, trust or limited liability
company, it is duly organized, validly existing and in good
standing under the laws of the state of its formation and has full
power and authority to execute, deliver and perform this Indemnity;
each of the undersigned will preserve and maintain such legal
existence and good standing;
(ii) there are no actions, suits or proceedings pending or threatened
against or affecting Borrower or any of the undersigned, at law, in
equity or before or by any governmental authorities except actions,
suits or proceedings which are fully covered by insurance or would, if
adversely determined, not be likely to have a material adverse effect
on Borrower's or any of the undersigned's business or financial
condition; neither Borrower nor any of the undersigned is in material
default with respect to any order, writ, injunction, decree or demand
of any court or governmental authorities;
(iii) the consummation of the transactions contemplated hereby and the
performance of this Indemnity have not resulted and will not result in
any breach of, or constitute a default under, any mortgage, deed of
trust, lease, bank loan or credit agreement, corporate charter,
by-laws, partnership agreement or other instrument to which any of the
undersigned is a party or by which any of the undersigned may be bound
or affected; and
(iv) each of the undersigned is in compliance with, and the
transactions contemplated by this Indemnity do not and will not
violate any provision of, or require any filing, registration, consent
or approval under, any federal, state or local law, rule, regulation,
ordinance, order, writ, judgment, injunction, decree, determination or
award (hereinafter, "Laws") presently in effect having applicability
to it; each of the undersigned will comply promptly with all Laws now
or hereafter in effect having applicability to it.
12. You shall, at all times, at your discretion and expense, be free to
independently establish to your satisfaction the existence or
non-existence of any fact or facts, the existence or non-existence of
which is a condition of this Indemnity or any of its provisions.
13. This Indemnity may be executed in one or more counterparts, each of
which shall be deemed an original. Said counterparts shall constitute
but one and the same instrument and shall be binding upon each of the
undersigned as fully and completely as if all had signed but one
instrument. The joint and several liability of the undersigned shall
be unaffected by the failure of any of the undersigned to execute any
or all of the counterparts.
14. All notices hereunder shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes when sent by
registered or certified mail, if to the undersigned at their
respective addresses stated on the signature page hereof and if to
you, at your address indicated above, or at such other address of
which a party shall have notified the party giving such notice in
writing in accordance with the foregoing requirements.
15. No provision of this Indemnity may be changed, waived, discharged or
terminated orally, by telephone or by any other means except by an
instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.
16. THE UNDERSIGNED BY EXECUTION HEREOF, AND YOU, BY ACCEPTANCE HEREOF,
XXXXXX EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY
SUIT, ACTION OR PROCEEDING BROUGHT BY YOU ON THIS INDEMNITY, ANY AND
EVERY RIGHT THEY MAY HAVE TO A TRIAL BY JURY.
17. THIS INDEMNITY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE APPLICABLE TO THE
INTERPRETATION, CONSTRUCTION AND ENFORCEMENT OF INDEMNITIES (WITHOUT
GIVING EFFECT TO TENNESSEE'S PRINCIPLES OF CONFLICTS OF LAW). THE
EXISTENCE OF HAZARDOUS MATERIALS SHALL BE DETERMINED IN ACCORDANCE
WITH FEDERAL LAW AND STATE AND LOCAL LAWS OF THE STATE IN WHICH THE
PROPERTY IS LOCATED.
18. THE UNDERSIGNED IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF ANY TENNESSEE STATE OR FEDERAL COURT SITTING IN THE CITY OF
MEMPHIS, STATE OF TENNESSEE, OVER ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDEMNITY AND THE UNDERSIGNED AGREE
AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS
PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN ANY ABOVE STATED COURT SITTING IN THE
CITY OF MEMPHIS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO THE UNDERSIGNED AT THEIR RESPECTIVE
ADDRESSES INDICATED ON THE SIGNATURE PAGE HEREOF, AND SERVICE SO MADE
SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO
MAILED.
Very truly yours,
Indemnitor: Address Of Indemnitor:
----------- ----------------------
APPLE SUITES, INC., a ATTN: Xxxxx X. Xxxxxx
Virginia corporation 000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
By /s/ Xxxxx X. Xxxxxx With a copy to:
-------------------- Xxxxxx X. Xxxxx, Esq.
Name: Xxxxx X. Xxxxxx Xxxxxxx & Xxxxxxxxx
Title: Chief Executive Officer 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
This is to certify that this Indemnity was executed in my
presence on the date hereof by the parties whose signatures appear above in the
capacities indicated.
/s/ Xxxxxxxxx X. Xxxxx
-------------------------------
Notary Public
My commission expires:
6/30/03
-------------------------------
EXHIBIT A
(Richmond-West End)
ALL THAT certain lot, piece or parcel of land, with the improvements thereon and
the appurtenances thereto belonging, lying and being in Henrico County,
Virginia, containing 3.745 acres, more or less (the "Property"), as more
particularly described on a Plat of Survey made by Xxxxxxx & Associates, P.C.,
dated June 2, 1995, revised October 3, 1995, entitled "Topographic And Boundary
Survey On 3.745 Acres Of Land Lying On The Eastern Line Of Innslake Drive Being
A Portion Of Block A - Section I - Innsbrook, Three Chopt District, Henrico
County, Va," (the "Plat") a copy of which is attached to the deed recorded
October 17, 1995 in the Clerk's Office, Circuit Court, Henrico County, Virginia,
in Plat Book 100, at Page 203, to which reference is hereby made for a more
particular description of the property.
TOGETHER WITH a permanent, non-exclusive easement and right-of-way for the
purpose of constructing, operating, maintaining, repairing, replacing and
relocating, as well as utilizing, necessary storm drainage facilities and access
thereto (the "Storm Drainage Easement") for the benefit of the Property, but
subject to the terms and conditions of the Xxxxxxx Xxxx (as hereinafter
defined), within the easement areas reserved by Grantor in that certain Deed,
Deed of Release and Relocation of Easement to the County of Henrico, Virginia,
dated May 17, 1991, and recorded in the Clerk's Office, Circuit Court, Henrico
County, Virginia in Deed Book 2296, at Page 793 (the "Xxxxxxx Xxxx"), and being
more particularly shown and described therein and on the plat of survey attached
thereto as "EASEMENT RESERVED BY THE INNSBROOK CORPORATION FOR THE PURPOSE OF
CONSTRUCTING, MAINTAINING, REPAIRING, REPLACING AND RELOCATING AS WELL AS
UTILIZING DRAINAGE, UTILITY AND JOGGING TRAILS AND GRANTING EASEMENTS THEREFOR";
PROVIDED HOWEVER, that Grantee, its successors and assigns, in exercising the
easement rights granted herein, shall restore any utilities, driveways, access
roads, parking lots, landscaping or facilities appurtenant thereto which it
disturbs to substantially the condition in which they existed prior to the
exercise of such rights.
BEING the same real estate conveyed to Promus Hotels, Inc., a Delaware
corporation, by deed from the Innsbrook Corporation, a Virginia corporation,
dated September 25, 1995, recorded October 17, 1995, in the Clerk's Office,
Circuit Court, Henrico County, Virginia, in Deed Book 2612, at Page 1166.
