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EXHIBIT 10.2
FIRST AMENDMENT TO
SALE AND PURCHASE AGREEMENT
This First Amendment to Sale and Purchase Agreement (the
"First Amendment") is entered into as of July 9, 2000, by and between SHOLODGE,
INC., a Tennessee corporation ("ShoLodge"), and PRIME HOSPITALITY CORP., a
Delaware corporation ("Prime").
WITNESSETH:
WHEREAS, ShoLodge and Prime entered into that certain Sale and
Purchase Agreement (the "Agreement"), dated March 16, 2000, regarding certain
Xxxxxx Suites hotels and development sites as described therein; and
WHEREAS, by letter dated April 11, 2000 (the "Termination
Letter") Prime terminated the Agreement; and
WHEREAS, ShoLodge and Prime desire to withdraw the termination
of the Agreement pursuant to the Termination Letter; and
WHEREAS, ShoLodge and Prime have renegotiated certain terms
and provisions of the Agreement and have agreed to the modification of certain
terms and provisions of the Agreement as set forth herein.
NOW, THEREFORE, in consideration of these premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ShoLodge and Prime hereby agree as follows:
1. Prime hereby withdraws the termination of the
Agreement pursuant to the Termination Letter, and ShoLodge and Prime hereby
enter into the Agreement, as amended hereby.
2. The Agreement is hereby amended by deleting the
definitions of the terms "Additional Advance Payments", "Additional Buildings",
"Additional Equipment", "Additional Hotel Operating Assets", "Additional Hotel
Operating Assets Transfer Documents", "Additional Hotel Subsidiaries",
"Additional HPT Hotels", "Additional Inventory", "Additional Land", "Additional
Operating Agreements", "Additional Property" and "Additional Property Documents"
in Section 1.1 thereof in their entirety.
3. The Agreement is hereby amended by deleting the
definition of the term "Advance Payments" in Section 1.1 thereof in its entirety
and inserting in lieu thereof the following:
"Advance Payments" means the STI Advance Payments and the
Texas Advance Payments.
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4. The Agreement is hereby amended by deleting the
definition of the term "Agreement" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Agreement" means this Sale and Purchase Agreement as amended
from time to time.
5. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Agreement",
definitions of the terms "Albuquerque Property' and "Alpharetta Property", as
follows:
"Albuquerque Property" shall have the meaning set forth in
Section 5.2(a).
"Alpharetta Property" shall have the meaning set forth in
Section 5.2(b).
6. The Agreement is hereby amended by deleting the
definition of the term "Assets" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Assets" means collectively the STI Assets, the Texas Property
and the Texas Hotel Operating Assets.
7. The Agreement is hereby amended by deleting the
definition of the term "Buildings" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Buildings" means the STI Buildings and the Texas Buildings.
8. The Agreement is hereby amended by deleting the
definition of the term "Closing" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Closing" shall mean the conference to be held at 10:00 a.m.,
New York, New York time, on the Closing Date, at the offices
of Xxxxxxx Xxxx & Xxxxxxxxx, 787 Seventh Avenue, New York, New
York, or at such other time and place on the Closing Date as
the parties may mutually agree to in writing, at which time
the transactions contemplated by this Agreement shall be
consummated.
9. The Agreement is hereby amended by deleting the
definition of the term "Closing Date" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Closing Date" shall mean the date on which the Closing
occurs.
10. The Agreement is hereby amended by deleting the
definition of the term "Closing Documents" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Closing Documents" means all documents to be executed by
Prime, a Prime Subsidiary, ShoLodge or a ShoLodge Subsidiary
to consummate the transactions contemplated in this Agreement,
including, without limitation, the STI Transfer Documents, the
Texas Lease, the Texas Hotel Operating Assets Transfer
Documents, the Construction Contract and the Reservation
Agreement.
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11. The Agreement is hereby amended by deleting the
definition of the term "Development Site Purchase Price" in Section 1.1 thereof
in its entirety.
12. The Agreement is hereby amended by deleting the
definition of the term "Development Site Transfer Documents" in Section 1.1
thereof in its entirety.
13. The Agreement is hereby amended by deleting the
definition of the term "Due Diligence Period" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Due Diligence Period" means the period commencing on the
Effective Date and ending on July 9, 2000.
14. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Effective Date",
the definition of the term "Effective Closing Date", as follows:
"Effective Closing Date" means July 9, 2000 at 11:00 p.m. (New
York time).
15. The Agreement is hereby amended by deleting the
definition of the term "Equipment" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Equipment" means the STI Equipment and the Texas Equipment.
16. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term"ERISA", the
definition of the term "Escrow Agent", and the definition of the term "Escrow
Agreement," as follows:
"Escrow Agent" shall have the meaning set forth in Section
5.6.
"Escrow Agreement" shall have the meaning set forth in Section
5.6.
17. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Existing HPT
Hotels", the definition of the term "Fairfax County Option", as follows:
"Fairfax County Option" shall have the meaning set forth in
Section 5.2(b).
18. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Fairfax County
Option", the definition of the term "Fairfax County Property", as follows:
"Fairfax County Property" shall have the meaning set forth in
Section 5.2(b).
19. The Agreement is hereby amended by deleting the
definition of the term "HPT Estoppel Certificate" in Section 1.1 thereof in its
entirety.
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20. The Agreement is hereby amended by deleting the
definition of the terms "Hotel" and "Hotels" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Hotel" and "Hotels" shall mean individually one of the
Existing HPT Hotels or one of the Texas Hotels and
collectively the Existing HPT Hotels and the Texas Hotels.
21. The Agreement is hereby amended by deleting the
definition of the term "HPT Assignment and Security Agreement" in Section 1.1
thereof in its entirety and inserting in lieu thereof the following:
"HPT Assignment and Security Agreement" means that certain
Assignment and Security Agreement dated as of November 19,
1997 between STI and Landlord, as amended by that certain
Second Amendment to Lease Agreement and First Amendment to
Incidental Documents dated as of June 29, 1999 among HPT,
Landlord, ShoLodge and STI and by that certain Fourth
Amendment to Lease Agreement and Amendment to Incidental
Documents dated as of May 11, 2000 among HPT, Landlord,
ShoLodge and STI, together with such subsequent amendments,
modifications and supplements thereto as shall have been
approved by Prime in writing prior to execution by STI, such
approval not to be unreasonably withheld, delayed or
conditioned.
22. The Agreement is hereby amended by deleting the
definition of "HPT Lease" in Section 1.1 thereof in its entirety and inserting
in lieu thereof the following:
"HPT Lease" means that certain Lease Agreement dated as of
November 19, 1997 between Landlord and STI, as amended or
supplemented by those certain letters dated November 19, 1997
among HPT, Landlord, ShoLodge and STI concerning a Declaration
of Restrictions recorded in the Xxxxx County, Indiana
Recorder's Office as Document Number 95-028307 and
environmental matters related to certain property in San
Antonio, Texas, respectively, by that certain First Amendment
to Lease Agreement dated as of March 5, 1999 between Landlord
and STI, by that certain Second Amendment to Lease Agreement
and First Amendment to Incidental Documents dated as of June
29, 1999 among HPT, Landlord, ShoLodge and STI, by that
certain letter dated June 29, 1999 from STI to Landlord
concerning revenues from the sale of liquor, by that certain
Third Amendment to Lease Agreement dated as of March 3, 2000
between Landlord and STI and by that certain Fourth Amendment
to Lease Agreement and Amendment to Incidental Documents dated
as of May 11, 2000 among HPT, Landlord, ShoLodge and STI,
together with such subsequent amendments, modifications and
supplements thereto as shall have been approved by Prime in
writing prior to execution by STI, such approval not to be
unreasonably withheld, delayed or conditioned.
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23. The Agreement is hereby amended by deleting the
definition of the term "HPT Lease Guaranty" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"HPT Lease Guaranty" means that certain Limited Guaranty
Agreement dated as of November 19, 1997 executed by ShoLodge
in favor of HPT and Landlord, as amended or supplemented by
that certain letter dated November 19, 1997 among HPT,
Landlord, ShoLodge and STI concerning a Declaration of
Restrictions recorded in the Xxxxx County, Indiana Recorder's
Office as Document Number 95-028307, by that certain Second
Amendment to Lease Agreement and First Amendment to Incidental
Documents dated as of June 29, 1999 among HPT, Landlord,
ShoLodge and STI and by that certain Fourth Amendment to Lease
Agreement and Amendment to Incidental Documents dated as of
May 11, 2000 among HPT, Landlord, ShoLodge and STI, together
with such subsequent amendments, modifications and supplements
thereto as shall have been approved by Prime in writing prior
to execution by ShoLodge, such approval not to be unreasonably
withheld, delayed or conditioned.
24. The Agreement is hereby amended by deleting the
definition of the term "HPT Lease Security Deposit" in Section 1.1 thereof in
its entirety and inserting in lieu thereof the following:
"HPT Lease Security Deposit" means the "Retained Funds" in the
amount of Twenty-Five Million Five Hundred Seventy-Five
Thousand Two Hundred and No/100 Dollars ($25,575,200.00)
deposited by STI with Landlord to secure the obligations of
STI under the HPT Lease.
25. The Agreement is hereby amended by deleting the
definition of the term "HPT Real Property" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"HPT Real Property" means the STI Land and the STI Buildings.
26. The Agreement is hereby amended by deleting the
definition of the term "HPT Security Agreement" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"HPT Security Agreement" means that certain Security Agreement
dated as of November 19, 1997 between STI and Landlord, as
amended by that certain Second Amendment to Lease Agreement
and First Amendment to Incidental Documents dated as of June
29, 1999 among HPT, Landlord, ShoLodge and STI, by that
certain Second Amendment to Security Agreement dated as of
March 3, 2000 between Landlord and STI and by that certain
Fourth Amendment to Lease Agreement and Amendment to
Incidental Documents dated as of May 11, 2000 among HPT,
Landlord, ShoLodge and STI, together with such subsequent
amendments, modifications and supplements thereto as shall
have been approved
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by Prime in writing prior to execution by STI, such approval
not to be unreasonably withheld, delayed or conditioned.
27. The Agreement is hereby amended by deleting the
definition of the term "HPT Stock Pledge" in Section 1.1 thereof in its entirety
and inserting in lieu thereof the following:
"HPT Stock Pledge" means that certain Stock Pledge dated as of
November 19, 1997 made by ShoLodge in favor of Landlord, as
amended by that certain Second Amendment to Lease Agreement
and First Amendment to Incidental Documents dated as of June
29, 1999 among HPT, Landlord, ShoLodge and STI and by that
certain Fourth Amendment to Lease Agreement and Amendment to
Incidental Documents dated as of May 11, 2000 among HPT,
Landlord, ShoLodge and STI, together with such subsequent
amendments, modifications and supplements thereto as shall
have been approved by Prime in writing prior to execution by
ShoLodge, such approval not to be unreasonably withheld,
delayed or conditioned.
28. The Agreement is hereby amended by deleting the
definition of the term "Inventory" in Section 1.1 thereof in its entirety and
inserting in lieu thereof the following:
"Inventory" means the STI Inventory and the Texas Inventory.
29. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Xxxxx", the
definition of the term "Mt. Laurel Option", as follows:
"Mt. Laurel Option" shall have the meaning set forth in
Section 5.2(a).
30. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Mt. Laurel
Option", the definition of the term "Mt. Laurel Property", as follows:
"Mt. Laurel Property" shall have the meaning set forth in
Section 5.2(a).
31. The Agreement is hereby amended by deleting the
definition of the term "Operating Agreements" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Operating Agreements" means the STI Operating Agreements and
the Texas Operating Agreements.
32. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Operating
Agreements", the definition of the term "Option", as follows.
"Option" means, respectively, each of the Mt. Laurel Option
and the Fairfax County Option.
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33. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Option", the
definition of the term "Option Agreement", as follows.
"Option Agreement" means the Exchange Option Agreement
applicable to each respective Option.
34. The Agreement is hereby amended by deleting the
definition of the term "Permitted Exceptions" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Permitted Exceptions" means (a) with respect to all Assets,
(i) liens for taxes, assessments and governmental charges with
respect to an Asset not yet due and payable or due and payable
but not yet delinquent or as to which adequate reserves are
provided therefor, (ii) those Encumbrances to be created
pursuant to this Agreement, and (iii) such other Encumbrances
as shall be approved or deemed approved by Prime pursuant to
Section 12.1; (b) with respect to the HPT Real Property only,
the HPT Lease; (c) with respect to the Texas Property only,
the Texas Lease; (d) with respect to the Hendersonville,
Tennessee Hotel only, the Hendersonville Restriction; and (e)
with respect to the Real Property only, applicable zoning
regulations and ordinances provided the same do not prohibit
or impair in any material respect use of such Real Property as
a hotel as currently operated or constructed.
35. The Agreement is hereby amended by adding in Section
1.1 thereof, immediately following the definition of the term "Prime", the
definition of the term 'Prime Development Site", as follows:
"Prime Development Site" shall have the meaning set forth in
Section 7.1.
36. The Agreement is hereby amended by deleting the
definition of the term "Prime HPT Subsidiary" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Prime HPT Subsidiary" means Xxxx Rock Holding Corp., a
Delaware corporation and a wholly-owned subsidiary of Prime,
and its successors and permitted assigns.
37. The Agreement is hereby amended by deleting the
definition of the term "Prime Texas Subsidiary" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"Prime Texas Subsidiary" means May-Ridge, L.P., a Delaware
limited partnership all of the partnership interests of which
are owned, directly or indirectly, by Prime, and its
successors and permitted assigns.
38. The Agreement is hereby amended by deleting the
definition of the term "Real Property" in Section 1.1 thereof in its entirety
and inserting in lieu thereof the following:
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"Real Property" means the STI Land, the STI Buildings, the
Texas Land and the Texas Buildings.
39. The Agreement is hereby amended by deleting the
definition of the term "ShoLodge Subsidiaries" in Section 1.1 thereof in its
entirety and inserting in lieu thereof the following:
"ShoLodge Subsidiaries" means STI, Southeast, the Development
Site Subsidiaries and Xxxxx.
40. The Agreement is hereby amended by adding in Section
1.1 thereof, at the end thereof, the definition of the term "Unavoidable Delays"
as follows:
"Unavoidable Delays" shall mean delays caused by governmental
orders or edicts, governmental rationing or allocation of
materials, strikes, lockouts, fires, acts of God, disasters,
riots, unreasonable delays in transportation, shortages of
labor or materials or any other cause beyond the control of
ShoLodge, Xxxxx or a Development Site Subsidiary, as
applicable.
41. The Agreement is hereby amended by changing all
references to "Closing Date" in Section 2.1 thereof to "Effective Closing Date".
42. The Agreement is hereby amended by changing all
references to "Closing Date" in Section 2.2 thereof to "Effective Closing Date".
43. The Agreement is hereby amended by deleting Section
2.3 thereof in its entirety and inserting in lieu thereof the following:
2.3 HPT Lease Guaranty. Prime will pay to ShoLodge at
Closing the sum of Fourteen Million and No/100 Dollars
($14,000,000.00) in cash or other immediately available funds
in exchange for the absolute assignment by ShoLodge to Prime
of all right, title and interest of ShoLodge in and to the HPT
Lease Guaranty Deposit, so long as Prime has received a fully
executed counterpart of the HPT Lease Amendment. Prime
acknowledges that such Guaranty Deposit shall continue to be
held by HPT to secure the obligations of ShoLodge under the
HPT Lease Guaranty. All accrued but unpaid interest on the HPT
Lease Guaranty Deposit for the period prior to and including
the Effective Closing Date shall be paid to ShoLodge by HPT,
and all interest on the HPT Lease Guaranty Deposit after the
Effective Closing Date shall be paid to Prime by HPT which
then will be contributed to the Prime HPT Subsidiary by Prime.
44. The Agreement is hereby amended by changing the
reference to "Closing Date" in the first sentence of Section 2.5 thereof to
"Effective Closing Date".
45. The Agreement is hereby amended by deleting Article
III thereof in its entirety and inserting in lieu thereof the following:
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ARTICLE III
[INTENTIONALLY DELETED]
46. The Agreement is hereby amended by changing all
references to "Closing Date" in Section 4.1 thereof to "Effective Closing Date".
47. The Agreement is hereby amended by changing all
references to "Closing Date" in Section 4.2 thereof to "Effective Closing Date".
48. The Agreement is hereby amended by deleting Section
4.3 thereof in its entirety and inserting in lieu thereof the following:
4.3 Lease of Texas Property. The lease of the Texas
Property from Southeast to the Prime Texas Subsidiary shall be
effected by lease (the "Texas Lease") which contains terms and
provisions reasonably satisfactory to Prime, but Prime shall
not have reason to object to any terms and provisions which
are in the HPT Lease unless an objection to such terms and
provisions is made in accordance with the provisions of
Section 12.1; provided, however, (i) the Texas Lease shall
require an audit of hotel revenues only unless and until the
Texas Property is sold to HPT or an Affiliate of HPT, at which
time an audit of the Prime Texas Subsidiary shall be required
if requested by such transferee, (ii) the Prime Texas
Subsidiary shall be deemed to have deposited "Retained Funds"
in the amount of Three Million One Hundred Twenty-Seven
Thousand Eight Hundred and No/100 Dollars ($3,127,800.00), and
(iii) the minimum annual rent under such lease with respect to
the Texas Property shall be (A) Two Million Nine Hundred
Twelve Thousand Two Hundred Forty-Four and No/100 Dollars
($2,912,244.00), allocated as set forth in Exhibit P attached
hereto and incorporated herein by this reference, prior to
July 1, 2011, and (B) Three Million One Hundred Twenty-Seven
Thousand Eight Hundred and No/100 Dollars ($3,127,800.00),
allocated as set forth in Exhibit P attached hereto and
incorporated herein by this reference, after June 30, 2011.
Notwithstanding anything to the contrary, in the event that
(x) either (1) any portion of the HPT Lease Security Deposit
which relates to an Existing HPT Hotel (or a hotel exchanged
for an Existing HPT Hotel as contemplated in the last sentence
of Section 11.6) is either (A) returned to Prime or the Prime
HPT Subsidiary prior to June 30, 2013 for any reason or (B)
applied against any obligation of the Prime HPT Subsidiary in
accordance with the terms of the HPT Lease prior to June 30,
2013 due to a default by the Prime HPT Subsidiary under the
HPT Lease, or (2) any portion of the HPT Lease Security
Deposit is paid to ShoLodge and Prime pursuant to the last
sentence of the initial paragraph of Section 5.3 or the last
sentence of the third paragraph of Section 5.4, then (y) the
minimum annual rent payable under the Texas Lease prior to
July 1, 2011 (as previously increased, if applicable), shall
be increased by an amount calculated by first determining the
monthly amount that if invested at nine percent (9%) for the
number of months between the date of calculation and June 30,
2013 (disregarding partial months) would equal the reduction
in the amount payable by Prime to ShoLodge pursuant to Section
18.3 as a result of the event requiring such calculation (and
assuming for the purpose of calculating such reduction only
that
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minimum annual rent is increased as a result of such event and
paid in a timely manner) and then multiplying such amount by
twelve (12), such increase in minimum annual rent to be
allocated among the Texas Hotels in the same proportion as the
minimum annual rent is allocated among the Texas Hotels before
such calculation. The calculation of minimum annual rent under
the Texas Lease as set forth in part (y) of the preceding
sentence is described in Exhibit T attached hereto and
incorporated herein by this reference. In the event of any
conflict between the calculation of minimum annual rent as set
forth in (A) part (y) above and (B) Exhibit T, the terms of
Exhibit T shall govern. The obligations of the Prime Texas
Subsidiary under the Texas Lease shall be secured by a
security interest in the personal property located at the
Texas Real Property and in the "FF&E Reserve" created pursuant
to the Texas Lease and by a pledge of the partnership
interests of the Prime Texas Subsidiary pursuant to documents
which contain terms and provisions reasonably satisfactory to
Prime, but Prime shall not have reason to object to any terms
and provisions which are in the HPT Security Agreement, the
HPT Assignment and Security Agreement or the HPT Stock Pledge
unless an objection to such terms and provisions is made in
accordance with the provisions of Section 12.1. The Texas
Property shall be leased by the Prime Texas Subsidiary free
and clear of all Encumbrances, but subject to the Permitted
Exceptions which relate to the Texas Property and to the Texas
Operating Agreements. From and after Closing, all liabilities
of Southeast under the Texas Operating Agreements and under
the instruments creating the Permitted Exceptions which relate
to the Texas Property which first accrue after the Effective
Closing Date shall be the responsibility of the Prime Texas
Subsidiary. The obligation of Southeast to deliver the
"Retained Funds" upon the expiration of the Texas Lease
pursuant to the terms thereof shall be guaranteed by ShoLodge
pursuant to an instrument in form and substance reasonably
satisfactory to Prime and ShoLodge, but such undertaking by
ShoLodge shall terminate upon the transfer of the Texas
Property to HPT or an Affiliate of HPT or to another Person
whose net worth on the date of such transfer is equal to or
greater than ten (10) times the unapplied balance of the
"Retained Funds" held pursuant to the Texas Lease, provided
that such transferee has assumed the obligation of Southeast
to deliver the "Retained Funds" upon the expiration of the
Texas Lease by written documents in form and substance
reasonably acceptable to Prime.
49. The Agreement is hereby amended by changing the
reference to "Closing Date" in the last sentence of Section 4.4 thereof to
"Effective Closing Date".
50. The Agreement is hereby amended by deleting Section
4.5 thereof in its entirety and inserting in lieu thereof the following:
Section 4.5 [Intentionally Deleted]
51. The Agreement is hereby amended by changing the
reference to "Closing Date" in the first sentence of Section 4.7 thereof to
"Effective Closing Date".
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52. The Agreement is hereby amended by deleting the words
"Prime and Southeast shall enter into a license or franchise agreement whereby
Southeast is given the right to operate the Texas Hotels as "AmeriSuites"
hotels, which agreement shall be" from the first sentence of Section 4.8 thereof
and inserting in lieu thereof the words "Southeast shall have the option, but
not the obligation, to operate each of the Texas Hotels as an "AmeriSuites"
hotel pursuant to".
53. The Agreement is hereby amended by deleting Section
4.9 thereof in its entirety.
54. The Agreement is hereby amended by deleting Article V
thereof in its entirety and inserting in lieu thereof the following:
ARTICLE V
DEVELOPMENT SITES
5.1 Construction on Development Sites. ShoLodge
hereby agrees to cause an AmeriSuites hotel to be constructed
on each parcel of property more particularly described on
Exhibit D attached hereto and incorporated herein by this
reference (or on an alternative site or sites as shall be
acceptable to Landlord and Prime in their absolute discretion)
(the "Development Sites"). ShoLodge shall cause each
Development Site Subsidiary to pay all costs and expenses for
the construction of such hotel on its respective Development
Site. Each such hotel shall be constructed in accordance with
the plans and specifications which have been filed by
ShoLodge, Xxxxx or the applicable Development Site Subsidiary,
as appropriate, with the respective building code officials,
but with the hotel to be built on the Mt. Laurel, New Jersey
Development Site to have one hundred twenty-five (125) units
and the hotel to be built on the Fairfax County, Virginia
Development Site to have one hundred twenty-four (124) units
and with finishes and signages to be in accordance with the
plans and specifications described on Exhibit K attached
hereto and incorporated herein by this reference, all in
accordance with any applicable laws, regulations, statutes and
orders. On or prior to the Closing Date, ShoLodge shall
deliver to Prime (i) a copy of the plans and specifications
described in the preceding sentence and (ii) a schedule which
sets forth: (a) the projected times for the commencement and
completion of each stage of construction, including, but not
limited to, the dates of substantial completion and the final
completion; (b) required delivery dates of materials; (c) the
percentage of completion of construction at the end of each
stage; and (d) the proportionate amount of the total
construction cost allocated to each such stage of
construction. Subject to Unavoidable Delays to the extent
permitted by Landlord pursuant to the documentation which
evidences Landlord's exchange option with respect to the
Development Sites as described in Section 10.6 and in Section
11.6 hereof, ShoLodge shall cause such construction to be
completed including, without limitation, installation of the
AmeriSuites signages by the later of (i) September 30, 2001,
or (ii) the date fifteen (15) months from the Closing Date (or
such later date as shall be permitted by Landlord pursuant to
the documentation which evidences Landlord's exchange option
with respect to the
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Development Sites as described in Section 10.6 and in Section
11.6 hereof). Prime shall have the right, during normal
business hours and with prior notice to ShoLodge, to
periodically (i) inspect the construction of each hotel and
(ii) review the timing and cost of such construction with
Xxxxx and the architect for each hotel. In conducting such
inspections, Prime shall use its best efforts to avoid
disrupting ongoing construction activities and shall indemnify
and hold ShoLodge, Xxxxx and the Development Site Subsidiaries
harmless from and against any and all claims for damages by
third parties for damage to property or personal injuries to
the extent arising out of or attributable to such inspections
by Prime or Prime's employees or agents. The construction
contract between each Development Site Subsidiary and Xxxxx
shall provide that such contract is assignable to Prime
without the consent of Xxxxx and that Prime shall be a third
party beneficiary thereunder. Prime shall not exercise any
rights as such third party beneficiary unless and until the
occurrence of, and during the continuance of, an Event of
Default as described in Subsections (iv), (v), (vi), (vii),
(viii), (ix) or (xiii) of Section 10.1 of each Option
Agreement.
Upon the occurrence and continuance of any such Event
of Default, Prime and/or its designees shall (i) have the
right to enter upon the Mt. Laurel Property and/or the Fairfax
County Property to complete Completion (as defined under the
Option) in accordance with the applicable Option and (ii) use
the balance of the Deposit (as defined in the Escrow
Agreement) in connection with the Completion. If Prime or its
designee undertakes the work to complete the Completion in
accordance with the applicable Option, upon Completion and
opening of the applicable hotel as an "AmeriSuites" hotel to
the public, Prime shall pay an amount equal to unreimbursed
actual costs expended by the applicable Development Site
Subsidiary in connection with the Completion from the balance
of the Deposit after deducting any unpaid portion of the
Exchange Shortfall Amount.
5.2 Exchange of Development Sites. Upon
completion of the construction of each hotel as set forth in
Section 5.1 and if Landlord exercises its exchange option
applicable to such property as described in Section 10.6 and
in Section 11.6 hereof, the following exchanges shall take
place:
(a) The Mt. Laurel, New Jersey Development Site
(being the property described on pages D-2
and D-3 of Exhibit D attached hereto), along
with the hotel and all other improvements
located thereon and all furniture, fixtures
and equipment used in the operation of a
hotel thereon (collectively, the "Mt. Laurel
Property") shall be transferred from the
Development Site Subsidiary which owns the
Mt. Laurel Property to Landlord in exchange
for the STI Land located in Albuquerque, New
Mexico (being the property described on page
A-5 of Exhibit A attached hereto), along
with the hotel and all other improvements
located thereon and all furniture, fixtures
and equipment used in the operation of a
hotel thereon (collectively, the
"Albuquerque Property") (the "Mt. Laurel
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Option"). All documents and instruments
necessary for the transfer of the Mt. Laurel
Property to Landlord and for the transfer of
the Albuquerque Property to ShoLodge or its
designee shall be in form and substance
reasonably satisfactory to Landlord and to
ShoLodge or its designee. Simultaneously
with the consummation of the exchange
transaction set forth above, the HPT Lease
shall be amended to add the Mt. Laurel
Property thereto and to delete the
Albuquerque Property therefrom, such
amendment to be in form and substance
reasonably satisfactory to Landlord and
Prime.
(b) The Fairfax County, Virginia Development
Site (being the property described on page
D-4 of Exhibit D attached hereto), along
with the hotel and all other improvements
located thereon and all furniture, fixtures
and equipment used in the operation of a
hotel thereon (collectively, the "Fairfax
County Property") shall be transferred from
the Development Site Subsidiary which owns
the Fairfax County Property to Landlord in
exchange for the STI Land located in
Alpharetta, Georgia (being the property
described on pages A-27 and A-28 of Exhibit
A attached hereto), along with the hotel and
all other improvements located thereon and
all furniture, fixtures and equipment used
in the operation of a hotel thereon
(collectively, the "Alpharetta Property")
(the "Fairfax County Option"). All documents
and instruments necessary for the transfer
of the Fairfax County Property to Landlord
and for the transfer of the Alpharetta
Property to ShoLodge or its designee shall
be in form and substance reasonably
satisfactory to Landlord and to ShoLodge or
its designee. Simultaneously with the
consummation of the exchange transaction set
forth above, the HPT Lease shall be amended
to add the Fairfax County Property thereto
and to delete the Alpharetta Property
therefrom, such amendment to be in form and
substance satisfactory to Landlord and
Prime.
At the closing of any such exchange as contemplated
herein and upon Landlord's authorization (without any
obligations imposed on Prime, contingent or otherwise) and
release of Prime and/or the Prime HPT Subsidiary with respect
to the FF&E Reserve to be delivered to ShoLodge under the FF&E
Pledge and/or the Deposit Account Control Agreement (both as
defined or described in the HPT Lease Amendment), Prime shall
cause the Prime HPT Subsidiary to deliver to ShoLodge an
amount equal to the sum of the "FF&E Reserve" created pursuant
to the HPT Lease allocable to the Existing HPT Hotel being
exchanged as of the Effective Closing Date plus all deposits
into such "FF&E Reserve" following the Effective Closing Date
allocable to the Existing HPT Hotel being exchanged, less
expenditures with respect to such Existing HPT Hotel
reimbursed from such "FF&E Reserve" following the Effective
Closing Date; provided, however, that the amount to be
delivered to ShoLodge pursuant to this paragraph for a
particular exchange shall not exceed an amount equal to the
portion of the "FF&E Reserve" released by Landlord in
connection with such exchange less any amount which
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the Prime HPT Subsidiary is obligated to deposit into the
"FF&E Reserve" at the closing of the exchange with respect to
the hotel exchanged for such Existing HPT Hotel.
5.3 Purchase of Property by ShoLodge. In the
event Landlord exercises its put option with respect to one or
both of the Alpharetta Property and the Albuquerque Property
as described in Section 9(c) of the HPT Lease Amendment, then
in such event ShoLodge shall purchase from Landlord the
Alpharetta Property and/or the Albuquerque Property, as
applicable, for the price as set forth in the HPT Lease
Amendment. At the closing of any such purchase by ShoLodge as
contemplated herein and upon Landlord's authorization (without
any obligations imposed on Prime, contingent or otherwise) and
release of Prime and/or the Prime HPT Subsidiary with respect
to the FF&E Reserve to be delivered to ShoLodge under the FF&E
Pledge and/or the Deposit Account Control Agreement (both as
defined or described in the HPT Lease Amendment), Prime shall
cause the Prime HPT Subsidiary to deliver to ShoLodge an
amount equal to the sum of the "FF&E Reserve" created pursuant
to the HPT Lease allocable to such acquired property as of the
Effective Closing Date plus all deposits into such "FF&E
Reserve" following the Effective Closing Date allocable to
such acquired property, less expenditures with respect to such
acquired property reimbursed from such "FF&E Reserve"
following the Effective Closing Date; provided, however, that
the amount to be delivered to ShoLodge pursuant to this
paragraph for a particular purchase shall not exceed an amount
equal to the portion of the "FF&E Reserve" released by
Landlord in connection with such purchase less any amount
which the Prime HPT Subsidiary is obligated to deposit into
the "FF&E Reserve" at the closing of such purchase and as a
result of such purchase. Further, if in connection with any
such purchase as contemplated herein, the HPT Lease Security
Deposit which relates to such acquired property is returned by
Landlord and the lien of Landlord therein is released, such
returned portion of the HPT Lease Security Deposit shall be
paid as follows:
(a) an amount equal to the present value of the
returned portion of the HPT Lease Security
Deposit on the date of payment assuming
payment on June 30, 2013 and assuming a
discount rate of nine percent (9%), plus the
present value of the rent reduction in
Section 4.3 attributable to this portion of
the HPT Lease Security Deposit from the date
such portion of the HPT Lease Security
Deposit is returned to June 30, 2011,
assuming a discount rate of nine percent
(9%), shall be paid to Prime; and
(b) the balance of the returned portion of the
HPT Lease Security Deposit shall be paid to
ShoLodge.
At the closing of any such purchase by ShoLodge as
contemplated herein and for no additional consideration, Prime
shall cause the Prime HPT Subsidiary to sell, convey,
transfer, assign and deliver to ShoLodge or its designee,
without
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any representation or warranty whatsoever, all the following
(subject to Landlord having released any lien which Landlord
may have on such property):
(a) all merchandise, inventories, materials and
supplies used or intended for use or held for
use in connection with and located on the
closing date of such purchase at the
transferred hotel;
(b) all reservation and advance booking deposits
and guest deposits (including interest, if
any, accrued thereon) for guests or future
guests of the transferred hotel existing on
the closing date of such purchase;
(c) to the extent assignable, all of the right,
title and interest of the Prime HPT
Subsidiary, if any, in and to all service
contracts, vendor agreements, maintenance
agreements, utility contracts, cable service
agreements, advertising agreements, equipment
leases and similar operating agreements
relating to the transferred hotel and in
effect on the closing date of such purchase;
(d) to the extent assignable, all of the right,
title and interest of the Prime HPT
Subsidiary, if any, in and to licenses and
permits for the sale and on-premises
consumption of liquor and other alcoholic
beverages at the transferred hotel in effect
on the closing date of such purchase; and
(e) all vehicles owned by the transferor and
located at and used in connection with the
transferred hotel on the closing date of such
purchase.
Further, at the closing of any such purchase as
contemplated herein, revenues and expenses respecting the
acquired properties shall be credited or charged, as the case
may be, similar to the adjustments with respect to the Hotels
as specified in Section 9.1 so that the Prime HPT Subsidiary
is given a credit or charge, as the case may be, for all
revenues and expenses respecting the transferred assets which
are attributable to operations before the closing date of the
acquisition, and the buyer of a particular property is given a
credit or charge, as the case may be, for all such revenues
and expenses attributable to operations on and after the
closing date of the acquisition.
Following the closing of any purchase as contemplated
herein, the Prime HPT Subsidiary shall cooperate with the
transferee in its efforts to obtain new operating permits and
licenses for the transferred hotel or modifications to
existing operating permits and licenses or, to the extent
permitted by applicable law, to maintain the existing
operating permits and licenses in effect until such time as
the new or modified operating permits and licenses may be
obtained. Until such time as such new or modified operating
permits and licenses are obtained, the Prime HPT Subsidiary,
to the extent permitted by applicable law,
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shall take all steps reasonably necessary to enable the
current operating permits and licenses, if any, to be used in
the operation of the transferred hotel and to permit the
continued operation of the transferred hotel, including,
without limitation, the uninterrupted sale and serving of
alcoholic beverages at the transferred hotel, if applicable.
All costs and expenses incurred by Prime and/or the Prime HPT
Subsidiary in connection with the foregoing shall be paid by
ShoLodge, and ShoLodge shall defend, indemnify and hold Prime
and/or the Prime HPT Subsidiary harmless from and against any
and all loss, expense (including, without limitation,
reasonable attorney's fees and court costs arising from the
enforcement of this indemnity), damage and liability arising
from the foregoing.
5.4 Purchase of Property by Prime. In the event
(i) Landlord exercises its put option with respect to one or
both of the Alpharetta Property and the Albuquerque Property
as described in Section 9(c) of the HPT Lease Amendment, (ii)
ShoLodge defaults in its obligation to acquire a put property
within 10 days of the Landlord's exercise of its put option
and otherwise in compliance with Section 5.3 hereof, and (iii)
Prime or an Affiliate of Prime sends notice to Landlord that
ShoLodge has failed to acquire such put property and that it
will purchase such put property pursuant to the exercise by
Landlord of its put option as described in Section 9(c) of the
HPT Lease Amendment, then, in such event, simultaneously with
the closing of the acquisition of such put property by Prime,
the following exchanges shall take place: (x) if ShoLodge has
failed to purchase and Prime is to purchase the Albuquerque
Property, ShoLodge shall cause the Development Site Subsidiary
which owns the Mt. Laurel Property to transfer the Mt. Laurel
Property to Prime or its designee, (y) if ShoLodge has failed
to purchase and Prime is to purchase the Alpharetta Property,
ShoLodge shall cause the Development Site Subsidiary which
owns the Fairfax County Property to transfer the Fairfax
County Property to Prime or its designee and (z) if ShoLodge
has failed to purchase and Prime is to purchase either or both
of the Albuquerque Property and/or Alpharetta Property,
ShoLodge shall pay the applicable Exchange Shortfall Amount
(as defined below) in exchange for the applicable put
property. Upon, ShoLodge's payment of the Exchange Shortfall
Amount, Prime shall pay the applicable Development Site
Subsidiary the balance of the Deposit, if any (as defined in
the Escrow Agreement). All documents and instruments necessary
for such exchange shall be in form and substance reasonably
acceptable to ShoLodge or its designee and to Prime.
In addition to the provisions of the preceding
paragraph, if Prime acquires one or both of the Alpharetta
Property and the Albuquerque Property pursuant to the exercise
by Landlord of its put option as described in Section 9(c) of
the HPT Lease Amendment, ShoLodge shall pay to Prime with
respect to each such acquired property an amount equal to the
difference between (an "Exchange Shortfall Amount") (i) the
sum of (x) purchase price paid by Prime to Landlord for such
property and (y) amounts incurred by Prime in connection with
Completion under the Fairfax County Option or Mt. Laurel
Option, as applicable, in excess of the portion of the Deposit
(as defined in the Escrow Agreement) paid
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to Prime and (ii) an amount equal to the number of units at
the Fairfax County Option (i.e., 124 units) or the Mt. Laurel
Option (i.e., 125 units), as applicable, multiplied times
Seventy-Six Thousand Five Hundred and No/100 Dollars ($76,500)
per unit. Such payment shall be made by ShoLodge in
immediately available funds simultaneously with the closing of
Prime's purchase of the applicable property.
At the closing of any such exchange as contemplated
herein and upon Landlord's authorization (without any
obligations imposed on Prime, contingent or otherwise) and
release of Prime and/or the Prime HPT Subsidiary with respect
to the FF&E Reserve to be delivered to ShoLodge under the FF&E
Pledge and/or the Deposit Account Control Agreement (both as
defined or described in the HPT Lease Amendment), Prime shall
cause the Prime HPT Subsidiary to deliver to ShoLodge an
amount equal to the sum of the "FF&E Reserve" created pursuant
to the HPT Lease allocable to the Existing HPT Hotel being
exchanged as of the Effective Closing Date plus all deposits
into such "FF&E Reserve" following the Effective Closing Date
allocable to such Existing HPT Hotel being exchanged, less
expenditures with respect to such Existing HPT Hotel
reimbursed from such "FF&E Reserve" following the Effective
Closing Date; provided, however, that the amount to be
delivered to ShoLodge pursuant to this paragraph for a
particular exchange shall not exceed an amount equal to the
portion of the "FF&E Reserve" released by Landlord in
connection with the purchase of such Existing HPT Hotel by
Prime, less any amount which the Prime HPT Subsidiary is
obligated to deposit into the "FF&E Reserve" at the closing of
such purchase and as a result of such purchase. Further, if in
connection with any purchase by Prime of a put property as
contemplated herein, the HPT Lease Security Deposit which
relates to such acquired property is returned by Landlord and
the lien of Landlord therein is released, then at the closing
of the exchange contemplated herein such returned portion of
the HPT Lease Security Deposit shall be paid as follows:
(a) an amount equal to the present value of the
returned portion of the HPT Lease Security
Deposit on the date of payment assuming
payment on June 30, 2013 and assuming a
discount rate of nine percent (9%), plus the
present value of the rent reduction in
Section 4.3 attributable to this portion of
the HPT Lease Security Deposit from the date
such portion of the HPT Lease Security
Deposit is returned to June 30, 2011,
assuming a discount rate of nine percent
(9%), shall be retained by Prime or the Prime
HPT Subsidiary; and
(b) the balance of the returned portion of the
HPT Lease Security Deposit shall be paid to
ShoLodge
The provisions of this Section 5.4 set forth the sole
and exclusive remedy available to Prime for any default by
ShoLodge in its obligation to purchase a put property as
described in Section 5.3. Prime, however, shall have any and
all
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remedies available to it at law or in equity in the event
ShoLodge fails to perform its obligations set forth in this
Section 5.4.
Nothing contained herein is intended to relieve
ShoLodge from causing the Development Site Subsidiary which
owns the Mt. Laurel Property and/or Fairfax County Property to
transfer to Prime or its designee the Mt. Laurel Property
and/or the Fairfax County Property in the event it fails to
pay to Prime the applicable Exchange Shortfall Amount.
ShoLodge acknowledges (i) its obligation to cause such
transfers of the Mt. Laurel Property and/or the Fairfax County
Property to Prime or its designee is independent of Prime's
obligation to transfer the applicable put property to ShoLodge
and (ii) the applicable put property or put properties will be
transferred to ShoLodge upon (x) its payment to Prime of the
applicable Exchange Shortfall Amount and (y) Completion,
including without limitation, the opening of the Mt. Laurel
Property and/or the Fairfax County Property, as applicable, as
an "AmeriSuites" hotel to public.
5.5 Operating Assets. At the closing of any
exchange as contemplated in Section 5.2 or in Section 5.4 and
for no additional consideration, ShoLodge shall cause the
applicable Development Site Subsidiary to sell, convey,
transfer, assign and deliver to the Prime HPT Subsidiary, and
Prime shall cause the Prime HPT Subsidiary to sell, convey,
transfer, assign and deliver to ShoLodge or its designee,
without any representation or warranty whatsoever, all the
following (subject to Landlord having released any lien which
Landlord may have on such property):
(a) all merchandise, inventories, materials and
supplies used or intended for use or held for
use in connection with and located on the
closing date of such exchange at the
transferred hotel;
(b) all reservation and advance booking deposits
and guest deposits (including interest, if
any, accrued thereon) for guests or future
guests of the transferred hotel existing on
the closing date of such exchange;
(c) to the extent assignable, all of the right,
title and interest of the transferor, if any,
in and to all service contracts, vendor
agreements, maintenance agreements, utility
contracts, cable service agreements,
advertising agreements, equipment leases and
similar operating agreements relating to the
transferred hotel and in effect on the
closing date of such exchange;
(d) to the extent assignable, all of the right,
title and interest of the transferor, if any,
in and to licenses and permits for the sale
and on-premises consumption of liquor and
other alcoholic beverages at the transferred
hotel in effect on the closing date of such
exchange; and
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(e) all vehicles owned by the transferor and
located at and used in connection with the
transferred hotel on the closing date of such
exchange.
Further, ShoLodge shall cause to be delivered to Prime a copy
of all surveys, warranties, specifications and plans and
as-built drawings, if any, in the possession of ShoLodge or an
Affiliate of ShoLodge which relate to any property transferred
to Landlord, Prime or the Prime HPT Subsidiary in connection
with any exchange contemplated in Section 5.2 or in Section
5.4.
Further, at the closing of any such exchange as
contemplated in Section 5.2 or in Section 5.4, revenues and
expenses respecting the exchanged properties shall be credited
or charged, as the case may be, similar to the adjustments
with respect to the Hotels as specified in Section 9.1 so that
the transferor of the operating assets described in the
preceding paragraph is given a credit or charge, as the case
may be, for all revenues and expenses respecting the
transferred assets which are attributable to operations before
the closing date of the exchange, and the transferee of the
operating assets described in the preceding paragraph is given
a credit or charge, as the case may be, for all such revenues
and expenses attributable to operations on and after the
closing date of the exchange.
Following the closing of any exchange as contemplated
in Section 5.2 or in Section 5.4, the transferor of the
operating assets described in the second preceding paragraph
shall cooperate with the transferee of such assets in its
efforts to obtain new operating permits and licenses for the
transferred hotel or modifications to existing operating
permits and licenses or, to the extent permitted by applicable
law, to maintain the existing operating permits and licenses
in effect until such time as the new or modified operating
permits and licenses may be obtained. Until such time as such
new or modified operating permits and licenses are obtained,
the transferor of the operating assets described in the second
preceding paragraph, to the extent permitted by applicable
law, shall take all steps reasonably necessary to enable the
current operating permits and licenses, if any, to be used in
the operation of the transferred hotel and to permit the
continued operation of the transferred hotel, including,
without limitation, the uninterrupted sale and serving of
alcoholic beverages at the transferred hotel, if applicable.
All costs and expenses incurred by such transferor in
connection with the foregoing shall be paid by the transferee,
and the transferee shall defend, indemnify and hold such
transferor harmless from and against any and all loss, expense
(including, without limitation, reasonable attorney's fees and
court costs arising from the enforcement of this indemnity),
damage and liability arising from the foregoing.
5.6 Escrow. In order to facilitate the transactions
contemplated in Section 5.1, in Section 5.2 and in Section
5.3, on the Closing Date ShoLodge, Prime and Bankers Trust
Company, as escrow agent (the "Escrow Agent") and others named
therein, shall enter into the Escrow Agreement in the form of
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Exhibit I attached hereto (as the same may be amended and
supplemented and in effect from time to time, the "Escrow
Agreement" and incorporated herein by this reference whereby a
limited warranty deed with covenants against grantor's acts,
or its local equivalent, for each Development Site and a xxxx
of sale or other transfer document for the remaining portion
of the Mt. Laurel Property and the Fairfax County Property,
all in form and substance reasonably satisfactory to Landlord
and Prime, Seven Million and No/100 Dollars ($7,000,000.00)
for the development of a hotel on the Mt. Laurel, New Jersey
Development Site and Six Million Nine Hundred Thirty-Two
Thousand and No/100 Dollars ($6,932,000.00) for the
development of a hotel on the Fairfax County, Virginia
Development Site shall be placed in escrow to be held and
delivered or invested and disbursed, as applicable, by the
Escrow Agent as provided therein.
5.7 Condition of Properties. In the event
ShoLodge or its designee acquires an Existing HPT Hotel
pursuant to an exchange described in Section 5.2, a purchase
described in Section 5.3 or an exchange described in Section
5.4, Prime HPT Subsidiary shall cause such Existing HPT Hotel
(including, without limitation, the real property, the
improvements located on such real property and the furniture,
fixtures and equipment located on such real property or within
such improvements) at the time of such acquisition by ShoLodge
or its designee to be in the same condition as existed on the
Effective Closing Date, ordinary wear and tear and conditions
resulting from casualty and/or condemnation only excepted;
provided, however, such exception for ordinary wear and tear
shall not limit the maintenance and repair obligations of the
Prime HPT Subsidiary under Article 5 of the HPT Lease, which
obligations shall be performed by the Prime HPT Subsidiary as
to each Existing HPT Hotel acquired by ShoLodge or its
designee. Further, between the Effective Closing Date and the
closing of any such exchange or purchase, as applicable, Prime
shall not further encumber, or permit the Prime HPT Subsidiary
to further encumber, any such property to be acquired by
ShoLodge or its designee except in each case required under
the HPT Lease or any amendments thereto. Nothing contained
herein is intended to modify ShoLodge's right to receive the
insurance and/or condemnation proceeds pursuant to Section 5.2
of the applicable Option Agreement.
5.8 AmeriSuites Name. ShoLodge or the Affiliate
of ShoLodge which owns the Mt. Laurel Property, the Fairfax
County Property, the Alpharetta Property or the Albuquerque
Property, as appropriate, shall have the option, but not the
obligation, to operate each such property as an "AmeriSuites"
hotel pursuant to the standard license or franchise agreement,
if any, then used, or most recently used if a standard license
or franchise agreement is not then being used, by Prime to
franchise "AmeriSuites" hotels, but with (i) a minimum term of
ten (10) years, (ii) no "initial" fee or "license" fee due
upon signing such agreement (but with full standard royalty,
marketing and reservation fees), and (iii) a right of the
licensee or franchisee to terminate without penalty or any
termination fee upon at least thirty (30) days prior written
notice (provided no written notice of termination shall be
required if termination occurs in connection with an exchange
contemplated in Section 5.2 or in Section 5.4).
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5.9 Survival. The provisions of Article V shall
survive the Closing of the transactions contemplated herein.
55. The Agreement is hereby amended by deleting the
initial sentence of Section 6.1 thereof in its entirety and inserting in lieu
thereof the following:
The total purchase price for the STI Assets and the Texas
Hotel Operating Assets shall be One Million Six Hundred
Seventeen Thousand Six Hundred Twenty Five and No/100 Dollars
($1,617,625.00) (the "Purchase Price").
56. The Agreement is hereby amended by deleting Section
6.1(a) in its entirety and inserting in lieu thereof the following:
ShoLoge shall, on the date hereof, pay $29,495.00 to Prime, in
cash or other immediately available funds, to an account or
accounts designated by Prime prior to the Closing, in return
for Prime's delivery of the debt securities referenced in
Section 6.1(b) below which are in excess of the Purchase Price
by such $29,495.00.
57. The Agreement is hereby amended by adding the
following after the last sentence of Section 6.1:
The parties hereto agree that the Purchase Price will increase
by the Incremental Purchase Price, if and only if Landlord
indefeasibly returns the Additional Deposit (as such term is
defined in the HPT Lease Amendment) to Prime at which time the
Purchase Price shall be paid to ShoLodge in cash or other
immediately available funds, to an account or accounts
designated by ShoLodge. The "Incremental Purchase Price" shall
mean the difference between (i) $382,375.00 and (ii) the
amount determined by multiplying Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00) by 2.00% and
dividing the product of such multiplication by 12, which
resulting stream of monthly payment amounts shall be
discounted using a discount rate of 9% for the number months
that have elapsed between the month in which the Closing
occurs and the month in which Landlord indefeasibly returns
the Additional Deposit to Prime (including the month in which
the Closing and the return of the Additional Deposit occur).
58. The Agreement is hereby amended by deleting the last
sentence of Section 6.1 thereof in its entirety and inserting in lieu thereof
the following:
The Purchase Price shall be allocated among the STI Assets and
the Texas Hotel Operating Assets as set forth on Exhibit N
attached hereto and made a part hereof.
59. The Agreement is hereby amended by deleting Section
6.2 thereof in its entirety.
60. The Agreement is hereby amended by deleting Section
7.1 thereof in its entirety and inserting in lieu thereof the following:
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7.1 Construction Contract. At the Closing, Prime
shall enter into, and ShoLodge shall cause Xxxxx to enter
into, an agreement (the "Construction Contract") in form and
substance reasonably satisfactory to Prime and Xxxxx whereby
Xxxxx will agree to construct for Prime, and Prime will engage
Xxxxx to construct, an AmeriSuites hotel on the property
described on Exhibit R attached hereto and incorporated herein
by this reference (or on an alternative site as shall be
acceptable to Landlord and ShoLodge in their absolute
discretion) (the "Prime Development Site"). The Construction
Contract shall provide for a fixed price of Seventy-Six
Thousand Five Hundred and No/100 Dollars ($76,500.00) per room
(including land (to the extent specified below), building and
furniture, fixtures and equipment). The parties acknowledge
that the fixed price set forth in the preceding sentence
includes Prime's out-of-pocket cost of acquisition of the
Prime Development Site in the amount of One Million One
Hundred Fifteen Thousand and No/100 Dollars ($1,115,000.00),
and, thus, Prime's out-of-pocket cost of acquiring the Prime
Development Site in the amount of One Million One Hundred
Fifteen Thousand and No/100 Dollars ($1,115,000.00) shall be
deducted from the fixed price otherwise payable to Xxxxx
during the course of construction. Disbursements to Xxxxx of
the fixed price will be paid by Prime monthly during
construction based upon the percentage of completion, subject
to retainage of ten percent (10%). The Construction Contract
shall further provide that Xxxxx shall construct on the Prime
Development Site a hotel building in accordance with the plans
and specifications for a prototypical six (6) story one
hundred twenty-four (124) unit Xxxxxx Suites hotel, but with
finishes and signage in accordance with the plans and
specifications described on Exhibit K attached hereto and
incorporated herein by this reference, all in accordance with
all applicable laws, regulations, statutes and orders. The
parties acknowledge that the Construction Contract shall
contain a scheduled completion date, together with delay
damages, among other terms, which terms shall be negotiated
during the Due Diligence Period. ShoLodge shall join in the
Construction Contract for the purpose of guaranteeing the
obligations of Xxxxx thereunder. At the Closing, ShoLodge
shall cause Xxxxx, at Xxxxx'x sole cost and expense, to
deliver to Prime a Performance Bond and a Labor and Material
Payment Bond relating to the Construction Contract, both in
form and substance reasonably satisfactory to Prime and Xxxxx.
The provisions of this Section 7.1 shall survive the Closing,
but any conflict between the terms of this Section 7.1 and the
terms of the Construction Contract shall be governed by the
Construction Contract.
61. The Agreement is hereby amended by deleting the
language "an agreement (the" from the first sentence of Section 8.1 thereof and
inserting in lieu thereof the language "an agreement or agreements
(collectively, the ".
62. The Agreement is hereby amended by deleting the
language "one (1) year period" both places it appears in Section 8.1(g) thereof
and inserting in lieu thereof the language "eighteen (18) month period" and by
deleting the language "initial Closing Date under this Agreement," and inserting
in lieu thereof the words "Effective Closing Date".
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63. The Agreement is hereby amended by deleting Section
9.1 thereof in its entirety and inserting in lieu thereof the following:
(a) The cash portion of the Purchase Price
described in Section 6.1(a) shall be increased, by:
(i) any cash on hand at the Hotels when a Prime
Subsidiary takes possession (any such cash shall be counted by
representatives of ShoLodge and Prime on the Effective Closing
Date);
(ii) any revenue generated by the operation of
the Hotels through and including the night of the Effective
Closing Date arising from accounts receivable with respect to
guests of the Hotels then in occupancy which in the normal
course of business would be received after the Effective
Closing Date (the amount of such revenue to be determined by
representatives of ShoLodge and Prime on the Effective Closing
Date);
(iii) amounts paid prior to Closing for any ad
valorem real estate taxes and assessments relating to the Real
Property on account of any period after the Effective Closing
Date;
(iv) personal property taxes, gross receipts
taxes, sales taxes, excise taxes, hotel occupancy taxes or
other similar taxes (but excluding income and franchise
taxes), if any, relating to the Assets paid prior to Closing
on account of any period after the Effective Closing Date;
(v) amounts paid prior to Closing under any
Operating Agreement, the HPT Lease or any instrument creating
a Permitted Exception on account of any period after the
Effective Closing Date;
(vi) any utility deposits relating to the Assets
which are transferred and remain on deposit after Closing for
the benefit of a Prime Subsidiary or Prime, as applicable; and
(vii) any other charges or fees customarily
prorated by a credit to the seller in the jurisdiction in
which the Real Property is situated, on customary terms.
(b) The cash portion of the Purchase Price
described in Section 6.1(a) shall be decreased, by:
(i) any Advance Payments retained by STI or
Southeast, as applicable;
(ii) unpaid ad valorem real estate taxes and
assessments relating to the Real Property on account of any
period on or prior to the Effective Closing Date;
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(iii) unpaid personal property taxes, gross
receipts taxes, sales taxes, excise taxes, hotel occupancy
taxes or other similar taxes (but excluding income and
franchise taxes), if any, relating to the Assets payable on
account of any period on or prior to the Effective Closing
Date;
(iv) unpaid amounts payable under any Operating
Agreement (ShoLodge shall use its best efforts to cause all
amounts due under the Operating Agreements to be paid to the
Effective Closing Date), the HPT Lease or any instrument
creating a Permitted Exception on account of any period on or
prior to the Effective Closing Date (for this purpose
"Additional Rent" (as defined in the HPT Lease) shall be
calculated based on the "Total Hotel Sales" (as defined in the
HPT Lease) for the current year to the Effective Closing Date
compared to "Base Total Hotel Sales" (as defined in the HPT
Lease) for the similar period of the applicable "Base Year"
(as defined in the HPT Lease));
(v) unpaid rates, rents and charges for sewer,
water, gas, electricity, telephone and other utility services
provided to the Hotels for any period on or prior to the
Effective Closing Date (ShoLodge shall use commercially
reasonable efforts to cause meters to be read as of the
Effective Closing Date);
(vi) accrued but unpaid benefits due to employees
of the Hotels who are hired by Prime or a Prime Subsidiary, as
applicable, which are not paid by STI, ShoLodge or an
Affiliate of ShoLodge directly to such employees upon
termination of employment; and
(vii) any other charges or fees customarily
prorated by a charge to the seller in the jurisdiction in
which the Real Property is situated, on customary terms.
(c) The intent of the foregoing is to credit or
charge, as the case may be, STI or Southeast, as applicable,
with all revenues and expenses respecting the Assets which are
attributable to operations prior to and including the
Effective Closing Date and to credit or charge, as the case
may be, Prime or a Prime Subsidiary, as applicable, with all
such revenues and expenses attributable to operations after
the Effective Closing Date. At Closing, STI and Southeast, as
applicable, shall provide the Prime HPT Subsidiary and the
Prime Texas Subsidiary, as applicable, with a list setting
forth advance guest bookings, conventions, meetings and any
other booking commitments for the period after the Effective
Closing Date.
64. The Agreement is hereby amended by deleting Section
10.6 thereof in its entirety and inserting in lieu thereof the following:
10.6 HPT Closing. All transactions with HPT and
Landlord as contemplated in this Agreement shall have closed
pursuant to documents in form and substance reasonably
satisfactory to ShoLodge, and ShoLodge shall have received (a)
a fully executed counterpart of the HPT Lease Amendment; (b) a
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release by Landlord of STI of and from any liability under the
HPT Lease arising after the Effective Closing Date; (c) a
release by Landlord of any liability of STI under the HPT
Security Agreement and the HPT Assignment and Security
Agreement; (d) a release by Landlord of any liability of
ShoLodge under the HPT Stock Pledge; and (e) a ratification of
the HPT Lease Guaranty as to obligations thereunder after the
Effective Closing Date and a supplement to the HPT Lease
Guaranty to reflect the partial release described in item (b)
of this sentence as to obligations thereunder prior to and
including the Effective Closing Date. Further, Landlord's
option to exchange the Alpharetta Property for the Mt. Laurel
Property and to exchange the Albuquerque Property for the
Fairfax County Property shall have been evidenced pursuant to
an option agreement in the form of Exhibit J attached hereto
and incorporated herein by this reference.
65. The Agreement is hereby amended by adding in Article
X thereof a new Section 10.8 as follows:
10.8 Landlord Consent. ShoLodge shall have
received the written consent to the Texas Lease from the
ground lessor of the Texas Land located in San Antonio, Texas
(being the property described on page C-3 of Exhibit C
attached hereto) in form and substance reasonably satisfactory
to ShoLodge.
66. The Agreement is hereby amended by deleting Section
11.6 thereof in its entirety and inserting in lieu thereof the following:
11.6 HPT Closing. All transactions with HPT and
Landlord as contemplated in this Agreement shall have closed
pursuant to documents in form and substance reasonably
satisfactory to Prime, and Prime shall have received a fully
executed counterpart of an amendment to the HPT Lease in the
form of Exhibit H attached hereto and incorporated herein by
this reference (as further modified, if applicable, to remove
any Hotel from the HPT Lease to accomplish a partial
termination of this Agreement pursuant to Section 13.3 or
Section 13.4 and to reduce minimum rent by the applicable
amount set forth in Exhibit C to the HPT Lease) (such
amendment being referred to herein as the "HPT Lease
Amendment"). Further, (i) Landlord's option to exchange the
Albuquerque Property for the Mt. Laurel Property and to
exchange the Alpharetta Property for the Fairfax County
Property shall have been evidenced pursuant to an option
agreement in the form of Exhibit J attached hereto and
incorporated herein by this reference, and (ii) Landlord's
option to exchange the STI Land located in Irving, Texas
(being the property described on page A-25 of Exhibit A
attached hereto), along with the hotel and all other
improvements located thereon and all assets used in the
operation of the current hotel thereon, for the Prime
Development Site, along with the hotel and all other
improvements located thereon and all assets used in the
operation of the current hotel thereon, shall have been
evidenced pursuant to an option agreement in the form of
Exhibit J attached hereto and incorporated herein by this
reference.
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67. The Agreement is hereby amended by deleting Section
11.9 thereof in its entirety and inserting in lieu thereof the following:
11.9 Landlord Consent. Prime shall have received
the written consent to the Texas Lease from the ground lessor
of the Texas Land located in San Antonio, Texas (being the
property described on page C-3 of Exhibit C attached hereto)
in form and substance reasonably satisfactory to Prime.
68. The Agreement is hereby amended by deleting Section
11.11 thereof in its entirety.
69. The Agreement is hereby amended by deleting the last
paragraph of Article XI thereof in its entirety.
70. The Agreement is hereby amended by deleting the third
sentence of Section 12.1 thereof in its entirety and inserting in lieu thereof
the following:
Unless ShoLodge undertakes to resolve such unacceptable items
in a manner acceptable to Prime on or prior to the Closing
Date, Prime may, by delivering written notice to ShoLodge on
or prior to the Closing Date, terminate this Agreement,
whereupon Prime and ShoLodge shall be released and relieved of
all further obligations, liabilities and claims hereunder,
other than the performance of each party of its Post
Termination Obligations.
71. The Agreement is hereby amended by deleting the
fourth, fifth and sixth sentences of Section 12.2 thereof in their entirety and
inserting in lieu thereof the following:
ShoLodge shall also request that HPT forward to Prime a copy
of all examinations and inspections which HPT obtained with
respect to the Existing HPT Hotels. Should Prime discover any
physical condition of the Assets (including, without
limitation, any environmental condition) which is not
acceptable to Prime and which is not eligible to be repaired
with funds then in the "FF&E Reserve" established under the
HPT Lease or the Texas Lease, as applicable, Prime shall
deliver written notice to ShoLodge on or prior to the last day
of the Due Diligence Period specifying in detail all such
unacceptable items; provided, however, that with respect to
any of the foregoing examinations and inspections obtained by
HPT with respect to the Existing HPT Hotels, the deadline for
Prime to deliver such written notice to ShoLodge shall end on
the later of (i) the last day of the Due Diligence Period or
(ii) the date ten (10) days after delivery of such item to
Prime or (iii) thirty (30) days after receipt by Prime of
written notice from HPT or ShoLodge that any such examinations
and inspections obtained by HPT will not be provided to Prime.
Unless ShoLodge undertakes to resolve such unacceptable items
in a manner acceptable to Prime on or prior to the Closing
Date, Prime may, by delivering written notice to ShoLodge on
or prior to the Closing Date, terminate this Agreement,
whereupon Prime and ShoLodge shall be released and relieved of
all further obligations, liabilities and
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claims hereunder, other than the performance of each party of
its Post Termination Obligations.
72. The Agreement is hereby amended by adding in Article
XII thereof a new Section 12.4 as follows:
12.4 Objections. Notwithstanding anything to the
contrary contained in this Article XII, ShoLodge and Prime
acknowledge that Prime has raised objections to the various
title, survey and property issues, and Prime hereby does renew
its objection to the uncured matters set forth on Exhibit S
attached hereto and incorporated herein by this reference
(collectively, the "Prime Objections"). ShoLodge has executed
and delivered that certain side letter dated July 9, 2000
setting forth the obligation of ShoLodge to cure the Prime
Objections or indemnify Prime with respect thereto.
73. The Agreement is hereby amended by deleting
subparagraph (c) of Section 13.1 thereof in its entirety and inserting in lieu
thereof the following:
(c) any violation by STI or Southeast, as
applicable, or notice of any alleged violation by STI or
Southeast, as applicable, of any federal, state or local law,
statute, ordinance, rule or regulation, but only as relates to
the operations of the Hotels; or
74. The Agreement is hereby amended by deleting the words
"the Additional Hotel Subsidiaries" from the introductory portion of Section
13.2 thereof.
75. The Agreement is hereby amended by deleting
subparagraph (b) of Section 13.2 thereof in its entirety and inserting in lieu
thereof the following:
(b) maintain the Equipment in good operating
condition and repair and replace with equipment of similar
value which is in good operating condition or repair any of
the Equipment which shall be worn out, lost, stolen or
destroyed (which maintenance, repair and replacement as to the
STI Equipment may be made from funds in the "FF&E Reserve"
created pursuant to the HPT Lease).
76. The Agreement is hereby amended by deleting the words
"or any separate lease as contemplated in Section 3.8" from subparagraph (g) of
Section 13.2 thereof.
77. The Agreement is hereby amended by deleting
subparagraph (m) of Section 13.2 thereof in its entirety and inserting in lieu
thereof the following:
(m) maintain the Buildings (including, but not
limited to, the mechanical systems, plumbing, electrical,
wiring, appliances, fixtures, heating, air conditioning and
ventilating equipment, elevators, boilers, equipment, roofs,
structural members and furnaces) in substantially the same
condition as they are as of the last day of the Due Diligence
Period, reasonable wear and tear excepted (which maintenance
as to the STI Buildings may be made from funds in the "FF&E
Reserve" created pursuant to the HPT Lease);
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78. The Agreement is hereby amended by changing the
reference to "Closing Date" in Section 13.2(l) thereof to "Effective Closing
Date".
79. The Agreement is hereby amended by deleting the
initial paragraph of Section 13.3 thereof in its entirety and inserting in lieu
thereof the following:
If on or prior to the Effective Closing Date, any Hotel
suffers loss or damage on account of fire, flood, earthquake,
accident, act of war, civil commotion or other similar cause
or event occurring after the Effective Date such that STI has
the right to terminate the HPT Lease as to such Hotel or would
have such right if such Hotel were leased by STI pursuant to
the HPT Lease and ShoLodge has not repaired such damage on or
prior to the Effective Closing Date, Prime shall have the
right to terminate this Agreement as to such damaged Hotel
(and the Assets related thereto) only by giving written notice
to ShoLodge on or prior to the Effective Closing Date, in
which event (i) the Purchase Price shall be reduced by the
applicable amount as reflected on Exhibit O attached hereto
and incorporated herein by this reference, (such reduction to
come first from the cash portion of the Purchase Price
described in Section 6.1(a) and then from the ShoLodge debt
securities described in Section 6.1(b)) and Exhibit N shall be
appropriately modified, and (ii) if applicable, the "minimum
annual rent" described in Section 4.3 shall be reduced by the
applicable amount as specified on Exhibit P attached hereto
and incorporated herein by this reference. If Prime fails to
terminate this Agreement as to a damaged Hotel (and the Assets
related thereto) by giving timely written notice of
termination as provided herein or if a Hotel is damaged but
the damage is such that Prime does not have an option to
terminate this Agreement as to such damaged Hotel (and the
Assets related thereto), Prime shall consummate the
transactions contemplated hereunder (including, without
limitation, as contemplated herein with respect to such
damaged Hotel (and the Assets related thereto)), in which
event the applicable Prime Subsidiary, except as otherwise
provided in the HPT Lease, shall be entitled to all insurance
or other proceeds payable by reason of such loss or damage to
such damaged Hotel in excess of the amount spent by ShoLodge
or a ShoLodge Subsidiary to repair such damage (insurance or
other proceeds in such amount being payable to ShoLodge or
such ShoLodge Subsidiary), and, in addition, there shall be a
reduction in the Purchase Price by the amount by which any
deductibles under the policies of insurance covering such loss
or damage exceed the amount spent by ShoLodge or a ShoLodge
Subsidiary to repair such damage which is not reimbursed from
insurance or other proceeds. ShoLodge shall not permit STI to
terminate the HPT Lease due to any casualty without the prior
written approval of Prime, such written approval not to be
unreasonably withheld, delayed or conditioned. In the event of
a casualty to an Existing HPT Hotel such that Prime elects to
terminate this Agreement as to such Hotel, ShoLodge agrees
that, at Prime's request, ShoLodge shall cause STI to
terminate the HPT Lease with respect to such Hotel pursuant to
the provisions thereof. Further, prior to commencing the
repair of any damage following a casualty event which would
cost more than Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) in the aggregate to repair,
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ShoLodge shall cause STI to obtain the prior written consent
of Prime, not to be unreasonably withheld, conditioned or
delayed, to such repair.
80. The Agreement is hereby amended by deleting Section
13.4 thereof in its entirety and inserting in lieu thereof the following:
13.4 Condemnation. In the event of any actual or
threatened taking pursuant to the power of eminent domain of
all or any portion of any HPT Real Property or the Texas Real
Property such that STI has the right to terminate the HPT
Lease as to such HPT Real Property or would have such right if
such HPT Real Property or such Texas Real Property were leased
by STI pursuant to the HPT Lease or any proposed sale in lieu
thereof, ShoLodge shall give written notice thereof to Prime
promptly after ShoLodge learns or receives notice thereof, and
Prime shall have the right to terminate this Agreement as to
such HPT Real Property or such Texas Real Property (and the
Assets related thereto), as applicable, only by giving written
notice to ShoLodge on or prior to the date ten (10) days after
receipt of such written notice from ShoLodge, in which event
(i) if applicable, the Purchase Price shall be reduced by the
applicable amount as reflected on Exhibit O attached hereto
and incorporated herein by this reference (such reduction to
come first from the cash portion of the Purchase Price
described in Section 6.1(a) and then from the ShoLodge debt
securities described in Section 6.1(b)) and Exhibit N shall be
appropriately modified, and (ii) if applicable, the "minimum
annual rent" in Section 4.3 shall be reduced by the applicable
amount as specified on Exhibit P attached hereto and
incorporated herein by this reference. If Prime fails to
terminate this Agreement as to any such HPT Real Property or
any such Texas Real Property (and the Assets related thereto),
as applicable, by giving timely written notice of termination
as provided herein or if the taking or threatened taking of
such HPT Real Property or Texas Real Property, as applicable,
is such that Prime does not have an option to terminate this
Agreement as to such HPT Real Property or such Texas Real
Property (and the Assets related thereto), as applicable,
Prime shall consummate the transactions contemplated hereunder
(including, without limitation, as contemplated herein with
respect to such HPT Real Property or such Texas Real Property
(and the Assets related thereto), as applicable), in which
event the applicable Prime Subsidiary or Prime, as applicable,
except as otherwise provided in the HPT Lease, shall be
entitled to all proceeds, awards and other payments arising
out of such condemnation or sale (actual or threatened), but
there shall be no reduction in the Purchase Price. ShoLodge
shall not permit STI to terminate the HPT Lease due to any
taking pursuant to the power of eminent domain without the
prior written approval of Prime, such written approval of
Prime not to be unreasonably withheld, delayed or conditioned.
In the event of a taking with respect to any HPT Real
Property, ShoLodge agrees that, at Prime's request, ShoLodge
shall cause STI to terminate the HPT Lease with respect to
such HPT Real Property pursuant to the provisions thereof.
In the event Prime timely elects to terminate this
Agreement pursuant to the preceding paragraph with respect to
any HPT Real Property or any Texas Real
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Property (and the Assets related thereto), as applicable,
thereafter, ShoLodge and Prime shall be released and relieved
of all further obligations, liabilities and claims hereunder
with respect to such HPT Real Property or such Texas Real
Property (and the Assets related thereto), as applicable,
other than the performance by each party of its Post
Termination Obligations with respect to such HPT Real Property
or such Texas Real Property (and the Assets related thereto),
as applicable. Such termination shall not affect the rights
and obligations of the parties hereto with respect to the
other Assets.
81. The Agreement is hereby amended by changing the
reference to "Closing Date" in Section 15.11 thereof to "Effective Closing
Date".
82. The Agreement is hereby amended by deleting the words
"or the Development Site Purchase Price" from the second sentence of Section
15.18 thereof, by deleting the words "prior to the Closing Date" from the second
sentence in Section 15.18 thereof and inserting in lieu thereof the words "on or
prior to the Effective Closing Date" and by adding the word "Effective" before
the words "Closing Date" both places in the third sentence of Section 15.18
thereof.
83. The Agreement is hereby amended by changing the
reference to "Closing Date" in Section 15.20 thereof to "Effective Closing
Date".
84. The Agreement is hereby amended by deleting the
initial sentence of Section 15.21 thereof in its entirety and inserting in lieu
thereof the following:
The amount of the HPT Lease Security Deposit is Twenty-Five
Million Five Hundred Seventy-Five Thousand Two Hundred and
No/100 Dollars ($25,575,200.00).
85. The Agreement is hereby amended by deleting Section
17.1 thereof in its entirety and inserting in lieu thereof the following:
17.1 Closing. The Closing shall occur on such
date as the parties hereto may agree upon in writing for the
closing of the transactions contemplated hereby; provided,
however, that such date shall not be later than July 21, 2000;
provided, further, that if on such date the conditions
precedent to Closing set forth in Sections 10.6, 10.8, 11.6
and 11.9 have not been satisfied, ShoLodge, by written notice
to Prime, may postpone the Closing while ShoLodge diligently
and continuously attempts to satisfy such conditions
precedent, such postponed Closing to occur no later than the
earlier of (i) the date one hundred five (105) days after the
last day of the Due Diligence Period, and (ii) the date
fifteen (15) days after such conditions precedent are
satisfied.
86. The Agreement is hereby amended by deleting the
language "the HPT Estoppel Certificate," from Section 17.2(a) thereof and
inserting in lieu thereof the language "a copy as fully executed of the option
agreements whereby Landlord is granted options to exchange the Alpharetta
Property for the Mt. Laurel Property and the Albuquerque Property for the
Fairfax County Property as described in Section 10.6,".
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87. The Agreement is hereby amended by changing all
references to "Closing Date" in Section 17.3 thereof to "Effective Closing
Date".
88. The Agreement is hereby amended by deleting the
language "prior to the Closing Date" in the first sentence of Section 17.4 in
its entirety and inserting in lieu thereof the language "on or prior to the
Effective Closing Date" and changing the reference to "Closing Date" in the
second sentence of Section 17.4 thereof to "Effective Closing Date".
89. The Agreement is hereby amended by deleting Section
17.5 thereof in its entirety and inserting in lieu thereof the following:
17.5 Closing Costs and Expenses. Prime shall pay
or cause to be paid the premium for any title policy insuring
Prime or a Prime Subsidiary, as applicable, as to the Real
Property. All costs of recording the transfer and assignment
documents to Prime or a Prime Subsidiary, as applicable,
contemplated herein, including, without limitation, any and
all real estate transfer taxes, shall be paid in accordance
with local custom; provided, however, all recording costs,
including, without limitation, any and all real estate
transfer taxes, incurred in connection with the closing of (1)
the exchanges contemplated in the last sentence of Section
11.6, (2) the purchase by ShoLodge of any property put to
ShoLodge pursuant to Section 9(c) of the HPT Lease Amendment,
and (3) the purchase by Prime of any property put to Prime
pursuant to Section 9(c) of the HPT Lease Amendment and the
exchanges contemplated in Section 5.4, in each case shall be
paid by ShoLodge. ShoLodge shall also pay (i) all expenses
incurred by Landlord which Landlord requests to be reimbursed
by Prime or by ShoLodge to Landlord in connection with the
exchanges contemplated in the last sentence of Section 11.6,
Section 5.3 or Section 5.4, including, without limitation,
said expenses in connection with the amendment(s) to the HPT
Lease and (ii) all reasonable out-of-pocket expenses,
excluding attorneys fees and expenses, incurred by Prime or
Prime HPT Subsidiary in connection with the exchange
contemplated in the last sentence of Section 11.6 and the
purchase and exchange contemplated in Section 5.3 or Section
5.4. Except as set forth in this paragraph or as otherwise
expressly provided in this Agreement, each party shall be
responsible for the payment of its own attorney's fees,
copying expenses and other costs and expenses incurred in
connection with the negotiation of this Agreement and the
consummation of the transactions contemplated hereunder. The
provisions of this Section 17.5 shall survive the Closing and
any termination of this Agreement.
90. The Agreement is hereby amended by deleting the words
"and the adjacent bank property" from part (ii) of the initial sentence of
Section 17.6 thereof.
91. The Agreement is hereby amended by deleting Section
18.2 thereof in its entirety and inserting in lieu thereof the following:
18.2 Radius Restriction. For a twenty (20) year
period commencing on the Effective Closing Date, neither
ShoLodge nor any ShoLodge Affiliate shall
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own, operate or franchise any all-suites hotel substantially
similar in nature and kind to the AmeriSuites hotels to be
operated by Prime or a Prime Subsidiary, as applicable, as
contemplated in this Agreement anywhere within a certain
designated area of each Hotel, such area being, as to the
Existing HPT Hotels, the applicable "Restricted Trade Area" as
set forth in Exhibit B to the HPT Lease, and such area being,
as to the Texas Hotels, a three (3) mile radius of each such
Texas Hotel. The foregoing, however, shall not apply to the
Texas Hotels upon the expiration or earlier termination of the
Texas Lease, other than a termination due to a default by
Southeast, the hotels developed on the Development Sites or
the hotels obtained by ShoLodge or any ShoLodge Affiliate
pursuant to Section 5.2, Section 5.3 or Section 5.4 and the
foregoing shall not limit ShoLodge or any ShoLodge Affiliate
from (i) developing or constructing any all-suites hotel
substantially similar in nature and kind to the AmeriSuites
hotels contemplated herein within such restricted area as long
as such hotel is both (A) operated by someone other than
ShoLodge or a ShoLodge Affiliate, and (B) owned by someone
other than ShoLodge or a ShoLodge Affiliate, or (ii) owning,
operating or franchising (A) any "Shoney's" brand all-suites
hotel within such restricted area, or (B) any other hotel
within such restricted area as long as such other hotel is not
an all-suites hotel substantially similar in nature and kind
to the AmeriSuites hotels contemplated herein. The provisions
of this Section 18.2 shall survive the Closing. Prime shall
have the right to any remedies available to it at law or in
equity, including without limitation, injunction, in the event
ShoLodge or any ShoLodge Affiliate violates the covenant set
forth in this Section 18.2.
92. The Agreement is hereby amended by adding a new
Section 18.3, a new Section 18.4 and a new Section 18.5 at the end of Article
XVIII as follows:
18.3 HPT Lease Extension. In the event that the
HPT Lease extends beyond June 30, 2013 or in the event
Landlord or an Affiliate of HPT and the Prime HPT Subsidiary
or an Affiliate of Prime enter into a lease with respect to
all of the Existing HPT Hotels leased pursuant to the HPT
Lease immediately preceding the execution of such lease
(including any hotel exchanged for an Existing HPT Hotel as
contemplated in the last sentence of Section 11.6) which
extends beyond June 30, 2013, then on July 1, 2013, Prime
shall pay to ShoLodge an amount equal to Four Million Eight
Hundred Seventeen Thousand Eight Hundred Seventy and No/100
Dollars ($4,817,870.00); provided, however, in the event that
either (i) any portion of the HPT Lease Security Deposit which
relates to an Existing HPT Hotel (or a hotel exchanged for an
Existing HPT Hotel as contemplated in the last sentence of
Section 11.6) either (A) is returned to Prime or the Prime HPT
Subsidiary prior to June 30, 2013 for any reason or (B) is
applied against any obligation of the Prime HPT Subsidiary in
accordance with the terms of the HPT Lease prior to June 30,
2013 due to a default by the Prime HPT Subsidiary under the
HPT Lease, or (ii) any portion of the HPT Lease Security
Deposit is paid to ShoLodge and Prime pursuant to the last
sentence of the initial paragraph of Section 5.3 or the last
sentence of the third paragraph of Section 5.4, and the rent
payable under the Texas Lease is increased pursuant to Section
4.3 and there has been no default in the payment of such
increased rent
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under the Texas Lease, then the amount payable by Prime to
ShoLodge (as previously reduced, if applicable) shall be
reduced by an amount equal to the assumed earnings on the
portion of the HPT Lease Security Deposit returned, applied or
paid, as applicable, at nine percent (9%) interest compounded
monthly between the later of (x) July 1, 2011, or (y) the date
of such return, application or payment, as applicable, and
June 30, 2013. The calculation of the amount payable to
ShoLodge as set forth in the preceding sentence is described
in Exhibit T attached hereto and incorporated herein by this
reference. In the event of any conflict between the
calculation of the amount payable to ShoLodge as set forth in
(x) this Section 18.3 and (y) Exhibit T, the terms of Exhibit
T shall govern. The provisions of this Section 18.3 shall
survive the Closing. ShoLodge shall have any and all remedies
available to it at law or in equity in the event Prime
violates the provisions of this Section 18.3.
18.4 Option Agreements. From and after the
Closing Date, ShoLodge shall not enter into an amendment to
the option agreements whereby Landlord is given options to
exchange the Alpharetta Property for the Mt. Laurel Property
and the Albuquerque Property for the Fairfax County Property
as described in Section 10.6 unless such amendment shall have
been approved by Prime in writing prior to execution by
ShoLodge, such approval not to be unreasonably withheld,
delayed or conditioned. The provisions of this Section 18.4
shall survive the Closing.
18.5 Development Sites. From and after the
Closing Date, and until the release of the transfer documents
with respect to a particular Development Site from the escrow
described in Section 5.6, ShoLodge agrees with respect to each
such Development Site, as appropriate, that (x) it will not
sell any interest in the applicable Development Site
Subsidiary, (y) it will not allow an applicable Development
Site Subsidiary to sell its respective Development Site, and
(z) it will prevent each applicable Development Site
Subsidiary from encumbering its respective Development Site.
93. The Agreement is hereby amended by deleting the words
"or the Development Site Purchase Price" from subparagraph (c) of Section 19.2
thereof and by deleting the language "on and after the Closing Date" and "on or
after the Closing Date" in subparagraph (c) of Section 19.2 thereof and
inserting in lieu thereof the language "after the Effective Closing Date".
94. The Agreement is hereby amended by deleting the words
"or the Development Site Purchase Price" from subparagraph (c) of Section 19.3
thereof and by deleting the language "prior to the Closing Date" in subparagraph
(c) of Section 19.3 thereof and inserting in lieu thereof the language "prior to
the Effective Closing Date".
95. The Agreement is hereby amended by deleting the last
paragraph of Section 19.3 thereof in its entirety and inserting in lieu thereof
the following.
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Notwithstanding the foregoing, ShoLodge shall have no
obligation to indemnify Prime or the Prime Subsidiaries with
respect to any representation or warranty concerning the
condition of the STI Assets or the Texas Property or any
portion thereof to the extent such condition can be corrected
in the ordinary course (by maintenance, repair or replacement)
pursuant to the terms of the HPT Lease or the Texas Lease with
funds then in the "FF&E Reserve" created pursuant to the HPT
Lease or the Texas Lease, as applicable.
96. The Agreement is hereby amended by adding at the end
of Exhibit A thereto the pages X-00, X-00, X-00 xxx X-00 attached hereto and
incorporated herein by this reference.
97. The Agreement is hereby amended by deleting Exhibit B
thereto in its entirety and inserting in lieu thereof the following:
EXHIBIT B
[Intentionally Deleted]
98. The Agreement is hereby amended by deleting Exhibit E
thereto in its entirety and inserting in lieu thereof the Exhibit E attached
hereto and incorporated herein by this reference.
99. The Agreement is hereby amended by deleting Exhibit F
thereto in its entirety and inserting in lieu thereof the Exhibit F attached
hereto and incorporated herein by this reference.
100. The Agreement is hereby amended by deleting Exhibit G
thereto in its entirety and inserting in lieu thereof the Exhibit G attached
hereto and incorporated herein by this reference.
101. The Agreement is hereby amended by deleting Exhibit H
thereto in its entirety and inserting in lieu thereof the Exhibit H attached
hereto and incorporated herein by this reference.
102. The Agreement is hereby amended by deleting Exhibit I
thereto in its entirety and inserting in lieu thereof the Exhibit I attached
hereto and incorporated herein by this reference.
103. The Agreement is hereby amended by deleting Exhibit J
thereto in its entirety and inserting in lieu thereof the Exhibit J attached
hereto and incorporated herein by this reference.
104. The Agreement is hereby amended by deleting Exhibit N
thereto in its entirety and inserting in lieu thereof the Exhibit N attached
hereto and incorporated herein by this reference.
34
35
105. The Agreement is hereby amended by deleting Exhibit P
thereto in its entirety and inserting in lieu thereof the Exhibit P attached
hereto and incorporated herein by this reference.
106. The Agreement is hereby amended by adding at the end
thereof the Exhibit R, the Exhibit S and the Exhibit T attached hereto and
incorporated herein by this reference.
107. All provisions of the Agreement not in conflict with
this First Amendment shall remain in full force and effect.
108. Unless otherwise provided to the contrary herein, all
capitalized undefined terms used in this First Amendment shall have the meanings
assigned to them in the Agreement.
109. This First Amendment may be executed in multiple
counterparts and by different parties on separate counterparts, each of which
shall be deemed an original for all purposes, and all of which, when taken
together, shall constitute but one and the same First Amendment.
(signatures on following page)
35
36
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed, all as of the date first above written.
SHOLODGE, INC.
By: /s/ Xxxx Xxxxx
---------------------------------
Date: July 9, 2000 Title: President & CEO
------------------------------
PRIME HOSPITALITY CORP.
By: /s/ X. X. Xxxxxxxxxx
---------------------------------
Date: July 9, 2000 Title: President
------------------------------
37
EXHIBIT A
(attach pages X-00, X-00, X-00 xxx X-00)
00
XXXXXXX E
ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
("Assignment") is made and delivered on this _____ day of __________, 2000, by
SUITE TENANT, INC., a Tennessee corporation ("Assignor"), to XXXX ROCK HOLDING
CORP., a Delaware corporation ("Assignee").
WITNESSETH:
WHEREAS, by Lease Agreement dated as of November 19, 1997 (the
"Lease Agreement"), HPT Suite Properties Trust, a Maryland real estate
investment trust ("Lessor"), as landlord, leased to Assignor, as tenant, certain
parcels of land and improvements thereon as more particularly described in the
Lease Agreement; and
WHEREAS, the Lease Agreement was supplemented by those certain
letters dated November 19, 1997 (the "1997 Letters") among Hospitality
Properties Trust, Lessor, ShoLodge, Inc. and Assignor concerning a Declaration
of Restrictions recorded in the Xxxxx County, Indiana Recorder's Office as
Document Number 95-028307 and environmental matters related to certain property
in San Antonio, Texas, respectively; and
WHEREAS, the Lease Agreement was amended by that certain First
Amendment to Lease Agreement (the "First Amendment") dated as of March 5, 1999,
between Lessor and Assignor; and
WHEREAS, the Lease Agreement was further amended by that
certain Second Amendment to Lease Agreement and First Amendment to Incidental
Documents (the "Second Amendment") dated as of June 29, 1999, among Hospitality
Properties Trust, Lessor, ShoLodge, Inc. and Assignor; and
WHEREAS, the Lease Agreement was further supplemented by that
certain letter dated June 29, 1999 (the "1999 Letter") from Assignor to Lessor
concerning revenues from the sale of liquor; and
WHEREAS, the Lease Agreement was further amended by that
certain Third Amendment to Lease Agreement (the "Third Amendment") dated as of
March 3, 2000, between Lessor and Assignor; and
WHEREAS, the Lease Agreement was further amended by that
certain Fourth Amendment to Lease Agreement and Amendment to Incidental
Documents (the "Fourth Amendment") dated as of May 11, 2000, among Hospitality
Properties Trust, Lessor, ShoLodge, Inc. and Assignor (the Lease Agreement as
amended or supplemented by the 1997 Letters, the First Amendment, the Second
Amendment, the 1999 Letter, the Third Amendment and the Fourth Amendment is
collectively referred to herein as the "Lease"); and
WHEREAS, Assignor now desires to assign its interest under the
Lease to Assignee, and Assignee desires to assume all of Assignor's obligations
under the Lease which
39
first accrue from and after the date of this Assignment, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the mutual receipt
and legal sufficiency of which are hereby acknowledged, Assignor hereby grants,
assigns, transfers and sets over to Assignee all of Assignor's right, title and
interest in, to and under the Lease (including, without limitation, the
"Retained Funds" and the "FF&E Reserve" (both as described in the Lease)) and
the leasehold estate of Assignor as created by the Lease, together with any and
all easement rights of any kind appurtenant to and benefitting the premises
demised under the Lease and with all right, title and interest of Assignor in
and to any and all buildings, structures and improvements now or hereafter
erected on, over, upon or under the premises demised under the Lease and
together with all right, title and interest of Assignor in and to the "Fixtures"
and the "Leased Personal Property" (both as described in the Lease).
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, from the date hereof and for the rest of the term mentioned in the
Lease, subject to the terms, covenants, provisions and conditions of the Lease,
and subject to all existing title encumbrances of record.
Assignee hereby assumes and agrees to perform all obligations,
covenants and agreements of Assignor under the Lease arising after the Effective
Closing Date (as defined in the Purchase Agreement described below) and to be
bound by all the respective terms and provisions thereof after the Effective
Closing Date.
Assignor hereby agrees to indemnify and hold Assignee harmless
from and against any and all liability, loss, costs, damages and expenses,
including reasonable attorneys' fees, incurred by Assignee as a result of
Assignor's failure to perform its obligations under the Lease which arose on or
before the Effective Closing Date, including specifically, without limitation,
Assignor's failure to comply with Section 4.3.1 of the Lease, even if such
failure to comply is discovered after the Effective Closing Date, including,
without limitation, with respect to the premises demised under the Lease located
in Smyrna, Georgia, San Antonio (Riverwalk), Texas and Austin, Texas.
Assignee hereby agrees to indemnify and hold Assignor harmless
from and against any and all liability, loss, costs, damages and expenses,
including reasonable attorneys' fees, incurred by Assignor as a result of
Assignee's failure to perform its obligations under the Lease which arise after
the Effective Closing Date.
This Assignment is made pursuant to and subject to the terms
and provisions of that certain Sale and Purchase Agreement dated March 16, 2000,
as amended by that certain First Amendment to Sale and Purchase Agreement dated
as of ____________, 2000, both between ShoLodge, Inc. and Prime Hospitality
Corp. (collectively, the "Purchase Agreement"); provided, that the indemnities
provided in this Assignment shall not be subject to any limitations set forth in
the Purchase Agreement.
40
Assignor agrees to perform, execute and/or deliver or cause to
be performed, executed and/or delivered any and all such further acts and
assurances as Assignee may reasonably require to perfect Assignee's interest in
the Lease and the leasehold estate assigned by this Assignment.
Simultaneously with the execution and delivery of this
Assignment, Assignor has executed and delivered to Assignee various other
instruments of transfer and conveyance. Nothing herein contained shall be deemed
to limit or restrict the properties, assets and rights conveyed, assigned or
transferred to or acquired by Assignee by such other instruments.
This Assignment may be executed simultaneously in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Assignment
on the date set forth above.
ASSIGNOR:
SUITE TENANT, INC., a Tennessee
corporation
By:
------------------------------------
Title:
---------------------------------
ASSIGNEE:
XXXX ROCK HOLDING CORP.,
a Delaware corporation
By:
------------------------------------
Title:
---------------------------------
41
EXHIBIT F
XXXX OF SALE
[Suite Tenant, Inc.] [Southeast Texas Inns, Inc.] (herein
"Seller"), a Tennessee corporation having an office at 000 Xxxxx Xxxxx Xxxxx,
Xxxxxxxxxxxxxx, Xxxxxxxxx 00000, in consideration of Ten and No/100 Dollars
($10.00), receipt of which is hereby acknowledged, does hereby sell, assign,
transfer and set over to [Xxxx Rock Holding Corp.] [May-Ridge, L.P.] (herein
"Buyer"), a [Delaware corporation] [Delaware limited partnership] having an
office at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, all of Seller's right,
title and interest in and to the [STI] [Texas] Inventory and the [STI] [Texas]
Advance Payments (as those terms are defined in the Purchase Agreement described
below).
This Xxxx of Sale is made pursuant to and subject to the terms
and provisions of that certain Sale and Purchase Agreement dated March 16, 2000,
as amended by that certain First Amendment to Sale and Purchase Agreement dated
as of _____________, 2000, both between ShoLodge, Inc. and Prime Hospitality
Corp. (collectively, the "Purchase Agreement").
Seller agrees to perform, execute and/or deliver or cause to
be performed, executed and/or delivered any and all such further acts and
assurances as Buyer may reasonably require to more fully vest in Buyer title to
any and all of the properties transferred by this Xxxx of Sale.
Simultaneously with the execution and delivery of this Xxxx of
Sale, Seller has executed and delivered to Buyer various other instruments of
transfer and conveyance. Nothing herein contained shall be deemed to limit or
restrict the properties, assets and rights conveyed, assigned or transferred to
or acquired by Buyer by such other instruments.
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be
executed by an officer duly authorized the ____ day of __________, 2000.
[Suite Tenant, Inc.] [Southeast Texas Inns, Inc.], a
Tennessee corporation
By:
---------------------------------------------
Title:
-----------------------------------------
STATE OF ___________)
COUNTY OF __________)
The foregoing instrument was acknowledged before me this _____
day of __________, 2000, by ____________________, the __________ of [Suite
Tenant, Inc.] [Southeast Texas Inns, Inc.], a Tennessee corporation, on behalf
of the corporation.
-----------------------------------------------
Notary Public
My commission expires:
-------------------------
42
EXHIBIT G
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
FOR VALUE RECEIVED, [Suite Tenant, Inc.] [Southeast Texas
Inns, Inc.], a Tennessee corporation ("Assignor"), hereby conveys, assigns,
transfers and sets over unto [Xxxx Rock Holding Corp.] [May-Ridge, L.P.], a
[Delaware corporation] [Delaware limited partnership] ("Assignee"), to the
extent assignable, all the right, title and interest of Assignor, if any, in and
to the [STI] [Texas] Operating Agreements (as that term is defined in the
Purchase Agreement described below).
Assignee hereby accepts the foregoing conveyance, assignment
and transfer and hereby assumes all obligations of Assignor under the [STI]
[Texas] Operating Agreements accruing after the Effective Closing Date (as
defined in the Purchase Agreement described herein).
Assignor hereby agrees to indemnify and hold Assignee harmless
from and against any and all liability, loss, costs, damages and expenses,
including reasonable attorneys' fees, incurred by Assignee as a result of
Assignor's failure to perform its obligations under the [STI] [Texas] Operating
Agreements which arose on or before the Effective Closing Date.
Assignee hereby agrees to indemnify and hold Assignor harmless
from and against any and all liability, loss, costs, damages and expenses,
including reasonable attorneys' fees, incurred by Assignor as a result of
Assignee's failure to perform its obligations under the [STI] [Texas] Operating
Agreements which arise after the Effective Closing Date.
This Assignment is made pursuant to and subject to the terms
and provisions of that certain Sale and Purchase Agreement dated March 16, 2000,
as amended by that certain First Amendment to Sale and Purchase Agreement dated
as of July 9, 2000, both between ShoLodge, Inc. and Prime Hospitality Corp.
(collectively, the "Purchase Agreement"); provided, that the indemnities
provided in this Assignment shall not be subject to any limitations set forth in
the Purchase Agreement.
Assignor agrees to perform, execute and/or deliver or cause to
be performed, executed and/or delivered any and all such further acts and
assurances as Assignee may reasonably require to perfect Assignee's interest in
the properties assigned by this Assignment and Assumption of Contracts.
Simultaneously with the execution and delivery of this
Assignment and Assumption of Contracts, Assignor has executed and delivered to
Assignee various other instruments of transfer and conveyance. Nothing herein
contained shall be deemed to limit or restrict the properties, assets and rights
conveyed, assigned or transferred to or acquired by Assignee by such other
instruments.
This Assignment and Assumption of Contracts may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
43
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment and Assumption of Contracts the _____ day of _____________, 2000.
ASSIGNOR:
[Suite Tenant, Inc.] [Southeast Texas Inns, Inc.], a
Tennessee corporation
By:
-------------------------------------------------
Title:
---------------------------------------------
ASSIGNEE:
[Xxxx Rock Holding Corp.] [May-Ridge, L.P.], a
[Delaware corporation] [Delaware limited partnership]
By:
-------------------------------------------------
Title:
---------------------------------------------
44
EXHIBIT H
HPT LEASE AMENDMENT
(to be attached)
45
EXHIBIT H
to
First Amendment to Sale and Purchase Agreement
CONSENT TO ASSIGNMENT, FIFTH AMENDMENT TO LEASE
AGREEMENT AND AMENDMENT TO INCIDENTAL DOCUMENTS
THIS CONSENT TO ASSIGNMENT, FIFTH AMENDMENT TO LEASE AGREEMENT AND
AMENDMENT TO INCIDENTAL DOCUMENTS (this "AGREEMENT") is entered into as of the
9th day of July, 2000, by and among HPT SUITE PROPERTIES TRUST, a Maryland real
estate investment trust ("LANDLORD"), SUITE TENANT, INC., a Tennessee
corporation ("ASSIGNOR") and XXXX ROCK HOLDING CORP., a Delaware corporation
("ASSIGNEE").
WITNESSETH:
WHEREAS, Landlord and Assignor entered into a Lease Agreement, dated as
of November 19, 1997, as amended by two (2) letters dated November 19, 1997, the
First Amendment to Lease Agreement, dated as of March 5, 1999, the Second
Amendment to Lease Agreement and First Amendment to Incidental Documents (the
"SECOND AMENDMENT"), dated as of June 29, 1999, a letter dated June 29, 1999,
the Third Amendment to Lease Agreement dated as of March 3, 2000 and the Fourth
Amendment to Lease Agreement and Amendment to Incidental Documents (the "FOURTH
AMENDMENT"), dated as of May 11, 2000 (as so amended, the "LEASE"), a copy of
which Lease is attached hereto as Exhibit A hereto;
WHEREAS, Assignor simultaneously herewith has assigned, and Assignee
has assumed, the Lease, and Landlord is willing to consent to such assignment
and assumption subject to and upon the terms and conditions set forth in this
Agreement; and
WHEREAS, Assignee and Landlord desire to amend the Lease as herein
after provided (the Lease as amended by this Agreement, the "AMENDED LEASE").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. ASSIGNMENT AND ASSUMPTION. (a) Each of Assignor and Assignee
represents and warrants to Landlord that pursuant to a separate instrument (i)
Assignor has irrevocably and absolutely assigned all of Assignor's right, title
and interest in, to and under the Lease to Assignee effective as of the date
hereof, (ii) except as may be expressly provided herein, Assignee has
irrevocably and absolutely (A) assumed and agreed to discharge all of Assignor's
obligations under the Lease arising from and after the date hereof and (B)
agreed to be bound by all of the terms,
46
covenants and conditions of the Lease binding upon the Tenant thereunder from
and after the date hereof and (iii) such assignment and assumption are effective
as of the date hereof.
(b) Each of Assignee and Assignor also warrants and represents
that simultaneously herewith, (i) ShoLodge has assigned to Prime Hospitality
Corp. ("PRIME") all of ShoLodge's right, title and interest in and to the
Guaranty Deposit held under that certain Limited Guaranty Agreement, dated as of
November 19, 1997, made by ShoLodge for the benefit of Landlord and Hospitality
Properties Trust as amended and supplemented by two (2) letters dated November
19,1999, the Second Amendment and the Fourth Amendment (as so amended and
supplemented, the "GUARANTY") and (ii) Prime has contributed to Assignee all of
Prime's right to receive interest on the Guaranty Deposit pursuant to the terms
of this Agreement attributable to the Term.
(c) Landlord hereby consents to the such assignments and
assumption. This consent does not constitute consent to any further assignment,
mortgage, pledge, hypothecation, encumbrance or other transfer of the Guaranty
Deposit or the Amended Lease or any subletting or by Assignee, which shall, in
each case, require Landlord's further consent except to the extent such consent
is expressly not required pursuant to the terms of Section 16.3 of the Amended
Lease. Assignor and Assignee acknowledge and agree that other than for a copy of
the instruments of such assignment and assumption, Landlord has not been
provided with, reviewed or consented to any of the transactions between Assignor
(and its affiliates) and Assignee (and its affiliates). Accordingly, Landlord
shall in no way be deemed to have consented to, approved, bound by or subject to
such transactions or the terms thereof.
2. REPRESENTATIONS OF ASSIGNEE ETC. As an inducement to Landlord
to enter into this Agreement, Assignee represents and warrants to Landlord and
Assignor, as of the date hereof:
(a) STATUS AND AUTHORITY OF ASSIGNEE, ETC. Assignee is a
corporation duly organized and validly existing under the laws of its state of
incorporation and has all requisite power and authority (corporate and other)
under the laws of such state and its respective charter documents to own its
property and assets, to enter into and perform its obligations under the Amended
Lease and this Agreement and to transact the business in which it is engaged or
presently proposes to engage. Assignee is duly qualified in each jurisdiction in
which the nature of the business conducted or to be conducted by it requires
such qualification, except where failure to do so could not reasonably be
expected to have a material adverse effect.
(b) CORPORATE ACTION OF ASSIGNEE, ETC. Assignee has taken all
necessary action (corporate or other) under its charter documents to authorize
the assumption and performance of the Amended Lease and the execution, delivery
and performance of this Agreement, and the Amended Lease and this Agreement
constitute the valid and binding obligations and agreements of Assignee
enforceable in accordance with their terms, except as limited by bankruptcy,
insolvency, reorganization or similar laws of general application affecting the
rights and remedies of creditors.
(c) NO VIOLATIONS OF OTHER AGREEMENTS, ETC. None of the assumption
of the Amended Lease, the execution and delivery of this Agreement by Assignee,
and compliance
-2-
47
with the terms and provisions thereof and hereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any
property or assets of Assignee pursuant to the terms of any indenture, mortgage,
deed of trust, note, evidence of indebtedness, agreement or other instrument to
which Assignee may be a party or by which it or its property is bound, or
violate any provisions of laws, or any applicable order, writ, injunction,
judgment or decree of any court, or any order or other public regulation of any
governmental commission, bureau or administrative agency.
(d) JUDGMENTS; LITIGATION. There are no judgments presently
outstanding and unsatisfied against Assignee or any of its properties, and none
of Assignee or any of its properties are involved in any material litigation at
law or in equity, or any proceeding before any court, or by or before any
governmental or administrative agency, which litigation or proceeding could
materially and adversely affect Assignee, and no such material litigation or
proceeding is, to the knowledge of Assignee, threatened against Assignee, and no
investigation looking toward such a proceeding has begun or is contemplated.
(e) DISCLOSURE. To the knowledge of Assignee, neither this
Agreement nor any other document, certificate or statement furnished to Landlord
or its affiliates, by or on behalf of Assignee, in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading. To the knowledge of Assignee, there
is no fact or condition which materially and adversely affects the business,
operations, affairs, properties or condition of Assignee which has not been set
forth in this Agreement or in the other documents, certificates or statements
furnished to Landlord in connection with the transactions contemplated hereby.
(f) BROKERAGE. Assignee dealt with no broker, finder or like agent
in connection with this Agreement or the transactions contemplated hereby.
(g) SALE. Simultaneously with the execution and delivery hereof,
Assignee has acquired from Assignor all of Assignor's right, title and interest
in and to all tangible personal property used or useful in connection with the
operation of the Properties, the FF&E Reserve and the Retained Funds, free and
clear of all liens, claims and encumbrances other than those in favor of
Landlord.
(h) PRIME. All of the issued and outstanding stock of Assignee is
held by Prime, free and clear of all liens, claims, assertions and encumbrances
other than those in favor of Landlord. Assignee shall not have any other
outstanding stock.
(i) BANKRUPTCY REMOTE. Assignee has (i) not sought or consented to
any dissolution, winding up, liquidation, consolidation, merger or sale of all
or substantially all of its assets, (ii) not failed to correct any known
misunderstanding regarding its separate identity, (iii) maintained its accounts,
books and records separate from any other Person, (iv) maintained its books,
records, resolutions and agreements as official records, (v) not commingled its
funds or assets with those of any other Person and has held its assets in its
own name, (vi) conducted its business in its own name, (vii) maintained its
financial statements, accounting records and other entity
-3-
48
documents separate from any other Person, (viii) paid its own liabilities out of
its own funds and assets, (ix) observed all organizational formalities, (x) not
assumed or guaranteed or become obligated for the debts of any other Person or
held out its credit as being available to satisfy the obligations of any other
Person, (xi) not acquired obligations or securities of its members or
shareholders, (xii) allocated fairly and reasonably any overhead for shared
office space and used separate stationery, invoices and checks, (xiii) not
pledged any of its assets for the benefit of any other Person, (xiv) held and
identified itself as a separate and distinct entity under its own name and not
as a division or part of any other Person, (xv) not made any loans to any
Person, (xvi) not identified its members or shareholders, or any of its
Affiliates as a division or part of it, or (xvii) not entered into or become a
party to any transaction with its members or shareholders, or its Affiliates
except the Amended Lease, this Agreement and the Incidental Documents or in the
ordinary course of its business and, in each case, on terms which are fair and
are no less favorable to it than would be obtained in a comparable arm's length
transaction with an unrelated third party, (xviii) not filed a bankruptcy or
insolvency petition or otherwise instituted insolvency proceedings with respect
to itself or to any other entity in which it has a direct or indirect legal or
beneficial ownership interest, (xix) paid the salaries of its own employees and
maintained a sufficient number of employees in light of its business operations,
(xx) maintained adequate capital in light of its contemplated business
operations or (xxi) not engaged in any business activity other than the leasing,
operating and owning of the Leased Premises for its Permitted Use as stated in
its organizational documents.
Assignee's liability with respect to the representations and warranties
set forth in this Agreement shall survive the execution and delivery hereof.
3. REPRESENTATIONS OF ASSIGNOR ETC. As an inducement to Landlord
to enter into this Agreement, Assignor represents and warrants to Landlord and
Assignee, as of the date hereof:
(a) STATUS AND AUTHORITY OF ASSIGNOR, ETC. Assignor is a
corporation duly organized and validly existing under the laws of its state of
incorporation and has all requisite power and authority (corporate and other)
under the laws of such state and its respective charter documents to own its
property and assets, to enter into and perform its obligations under this
Agreement and to transact the business in which it is engaged or presently
proposes to engage. Assignor is duly qualified in each jurisdiction in which the
nature of the business conducted or to be conducted by it requires such
qualification, except where failure to do so could not reasonably be expected to
have a material adverse effect.
(b) CORPORATE ACTION OF ASSIGNOR, ETC. Assignor has taken all
necessary action (corporate or other) under its charter documents to authorize
the execution, delivery and performance of this Agreement, and this Agreement
constitutes the valid and binding obligation and agreement of Assignor
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization or similar laws of general application affecting the
rights and remedies of creditors.
(c) NO VIOLATIONS OF OTHER AGREEMENTS, ETC. Neither the execution
and delivery of this Agreement by Assignor, nor compliance with the terms and
provisions thereof, will result in
-4-
49
any breach of the terms, conditions or provisions of, or conflict with or
constitute a default under, or result in the creation of any lien, charge or
encumbrance upon any property or assets of Assignor pursuant to the terms of any
indenture, mortgage, deed of trust, note, evidence of indebtedness, agreement or
other instrument to which Assignor may be a party or by which it or its property
is bound, or violate any provisions of laws, or any applicable order, writ,
injunction, judgment or decree of any court, or any order or other public
regulation of any governmental commission, bureau or administrative agency.
(d) JUDGMENTS; LITIGATION. There are no judgments presently
outstanding and unsatisfied against Assignor or any of its properties, and none
of Assignor or any of its properties are involved in any material litigation at
law or in equity, or any proceeding before any court, or by or before any
governmental or administrative agency, which litigation or proceeding could
materially and adversely affect Assignor, and no such material litigation or
proceeding is, to the knowledge of Assignor, threatened against Assignor, and no
investigation looking toward such a proceeding has begun or is contemplated.
(e) DISCLOSURE. To the knowledge of Assignor, neither this
Agreement nor any other document, certificate or statement furnished to Landlord
or its affiliate by or on behalf of Assignor, in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading. To the knowledge of Assignor, there
is no fact or condition which materially and adversely affects the business,
operations, affairs, properties or condition of Assignor which has not been set
forth in this Agreement or in the other documents, certificates or statements
furnished to Landlord in connection with the transactions contemplated hereby.
(f) BROKERAGE. Assignor dealt with no broker, finder or like agent
in connection with this Agreement or the transactions contemplated hereby.
(g) SALE. Simultaneously with the execution and delivery hereof,
Assignee has acquired from Assignor all of Assignor's right, title and interest
in and to all tangible personal property used or useful in connection with the
operation of the Properties, the FF&E Reserve, and the Retained Funds, free and
clear of all liens, claims and encumbrances other than those in favor of
Landlord.
(h) THE LEASE. The Lease (a true, correct and complete copy of
which is attached to this Agreement as Exhibit A) is in full force and effect,
there is no Event of Default thereunder, there are no facts or circumstances
which with the giving of notice, the lapse of time or both would constitute such
an Event of Default and, to the knowledge of Assignor, Landlord has fully and
faithfully performed all of its obligations under the Lease and is not in
default or breach thereof. The amount of Retained Funds under the Lease is
$25,575,200.00 and the amount of the Guaranty Deposit is $14,000,000.
Assignor's liability with respect to the representations and warranties
set forth in this Agreement shall survive the execution and delivery hereof and
shall not be assumed by Assignee.
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50
4. REPRESENTATIONS OF LANDLORD. Landlord represents and warrants
to Assignee as of the date hereof that:
(a) STATUS AND AUTHORITY OF LANDLORD. Landlord is a Maryland real
estate investment trust duly organized, validly existing and in good standing
under the laws of the State of Maryland, and has all requisite power and
authority under the laws of such state and under its charter documents to enter
into and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. Landlord has duly qualified and is in good
standing as a trust or unincorporated business association in each jurisdiction
in which the nature of the business conducted by it requires such qualification,
except where failure to do so could not reasonably be expected to have a
material adverse effect.
(b) ACTION OF LANDLORD. Landlord has taken all necessary action to
authorize the execution, delivery and performance of the Amended Lease and this
Agreement, and each of them constitutes the valid and binding obligation and
agreement of Landlord, enforceable against Landlord in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors.
(c) NO VIOLATIONS OF AGREEMENTS. None of the execution, delivery
and performance of the Lease and this Agreement by Landlord, and compliance with
the terms and provisions hereof or thereof, will result in any breach of the
terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any
property or assets of Landlord pursuant to the terms of any indenture, mortgage,
deed of trust, note, evidence of indebtedness or any other agreement or
instrument by which Landlord or its property is bound, or violate any provisions
of laws, or any applicable order, writ, injunction, judgment or decree of any
court, or any order or other public regulation of any governmental commission,
bureau or administrative agency.
(d) JUDGMENTS; LITIGATION. There are no judgments presently
outstanding and unsatisfied against Landlord or any of its properties, and
neither Landlord nor any of its properties are involved in any material
litigation at law or in equity, or any proceeding before any court, or by or
before any governmental or administrative agency, which litigation or proceeding
could materially and adversely affect Landlord, and no such material litigation
or proceeding is, to the knowledge of Landlord, threatened against Landlord, and
no investigation looking toward such a proceeding has begun or is contemplated.
(e) THE LEASE. A true and complete copy of the Lease is attached
hereto as Exhibit A. Except as set forth in Exhibit A, the Lease has not been
modified or amended. Landlord has no knowledge of any Event of Default under the
Lease or of other circumstance which with notice, the lapse of time or both
would constitute such an Event of Default or the Lease not being in full force
and effect. The amount of Retained Funds is $25,575,200.00, and the amount of
the Guaranty Deposit is $14,000,000. Neither HPT nor Landlord has offset any
obligations of Assignor under the Lease against the Retained Funds or Guaranty
Deposit.
Landlord's liability with respect to the representations and warranties
set forth in this Agreement shall survive the execution and delivery hereof.
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5. ADDITIONAL ASSIGNEE OBLIGATIONS. Simultaneously with the
execution and delivery hereof, Assignee shall cause each of the following to be
delivered to Landlord, each of which shall be satisfactory in form and substance
to Landlord:
(a) A security agreement with respect to all tangible personal
property owned or used by Assignee and used in connection with the operation of
the Properties, such security agreement to create a first lien and security
interest in such property and to be otherwise in form and substance satisfactory
to Landlord (the "SECURITY AGREEMENT");
(b) Such financing statements as Landlord may reasonably require;
(c) An assignment and security agreement with respect to the FF&E
Reserve, such assignment and security agreement to create a first lien in the
FF&E Reserve (the "FF&E PLEDGE");
(d) A stock pledge agreement with respect to all of the issued and
outstanding stock of Assignee, together with such stock and a stock power in
blank, each executed and delivered by Prime, such stock pledge and security
agreement to create a first lien and security interest in such shares (the
"STOCK PLEDGE");
(e) A subordination agreement from Prime for the benefit of, and
in form and substance satisfactory to, Landlord (the "SUBORDINATION AGREEMENT");
(f) A Deposit Account Control Agreement in form and substance
satisfactory to the Landlord executed and delivered by Assignee and the bank at
which the FF&E Reserve is maintained;
(g) An opinion of Xxxxxxx Xxxx & Xxxxxxxxx with respect to the
bankruptcy remoteness of Assignee and the due execution, delivery and
enforceability of this Agreement and the other instruments and documents
executed in connection herewith by and against Assignee and Prime;
(h) Evidence regarding the due transfer of any liquor and other
licenses from Assignor to Assignee or, if any such transfer is still pending,
other evidence and assurances that the operations of the Properties and the
values thereof will not be adversely affected by reason of the pendency of such
transfer;
(i) Insurance Certificates evidencing that the insurance required
under the Lease is in full force and effect;
(j) Copies of all management agreements affecting the Properties
not previously delivered to Landlord;
(k) Tax lien and judgment searches with respect to Assignee and
Prime satisfactory to Landlord;
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(l) Copies of Assignee's Charter or Certificate of Incorporation,
certified by the Secretary of State of the state of its incorporation;
(m) Evidence of the due execution and delivery hereof and the
documents executed in connection hereunder by Assignee and Prime (including
certified by-laws and incumbency certificates);
(n) Evidence that Assignee is duly qualified to do business in
each jurisdiction in which any of the Properties is located;
(o) An Exchange Option Agreement to exchange the Property located
in Las Colinas, Texas (the "PRIME EXCHANGE PROPERTY"), for a new AmeriSuites
property currently under development in Utica, Michigan (the "MI OPTION"); and
(p) An amount equal to the Minimum Rent, Additional Rent and other
amounts payable under the Lease with respect to the month in which this
Agreement is executed which are not yet due and payable under the terms of the
Lease (without giving effect to the terms hereof). Assignee acknowledges and
agrees that "Total Hotel Sales" for the current Fiscal Year shall include all
revenue and receipt of every kind derived by Assignor or Assignee from operating
the Properties and the parts thereof.
6. ADDITIONAL ASSIGNOR OBLIGATIONS. Simultaneously with the
execution and delivery hereof, Assignor shall cause each of the following to be
delivered to Landlord, each of which shall be satisfactory in form and substance
to Landlord:
(a) Evidence that all management agreements between Assignor and
its affiliates with respect to any of the Properties have been terminated;
(b) An Exchange Option Agreement to exchange the property located
in Alpharetta, Georgia for a new AmeriSuites property to be built in Chantilly,
Virginia (the "VA OPTION");
(c) An Exchange Option Agreement to exchange the Property located
in Albuquerque, New Mexico for a new AmeriSuites property to be built in Mt.
Laurel, New Jersey (the "NJ OPTION"; the NJ Option, the MI Option and the VA
Option, each an "EXCHANGE OPTION", and collectively, the "EXCHANGE OPTIONS");
(d) A supplemental guaranty from Sholodge for the benefit of
Landlord (the "SUPPLEMENTAL GUARANTY"); and
(e) An opinion of Assignor's counsel with respect to the due
execution, delivery and enforceability of this Agreement, the VA Option, the NJ
Option and such supplemental guaranty.
7. ADDITIONAL OBLIGATIONS OF LANDLORD. Simultaneous herewith,
Landlord shall execute and deliver a partial release in favor of Assignor, in
form and substance satisfactory to Landlord.
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8. CERTAIN AMENDMENTS.
(a) The following definitions are hereby inserted in Article 1 of
the Lease:
"Independent Director" shall mean a natural person who is not at the
time of initial appointment and has not been at any time during the preceding
five (5) years: (a) a stockholder, director (other than independent director for
other Affiliates that are bankruptcy remote single purpose entities), officer,
employee, partner, member, trustee or beneficial-interest holder of Tenant or
any of its Affiliates; (b) a customer, supplier or other Person who derives in
any twelve month period in excess of $50,000 of its purchases or revenues from
its activities with Tenant or any of its Affiliates, stockholders, directors,
officers, employees, partners, managers, members, trustees or
beneficial-interest holders of any such customer, supplier or other Person s;
(c) a Person controlling or under common control with any Person described in
clause (a) or (b) above; or (d) a member of the immediate family of any Person
described in clause (a), (b) or (c) above. For the purpose of this definition
alone, an "Affiliate" of a Person is any other Person (i) which owns
beneficially, directly or indirectly, more than 5% of the outstanding shares of
the common stock or other voting securities of such first Person or which is
otherwise in control of such first Person, (ii) of which more than 5% of the
outstanding voting securities are owned beneficially, directly or indirectly, by
any Person described in clause (i) above, or (iii) which is controlled by, or
under common control with, any Person described in clause (i) above; the terms
"control" and "controlled by" shall have the meanings assigned to them in Rule
405 under the Securities Act of 1933, as amended, and the rules and regulations
of the Securities and Exchange Commission promulgated thereunder.
"Single Purpose Entity" shall mean a corporation, which, at all times
since its formation and thereafter, (i) was organized solely for the purpose of
(x) leasing the Leased Property for its Permitted Use or (y) guaranteeing the
Amended Lease, (ii) has not and will not engage in any business unrelated to
leasing the Leased Property for its Permitted Use or guaranteeing the Amended
Lease, (iii) has not and will not have any assets other than those related to
leasing the Leased Property for its Permitted Use or guaranteeing the Amended
Lease, (iv) except as otherwise expressly permitted by this Agreement, has not
and will not engage in, seek or consent to any dissolution, winding up,
liquidation, consolidation, merger, asset sale, or amendment of its articles of
incorporation, (v) has and will have at least one Independent Director, (vi)
the board of directors of such corporation may not take any action requiring the
unanimous affirmative vote of 100% of the members of the board of directors
unless all of the directors, including an Independent Director shall have
participated in such vote, (vii) has not and will not fail to correct any known
misunderstanding regarding the separate identity of such corporation, (viii)
without the unanimous consent of all of the directors and has not and will not
with respect to itself or to any other Person which it has a direct or indirect
legal or beneficial ownership interest (a) file or consent to a bankruptcy,
insolvency or reorganization petition or otherwise institute or consent to
insolvency proceedings or otherwise seek or consent to any relief under any laws
relating to the relief from debts or the protection of debtors generally; (b)
seek or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such Person or all or any
portion of such Person's properties; (c) make any assignment for the benefit of
such Person's creditors or (d) take any action that might cause such Person to
become insolvent, (ix) has maintained and will maintain its accounts, books and
records separate from any other Person, (x)
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has maintained and will maintain its books, records, resolutions and agreements
as official records, (xi) has not and will not commingle its funds or assets
with those of any other Person, (xii) has held and will hold its assets in its
own name, (xiii) has conducted and will conduct its business in its name other
than to operate, own or lease the Leased Property using a service xxxx and/or
under a trade name including the name "AmeriSuites", (xiv) has maintained and
will maintain its financial statements, accounting records, and other entity
documents separate from any other person, (xv) has paid and will pay its
liabilities, including salaries of any employees, out of its own funds and
assets, (xvi) has observed and will observe all corporate formalities, (xvii)
has maintained and will maintain an arms-length relationship with its
affiliates, (xviii) has no Indebtedness other than (1) amounts due under the
Amended Lease and (2) unsecured trade payables incurred in the ordinary course
of business relating to owning, leasing and operating the Leased Property which
do not exceed, at any time, a maximum amount of $1,000,000 and that are paid
within sixty (60) days of the date incurred, (xix) has not and will not assume
or guarantee or become obligated for the debts of any other Person or hold out
its credit as being available to satisfy the obligations of any other Person,
(xx) will not acquire obligations or securities of its partners, members or
shareholders, (xxi) has established and maintains an office though which it
conducts its business separate and apart from that of any of its Affiliates or
has allocated and will allocate fairly and reasonably shared expenses,
including, without limitation, shared office space and uses separate stationary,
invoices and checks, (xxii) except pursuant hereto and the Incidental Documents,
has not and will not pledge its assets for the benefit of any other Person,
(xxiii) has held and identified itself and will hold itself and its own name and
not as a division or part of any other Person and has not failed to correct any
known misunderstanding regarding its separate identity, (xxiv) has not made and
will not make loans to any Person, (xxv) has not and will not identify its
partners, members or shareholders, or any Affiliates of any of them as a
division or part of it, (xxvi) has not entered and will not enter into or be a
party to, any transaction with its partners, members, shareholders or its
Affiliates except in the ordinary course of its business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arms-length transaction with an unrelated third party, and (xxvii)
has maintained and will maintain adequate capital in light of its contemplated
business operations.
(b) The terms "Amended Lease" and "Prime" as used in the Lease
shall each have the meanings ascribed to each such term in this Agreement. The
term "Consent" as used in the Lease shall mean this Agreement.
(c) Section 2.3 of the Lease is hereby amended by deleting the
date "June 30, 2011" appearing therein and inserting the date "June 30, 2013" in
its place.
(d) Section 2.4 of the Lease is hereby amended by deleting "five
(5)" on the third line thereof and replacing it with "three (3)", and by
deleting "ten (10)" on that line and inserting "fifteen (15)" in its place.
(e) If any of the representations or warranties made herein by
Assignee shall be false or misleading in any material respect, the same shall
constitute a Event of Default under the Lease.
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(f) All notices required or desired to be given under the Lease to
Assignee shall be addressed as follows:
c/o Prime Hospitality Corp.
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx, Senior Vice President
Telecopy: (000) 000-0000
with a copy to:
Prime Law Department
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq., General Counsel
Telecopy: (000) 000-0000
(g) The term "Incidental Documents" as used in the Lease shall
mean the MI Option, the Guaranty, the Security Agreement, the FF&E Pledge,
Subordination Agreement and the Stock Pledge, as each of them may be amended
from time to time.
(h) The term "ShoLodge" as used in Sections 1.19, 12.1(k), 16.1,
17.2, 21.10 and 22.11 of the Lease shall mean Prime, and the term "ShoLodge" as
used in Section 12.1(e) of the Lease shall mean Prime or Guarantor.
(i) The term "ShoLodge Parties" as used in Section 12.1(f) of the
Lease shall mean Prime and/or Guarantor and the parenthetical "(as defined in
the Purchase Agreement)" in said Section is deleted.
(j) There is inserted in the Lease new Sections 12.1(l), 12.1(m),
12(n) and (o) as follows:
(l) should Tenant fail to fully and faithfully observe the
terms of Section 21.11; or
(m) should there occur any other event of circumstance which
constitutes an Event of Default under this Agreement pursuant
to the terms of the Amended Lease; or
(n) should any petition be filed by or against the guarantor
under the Guaranty (the "Guarantor") under the Federal
bankruptcy laws, or should any other proceeding be instituted
by or against Guarantor seeking to adjudicate Guarantor a
bankrupt or insolvent, or seeking liquidation, reorganization,
arrangement, adjustment or composition of Guarantor's debts
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a
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receiver, trustee, custodian or other similar official for
Guarantor or for any substantial part of the property of
Guarantor unless, in each instance, within 30 days thereafter,
Prime assumes the obligations of the Guarantor under the
Guaranty subject to (x) the limitation that the Guarantor's
liability thereunder is limited to $14,000,000 and (y) the
non-recourse provisions thereof; or
(o) should any petition be filed by or against Prime under the
Federal bankruptcy laws, or should any other proceeding be
instituted by or against Prime seeking to adjudicate Prime a
bankrupt or insolvent, or seeking liquidation, reorganization,
arrangement, adjustment or composition of Prime's debts under
any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or
other similar official for Prime or for any substantial part
of the property of Prime and such proceeding is not dismissed
within one hundred eighty (180) days after institution
thereof;
(k) On or before the later of March 31, 2001 and the date that is
nine (9) months after the date hereof, Assignee, at its own cost and expense,
shall cause the Leased Properties to be re-flagged as "AmeriSuites" hotels. All
costs and expenses of this re-flagging including, without limitation, new
signage, marketing materials and any new front desk system shall be paid by
Prime. No portion of such cost shall be paid for with funds from the FF&E
Reserve. With respect to each Property, upon such Property being so re-flagged:
(i) the phrase "Xxxxxx Suites" in Section 4.1.1(a) of the Lease shall be deemed
deleted and "AmeriSuites" is inserted in its place; and (ii) the third sentence
of Section 4.1.1(a) of the Lease shall be deemed deleted and replaced with:
Tenant shall operate the Leased Properties under the brand
name which Tenant and its Affiliated Persons operate most of
the other hotels owned, leased or otherwise operated by them
which are similar to the Leased Properties, which brand name,
as of the date of the Consent, is "AmeriSuites". Tenant shall
not change the brand of the Hotels without Landlord's prior
written consent, which consent shall not be unreasonably
withheld, delayed or conditioned, it being agreed that, it
shall be reasonable for Landlord to withhold its consent to a
brand name that is generally associated with lower prices than
the brand name under which the Hotels are then currently being
operated.
(l) There is inserted in the Lease a new Section 21.11 as follows:
21.11 Negative Covenants. Except as expressly permitted in
this Agreement, Tenant shall not, without the prior written
consent of the Landlord:
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a) purchase or lease any real property other than the
Leased Property, have any assets or liabilities other than
assets or liabilities derived from or related to the Leased
Property or engage in any business or undertake any activity
other than as permitted herein, including, without limitation,
the operation, as a lessee or otherwise, of any property other
than the Leased Property;
b) have any subsidiaries;
c) amend, supplement or otherwise modify its governing
instruments with respect to (i) bankruptcy remoteness, (ii)
being a Single Purpose Entity or (iii) the Independent
Director or remove or otherwise cease to have an Independent
Director as a director;
d) fail to do all things necessary to keep in full force
and effect its valid existence as a corporation and as a
Single Purpose Entity and to qualify to do business in each
jurisdiction in which such qualification is necessary to the
conduct of its business or to protect the validity and
enforceability of the Amended Lease and the Incidental
Documents, as the same may be amended or modified from time to
time;
e) fail to keep proper books of account and records in
which full, true and correct entries in accordance with GAAP
shall be made of all dealings and transactions in relation to
its business and activities;
f) fail to generally pay its debts as they become due;
g) take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts
set forth above.
(m) Landlord hereby approves of Ernst & Young as Assignee's firm
of independent certified public accountants.
(n) The definition of "Accounting Period" set forth in the Lease
is hereby deleted in its entirety and the following inserted in its place:
"ACCOUNTING PERIOD" shall mean each calendar month.
(o) The definition of "Base Year" set forth in the Lease is hereby
deleted in its entirety and the following inserted in its place:
"BASE YEAR" shall mean (i) with respect to each Property
described in Exhibit A-1 through A-14 other than any Property
located in Arizona, the 1998 Fiscal Year; (ii) with respect to
each Property described in Exhibit A-1 through A-14 and
located in Arizona, the twelve (12) Accounting Periods
commencing July 13, 1998; (iii) with respect to each Property
described in Exhibit A-15 through A-20, the 2000 Fiscal Year,
and (iv) with respect to each Property
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described in Exhibit A-21 through A-24, the twelve (12)
Accounting Periods commencing July 1, 2000.
(o) The definition of "Fiscal Year" set forth in the Lease is
hereby deleted in its entirety and the following inserted in its place:
"FISCAL YEAR" shall mean each calendar year.
(p) The definition of "Minimum Rent" set forth in the Lease is
hereby deleted in its entirety and the following inserted in its place:
"MINIMUM RENT" shall mean an amount equal to Two Million One
Hundred Thirty One Thousand Two Hundred Sixty Seven Dollars
($2,131,267) per Accounting Period.
(q) Exhibit C to the Lease is hereby deleted and Exhibit B to this
Agreement inserted in its place.
9. TRADE AREA RESTRICTIONS. Assignee acknowledges that currently
there are violations of Section 22.11 of the Lease with respect to the
Properties in Gwinnett, Georgia; Overland Park, Kansas; Charlotte, North
Carolina; Orlando, Florida; Las Colinas, Texas; Alpharetta, Georgia; Austin,
Texas; and Albuquerque, New Mexico. Landlord agrees to forbear from exercising
its rights and remedies in connection with such violations subject to the
following terms and conditions:
(a) On or before the earlier of March 31, 2001 and the date that
is nine (9) months after the date hereof, Assignee shall cause the now existing
AmeriSuites hotel in the trade area of the Property in Gwinnett, Georgia to be
re-flagged as a "Wellesley Inn" and at all times thereafter cause such hotel to
be operated in a manner and fashion which is not in violation of Section 22.11
of the Lease. Provided Assignee so timely re-flags such Property and causes the
same to be so operated, the violation of Section 22.11 with respect to such
Property resulting from such now existing AmeriSuites hotel shall be deemed
cured. If such property is not timely re-flagged as herein required, (i) the
same shall constitute an Event of Default under the Lease and (ii) the
Landlord's obligation to forbear from exercising its rights and remedies in
connection with such violations Section 22.11 pertaining to the Property in
Gwinnett, Georgia shall terminate.
(b) Landlord waives the violations of Section 22.11 of the Lease
resulting from the now existing AmeriSuite hotels in the designated areas for
the Properties located in: Xxxxxxxx Xxxx, Xxxxxx; Xxxxxxxxx, Xxxxx Xxxxxxxx;
Austin Texas; and Orlando, Florida; provided, however, such waiver shall not
alter or otherwise effect the Amended Lease which shall continue in full force
and effect with respect to any other violations of its terms; and
(c) If after December 31, 2001 there shall be (x) an Event of
Default (as defined in the applicable Exchange Options) or (y) other event or
circumstances which with the passage of time, the giving of notice or both would
constitute such an Event of Default (other than the failure to achieve
Completion (as defined in the applicable Exchange Option), in either case, on or
before the date initially specified as the Outside Date under the applicable
Exchange Options provided that Completion is achieved by the date to which
Outside Date may be extended
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59
pursuant to the terms of the applicable Exchange Options) under any of the
Exchange Options then the following shall apply:
(i) Landlord shall have the option (each, a "PUT OPTION") at
its election, in addition such rights and remedies as may be available
to it under the Amended Lease, the Exchange Options, at law, in equity
or otherwise, to require that Assignor, Assignee, Prime and ShoLodge
purchase, and each of them (jointly, severally and collectively, the
"PURCHASER") agrees to purchase the Property or Properties (each, A
"SALE PROPERTY") which were to be disposed of by Landlord pursuant to
the terms of the applicable Exchange Option (assuming Landlord had
exercised its option thereunder) without recourse or representation on
the part of Landlord except for those, if any, contained in the
applicable Exchange Option.
(ii) Landlord shall exercise such Put Option no later than
the later of (x) March 31, 2002 and (y) the date that is ninety (90)
days after Landlord has notice from Assignee that such Event of Default
or other event or circumstance has occurred. Such Put Option shall be
exercisable by Landlord if Assignee has given such notice to Landlord
regardless of any dispute by Assignor or ShoLodge regarding whether
such Event of Default or other event or circumstances has occurred.
(iii) Notwithstanding the foregoing, neither Assignor nor
ShoLodge shall be obligated to purchase the Prime Exchange Property.
(iv) The consummation of such sale of a Sale Property shall
take place on or before the day that is thirty (30) days after the day
on which notice is given by Landlord to Assignee and Assignor that
Landlord has elected to exercise the applicable Put Option at 10:00
a.m. at the offices of Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
(v) The purchase price for each Sale Property shall be as
specified in Exhibit C hereto which amount shall be paid by wire
transfer.
(vi) Simultaneously with such sale, the Amended Lease shall be
appropriately amended to eliminate from the Amended Lease the Sale
Property (and the rent attributed thereto) being disposed of by the
Landlord and to pro-rate the rents and other charges due under the
Amended Lease as of the date of the closing of such sale with respect
to such Sale Property.
(vii) In addition, simultaneously with such sale, (A) Assignee
and Purchaser shall make appropriate adjustment on account of amounts
contributed to, and expended from, the FF&E Reserve with respect to the
applicable Sale Property (and the references to such Sale Property
shall be deleted from the FF&E Pledge), (B) Landlord shall return to
Assignee a portion of the Retained Funds equal to the annual Minimum
Rent allocable to the Sale Property as set forth in Exhibit C hereto,
(C) Landlord shall release from the lien of the Security Agreement the
tangible personal property of Assignee located at the Sale Property and
(D) Landlord shall execute and deliver appropriate Uniform Commercial
Code terminations.
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(viii) Upon the consummation of the sale of the Sale Property
or if Landlord fails to timely exercise a Put Option, Landlord shall be
deemed to have waived (x) the applicable violation(s) of Section 22.11
of the Lease and (y) all Events of Default and Defaults resulting from
violations or defaults under the Exchange Option Agreement(s).
(ix) If the sale of a Sale Property is not consummated as
herein required, (A) the same shall constitute an Event of Default
under the Lease, (B) the Landlord's obligation to forbear from
exercising its rights and remedies in connection with such violations
Section 22.11 pertaining to such Sale Property shall terminate, and (C)
such violation shall also constitute an Event of Default under the
Lease.
(x) The terms of Section 11.7 of the Exchange Options are
incorporated herein by this reference and shall apply with equal force
to the Put Options, mutatis mutandis.
10. THE GUARANTY AND THE GUARANTY DEPOSIT. (a) Except as expressly
provided in Section 10(b) below, upon the expiration of the Amended Lease and
the payment and performance of each and every obligation of the Tenant to
Landlord and HPT under the Lease and Incidental Documents, provided no Event of
Default shall have occurred and be continuing, any unapplied balance of the
Guaranty Deposit shall be paid to Prime together with any accrued and unpaid
interest with respect thereto. In the event HPT and Landlord shall fail to so
pay any unapplied balance of the Guaranty Deposit and accrued interest to Prime
on the date due, HPT and Landlord shall thereafter pay Prime interest thereon at
the Overdue Rate until paid. Landlord shall credit accrued interest on the
Guaranty Deposit against the monthly Minimum Rent. Under no circumstance shall
ShoLodge or any of its Affiliated Persons be entitled to any of the Guaranty
Deposit or interest thereon.
(b) Provided that no (i) monetary Default, (ii) Default as to
which Notice thereof has been given to Tenant or (iii) Event of Default shall
have occurred and be continuing under the Amended Lease, (iv) Cash Flow (as
defined below) for a period of twelve (12) full consecutive Accounting Periods
equals or exceeds Thirty-Four Million Fifteen Thousand Dollars ($34,015,000)
with respect to such period, and (v) HPT and Landlord shall receive a schedule
evidencing the foregoing, in form and substance reasonably satisfactory to HPT
and Landlord prepared by a, so-called, "Big-Five" accounting firm or such other
certified public accountants as are approved by HPT and Landlord (such approval
not to be unreasonably withheld, delayed or conditioned), the Guaranty shall
terminate ten (10) Business Days after delivery to HPT and Landlord of the
financial statements described in clause (v) preceding, and HPT and Landlord
shall, within ten (10) Business Days after the written request of Prime, pay any
unapplied balance of the Guaranty Deposit to Prime, together with any accrued
and unpaid interest thereon.
(c) As used herein, "CASH FLOW" shall mean the net income (or
loss) of Tenant in connection with the operation of the Hotels before income
taxes, calculated in accordance with GAAP, plus (a) all extraordinary expense
items, (b) depreciation and amortization, (c) interest expense on Indebtedness
permitted under the Lease, (d) base management fees, incentive
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management fees, trade name fees, franchise fees, royalty fees and central
marketing fees paid to the Manager to the extent subordinate to payment of rent
pursuant to the Lease from and after the occurrence of an Event of Default minus
(e) required contributions to the FF&E Reserve and (f) all extraordinary income
items.
(d) Landlord and HPT hereby confirm that their recourse against
ShoLodge under the Guaranty shall be limited to the Guaranty Deposit and
interest thereon. ShoLodge hereby ratifies and confirms it obligations under the
Guaranty, and acknowledges and agrees that its obligations thereunder will not
be affected or impaired by: (i) the existence or invalidity of any other
guarantee or security or by any waiver, amendment, release or modification
thereof; (ii) any assignment or transfer in whole or in part of any of the
Guaranteed Obligations (as defined in the Guaranty) without notice to the
ShoLodge; (iii) waiver by HPT or Landlord or any holder of any of the Guaranteed
Obligations or by the holders of all of the Guaranteed Obligations of the
performance or observance by the Tenant or any other guarantor of any of the
agreements, covenants, terms or conditions contained in the Guaranteed
Obligations or the Transaction Documents (as defined in the Guaranty); (iv) any
indulgence in or the extension of the time for payment by the Tenant or any
other guarantor of any amounts payable under or in connection with the
Guaranteed Obligations or the Transaction Documents or any other instrument or
agreement relating to the Guaranteed Obligations or of the time for performance
by the Tenant or any other guarantor of any other obligations under or arising
out of any of the foregoing or the extension or renewal thereof; (v) the
modification or amendment (whether material or otherwise) of any duty, agreement
or obligation of the Tenant or any other guarantor set forth in any of the
foregoing including, without limitations, the modifications contemplated by this
Agreement, the Options or in any other document executed in connection herewith
or the Amended Lease; (vi) the voluntary or involuntary sale or other
disposition of all or substantially all the assets of the Tenant or any other
guarantor or insolvency, bankruptcy, or other similar proceedings affecting the
Tenant or any other guarantor or any assets of the Tenant or any such other
guarantor; or (vii) the release or discharge of the Tenant or any such other
guarantor from the performance or observance of any agreement, covenant, term or
condition contained in any of the foregoing without the consent of the holders
of the Guaranteed Obligations by operation of law. Landlord, HPT, Assignee and
Prime acknowledge and agree that under no circumstance shall ShoLodge or
Assignor ever be obligated to contribute additional funds hereunder or under the
Guaranty to be added to or to replenish the Guaranty Deposit, including, without
limitation, upon any use of the Guaranty Deposit, any portion thereof or any
interest thereon to cure any default under the Amended Lease or any failure by
HPT, Landlord or any successor holder of the Guaranty Deposit to deliver the
Guaranty Deposit or any interest thereon as required herein. Nothing contained
in the foregoing shall diminish or reduce Sholodge's obligations under the
Supplemental Guaranty.
(e) Sholodge, Landlord and HPT shall not amend or modify the
Guaranty without Prime's prior written consent; provided that the terms thereof
as modified hereby may be ratified and confirmed from time to time. Sholodge
hereby agreeing to execute and deliver such confirmations of the Guaranty as
Landlord may reasonably require in connection with the closings under the
Exchange Options and/or the Put Options. Further, Sholodge shall execute and
deliver such amendments to the Guaranty as Prime and Landlord shall request
provided that
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no such amendment modifies or diminishes the non-recourse nature of the
Guaranty as set forth in Section 10(d) above.
(f) If, in connection with the assignment in whole or in part of
the Amended Lease, HPT and Landlord or any successor holder of the Guaranty
Deposit shall transfer the Guaranty Deposit to a someone having a Net Worth of
not less than ten (10) times the unapplied balance thereof, Landlord and HPT or
any such successor shall be relieved of all of their obligations with respect to
the Guaranty Deposit and interest thereon. If such successor shall not satisfy
the aforesaid Net Worth requirement, Landlord and HPT shall, in a guaranty in
form and substance reasonably satisfactory to Prime, guaranty the payment of the
Guaranty Deposit and interest thereon in accordance with this Agreement. At the
time of any such assignment, Landlord and HPT shall cause such successor to
acknowledge in writing to ShoLodge and Assignor such successor's agreement to
the continued applicability of the provisions of Section 10(d).
(g) Provided that no Event of Default shall have occurred and be
continuing, in lieu of the interest otherwise due under the Guaranty during the
Term, HPT shall credit the Tenant with interest on any unapplied balance of the
Guaranty Deposit at a rate of 11.11% per annum. Such interest shall be credited
against the rent and other charges due under the Lease in arrears and pro rated
with respect to any partial month.
11. ADDITIONAL DEPOSIT. (a) Simultaneously with the execution and
delivery hereof, Prime has (i) deposited with Landlord the sum (the "ADDITIONAL
DEPOSIT") of Two Million Five Hundred Thousand Dollars ($2,500,000) as security
the payment and performance of each and every obligation of the Tenant to
Landlord under the Amended Lease and the Incidental Documents, whether now
existing or hereafter arising, and including, without limitation, the payment of
the full amount of the Rent payable under the Amended Lease and (ii) contributed
to Assignee the right to receive any interest due on the Additional Deposit
during the Term pursuant to the terms hereof. Landlord shall have no obligation
to hold the Additional Deposit in a segregated account and may commingle the
same with its general funds. Provided that no Event of Default shall have
occurred and be continuing, Landlord shall credit the Tenant with interest on
any unapplied balance of the Additional Deposit at a rate of 9% per annum. Such
interest shall be credited against the rent and other charges due under the
Amended Lease in arrears and pro rated with respect to any partial month. Upon
the earlier of the expiration of the Amended Lease and the payment and
performance of each and every obligation of the Tenant to Landlord and HPT under
the Lease and Incidental Documents and the termination of Prime's obligation to
keep the Additional Deposit with Landlord pursuant to Section 11(b) below,
provided no Event of Default shall have occurred and be continuing, Landlord
shall refund any unapplied balance of the Additional Deposit, together with any
accrued and unpaid (or uncredited) interest with respect thereto, to Prime. In
the event Landlord shall fail to refund any unapplied balance of the Additional
Deposit and accrued interest to Prime on the date due, Landlord shall thereafter
pay Prime interest thereon at the Overdue Rate until paid.
(b) Provided that no (i) monetary Default, (ii) Default as to
which Notice thereof has been given to Tenant or (iii) Event of Default shall
have occurred and be continuing under the
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Amended Lease, (iv) Cash Flow for a period of twelve (12) full consecutive
Accounting Periods equals or exceeds Thirty-Four Million Fifteen Thousand
Dollars ($34,015,000) with respect to such period and (v) Landlord shall receive
a schedule evidencing the foregoing, in form and substance reasonably
satisfactory to Landlord prepared by a, so-called, "Big-Five" accounting firm or
such other certified public accountants as are approved by Landlord (such
approval not to be unreasonably withheld, delayed or conditioned), the
obligation of Prime to keep the Additional Deposit with Landlord shall terminate
ten (10) Business Days after delivery to Landlord of the financial statements
described in clause (v) preceding, and Landlord shall, within ten (10) Business
Days after the written request of Prime, pay any unapplied balance of the
Additional Deposit to Prime, together with any accrued and unpaid interest
thereon.
(c) If, in connection with the assignment in whole or in part of
the Amended Lease, Landlord or any successor holder of the Additional Deposit
shall transfer the Additional Deposit to someone having a Net Worth of not less
than ten (10) times the unapplied balance thereof, Landlord or any such
successor shall be relieved of all of their obligations with respect to the
Additional Deposit and interest thereon. If such successor shall not satisfy the
aforesaid Net Worth requirement, Landlord shall, in a guaranty in form and
substance reasonably satisfactory to Prime, guaranty the payment of the
Additional Deposit and interest thereon in accordance with this Agreement.
12. MISCELLANEOUS.
(a) EXPENSES. Assignor and Assignee shall pay their and Landlord's
expenses incident to the negotiation, preparation and carrying out of this
Agreement, including, without limitation, all reasonable fees and expenses of
Landlord's counsel (collectively, "LANDLORD'S EXPENSES"). Assignor and Assignee
shall also pay the cost of all recording fees, transfer fees and other like
costs and expenses incident to this Agreement and the assignment of the Lease.
As between Assignor and Assignee, Landlord's Expenses shall be paid as they have
or may agree.
(b) BROKERAGE. Assignor and Assignee agree that Landlord is not
responsible for the payment of any commission or fees in connection with this
Agreement and they each jointly and severally agree to indemnify and hold
harmless Landlord from and against any claims, liabilities, losses or expenses,
including reasonable attorneys' fees, incurred by Landlord in connection with
any claims for commissions or fees by any broker or agent in connection with
this Agreement.
(c) PUBLICITY. The parties agree that no party shall, with respect
to this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated to any third party without the consent of the other
party, which consent shall not be unreasonably withheld, delayed or conditioned,
except as required by law or unless such action is taken based on advice of
counsel given in good faith. No party or its employees shall trade in the
securities of the parties hereto or their affiliates until a public announcement
of the transactions contemplated by this Agreement has been made.
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(d) PERFORMANCE ON BUSINESS DAYS. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
13. APPLICABLE LAW, ETC. This Agreement shall be interpreted,
construed, applied and enforced in accordance with the laws of The Commonwealth
of Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts, regardless of (i) where
this Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or (iii)
where any breach of any provision of this Agreement occurs, or any cause of
action otherwise accrues; or (iv) where any action or other proceeding is
instituted or pending; or (v) the nationality, citizenship, domicile, principal
place of business, or jurisdiction of organization or domestication of any
party; or (vi) whether the laws of the forum jurisdiction otherwise would apply
the laws of a jurisdiction other than The Commonwealth of Massachusetts; or
(vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as is provided by law; and the parties consent
to the jurisdiction of said court or courts located in The Commonwealth of
Massachusetts and to service of process by registered mail, return receipt
requested, or by any other manner provided by law.
14. MODIFICATION OF AGREEMENT. No modification or waiver of any
provision of this Agreement, nor any consent to any departure by any party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the others, and such modification, waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any party in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
By a separate instrument of even date herewith, Landlord has released Assignor
with respect to its obligations arising after the date hereof under the Amended
Lease to the extent assumed by Assignee. Accordingly, notwithstanding anything
contained to the contrary, the consent of Assignor shall not be required for any
further modifications of the Lease.
15. WAIVER OF RIGHTS. Neither any failure nor any delay on the
part of any party in exercising any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
right, power or privilege.
16. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby and this Agreement shall thereupon be reformed and construed and
enforced to the maximum extent permitted by law.
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17. ENTIRE CONTRACT. This Agreement, including all annexes and
exhibits hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and thereof and shall supersede and
take the place of any other instruments purporting to be an agreement of the
parties hereto relating to the transactions contemplated hereby, including,
without limitation, any letter of intent or commitment letter.
18. COUNTERPARTS; HEADINGS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but which,
when taken together, shall constitute but one instrument and shall become
effective as of the date hereof when copies hereof, which, when taken together,
bear the signatures of each of the parties hereto shall have been signed.
Headings in this Agreement are for purposes of reference only and shall not
limit or affect the meaning of the provisions hereof.
19. BINDING EFFECT. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
20. NONLIABILITY OF TRUSTEES, ETC. THE DECLARATION OF TRUST
ESTABLISHING LANDLORD, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO
(THE "DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HPT SUITE PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF LANDLORD SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY
OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, LANDLORD. ALL PERSONS
DEALING WITH LANDLORD, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF LANDLORD FOR
THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
21. AMENDMENT. Except as amended hereby, the Lease remains
unmodified. Landlord and Assignee hereof ratify and confirm the terms of the
Lease.
22. DEFINITIONS. Each capitalized term used but not defined in
this Agreement shall have the meaning ascribed thereto in the Amended Lease.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
under seal as of the date above first written.
HPT SUITE PROPERTIES TRUST
By:
---------------------------------
Its (Vice) President
SUITE TENANT, INC.
By:
---------------------------------
Its (Vice) President
XXXX ROCK HOLDING, CORP.
By:
---------------------------------
Name:
Title:
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PRIME HOSPITALITY CORP. hereby acknowledges it agrees to be bound by
the provisions of Section 22.11 of the Lease (as defined above), as amended by
the foregoing and the terms of Section 9 and Section 10(d) above.
PRIME HOSPITALITY CORP.
By:
---------------------------------
Name:
Title:
Dated: July 9, 2000
SHOLODGE, INC. hereby agrees to be bound by the terms of Section 9
above.
SHOLODGE, INC.
By:
---------------------------------
Name:
Title:
Dated: July 9, 2000
HOSPITALITY PROPERTIES TRUST hereby (I) consents to the assignment of
the Guaranty Deposit to Prime and the contribution of the right to receive
interest with respect thereto pursuant to the terms of this Agreement during the
Term to Assignee, but such consent does not constitute consent to any further
assignment, mortgage, pledge, hypothecation, encumbrance or other transfer of
the Guaranty Deposit, which shall, in each case, require the further consent of
Hospitality Properties Trust and (ii) agrees to be bound by the provisions of
Section 10 above.
HOSPITALITY PROPERTIES TRUST
By:
---------------------------------
Name:
Title:
Dated: July 9, 2000
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EXHIBIT A
The Lease
[See attached copy.]
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EXHIBIT B
ALLOCATION OF MINIMUM RENT
LOCATION STATE ALLOCABLE RENT PER ACCOUNTING
-------- ----- PERIOD
-----------------------------
Tampa FL 35,932
San Antonio Riverwalk TX 117,765
Fort Xxxxx IN 80,773
Albuquerque NM 95,984
El Paso TX 76,240
Hendersonville TN 62,597
Smyrna/Cumberland GA 79,988
Gwinnett/Duluth GA 94,419
Columbus OH 111,794
College Part (Atlanta AP) GA 85,973
Dallas Galleria TX 93,247
Austin TX 76,926
Tucson AZ 71,129
Tempe AZ 83,900
-----------------------------
Alpharetta GA 96,133
Las Colinas/Irving TX 102,667
Overland Park KS 103,600
Charlotte NC 95,200
Colorado Springs CO 102,667
Louddon Tech Ctr/Sterling VA 106,400
-----------------------------
Pine Xxxxx Shores NC 79,333
Indianapolis IN 88,200
Kansas City MO 91,467
Orlando FL 98,933
-----------------------------
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EXHIBIT C
SALE PROPERTY PURCHASE PRICES
Allocable Annual
Property Purchase Price Minimum Rent
-------- -------------- ------------
Alpharetta, GA $10,815,000 $1,153,600
Albuquerque, NM 12,093,955 1,151,805
Las Colinas/Irving, TX 11,550,000 1,232,000
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EXHIBIT I
ESCROW AGREEMENT
(to be attached)
73
EXHIBIT I
TO
FIRST AMENDMENT TO SALE AND PURCHASE AGREEMENT
ESCROW AGREEMENT
AGREEMENT (this "Agreement") made as of July ___, 2000, by and among
SHOLODGE, INC., a Tennessee corporation ("ShoLodge"), DELAWARE INNS, INC., a
Tennessee corporation ("New Jersey Owner"), VIRGINIA INNS, INC., a Tennessee
corporation ("Virginia Owner"), PRIME HOSPITALITY CORP., a Delaware corporation
("Prime"), and BANKERS TRUST COMPANY ("Escrowee"). Each of the New Jersey Owner
and the Virginia Owner will be referred to respectively in this Agreement as an
"Owner". Each of ShoLodge, New Jersey Owner, Virginia Owner and Prime will be
referred to respectively in this Agreement as an "Escrow Party".
WITNESSETH
WHEREAS, ShoLodge and Prime entered into that certain Sale and Purchase
Agreement dated March 16, 2000, as amended by First Amendment to Sale and
Purchase Agreement dated as of July 9, 2000 (as the same may be further amended
and supplemented and in effect from time to time, the "Purchase Agreement").
WHEREAS, on November 19, 1997, HPT Suite Properties Trust, a Maryland
real estate investment trust ("Landlord") and Suite Tenant, Inc., a Tennessee
corporation ("STI") entered into a Lease Agreement for the lease of several
hotel properties (the "Original Lease"). The Original Lease has been amended by
(i) two (2) letters dated November 19, 1997, (ii) First Amendment to Lease
Agreement dated as of Xxxxx 0, 0000, (xxx) Second Amendment to Lease Agreement
and First Amendment to Incidental Documents dated as of June 29, 1999, (iv)
letter dated June 29, 1999, (v) Third Amendment to Lease Agreement dated as of
March 3, 2000, (vi) Fourth Amendment to Lease Agreement and Amendment to
Incidental Documents dated as of May 11, 2000, and (vii) Consent to Assignment
and Fifth Amendment to Lease Agreement between Landlord, STI and Xxxx Rock
Holding Corp., a Delaware corporation, dated as of July 9, 2000 (the "Consent
Agreement") (the Original Lease, as so amended, the "Lease").
WHEREAS, pursuant to the Purchase Agreement, a subsidiary of Prime (the
"Prime HPT Subsidiary") is to acquire the leasehold positions of STI in several
Xxxxxx Suites hotels pursuant to the Lease, all as more particularly described
in the Purchase Agreement. The consent of the Landlord, Hospitality Properties
Trust, a Maryland real estate investment trust ("HPT"), is necessary for such
assignment of leasehold interests from STI to the Prime HPT Subsidiary. The
terms of HPT's consent are set forth in the Consent Agreement.
WHEREAS, each Owner is a wholly owned subsidiary of ShoLodge.
74
WHEREAS, (1) HPT, ShoLodge and Virginia Owner entered into an Exchange
Option Agreement dated as of July 9, 2000 (the "VA Option Agreement") for the
exchange of the Property (as defined in the Lease) located in Alpharetta,
Georgia (the "GA Property") for a new AmeriSuites hotel property currently under
development in Chantilly, Virginia (the "VA Option") and (2) HPT, ShoLodge and
New Jersey Owner entered into an Exchange Option Agreement dated as of July 9,
2000 (the "NJ Option Agreement") for the exchange of the Property located in
Albuquerque, New Mexico (the "NM Property") for a new AmeriSuites hotel property
currently under development in Mt. Laurel, New Jersey (the "NJ Option"). Each of
the VA Option and the NJ Option will be referred to respectively in this
Agreement as an "Option." The properties located in Chantilly, Virginia and Mt.
Laurel, New Jersey will be referred to in this Agreement respectively as the "VA
Property" and the "NJ Property." Each of the VA Property and the NJ Property
will be referred to respectively in this Agreement as an "Exchange Property,"
and, collectively, as the "Exchange Properties." Each of the GA Property and the
NM Property will be referred to respectfully in this Agreement as a "Landlord
Property", and, collectively, as the "Landlord Properties".
WHEREAS, in certain circumstances as set forth in the Consent
Agreement, Landlord has the right to require that Prime, Xxxx Rock Holding
Corp., ShoLodge and/or STI acquire any or all of those Landlord Properties which
were not disposed of by Landlord pursuant to the terms of the applicable Option
(the "Put Option").
WHEREAS, (i) if Landlord exercises the Put Option with regard to either
or both of the GA Property and/or the NM Property, ShoLodge and/or STI shall be
required to acquire from Landlord such Landlord Property so "put" (the "Put
Property") and (ii) if ShoLodge and/or STI fail to so acquire any Put Property
within 10 days of the date of Landlord's exercise of either Put Option and
otherwise in accordance with the terms of the Consent Agreement such that Prime
is required under the Consent Agreement to acquire, and in fact acquires, such
Put Property or otherwise pays the applicable put price as set forth in Exhibit
C to the Consent (the "Put Price"), ShoLodge shall, upon payment of the
applicable Put Price by Prime, (x) cause each Owner and each Owner shall,
promptly transfer to Prime or its designee all of its right, title and interest
in and to the Exchange Property owned by such Owner together with all fixtures,
machinery, equipment, furniture and other personal property attached thereon, by
directing the Escrowee to deliver the Escrowed Documents (hereinafter defined)
to Prime or its designee and (y) simultaneously pay the Exchange Shortfall
Amount (as defined in the Purchase Agreement), in exchange for the Put Property,
all as contemplated in the Purchase Agreement.
WHEREAS, pursuant to and as more particularly set forth in the Purchase
Agreement, ShoLodge is required to deposit into escrow (a) $7,000,000 for the
development of a hotel on the NJ Property and (b) $6,932,000 for the development
of a hotel on the VA Property.
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the mutual
receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Each of ShoLodge, New Jersey Owner and Virginia Owner hereby
acknowledges the statements set forth in the foregoing "Whereas" clauses, and
such statements are incorporated herein as representations and warranties of
ShoLodge, New Jersey Owner and Virginia Owner, as appropriate.
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2. New Jersey Owner hereby delivers to Escrowee:
(a) a special warranty deed conveying all of New Jersey
Owner's right, title and interest in and to the NJ
Property to an entity whose identity shall be left in
blank and whose identity shall be determined and
inserted therein as provided in paragraph 5 herein
(the "NJ Deed"); and
(b) a xxxx of sale conveying all of New Jersey Owner's
right, title and interest in and to all fixtures,
machinery, equipment, furniture and other personal
property attached to the NJ Property to an entity
whose identity shall be left in blank and whose
identity shall be determined and inserted therein as
provided in paragraph 5 herein (the "NJ Xxxx of
Sale", and together with the NJ Deed, the "NJ
Documents").
3. Virginia Owner hereby delivers to Escrowee:
(a) a special warranty deed conveying all of Virginia
Owner's right, title and interest in and to the VA
Property to an entity whose identity shall be left in
blank and whose identity shall be determined and
inserted therein as provided in paragraph 5 herein
(the "VA Deed"); and
(b) a xxxx of sale conveying all of Virginia Owner's
right, title and interest in and to all fixtures,
machinery, equipment, furniture and other personal
property attached to the VA Property to an entity
whose identity shall be left in blank and whose
identity shall be determined and inserted therein as
provided in paragraph 5 herein (the "VA Xxxx of
Sale", and together with the VA Deed, the "VA
Documents; the NJ Documents and the VA Documents,
collectively, the "Escrowed Documents").
4. (a) ShoLodge hereby delivers, or causes the appropriate Owner
to deliver, to Escrowee (i) the amount of $6,932,000 by wire transfer of
immediately available funds for the construction of a hotel on the VA Property
(the "VA Deposit") and (ii) the amount of $7,000,000 by wire transfer of
immediately available funds for the construction of a hotel on the NJ Property
(the "NJ Deposit", and together with the VA Deposit, the "Deposit").
(b) Receipt by Escrowee of the VA Deposit and the NJ Deposit is
hereby acknowledged. Escrowee shall invest the VA Deposit in an interest bearing
bank or money market account at Escrowee, account titled Prime/ShoLodge Virginia
Escrow Account (the "VA Account"). Escrowee shall invest the NJ Deposit in an
interest bearing bank or money market account at Escrowee, account titled
Prime/ShoLodge New Jersey Escrow Account (the "NJ Account; each of the NJ
Account and the VA account, respectively, a "Deposit Account"). Escrowee shall
keep the Deposit, if any, invested in a manner such that the Deposit shall be
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available for release in accordance with the terms of this Agreement. Escrowee
shall bear no liability for any loss occasioned by investment of any Deposit as
herein provided, by any delays in investing or reinvesting any Deposit or by any
failure to achieve the maximum possible yield from any Deposit. The accounts in
which the Deposit is held need not be insured.
(c) The Deposit, if any, plus any interest earned from the
investment thereof in accordance with the terms of this Agreement, less any and
all out-of-pocket transaction or account fees, costs, expenses or charges,
including, without limitation, brokerage and custodial fees, attributable to
such investment (such net sum hereinafter called the "Invested Cash Deposit"),
shall be delivered by Escrowee in accordance with the terms of paragraph 6
hereof, or, if permitted pursuant to paragraph 8 hereof, to a substitute
impartial party or, to a court having appropriate jurisdiction, in accordance
with the terms of this Agreement. Delivery of the Invested Cash Deposit, if any,
in accordance with the terms of this Agreement shall be made by a bank check or
by wire transfer (limited to one per Draw Request), at the option of the party
which is to receive the Invested Cash Deposit pursuant to terms of this
Agreement. Escrowee agrees, upon request (but not more frequently than once per
month), to provide the parties with its computation of any Invested Cash
Deposit. Notwithstanding anything in this Agreement to the contrary, it shall be
conclusively presumed that: (i) any and all investments made by Escrowee in bank
or money market accounts of the Escrowee are authorized and permitted under the
terms of this Agreement; (ii) the parties hereto have agreed to and concurred in
all such investments; (iii) by so investing the Deposit, Escrowee has complied
with its investment obligations pursuant to this Agreement; and (iv) Escrowee's
computation of any Invested Cash Deposit is correct in the absence of manifest
error.
5. The Escrowed Documents shall be released as follows:
(a) If Escrowee receives written notice from ShoLodge and Prime
that Landlord has waived its rights under the NJ Option or that the NJ Option
has terminated in accordance with the terms of the NJ Option Agreement, the NJ
Documents shall be promptly returned by Escrowee to the New Jersey Owner.
(b) If Escrowee receives written notice from ShoLodge and Prime
that Landlord has waived its rights under the VA Option or that the VA Option
has otherwise terminated in accordance with the terms of the VA Option
Agreement, the VA Documents shall be promptly returned by Escrowee to the
Virginia Owner.
(c) If Escrowee receives written notice from ShoLodge that
Landlord has exercised the NJ Option and that a closing with respect to such
Option is to occur on a date no later than seven (7) days subsequent to the date
of receipt of such notice, Escrowee shall promptly deliver the NJ Documents to
ShoLodge to hold in escrow until such closing shall occur under the NJ Option;
provided, however, that if such closing shall fail to occur for any reason,
ShoLodge shall promptly return the NJ Documents to Escrowee to hold in escrow
pursuant to the terms of this Agreement, including, without limitation, this
paragraph 5(c).
(d) If Escrowee receives written notice from ShoLodge that
Landlord has exercised the VA Option and that a closing with respect to such
Option is to occur on a date no later than seven (7) days subsequent to the date
of receipt of such notice, Escrowee shall
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promptly deliver the VA Documents to ShoLodge to hold in escrow until such
closing shall occur under the VA Option; provided, however, that if such closing
shall fail to occur for any reason, ShoLodge shall promptly return the VA
Documents to Escrowee to hold in escrow pursuant to the terms of this Agreement,
including, without limitation, this paragraph 5(d).
(e) If Escrowee receives written notice from Prime that Landlord
has exercised the Put Option with regard to any Landlord Property and Prime or
Prime HPT Subsidiary has paid the applicable Put Price for the sale of such
Landlord Property to Prime, Escrowee shall promptly (i) insert in each of the
Escrowed Documents, in the appropriate blanks and as directed by Prime, the name
and address of Prime or its designee and (ii) deliver the Escrowed Documents to
Prime or its designee.
(f) Notwithstanding anything to the contrary contained in this
Agreement, if Escrowee shall receive written instructions signed by both Prime
and ShoLodge, designating the party to whom any or all of the Escrowed Documents
are to be delivered and the time and place where and the manner in which the
same is to be delivered, Escrowee shall use reasonable efforts to deliver the
same in accordance with such written instructions, such delivery to be made by
Federal Express, overnight delivery, against a signed receipt therefor from such
designated party (or, if Federal Express does not offer such service, by a
nationally recognized next day courier which provides such service), or, if so
requested by Prime and ShoLodge and at ShoLodge's cost and expense, by messenger
against a signed receipt therefor from such designated party.
(g) Upon the release of the any of the Escrowed Documents in
accordance with this paragraph 5, Escrowee shall thereupon be relieved of and
discharged and released from any and all liability hereunder with respect to the
Escrowed Documents so released.
(h) If Escrowee receives written notice from Prime that there has
occurred any Event of Default described in Subsection (iv), (v), (vi), (vii),
(viii), (ix) or (xiii) of Section 10(a) of the NJ Option Agreement or the VA
Option Agreement, Escrowee shall promptly deliver the balance of the NJ Deposit
or the VA Deposit, as applicable, to Prime. If either the NJ Deposit or the VA
Deposit is delivered to Prime pursuant to the terms of the preceding sentence,
Excrowee shall not release the NJ Documents or the VA Documents, as applicable,
until such time as Prime delivers to Escrowee a notice that all of the
requirements of Section 8.6(h) of the VA Option Agreement or the NJ Option
Agreement, as applicable, have been satisfied (a "Notice of Completion"); and
following receipt of a Notice of Completion, Escrowee shall release the NJ
Documents or the VA Documents, as applicable, only when required pursuant to the
terms of Subsections (a) through (g) of this Section 5.
6. Subject to paragraph 5(h) above, the Deposit (to the extent
then held by Escrowee) shall be disbursed as follows:
(a) Subject to the terms of paragraph 7 hereof, promptly following
the receipt by Escrowee of a substantially completed, executed and acknowledged
AIA Document G-702, certified by the architect overseeing construction of the
hotel on the NJ Property, together with a substantially completed AIA Document
G-703, requesting disbursement of the NJ Deposit to Xxxxx and Associates, Inc.
("Xxxxx") (each such request being a "NJ Draw Request"), Escrowee shall promptly
release to Xxxxx from the NJ Deposit the amount set forth in such NJ Draw
Request.
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(b) Subject to the terms of paragraph 7 hereof, promptly following
the receipt by Escrowee of a substantially completed, executed and acknowledged
AIA Document G-702, certified by the architect overseeing construction of the
hotel on the VA Property, together with a substantially completed AIA Document
G-703, requesting disbursement of the VA Deposit to Xxxxx (each such request
being a "VA Draw Request"), Escrowee shall promptly release to Xxxxx from the VA
Deposit the amount set forth in such VA Draw Request.
(c) If the NJ Documents are released to New Jersey Owner pursuant
to the terms of paragraph 5(a) hereof, then the balance of the NJ Deposit shall
promptly be released by Escrowee to an account designated by ShoLodge.
(d) If the VA Documents are released to Virginia Owner pursuant to
the terms of paragraph 5(b) hereof, then the balance of the VA Deposit shall
promptly be released by Escrowee to an account designated by ShoLodge.
(e) If the NJ Documents are released to HPT pursuant to the terms
of paragraph 5(c) hereof, then the balance of the NJ Deposit shall promptly be
released by Escrowee to an account designated by ShoLodge.
(f) If the VA Documents are released to HPT pursuant to the terms
of paragraph 5(d) hereof, then the balance of the VA Deposit shall promptly be
released by Escrowee to an account designated by ShoLodge.
(g) If the NJ Documents are released to Prime pursuant to the
terms of paragraph 5(e) hereof, then the balance of the NJ Deposit shall
promptly be released by Escrowee to an account designated by Prime.
(h) If the VA Documents are released to Prime pursuant to the
terms of paragraph 5(e) hereof, then the balance of the VA Deposit shall
promptly be released by Escrowee to an account designated by Prime.
(i) Notwithstanding anything to the contrary contained in this
Agreement, if Escrowee shall receive written instructions signed by both Prime
and ShoLodge, designating the party to whom the balance of the Invested Cash
Deposit is to be delivered and the time and place where and the manner in which
the same is to be delivered, Escrowee shall use reasonable efforts to deliver
the same in accordance with such written instructions, and if such disbursement
of the balance of the Invested Cash Deposit is to be made by bank check, such
delivery shall be made by Federal Express, overnight delivery, against a signed
receipt therefor from such designated party (or, if Federal Express does not
offer such service, by a nationally recognized next day courier which provides
such service), or, if so requested by Prime and ShoLodge and at ShoLodge's cost
and expense, by messenger against a signed receipt therefor from such designated
party.
(j) Upon the release of the entire Invested Cash Deposit in
accordance with this paragraph 6, Escrowee shall thereupon be relieved of and
discharged and released from any and all liability hereunder with respect to the
Invested Cash Deposit.
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7. (a) Sholodge shall deliver to Escrowee, and Escrowee
shall disburse funds from the Deposit pursuant to, no more than (i) one (1) NJ
Draw Request and (ii) one (1) VA Draw Request during any thirty (30) period.
(b) Draw Requests shall be received by Escrowee not less
than five (5) business days prior to the date on which on which the requested
disbursement is to be made. The minimum amount of any Draw Request shall be the
lesser of (i) $50,000 and (ii) the balance of the applicable Deposit Account.
(c) Escrowee shall not disburse any funds from the NJ
Deposit or the VA Deposit pursuant to a Draw Request (with each Draw Request to
be treated separately) unless ShoLodge has delivered to Escrowee and Prime:
1. Interim lien waivers from (i) Xxxxx and (ii) any
subcontractor which is party to a subcontract worth
in excess of $70,000.00 (each a "Major
Subcontractor") to whom funds were disbursed pursuant
to any previous Draw Request with respect to the
applicable Exchange Property; and
2. a certificate by the architect overseeing the
construction of the hotel on the applicable Exchange
Property setting forth the amount required to
complete the construction of such hotel (each, an
"Architect's Certificate").
(d) Escrowee shall withhold ten (10%) of the amount being
requested pursuant to any Draw Request (with respect such amounts withheld from
NJ Draw Requests, the "NJ Retainage", and with respect to such amounts withheld
from VA Draw Requests, the "VA Retainage") until such time that the applicable
architect delivers to Escrowee and Prime a certificate that eighty (80%) percent
of the construction of the applicable hotel has been completed (a "Retainage
Release Certificate"). Escrowee shall disburse the NJ Retainage to ShoLodge upon
the receipt by Escrowee of (a) a Retainage Release Certificate with respect to
the hotel being constructed on the NJ Property, (b) a fully executed AIA
Document G-704, and (c) lien waivers from Xxxxx and all Major Subcontractors
performing work at such hotel for whom payment is requested and to whom funds
were disbursed pursuant to any previous NJ Draw Request and from whom Escrowee
has not received lien waivers for all work for which funds were so previously
disbursed. Escrowee shall disburse the VA Retainage to ShoLodge upon the receipt
by Escrowee of (a) a Retainage Release Certificate with respect to the hotel
being constructed on the VA Property, (b) a fully executed AIA Document G-704,
and (c) lien waivers from Xxxxx and all Major Subcontractors performing work at
such hotel for whom payment is requested and to whom funds were disbursed
pursuant to any prior VA Draw Request and from whom Escrowee has not received
lien waivers for all work for which funds were so previously disbursed.
(e) If any Architect's Certificate indicates that the
cost to complete construction of the applicable hotel is in excess of the
balance of the NJ Deposit or VA Deposit, as applicable, no funds shall be
released pursuant to such Draw Request until ShoLodge delivers to both Escrowee
and Prime proof of payment of such excess. Escrowee may (but shall not be
obligated to), within two (2) business days of receipt of such proof of payment
of such excess,
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request that Prime deliver notice to Escrowee of any objection(s) to such proof
of payment; provided, however, Prime shall be deemed to have approved of such
proof of payment should Escrowee not receive from Prime within two (2) business
days of Escrowee's receipt of such proof a notice from Prime setting forth
Prime's objection(s) thereto.
(f) Upon delivery of any Draw Request to Escrowee by
ShoLodge, ShoLodge shall simultaneously deliver to Prime by overnight courier,
to the attention of the persons set forth in paragraph 14 hereof, a copy of such
Draw Request, together with copies of the accompanying documentation required
pursuant to this paragraph 7. Escrowee may (but shall not be obligated to),
within four (4) business days of receipt of a Draw Request, request that Prime
deliver notice to Escrowee of any objection(s) to such Draw Request; provided,
however, Prime shall be deemed to have approved of a Draw Request should
Escrowee not receive from Prime within four (4) business days of Escrowee's
receipt of such Draw Request a notice from Prime setting forth Prime's
objection(s) thereto. Escrowee may assume that ShoLodge has performed in
accordance with the provisions of the first sentence of this paragraph 7(f) and
made the other deliveries to Prime required hereby.
8. In the event that: (i) Escrowee shall not have
received instructions pursuant to this Agreement on or prior to December 31,
2002; (ii) Escrowee shall receive contrary instructions from the parties hereto;
(iii) any dispute shall arise as to any matter arising under this Agreement; or
(iv) there shall be any uncertainty as to the meaning or applicability of any of
the provisions hereof, Escrowee's duties, rights or responsibilities hereunder
or any written instructions received by Escrowee pursuant hereto, Escrowee may,
at its option (x) at any time thereafter, deposit the funds and/or instruments
then being held by it in escrow into any court having appropriate jurisdiction,
(y) at any time thereafter, take such affirmative steps as it may elect in order
to substitute an impartial party reasonably agreed to by Prime and ShoLodge to
hold any and all escrowed funds and/or instruments or (z) hold such funds and/or
instruments until such time as Escrowee receives written instructions signed by
Prime and ShoLodge or a court order which directs Escrowee to deliver the funds
and/or instruments to a specified person or entity, in which case Escrowee shall
comply with such written instructions (if reasonable) or court order, as
applicable, and upon making such deposit, delivery or election pursuant to this
paragraph 8, Escrowee shall thereupon be relieved of and discharged and released
from any and all liability hereunder and with respect to the escrowed funds
and/or instruments or any portion of any of them so deposited or delivered.
9. Escrowee shall be entitled to assume and rely upon
the authenticity of any signature and the genuineness and/or validity of any
writing received by Escrowee pursuant to or otherwise relating to this
Agreement.
10. This Agreement shall expire on the second anniversary
of the date of this Agreement (the "Expiration Date"). Without limiting any
other provisions of this Agreement, Escrowee shall charge (i) an annual fee of
$10,000 for the services to be provided pursuant to this Agreement in connection
with the NJ Documents and the NJ Deposit (the "NJ Fee"), (ii) an annual fee of
$10,000 for the services to be provided pursuant to this Agreement in connection
with the VA Documents and the VA Deposit (the "VA Fee") and (iii) a
non-refundable fee of $5,000 for legal fees incurred by Escrowee in connection
with the negotiation and execution of this Agreement (the "Legal Fee", and
collectively with the NJ Fee and the VA Fee, the "Escrow
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Fee"). Should (a) VA Documents and the balance of the VA Deposit or (b) the NJ
Documents and the balance of the NJ Deposit be released by Escrowee prior to the
Expiration Date, Escrowee shall promptly return to ShoLodge the pro rata balance
of the NJ Fee or the VA Fee, as applicable; and should this Agreement otherwise
terminate for any reason prior to the Expiration Date, Escrowee shall promptly
return to ShoLodge the pro rata balance of the VA Fee and the NJ Fee for the
applicable year. Each Escrow Party recognizes and acknowledges that Escrowee
shall not be liable to either of such parties for any error of judgment, mistake
or act or omission hereunder or any matter or thing arising out of its conduct
hereunder, except for Escrowee's willful misfeasance or gross negligence.
Escrowee acknowledges the receipt of $25,000, representing (i) the Legal Fee and
(ii) for the first year of this Agreement, the NJ Fee and the VA Fee. The Escrow
Fee for the second year of this Agreement shall be due upon the first
anniversary of the date of this Agreement.
11. Subject to Escrowee's obligation to return the VA Fee
and the NJ Fee as provided in paragraph 10, Escrowee shall have the right to
resign upon thirty one (31) days written notice to Prime and ShoLodge (a
"Resignation Notice"). Within thirty (30) days of receipt of the Resignation
Notice, ShoLodge and Prime shall deliver a notice to Escrowee designating a new
escrowee and Escrowee shall deliver the Escrowed Documents and the balance of
the Deposit to such new escrowee within one (1) business day of such notice.
Should Escrowee not receive such notice within such thirty (30) day period,
Escrowee may designate a bank which is a member of the New York Clearing House
and which has a net worth in excess of One Hundred Million Dollars
($100,000,000) to serve as escrowee pursuant to the terms of this Agreement. In
lieu of returning the unearned Escrow Fee, Escrowee may pay the same over to the
new Escrowee.
12. In addition to the fee paid pursuant to paragraph 10,
each Escrow Party jointly and severally agrees to indemnify and hold harmless
Escrowee from and against any and all costs, claims, damages or expenses
(including, without limitation, reasonable attorneys' fees and disbursements,
whether paid to retained attorneys or representing the fair value of legal
services rendered to itself) howsoever occasioned that may be incurred by
Escrowee acting under this Agreement (including, without limitation, any costs
incurred by Escrowee pursuant to paragraph 8 hereof) or to which Escrowee may be
put in connection with Escrowee acting under this Agreement, except for costs,
claims or damages to the extent arising out of Escrowee's willful misfeasance or
gross negligence. Escrowee may charge against the Invested Cash Deposit any
amounts owed it under the foregoing indemnity or may withhold payment of the
escrowed funds as security for any unliquidated claim, or both.
13. If any Escrow Party is comprised of more than one
party, each such party comprising such Escrow Party shall be jointly and
severally liable for the obligations of such Escrow Party hereunder.
14. (a) Except as expressly provided in paragraph 7(f)
hereof, all notices, certificates and other communications permitted hereunder
shall be in writing, and shall be deemed duly served and given two (2) business
days after mailed by registered or certified mail, return receipt requested,
postage prepaid, at a regularly maintained branch of the United States Postal
Service or sent by a nationally recognized next day courier (such as FedEx) (any
notice or communication so sent being deemed to have been received one (1)
business day after sending in
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the United States) unless it is also sent via facsimile at which time it would
be deemed received on such day (if before 3:00 p.m. on a business day) it was
sent, addressed to the respective parties as follows:
If to ShoLodge, then to:
ShoLodge, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telecopy: (000) 000-0000
and with a copy to:
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to Prime, then to:
Prime Hospitality Corp.
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
and with a copy to:
Prime Law Department
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to New Jersey Owner, then to:
Delaware Inns, Inc.
c/o ShoLodge, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telecopy: (000) 000-0000
and with a copy to:
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83
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to Virginia Owner, then to:
Virginia Inns, Inc.
c/o ShoLodge, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telecopy: (000) 000-0000
and with a copy to:
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to Escrowee, then to:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Telecopy: 000-000-0000
and with a copy to:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxxx
Telecopy: 000-000-0000
Each party may, by notice as aforesaid, designate such other person or persons
and/or such other address or addresses for the receipt of notices. Copies of all
notices, certificates or other communications relating to this Agreement in
respect to which Escrowee is not the addressee or sender shall be sent to
Escrowee in the manner hereinabove set forth.
(b) Except as expressly provided in paragraph 7(f)
hereof, a copy of any notice requesting from Escrowee the disbursement of the
Deposit or the release of the Escrowed Documents shall be delivered to each
other Escrow Party. Escrow Party may (but shall not be obligated to) within four
(4) business days of receipt of any such Notice, request that the other
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Escrow Parties deliver notice to Escrowee of any objection(s) to such requested
disbursement or release; provided, however, each respective Escrow Party shall
be deemed to have approved of such requested disbursement or release should
Escrowee not receive from such Escrow Party within four (4) business days of
Escrowee's receipt of such Notice a notice of such Escrow Party's objection to
such requested disbursement or release.
15. Prime and ShoLodge agree that ShoLodge is responsible
for paying taxes on any interest earned on any Invested Cash Deposit. ShoLodge
agrees to complete the forms necessary to comply with the backup withholding and
interest reporting regulations under the Internal Revenue Code of 1986, as
amended, or any successor thereto, including, without limitation, Form W-9, a
separate copy of which is to be completed by ShoLodge and delivered to Escrowee
contemporaneously with the execution and delivery of this Agreement. ShoLodge's
Employer Identification Number is 00-0000000.
16. Notwithstanding anything herein to the contrary,
Escrowee shall (quarterly or on a more frequent basis, as determined by
Escrowee) release to ShoLodge any and all interest earned on the Invested Cash
Deposit as such interest accrues.
17. Xxxxxx and Xxxxxx Architects is currently overseeing
construction of both the hotel on the NJ Property and the hotel on the VA
Property. If there is any change of the architect overseeing the construction of
either such hotel, ShoLodge shall promptly send a Notice to Escrowee which sets
forth the identity of the new architect.
18. This Agreement, which sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
shall be binding on and inure to the benefit of all parties hereto and their
respective successors and permitted assigns and may not be modified or amended
orally, but only in a writing signed by all parties hereto. No Escrow Party may
assign its rights or obligations under this Agreement to any party.
19. The undersigned hereby submit to personal
jurisdiction in the State of New York for all matters, if any, which shall arise
with respect to this Agreement, and waive any and all rights under the law of
any other state or country to object to jurisdiction within the State of New
York or to institute a claim of forum non conveniens with respect to any court
in the County of New York in the State of New York for the purposes of
litigation with respect to this Agreement.
20. This Agreement shall be governed by the laws of the
State of New York. If any term, condition or provision of this Agreement, or the
application thereof to any circumstance or party hereto, shall ever be held to
be invalid or unenforceable, then in each such event the remainder of this
Agreement or the application of such term, condition or provision to any other
circumstance or party hereto (other than those as to which it shall be invalid
or unenforceable) shall not be thereby affected, and each term, condition and
provision hereof shall remain valid and enforceable to the fullest extent
permitted by law.
21. This Agreement may be executed in any number of
counterparts, each counterpart for all purposes being deemed an original, and
all such counterparts shall together constitute only one and the same agreement.
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22. ShoLodge shall, promptly after the execution and
delivery of this Agreement, deliver to Escrowee and Prime a list of the Major
Subcontractors, and thereafter ShoLodge shall provide to Escrowee monthly a list
of current Major Subcontractors. Escrowee may, for the purposes of this
Agreement, be entitled to rely on the list of Major Subcontractors last received
by Escrowee.
23. ShoLodge hereby grants Prime its power of attorney
coupled with interest to execute and deliver any other documents reasonably
required in connection with transferring the VA Property and/or the NJ Property
as contemplated under this Agreement in the event ShoLodge fails to execute and
deliver such other documents reasonably requested either by Prime and/or
Escrowee.
24. Each of X.X. Xxxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxx and Xxxxxx Xxxxxxxxx, or such other individual identified in a notice
to Escrowee signed by one of such individuals, alone, is authorized to sign any
notice or document contemplated hereunder on behalf of Prime. Each of Xxxx
Xxxxx, Xxxx Xxxxxxxx, Xxxxx X. Xxxxx, Xxxxxx Xxxxxxx and Xxx Xxxxxxx, or such
other individual identified in a notice to Escrowee signed by one of such
individuals, alone, is authorized to sign any notice or document contemplated
hereunder on behalf of ShoLodge, VA Owner and NJ Owner.
25. Escrowee (i) shall not be bound by or charged with
knowledge of any document other than this Agreement and (ii) may otherwise do
business of any nature with any Escrow Party as if this Agreement had not been
executed and delivered. Escrow Parties acknowledge that Escrowee has made no
representations or warranties with respect to any matters referred to in the
recitals of this Agreement. Each Escrow Party agrees not to encumber the
Deposit.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
SHOLODGE, INC.
By:
-----------------------------------------
Name:
Title:
DELAWARE INNS, INC.
By:
-----------------------------------------
Name:
Title:
VIRGINIA INNS, INC.
By:
-----------------------------------------
Name:
Title:
PRIME HOSPITALITY CORP.
By:
-----------------------------------------
Name:
Title:
ESCROWEE:
BANKERS TRUST COMPANY
By:
-----------------------------------------
Name:
Title:
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EXHIBIT J
FORM OF OPTION AGREEMENT
(to be attached)
88
EXHIBIT J
TO
FIRST AMENDMENT TO SALES AND PURCHASE AGREEMENT
FORM OF EXCHANGE OPTION AGREEMENT
by and among
VIRGINIA INNS, INC.
as Developer,
and
HPT SUITE PROPERTIES TRUST,
as Investor
---------------------------
July 9, 2000
89
EXCHANGE OPTION AGREEMENT
THIS EXCHANGE OPTION AGREEMENT is made as of July 9, 2000, by and among
SHOLODGE, INC, a Tennessee corporation, VIRGINIA INNS, INC., a Tennessee
corporation ("Developer") and HPT SUITE PROPERTIES TRUST, a Maryland real estate
investment trust ("Investor").
WITNESSETH:
WHEREAS, simultaneously with the execution and delivery hereof,
Investor, Assignor and Assignee are entering into the Consent, pursuant to
which, inter alia, as a condition to Investor agreeing to forbear from
exercising its rights and remedies with respect to certain breaches under the
Lease, Developer has agreed to enter into this Agreement and, at the option of
Investor, exchange the Development Assets for the Existing Assets on the terms
and conditions hereinafter set forth; and
WHEREAS, ShoLodge owns, directly or indirectly, all of the outstanding
capital stock of Developer and Assignor, and the transactions contemplated by
this Agreement are of direct and material benefit to ShoLodge;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the Developer Parties and
Investor hereby agree as follows:
SECTION 1
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set
forth below or in the Section of this Agreement referred to below:
1.1 "AGREEMENT" shall mean this Exchange Option Agreement,
together with Schedules and Exhibits attached hereto, as it and they may be
amended from time to time as herein provided.
1.2 "APPRAISAL" shall mean an original market study report, dated
within sixty (60) days prior to the Closing Date, addressed to Investor,
prepared by a qualified real estate appraiser reasonably satisfactory to
Investor, which market study is otherwise in form and substance reasonably
acceptable to Investor.
1.3 "APPROVED PLANS" shall mean the plans and specifications for
the construction of the Project, including, without limitation, installation of
curbs, sidewalks, gutters, amenities (e.g., swimming pool), landscaping, utility
connections (whether located on or off the site thereof) and all fixtures and
equipment necessary for construction, operation and occupancy of the Project,
prepared by a qualified licensed architect reasonably acceptable to Investor, as
approved by Investor, as such plans and specifications may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms of this Agreement. A schedule of the Approved
90
Plans or the design development plans upon which the Approved Plans shall be
prepared is set forth in Schedule A.
1.4 "ASSETS" shall mean, with respect to any Hotel, collectively,
all of the Real Property, the FF&E, the Contracts, the Documents, the
Improvements, the Intangible Property and the Tenant Leases relating to such
Hotel.
1.5 "ASSIGNEE" shall mean Xxxx Rock Holding Corp. a Delaware
corporation, all of whose issued and outstanding stock is owned by Prime.
1.6 "ASSIGNOR" shall mean Suite Tenant, Inc., a Tennessee
corporation, all of whose issued and outstanding stock is owned by ShoLodge.
1.7 "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which banking institutions in The Commonwealth of
Massachusetts or the State of New York are authorized by law or executive action
to close.
1.8 "CLOSING" shall have the meaning given such term in Section 3.
1.9 "CLOSING DATE" shall have the meaning given such term in
Section 3.
1.10 "COMPLETION" shall mean the satisfaction of all of the
requirements of Section 8.6(h).
1.11 "COMPLETION DATE" shall mean the date on which Developer gives
Investor notice that Completion has occurred, provided that Completion has in
fact occurred.
1.12 "CONSENT" shall mean that certain Consent To Assignment, Fifth
Amendment To Lease Agreement And Amendment To Incidental Documents of even date
herewith among Assignor, Assignee and Investor.
1.13 "CONTRACTS" shall mean, with respect to any Property, all
hotel licensing agreements and other service contracts, equipment leases,
booking agreements and other arrangements or agreements to which any of
Developer or Investor, as applicable, is a party affecting the ownership,
repair, maintenance, management, leasing or operation of such Property.
1.14 "DEVELOPER" shall have the meaning given such term in the
first paragraph of this Agreement.
1.15 "DEVELOPER PARTIES" shall mean, collectively, ShoLodge and
Developer, jointly and severally.
1.16 "DEVELOPMENT ASSETS" shall mean the Hotel to be constructed on
the Development Property and all other Assets relating to such Hotel.
1.17 "DEVELOPMENT PROPERTY" shall mean the real property described
in Schedule B.
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1.18 "DOCUMENTS" shall mean, with respect to any Property, all
books, records and files relating to the leasing, maintenance, management or
operation of such Property.
1.19 "ENVIRONMENTAL REPORTS" shall mean a "Phase I" environmental
report of the Project and the Development Assets, certified to the Investor and
its successors and assigns, from a firm approved by the Investor with respect to
an inspection conducted after substantial completion of the Project but not more
than sixty (60) days before the Closing Date, of a scope reasonably satisfactory
to Investor and at a minimum in conformity with ASTM Standard E1527 and
consistent with the covenants, representations and warranties contained herein.
1.20 "EVENT OF DEFAULT" shall have the meaning ascribed thereto in
Section 10.1(a).
1.21 "EXISTING ASSETS" shall mean the Hotel located on the Existing
Property and all other Assets relating to such Hotel.
1.22 "EXISTING PROPERTY" shall mean the real property described in
Schedule C.
1.23 "FF&E" shall mean, with respect to any Property, all
appliances, machinery, devices, fixtures, appurtenances, equipment, furniture,
furnishings and articles of tangible personal property of every kind and nature
whatsoever (other than motor vehicles) owned by Developer or Investor, as
applicable, and located in or at, or used in connection with the ownership,
operation or maintenance of such Property.
1.24 "HOTEL" shall mean each hotel now or hereafter located at a
Property.
1.25 "HPT" shall mean Hospitalities Properties Trust, a Maryland
real estate investment trust.
1.26 "IMPROVEMENTS" shall mean, with respect to any Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to Real Property of which such
Property forms a part.
1.27 "INTANGIBLE PROPERTY" shall mean, with respect to any Hotel,
all transferable or assignable permits, certificates of occupancy, operating
permits, sign permits, development rights and approvals, certificates, licenses,
warranties and guarantees, the Contracts, telephone exchange numbers identified
with such Hotel held by Developer or Investor, as applicable, and all other
transferable intangible property, miscellaneous rights, benefits and privileges
of any kind or character with respect to such Property held by Developer or
Investor, as applicable, except for liquor licenses to the extent held by or
transferred to the Tenant.
1.28 "LEASE" shall mean the Lease Agreement, dated as of November
19, 1997 between Assignor and Investor as amended by two (2) letters dated
November 19, 1997, the First Amendment to Lease Agreement, dated as of March 5,
1999, the Second Amendment to Lease Agreement and First Amendment to Incidental
Documents, dated as of June 29, 1999, a letter dated June 29, 1999, the Third
Amendment to Lease Agreement dated as of March 3, 2000, the Fourth Amendment to
Lease Agreement and Amendment to Incidental Documents dated as of
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May 11, 2000 and the Consent, as the same may hereafter be amended or modified
in accordance with the terms thereof.
1.29 "OPTION EXPIRATION DATE" shall mean the date that is ten (10)
days after the Review Period Expiration Date.
1.30 "OUTSIDE DATE" shall mean the date that is the later of
September 30, 2001 and 15 months after the date hereof; provided, however, to
the extent that the Completion is delayed beyond the later of such dates by
reason of causes beyond the reasonable control of the Developer Parties, the
Outside Date may be extended for up to six-months in the aggregate so long as at
all times the Developer Parties are at all times diligently prosecuting
Completion by Developer giving notice to Investor of such extension, which
notice shall be given as soon as reasonably practicable (but in all events not
less than five (5) days after Developer knows that (Completion will be so
delayed), which notice shall specify Developer's best estimate of the period of
delay, the causes thereof and steps being undertaken to overcome the same, all
in reasonable detail.
1.31 "PERMITTED ENCUMBRANCES" shall mean, with respect to any
Property, (a) liens for taxes, assessments and governmental charges with respect
to such Property not yet due and payable or due and payable but not yet
delinquent; (b) applicable zoning regulations and ordinances provided the same
do not prohibit or impair in any material respect use of the Hotel at such
Property as an all suites hotel as operated and constructed as of the Closing
Date; (c) such other nonmonetary encumbrances as do not, in Investor's
reasonable opinion, impair marketability and do not materially interfere with
the use of such Property as a fully functioning all suites hotel as currently
operated and constructed; (d) UCC Financing Statements which would be permitted
pursuant to the terms of Section 21.9 of the Lease; (e) the matters listed on
Schedule D hereto with respect to the applicable Property; and (f) such other
nonmonetary encumbrances with respect to such Property which are not objected to
by Investor in accordance with Sections 2.4 and 2.5.
1.32 "PRIME" shall mean Prime Hospitality Corp., a Delaware
corporation.
1.33 "PROJECT" shall mean the Hotel and all improvements to be
constructed on the Development Property in accordance with the Approved Plans
and all other improvements and installations made or to be made on or off of
such Property in connection therewith.
1.34 "PROPERTY" shall mean, either the Development Property or the
Existing Property.
1.35 "REAL PROPERTY" shall mean, with respect to any Property, such
Property, together with all easements, rights of way, privileges, licenses and
appurtenances which Developer or Investor, as applicable, may own with respect
thereto.
1.36 "REVIEW PERIOD" shall mean the period commencing on the date
of this Agreement and expiring on the Review Period Expiration Date.
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1.37 "REVIEW PERIOD EXPIRATION DATE" shall mean the date, that is
twenty (20) days after the Completion Date or such later date to which the
Review Period Expiration Date may be extended pursuant to Section 2.3.
1.38 "SHOLODGE" shall mean ShoLodge, Inc., a Tennessee corporation.
1.39 "SURVEY" shall have the meaning given such term in Section
2.5.
1.40 "TENANT" shall mean the tenant under the Lease.
1.41 "TENANT LEASES" shall mean, with respect to any Hotel, all
leases, rental agreements or other agreements (other than agreements for letting
of rooms or other facilities to hotel guests) (including all amendments or
modifications thereto) with Developer or Investor, as applicable, or by which
either of them or their property is bound, which entitle any Person to have
rights with respect to the use or occupancy of any portion of the Real Property
pertaining to such Hotel.
1.42 "TITLE COMMITMENT" shall have the meaning given such term in
Section 2.4.
1.43 "TITLE COMPANY" shall mean American Title Company of Dallas,
Texas, or such other title insurance company as shall have been selected by
Investor and approved by Developer, which approval shall not be unreasonably
withheld, delayed or conditioned.
SECTION 2
PURCHASE AND SALE; DILIGENCE
2.1 EXCHANGE. At the option of Investor, Investor shall exchange
all of its right, title and interest in and to the Existing Assets for all of
Developer's right, title and interest in and to the Development Assets, and
Developer shall exchange all of its right, title and interest in and to
Development Assets for all of Investor's right, title and interest in and to the
Existing Assets, subject to and in accordance with the terms and conditions of
this Agreement. The parties intend that such exchange qualify as a like-kind
exchange under Section 1031 of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
2.2 DILIGENCE INSPECTIONS. For the Review Period and, thereafter,
until Closing, Developer shall permit Investor and its representatives to
inspect the Development Assets (including, without limitation, all roofs,
electric, mechanical and structural elements, and HVAC systems therein), to
perform due diligence, soil analysis and environmental investigations, to
examine the books of account and records of Developer with respect to the
Development Assets, including, without limitation, all leases, construction
contracts and other agreements affecting the Development Assets, and make copies
thereof, at such reasonable times as Investor or its representatives may request
by notice to Developer (which notice may be oral). To the extent that, in
connection with such investigations, Investor, its agents, representatives or
contractors, damages or disturbs any of the Real Property, the Improvements or
FF&E located on the Development Property, Investor shall return the same to
substantially the same condition which existed immediately prior to such damage
or disturbance. Neither Investor nor any of its agents,
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representatives or contractors shall have any right whatsoever to alter the
condition of the Development Assets, or portion thereof, without the prior
written consent of Developer, which consent shall not be unreasonably withheld,
delayed or conditioned. In no event shall any such inspection include any
drilling into or under the surface of the Development Property, soil sampling,
water sampling or similar activities commonly known as a "Phase II environmental
study" without the prior written consent of Developer, which consent shall not
be unreasonably withheld, delayed or conditioned. In the event that the
transactions contemplated by this Agreement are not closed and consummated for
any reason, so long as there has occurred no Event of Default and Developer
shall have paid to Investor all amounts owed hereunder to Investor, Investor
shall, upon Developer's request, deliver to Developer all tests, reports and
inspections of the Development Property made and conducted by Investor or for
its benefit or any other documents or information Investor has received pursuant
to this Agreement. Investor shall indemnify, defend and hold harmless Developer
from and against any and all expense, loss or damage which Developer may incur
as a result of any act or omission of Investor or its representatives, agents or
contractors in connection with such examinations and inspections, other than to
the extent that any expense, loss or damage arises from any negligence or
misconduct of Developer. The provisions of this Section 2.2 shall survive the
termination of this Agreement and the Closing.
2.3 DEFECTIVE PROPERTIES. (a) In the event that Investor
reasonably determines that the Development Assets have structural, environmental
or other defects or conditions, Developer agrees to promptly and diligently
remedy such defect or condition but in all events not later than the Review
Period Expiration Date.
(b) Developer shall promptly repair or restore prior to the Review
Period Expiration Date any damage caused by any casualty or condemnation
affecting the Development Property. Investor shall be entitled to any
condemnation proceeds recovered in connection with such condemnation in excess
of amounts reasonably expended by Developer in connection with any restoration
of the Development Property as a result of such condemnation. At the Closing,
Developer shall pay such excess to Investor and assign to Investor the right to
receive any unpaid amount due by reason of such condemnation. Promptly upon
learning of the same, the Developer Parties covenant and agree to provide
Investor with prompt written notice of any casualty or condemnation affecting
the Development Property.
(c) Developer shall be entitled to extend the Review Period
Expiration Date for up to ninety (90) days in the aggregate if reasonably
required for Developer to perform its obligations under this Section 2.3 and
Sections 2.4 and 2.5 by giving notice of such extension(s) to Investor not less
than ten (10) days prior to the then Review Period Expiration Date, which notice
shall specify the new Review Period Expiration Date. Developer shall give to
Investor notice of when each such cure, repair, restoration or other corrective
work is completed.
2.4 TITLE MATTERS. (a) On or before the Completion Date, Developer
shall obtain from the Title Company and deliver to Investor a preliminary title
commitment, for an extended owner's policy of title insurance written on the
ALTA Form B (1970), with respect to the Development Property and the Real
Property of which it forms a part based on a title search (or
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update) performed after substantial completion of the Project, together with
complete and legible copies of all instruments and documents referred to as
exceptions to title (the "Title Commitment").
(b) Within twenty (20) Business Days after receipt of the Title
Commitments, Investor shall give Developer notice of any title exceptions (other
than Permitted Encumbrances) which adversely affect such Real Property in any
material respect and as to which Investor reasonably objects. Before the Closing
Date, Developer shall cure all such exceptions and all exceptions, notice of
which is first given to Investor after its receipt of the Title Commitment and
before the Closing Date.
2.5 SURVEY MATTERS. (a) On or before the Completion Date,
Developer shall deliver to Investor an ALTA survey with respect to the
Development Property and the Real Property of which it forms a part (the
"Survey") prepared by a surveyor licensed in the jurisdiction in which such
Property is located based upon an inspection of the Development Property made
after substantial completion of the Project, which (i) contains an accurate
legal description of the Development Property, (ii) shows the exact location,
dimension and description (including applicable recording information) of all
utilities, easements, encroachments and other physical matters affecting such
Property, the number of striped parking spaces located thereon and all
applicable building set-back lines, (iii) states whether any part of such Real
Property is located within a 100-year flood plain and (iv) includes a
certification in the form set forth in Exhibit A, or such other form as may be
acceptable to Investor, addressed to Investor, the Title Company and anyone else
requested by Investor or designated by Developer.
(b) Within twenty (20) Business Days after receipt of the Survey
together with a notice from the Title Company of the particular exceptions to
title it intends to take as a result of matters shown on such Survey, Investor
shall give Developer notice of any matters shown thereon (other than Permitted
Encumbrances) which adversely affect such Real Property in any material respect
and as to which Investor reasonably objects. Developer shall take such actions
as may be required to remedy the objectionable matters on or before the Review
Period Expiration Date.
2.6 ENVIRONMENTAL REPORT AND APPRAISAL. On or before the
Completion Date, Developer shall deliver an Environmental Report and an
Appraisal to Investor.
SECTION 3
PURCHASE AND SALE
CLOSING. The exchange of the Properties shall be consummated at a
closing (the "Closing") to be held at the offices of Xxxxxxxx & Worcester LLP,
Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or at such other location as the
parties may agree, at 10:00 a.m. local time, on a date (the "Closing Date")
which is twenty (20) days after Investor gives Developer notice of Investor's
election to consummate the within exchange. Investor shall give notice of its
election to consummate the within exchange not later than the Option Expiration
Date. If Investor fails to give notice of such election on or before the Option
Expiration Date, this Agreement shall terminate and be of no further force or
effect except as herein expressly
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provided to the contrary. If this Agreement so terminates, promptly after
Developer's request, Investor shall enter into an agreement confirming such
termination.
SECTION 4
CONDITIONS TO INVESTOR OBLIGATION TO CLOSE
The obligation of Investor to exchange the Existing Assets for the
Development Assets on the Closing Date shall be subject to Investor giving
Developer notice of Investor's election to consummate such exchange and the
satisfaction of the following conditions precedent on and as of the Closing Date
(and the Developer Parties shall cause each of the following conditions to be so
satisfied other than those contained in Section 4.5):
4.1 CLOSING DOCUMENTS. Developer or the Tenant (as applicable)
shall have delivered to Investor:
(a) A good and sufficient limited warranty deed with covenants
against grantor's acts, or its local equivalent, in proper statutory form for
recording, duly executed and acknowledged by Developer, conveying good and
marketable title to the Development Property, the Improvements thereat and the
Real Property of which they form a part, free from all liens and encumbrances
other than the Permitted Encumbrances, which deed shall be substantially in the
form attached hereto as Exhibit B (subject to such changes thereto as are
required to conform with local requirements and practices);
(b) A xxxx of sale and assignment agreement, in the form attached
hereto as Exhibit C, duly executed and acknowledged by Developer, with respect
to all of Developer's right, title and interest in, to and under the other
Development Assets including, without limitation, the FF&E, the Contracts, the
Documents, the Intangible Property and the Tenant Leases with respect to the
Development Property;
(c) An amendment to the Lease in the form attached hereto as
Exhibit D , all other documents and sums required to be delivered by the
Developer Parties and/or the Tenant pursuant to such amendment and an instrument
in recordable form confirming the removal of the Existing Property from Lease;
(d) Certified copies of all charter documents, applicable
corporate resolutions and certificates of incumbency with respect to the
Developer Parties and the Tenant;
(e) Such ratification of the Incidental Documents (as defined in
the Lease) as Investor shall reasonably requested;
(f) Lien and judgment searches with respect to the Developer
Parties and Tenant satisfactory to Landlord; and
(g) Such other conveyance documents, certificates, deeds,
affidavits, financing statements and other instruments as Investor or the Title
Company may reasonably require or are
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customary to effectuate the transactions contemplated by this Agreement or the
amendment to the Lease.
4.2 CONDITION OF PROPERTIES. (a) All the Improvements located on
the Real Property pertaining to the Development Property shall be in
substantially the same physical condition as on the Completion Date, ordinary
wear and tear excepted;
(b) No material default or event which with the giving of notice
and/or lapse of time could constitute a material default shall have occurred and
be continuing under any material agreement benefiting or affecting the
Development Property in any respect;
(c) No action shall be pending or threatened for the condemnation
or taking by power of eminent domain of all or any material portion of the
Development Property; and
(d) All material licenses, permits and other authorizations
necessary for the current use, occupancy and operation of the Development
Property shall be in full force and effect and appropriately transferred.
4.3 TITLE POLICIES. The Title Company shall be prepared, subject
only to payment of the customary applicable premium and endorsement fees and
delivery of all conveyance documents in recordable form, to issue a title
insurance policy to Investor, in form and substance reasonably satisfactory to
Investor in accordance with Section 2.4, together with such affirmative
coverages as Investor may reasonably require and shall have been determined by
the Title Company as available prior to the expiration of the Review Period.
4.4 OPINIONS OF COUNSEL. (a) Investor shall have received one or
more written opinions from counsel to the Developer Parties and the Tenant,
which counsel shall be reasonably acceptable to Investor, in form and substance
reasonably satisfactory to Investor, regarding the organization and authority of
the Developer Parties, the Tenant and the other parties to the Incidental
Documents, the enforceability of this Agreement, the Lease and the Incidental
Documents, and such other matters with respect to the transactions contemplated
by this Agreement as Investor may reasonably require.
(b) Investor shall have received a zoning diligence memorandum
from local counsel to Investor, in form and substance reasonably satisfactory to
Investor, regarding the compliance of the Development Property with respect to
zoning, licensing and such other matters as Investor may reasonably require.
4.5 MARKET STUDIES. As of the Closing Date, Investor shall have
received and approved the Appraisal.
SECTION 5
CONDITIONS TO THE DEVELOPER PARTIES' OBLIGATION TO CLOSE
The obligation of Developer to exchange the Development Assets for the
Existing Assets on the Closing Date shall be subject to Investor giving
Developer notice of Investor's election to
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consummate the within exchange and the satisfaction of the following conditions
precedent on and as of the Closing Date:
5.1 CLOSING DOCUMENTS. Investor shall have delivered to Developer:
(a) A good and sufficient New York bargain and sale deed without
covenants against grantor's acts, or its local equivalent, in proper statutory
form for recording, duly executed and acknowledged by Investor or HPT (as
applicable), conveying title to the Existing Property, the Improvements thereat
and the Real Property of which they form a part, free from all liens and
encumbrances other than the Permitted Encumbrances;
(b) A xxxx of sale and assignment agreement (with recourse or
representation), in form attached hereto or Exhibit E, duly executed and
acknowledged by Investor, with respect to all of Investor's right, title and
interest in, to and under the other Existing Assets including, without
limitation, the FF&E, the Contracts, the Documents, the Intangible Property and
the Tenant Leases with respect to the Existing Property;
(c) An amendment to the Lease in the form attached hereto as
Exhibit D, all other documents and sums required to be delivered by Investor
pursuant to such amendment and an instrument in recordable form confirming the
removal of the Existing Property from Lease;
(d) Certified copies of all charter documents, applicable
corporate resolutions and certificates of incumbency with respect to Investor;
and
(e) Releases of UCC Financing Statements filed for the benefit of
Landlord with respect to the Existing Assets, as Developer shall reasonably
request.
5.2 CONDITION OF EXISTING PROPERTY. (a) All the Improvements
located on the Real Property pertaining to the Existing Property shall be in
their then condition. In the event of a casualty or condemnation affecting the
Existing Assets after the date hereof, Developer shall nevertheless be obligated
to consummate the within transaction; provided, however, all condemnation awards
and insurance proceeds resulting therefrom actually received by Investor in
excess of amounts incurred by Investor to recover such awards or proceeds or to
restore or repair the Existing Assets shall be paid to Developer at the Closing.
5.3 OPINION OF COUNSEL. The Developer Parties shall have received
a written opinion from Xxxxxxxx & Worcester LLP, counsel to Investor, in form
reasonably satisfactory to the Developer Parties, regarding the organization and
authority of Investor and such other matters with respect to the transactions
contemplated by this Agreement as the Developer Parties may reasonably require.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF DEVELOPER PARTIES
To induce Investor to enter into this Agreement, the Developer Parties
represent and warrant to Investor as follows:
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6.1 STATUS AND AUTHORITY OF THE DEVELOPER PARTIES. Each of the
Developer Parties is a corporation duly organized, validly existing and in
corporate good standing under the laws of its state of incorporation, and has
all requisite power and authority under the laws of such state and its
respective charter documents to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. Each of
the Developer Parties has duly qualified to transact business in each
jurisdiction in which the nature of the business conducted by it requires such
qualification, except where failure to do so could not reasonably be expected to
have a material adverse effect.
6.2 ACTION OF THE DEVELOPER PARTIES. Each of the Developer Parties
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and upon the execution and delivery of any
document to be delivered by any of the Developer Parties on or prior to the
Closing Date, such document shall constitute the valid and binding obligation
and agreement of such Developer Party, enforceable against such Developer Party
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.
6.3 NO VIOLATIONS OF AGREEMENTS. Neither the execution, delivery
or performance of this Agreement by any of the Developer Parties, nor compliance
with the terms and provisions hereof, will result in any breach of the terms,
conditions or provisions of, or conflict with or constitute a default under, or
result in the creation of any lien, charge or encumbrance upon any of the
Development Assets pursuant to the terms of any indenture, mortgage, deed of
trust, note, evidence of indebtedness or any other agreement or instrument by
which any of the Developer Parties is bound.
6.4 LITIGATION. None of the Developer Parties has received written
notice of and, to each of the Developer Party's knowledge, no action or
proceeding is pending or threatened and no investigation looking toward such an
action or proceeding has begun, which (a) questions the validity of this
Agreement or any action taken or to be taken pursuant hereto, (b) will result in
any material adverse change in the business, operation, affairs or condition of
any of the Development Assets, (c) will result in or subject any of the
Development Assets to a material liability, or (d) involves condemnation or
eminent domain proceedings against any material part of any of Development
Assets.
6.5 EXISTING LEASES, AGREEMENTS, ETC. There are no other material
agreements affecting any of the Development Assets which will be binding on
Investor subsequent to the Closing Date which Investor cannot terminate on
thirty (30) days notice without payment of premium or penalty.
6.6 DISCLOSURE. To each of the Developer Party's knowledge, there
is no fact or condition which materially and adversely affects the business or
condition of the Development Assets which has not been set forth in this
Agreement or in the other documents, certificates or statements furnished to
Investor in connection with the transactions contemplated hereby.
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6.7 UTILITIES, ETC. To each of the Developer Party's knowledge,
all utilities and services necessary for construction of the Project and the
intended use and operation of the Project (including, without limitation, road
access, gas, water, electricity and telephone) upon Completion are, and will be,
available to the Development Property and are of sufficient capacity. To each of
the Developer Party's knowledge, no fact, condition or proceeding exists which
would result in the termination or material impairment of the furnishing of such
utilities to the Development Property.
6.8 COMPLIANCE WITH LAW. (a) The Development Assets and the
intended use and operation of the Project, upon completion thereof do not, and
will not, violate any material federal, state, municipal and other governmental
statutes, ordinances, by-laws, rules, regulations or any other legal
requirements, including, without limitation, those relating to construction,
occupancy, zoning, adequacy of parking, environmental protection, occupational
health and safety and fire safety applicable thereto;
(b) There are presently in effect all material approvals,
licenses, permits and other authorizations necessary for the construction of the
Project, except for those which are expected to be obtained in the ordinary
course of development and which do not involve any discretion on the part of the
party granting or issuing the same.
(c) None of the Developer Parties has received written notice of
any threatened request, application, proceeding, plan, study or effort which
would materially adversely affect the intended use or zoning of any of the
Development Assets or which would modify or realign any adjacent street or
highway in a material and adverse way.
6.9 TAXES. To each of the Developer Party's knowledge, no taxes or
special assessments of any kind (special, bond or otherwise) are, are intended
to be, or have been levied with respect to any of the Development Assets, other
than taxes not yet due and payable or, if due and payable, not yet delinquent.
6.10 NOT A FOREIGN PERSON. None of the Developer Parties is a
"foreign person" within the meaning of Section 1445 of the United States
Internal Revenue Code of 1986, as amended, and the treasury regulations
promulgated thereunder.
6.11 HAZARDOUS SUBSTANCES. Except as disclosed in the current
environmental report listed in Schedule E annexed hereto and made a part hereof,
none of the Developer Parties nor any tenant or other occupant or user of any of
the Development Assets, or any portion thereof, has stored or disposed of (or
engaged in the business of storing or disposing of) or has released or caused
the release of any hazardous waste, contaminants, oil, radioactive or other
material on the Development Property, or any portion thereof, the removal of
which is required or the maintenance of which is prohibited or penalized by any
applicable Federal, state or local statutes, laws, ordinances, rules or
regulations; and the Development Property is free from any such hazardous waste,
contaminants, oil, radioactive and other materials, except any such materials
maintained in accordance with applicable law.
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6.12 INSURANCE. None of the Development Parties has received
written notice from any insurance carrier of defects or inadequacies in the
Development Assets which, if uncorrected, would result in a termination of
insurance coverage or a material increase in the premiums charged therefor.
6.13 OWNERSHIP OF DEVELOPER. ShoLodge is the sole owner, directly
or indirectly, of all of the issued and outstanding beneficial interests in
Developer and the transactions contemplated by the Consent and this Agreement
are of direct material benefit to ShoLodge.
6.14 TITLE TO THE DEVELOPMENT ASSETS. Developer has good and
marketable title to the Development Assets, free and clear of all liens, claims
and encumbrances other than the Permitted Encumbrances.
6.15 ADJACENT LAND. No Developer Party or any of its affiliates
owns any property adjacent to the Development Property which is not being
conveyed to Investor pursuant to this Agreement or is not subject to a binding
agreement for sale to an unaffiliated third party.
The representations and warranties made in this Agreement by the
Developer Parties shall be continuing and shall be deemed remade by the
Developer Parties as of the Closing Date with the same force and effect as if
made on, and as of, such date; provided, however, that, the Developer Parties
shall have the right, from time to time prior to the Closing Date, to modify the
representations and warranties as a result of changes in condition of the
Development Property due to no fault on the part of the Developer Parties by
notice to Investor. The Developer Parties' liability with respect to all
representations and warranties made in this Agreement by the Developer Parties
with respect to the Development Assets shall survive the Closing for a period of
one (1) year, after which the Developer Parties shall have no liability with
respect thereto other than as to any matters for which claims have been asserted
prior to the expiration of such one (1) year period.
Except as otherwise expressly provided in this Agreement or any
documents to be delivered pursuant to the terms hereof or thereof, each of
Investor and Developer Parties disclaim the making of any representations or
warranties, express or implied, regarding the Properties or matters affecting
the Properties, including, without limitation, the physical condition of the
Properties, title to or the boundaries of the Real Property, pest control
matters, soil conditions, the presence, existence or absence of hazardous
wastes, toxic substances or other environmental matters, compliance with
building, health, safety, land use and zoning laws, regulations and orders,
structural and other engineering characteristics, traffic patterns, market data,
economic conditions or projections, and any other information pertaining to the
Properties or the market and physical environments in which they are located.
Each of the parties hereto further acknowledges (i) that it has entered into
this Agreement with the intention of making and relying upon its own
investigation or that of third parties with respect to the physical,
environmental, economic and legal condition of each Property (except as
otherwise expressly provided herein) and (ii) that it is not relying upon any
statements, representations or warranties of any kind, other than those
specifically set forth in this Agreement or in any document to be delivered to
it in connection herewith. Each of the parties further acknowledges that it has
not
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received from or on behalf of the others any accounting, tax, legal,
architectural, engineering, property management or other advice with respect to
this transaction and is relying solely upon the advice of third party
accounting, tax, legal, architectural, engineering, property management and
other advisors. Subject to the provisions of this Agreement, the parties shall
exchange the Properties in their "as is" condition on the Closing Date.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF INVESTOR
To induce the Developer Parties to enter in this Agreement, Investor
represents and warrants to the Developer Parties as follows:
7.1 STATUS AND AUTHORITY OF INVESTOR. Investor is a Maryland real
estate investment trust duly organized, validly existing and in trust good
standing under the laws of the State of Maryland, and has all requisite power
and authority under the laws of such state and under its charter documents to
enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. Investor has duly qualified and is in good
standing as a trust or unincorporated business association in each jurisdiction
in which the nature of the business conducted by it requires such qualification,
except where the failure to do so could not reasonably be expected to have a
material adverse effect.
7.2 ACTION OF INVESTOR. Investor has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by Investor on or
prior to the Closing Date such document shall constitute the valid and binding
obligation and agreement of Investor, enforceable against Investor in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors.
7.3 NO VIOLATIONS OF AGREEMENTS. Neither the execution, delivery
or performance of this Agreement by Investor, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of
Investor pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which Investor
is bound.
7.4 LITIGATION. No investigation, action or proceeding is pending
and, to Investor's knowledge, no action or proceeding is threatened and no
investigation looking toward such an action or proceeding has begun, which
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto.
The representations and warranties made in this Agreement by Investor
shall be continuing and shall be deemed remade by Investor as of the Closing
Date with the same force and effect as if made on, and as of, such date.
Investor's liability with respect to all representations and warranties made in
this Agreement by Investor shall survive the Closing for a period of one (1)
year, after which Investor shall have no liability with respect thereto other
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than as to any matters for which claims have been asserted prior to the
expiration of such one (1) year period.
SECTION 8
COVENANTS OF THE DEVELOPER PARTIES
The Developer Parties hereby covenant with Investor between the date of
this Agreement and the Closing Date as follows:
8.1 COMPLIANCE WITH LAWS, ETC. To comply or to cause compliance in
all material respects with (i) all applicable laws, regulations and other
requirements from time to time of every governmental body having jurisdiction of
the Development Assets, or the construction, use or occupancy of the
Improvements now or hereafter forming a part thereof and (ii) all terms,
covenants and conditions of all instruments of record and other agreements
affecting the Development Assets.
8.2 APPROVAL OF AGREEMENTS. Except as otherwise authorized by this
Agreement or in the ordinary course of business, not to enter into, modify,
amend or terminate any agreement with respect to the Development Assets which
would encumber or be binding upon such Development Assets from and after the
Closing Date without in each instance obtaining the prior written consent of
Investor, which consent shall not be unreasonably withheld, delayed or
conditioned.
8.3 NOTICE OF MATERIAL CHANGES OR UNTRUE REPRESENTATIONS. Upon
learning of any material change in any condition with respect to any of the
Development Assets or of any event or circumstance which makes any
representation or warranty of the Developer Parties to Investor under this
Agreement untrue or misleading in any material respect, promptly to notify
Investor thereof (Investor agreeing, on learning of any such fact or condition,
promptly to notify the Developer Parties thereof).
8.4 OPERATION OF DEVELOPMENT PROPERTY. Upon substantial completion
of the Project, to operate it as an AmeriSuites hotel, in a good and
businesslike fashion like the other AmeriSuites Hotels operated by Developer and
its affiliates and to cause the Project to be maintained in good working order
and condition.
8.5 FINANCIAL INFORMATION. To provide to Investor, promptly upon
request at the Developer Parties' sole cost and expense, such audited and
unaudited financial and other information and certifications of the Developer
Parties with respect to the Developer Parties and the Development Assets as
Investor may from time to time reasonably request in order to comply with any
applicable securities laws and/or any rules, regulations or requirements of the
Securities and Exchange Commission and, if required or requested, to permit
Investor to incorporate by reference any information included in filings made by
ShoLodge with the Securities and Exchange Commission.
8.6 CONSTRUCTION OF THE PROJECT. (a) Each addition or modification
to the Approved Plans which (together with all other additions or modifications
not approved in writing by the
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Investor) is material must be approved in writing by Investor, and to the extent
required by law, shall be approved by the appropriate governmental authorities.
Developer shall not commence any work on any stage or phase of the Project
unless all required permits and licenses therefor have been issued or obtained
from appropriate governmental authorities. Developer shall timely construct and
equip the Project substantially in accordance with the Approved Plans, free and
clear of all mechanics' liens, notices of intention to file mechanic's lien,
notices of pendency, stop orders or comparable liens or filings and all other
liens, encumbrances and security instruments of any nature whatsoever (other
than the Permitted Encumbrances).
(b) The Project shall be constructed and equipped in compliance
with all legal requirements.
(c) Developer shall obtain and furnish to Investor within thirty
(30) days after the completion of the Project the originals or copies of all
certificates of occupancy, or their local equivalent (or in lieu thereof, a
letter reasonably satisfactory from the applicable governmental authority to the
effect that certificates of occupancy are not issued, or an opinion of counsel
reasonably satisfactory to the Investor to such effect), and all other
certificates, licenses, consents and other approvals of the governmental
authorities which are required for the use and occupancy of the Project.
(d) Developer shall furnish to the Investor from time to time upon
request required lien waivers, receipted bills or other evidence of payment of
all costs and expenses incurred in connection with the construction and
equipping of the Project and any other costs and expenses relating to the
Development Assets.
(e) Developer shall pay when due all costs and expenses incurred
by Developer in connection with the construction of the Project.
(f) Developer shall make available to Investor, upon request, all
shop and related drawings used in connection with the Approved Plans and the
construction of the Project at the office and location where the same are kept.
(g) Developer shall commence construction and equipping of the
Project on or before the date that is sixty (60) days after the date hereof
(subject to up to 60 days of delay by reason of causes beyond the reasonable
control of the Developer Parties) and shall continue with such construction
until the Project is completed in accordance with the Approved Plans and the
provisions of this Agreement.
(h) On or prior to the Outside Date, Developer shall deliver to
Investor the Survey, Environmental Report and Title Commitment and cause:
(i) construction and equipping of the Project to be fully
completed in accordance with the Approved Plans (subject to
minor immaterial deviations therefrom) and all legal
requirements;
(ii) a certificate of completion and a valid certificate
of occupancy (or local
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equivalent) to have been obtained from the appropriate
governmental authorities and delivered to Investor (or in lieu
of one or both thereof, a letter reasonably satisfactory to
the Investor from the applicable governmental authority to the
effect that certificates of completion and/or certificates of
occupancy, as the case may be, are not issued, to have been
obtained and delivered to Investor, or an opinion of counsel
reasonably satisfactory to the Investor to such effect to be
obtained and delivered to the Investor); provided, however, if
such certificate of occupancy shall not be permanent Developer
shall cause Investor to have received evidence reasonably
satisfactory to the Investor that the Project is sufficiently
completed for the issuance of a permanent certificate of
occupancy and that a permanent certificate of occupancy shall
be obtained after the passage of time without the need for any
further work;
(iii) certificates from the architect who prepared the
Approved Plans and Developer to be delivered to the Investor
to the effect that all of the work required to be performed to
complete the Project (including all so-called "punch-list"
items) has been performed in substantial accordance with the
Approved Plans and in accordance with all legal requirements
and to the satisfaction of such architect, without material
defect, and that the Project and the Development Assets are
suitable for their intended use and comply with all applicable
zoning and land use regulations;
(iv) all other approvals of governmental authorities
having jurisdiction over the Development Assets to be
received, to the extent that any such approval is a condition
for the lawful use and occupancy thereof, or necessary or
advisable for the operation thereof;
(v) all costs relating to the construction and equipping
the Project and the Development Assets, to be paid in full,
and such instruments as may be required to cause all liens of
record and claims of mechanics and materialmen to be waived,
bonded or insured by the title policy to be delivered to the
Title Company;
(vi) [the Project to be opened as a hotel to the general
public, under the AmeriSuite flag and with all services
provided]; and
(vii) the removal of all debris and soil mounds disclosed
in the current environmental report listed in Schedule E
annexed hereto and made a part hereof and compliance with all
recommendations contained therein.
8.7 INSURANCE. (a) At Developer's expense, Developer shall obtain
and maintain policies of insurance in form and in amounts and issued by
companies, associations or organizations satisfactory to Investor, licensed to
do business in the state where the Development Property is located, covering
such casualties, risks, perils, liabilities and other hazards reasonably
required by Investor as of the date of this Agreement and such other insurance
as Investor shall from time to time reasonably require against such other
insurable hazards which at the time are
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commonly insured against in respect of properties similar to the Development
Assets with due regard being given to the size, type, location, construction,
use and occupancy of the Development Assets. Without limiting the generality of
the foregoing, Developer shall provide the following types of insurance
coverage.
(i) Insurance against loss or damage to the Development
Assets, including, without limitation, risks covered by
insurance of the types known as "all risk" in an amount
sufficient to prevent the application of co-insurance
contributions on loss. The insurance program shall contain
"replacement cost" endorsements and shall provide for
deductibles not to exceed $25,000;
(ii) If any portion of the Development Property is located
in an area designated as "flood prone" or as a special flood
hazard area (Zone or Zone V) pursuant to the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of
1973 (42 U.S.C. Sections 4001, 4128) or by the Federal
Emergency Management Agency and any amendments or supplements
thereto or substitutions therefor, flood insurance to the
extent required by Investor;
(iii) to the extent not covered under Section 8.7(a)(i) and
8.7(a)(ii), difference in conditions coverage (including
flood, if the Development Property is located in a flood zone,
and earthquake, to the extent available at commercially
reasonable rates and to the extent such applicable coverage is
customarily obtained for similar properties with similar uses
in the vicinity of the Development Property) in an amount
reasonably satisfactory to Investor;
(iv) Commercial General Liability Insurance in an amount
of not less than primary limits of $1,000,000 per occurrence
with $2,000,000 aggregate, plus umbrella and/or excess
liability limits equal to or greater than $10,000,000 per
occurrence with $10,000,000 aggregate (or such higher amount
as Investor shall from time to time reasonably require)
combined single limit for bodily injury (including death
resulting therefrom) and third-party property damage; such
insurance shall include premises liability insurance, blanket
contractual liability insurance and personal injury liability
insurance; such requirement may be satisfied by layering of
comprehensive general liability, umbrella and/or excess
liability policies, but in no event shall the primary
comprehensive general liability policy be written for an
amount less than $1,000,000/$2,000,000 (or such higher amount
as Investor shall from time to time reasonably require)
combined single limit for bodily injury (including death
resulting therefrom) and third-party property damage;
(v) During the performance of any material construction
or renovations, including prior to Completion, broad form
Builder's Risk Insurance on an all risk, completed value
basis; and
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(vi) Worker's compensation and employer's liability
insurance subject to the statutory limits in respect of any
work or other operations on, about or in connection with the
Development Property.
(b) Developer may effect coverage under Section 8.7(a) under a
blanket insurance policy reasonably satisfactory to Investor, provided that: (i)
any such policy of blanket insurance shall specify therein, or the insurer under
such policy shall certify to Investor, (A) the maximum amount of the total
insurance afforded by the blanket policy applicable to the Development Assets
and (B) any sublimits in such blanket policy applicable to the Development
Assets, which amounts shall not be less than the amount required pursuant to
Section 8.7(a); (ii) any such policy of blanket insurance shall comply in all
respects with the other provisions of Section 8.7(a); and (iii) the protection
afforded under any policy of blanket insurance shall be no less than that which
would have been afforded under a separate policy or policies relating only to
the Development Assets.
(c) All insurance maintained by Developer hereunder shall provide
that: (i) no cancellation, material change or reduction thereof shall be
effective until at least thirty (30) days after receipt by Investor of notice
thereof; (ii) all losses shall be payable notwithstanding any act or negligence
of Developer or its agents or employees which might, absent such agreement,
result in a forfeiture of all or part of such insurance payment and (iii) shall
name Investor as an additional insured party and loss payee.
(d) Developer shall furnish, or cause to be furnished, to
Investor, without notice or demand by Investor, not later than ten (10) days
prior to the expiration date of each policy required to be maintained by
Developer hereunder, an insurance certificate or certificates executed by the
insurer or its authorized agent evidencing the insurance maintained under such
policy, and reasonably satisfactory to Investor of payment of the premium
therefor. As soon as reasonably practicable after the commencement or renewal,
as applicable, of the term thereof (but in no event later than ten (10) days
after receipt by Developer), Developer shall provide Investor with a copy of any
such policy (and endorsements thereto) maintained by Developer verified (if
available at no material cost to Developer) to be a true copy by the insurer or
its authorized agent.
SECTION 9
APPORTIONMENTS
9.1 REAL PROPERTY APPORTIONMENTS. Representatives of Investor and
the Developer Parties shall perform any and all of the adjustments and
apportionments which are appropriate and usual for a transaction of this nature
and taking into account the simultaneous execution of the amendment to the Lease
contemplated hereby. Without limiting the generality of the foregoing, to the
extent that amounts expended from the FF&E Reserve (as defined in the Lease)
with respect to the Existing Assets exceeds amounts contributed to such FF&E
Reserve attributable to the Existing Assets, the Developer shall transfer by
wire transfer of immediately available funds such excess into the FF&E Reserve
at the Closing. To the extent that the amounts in the FF&E Reserve attributable
to the Existing Assets exceeds the amounts expended
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from the FF&E Reserve with respect to the Existing Assets, Investor shall
authorize the Tenant at the Closing to release such excess to Developer or as
the Developer may direct. The adjustments hereunder shall be calculated or paid
in an amount based upon a fair and reasonable estimated accounting performed and
agreed to by representatives of the Developer Parties and Investor at or prior
to the Closing. Subsequent final adjustments and payments shall be made in cash
or other immediately available funds as soon as practicable after the Closing
Date and in any event within ninety (90) days after such Closing Date, based
upon an agreed accounting performed by representatives of the Developer Parties
and Investor. In the event the parties have not agreed with respect to the
adjustments required to be made pursuant to this Section 9.1 within such
ninety-day period, upon application by either party, Ernst & Young LLP or other
certified public accountants reasonably acceptable to Investor and the Developer
Parties shall determine any such adjustments which have not theretofore been
agreed to between the Developer Parties and Investor. The charges of such
accountant shall be borne by the Developer Parties.
9.2 CLOSING COSTS. The Developer Parties shall pay all costs and
expenses associated with the transactions contemplated hereby, including,
without limitation, recording costs, title insurance premiums, the costs and
expenses of preparing engineering and environmental reports, market studies and
appraisals and the reasonable costs and expenses of legal counsel retained by
Investor.
The obligations of the parties under this Section 9 shall survive the
Closing.
SECTION 10
DEFAULT
10.1 DEFAULT BY THE DEVELOPER PARTIES. (a) Events of Default. Any
of the following shall constitute a default under this Agreement (each, an
"Event of Default") on the part of Developer:
(i) any representation or warranty of the Developer
Parties contained here in or made in connection herewith shall
have been or become untrue, incorrect or misleading in any
material respect; or
(ii) a failure by the Developer Parties to timely perform
or observe their obligations (A) under Sections 2.3, 2.4 or
2.5 above or (B) which pursuant to the terms hereof are to be
performed on or before the Closing Date; or
(iii) failure by any of the Developer Parties to perform or
observe any of their covenants under this Agreement (other
than such failures as are otherwise referred to in this
Section 10.1(a)) which failure continues unremedied for thirty
(30) days after notice thereof by Investor to Developer
requiring the same to be remedied; provided, however, that it
shall not be an event of default on the part of Developer if
such failure is curable but is not reasonably capable of being
cured within such thirty (30) day period provided that the
Developer shall have commenced to cure such failure within
such 30-day period and thereafter shall diligently pursue such
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cure to completion, but in no event later than 90 days after
the date on which the Developer received such notice from
Investor; or
(iv) an order (that has not been vacated or stayed within
60 days from the entry thereof) is made for, or the members,
directors or the stockholders of Developer, Prime or ShoLodge
take any action with regard to, the winding up of any of the
Developer Parties, except a winding up for the purpose of a
merger, restructuring or contribution, the terms of which have
previously been consented to by Investor; or
(v) any of the Developer Parties shall commence any
action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it
or for all or substantially all of its assets; or
(vi) any of the Developer Parties shall make a general
assignment for the benefit of its creditors; or
(vii) there shall be commenced against any of the Developer
Parties any action of a nature referred to in clause (v) above
which (A) results in the entry of any order for relief or any
such adjudication or appointment and (B) remains undismissed,
undischarged or unbonded for a period of 120 days; or
(viii) there shall be commenced against any of the Developer
Parties any action seeking issuance of a warrant of
attachment, execution, distraint or similar process against
all or substantially all of its assets which results in the
entry of an order for any such relief that shall not have been
vacated, discharged, stayed, satisfied or bonded pending
appeal within 120 days from the entry thereof; or
(ix) any of the Developer Parties shall generally not, or
shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
(x) the Completion Date not occurring on or prior to the
Outside Date; or
(xi) the failure by Developer to consummate the within
exchange on the Closing Date as required hereby or to keep and
observe the terms of Section 11.6; or
(xii) if any survey required or requested by Investor
pursuant to the provisions of this Agreement shows any
material condition not approved by Investor, and such material
condition is not removed on or before the Review Period
Expiration Date; or
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(xiii) if construction of the Project in the reasonable
judgment of the Investor is not carried on with reasonable
diligence, or if Investor reasonably concludes that the
Project cannot be completed by the Outside Date (whether as a
result of damage by fire or other casualty or for any other
reason) because construction of the Project is suspended for a
period of thirty (30) consecutive days or otherwise.
(b) Upon the occurrence of an Event of Default, Investor may
terminate this Agreement and/or Investor may pursue any and all remedies
available to it hereunder, under the Lease, under the Incidental Documents, at
law or in equity, including, but not limited to, a suit for specific performance
or other equitable relief.
10.2 DEFAULT BY INVESTOR. If Investor shall have made any
representation or warranty herein which shall be untrue or misleading in any
material respect, or if Investor shall fail to perform any of the covenants and
agreements contained herein to be performed by it and such failure shall
continue for a period of ten (10) days after notice thereof from the Developer
Parties and such default shall continue beyond the expiration of any applicable
cure period, the Developer Parties may, as their sole and exclusive remedy at
law and in equity, terminate this Agreement.
SECTION 11
MISCELLANEOUS
11.1 AGREEMENT TO INDEMNIFY. (a) Subject to any express provisions
of this Agreement to the contrary, (i) the Developer Parties shall indemnify and
hold harmless Investor from and against any and all obligations, claims, losses,
damages, liabilities, and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and disbursements) arising out of (x) events,
contractual obligations, acts or omissions of the Developer Parties that
occurred in connection with the ownership or operation of the Development Assets
prior to the Closing or (y) any damage to property of others or injury to or
death of any person or any claims for any debts or obligations occurring on or
about or in connection with any of the Development Assets or any portion thereof
at any time or times prior to the Closing.
(b) Whenever either party shall learn through the filing of a
claim or the commencement of a proceeding or otherwise of the existence of any
liability for which the other party is or may be responsible under this
Agreement, the party learning of such liability shall notify the other party
promptly and furnish such copies of documents (and make originals thereof
available) and such other information as such party may have that may be used or
useful in the defense of such claims and shall afford said other party full
opportunity to defend the same in the name of such party and shall generally
cooperate with said other party in the defense of any such claim.
(c) The provisions of this Section 11.1 shall survive the Closing
and the termination of this Agreement.
11.2 BROKERAGE COMMISSIONS. Each of the parties hereto represents
to the other parties that it dealt with no broker, finder or like agent in
connection with this Agreement or the
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transactions contemplated hereby. Each party shall indemnify and hold harmless
the other and its respective legal representatives, heirs, successors and
assigns from and against any loss, liability or expense, including, reasonable
attorneys' fees, arising out of any claim or claims for commissions or other
compensation for bringing about this Agreement or the transactions contemplated
hereby made by any broker, finder or like agent claiming to have dealt with the
indemnifying party. The provisions of this Section 11.2 shall survive the
Closing and any termination of this Agreement.
11.3 PUBLICITY. The parties agree that no party shall, with respect
to this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated to any third party without the consent of the other
parties, which consent shall not be unreasonably withheld, delayed or
conditioned, except as required by law or unless such action is taken based on
advice of counsel given in good faith. No party, or its employees shall trade in
the securities of any parent or affiliate of Developer or of Investor until a
public announcement of the transactions contemplated by this Agreement has been
made. No party shall record this Agreement or any notice thereof, except as
required by law or unless such action is taken based on advice of counsel given
in good faith. Notwithstanding the foregoing, at the sole cost and expense of
Developer, the parties shall execute a memorandum hereof in recordable form
containing such information as Investor shall determine and cause the same to be
recorded against the Development Property.
11.4 NOTICES. (a) Any and all notices, demands, consents,
approvals, offers, elections and other communications required or permitted
under this Agreement shall be deemed adequately given if in writing and the same
shall be delivered either in hand, by telecopier with written acknowledgment of
receipt, or by mail or Federal Express or similar expedited commercial carrier,
addressed to the recipient of the notice, postpaid and registered or certified
with return receipt requested (if by mail), or with all freight charges prepaid
(if by Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
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(c) All such notices shall be addressed,
if to the Developer Parties to:
ShoLodge, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxx
Telecopy: (000) 000-0000
with copies to:
Boult Xxxxxxxx Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Prime Hospitality Corp.
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx, Senior Vice President
Telecopy: (000) 000-0000
Prime Law Department
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq., General Counsel
Telecopy: (000) 000-0000
If to Investor, to:
Hospitality Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Sander X. Xxx, Esq.
Telecopy: (000) 000-0000
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(d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses effective upon receipt by the other parties of such notice and each
shall have the right to specify as its address any other address within the
United States of America.
11.5 WAIVERS, ETC. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.6 ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement and all
rights and obligations hereunder shall not be assignable by any party without
the written consent of the other parties, except that (a) Investor may assign
this Agreement to an affiliate of Investor, (b) after the Closing, Developer may
assign its surviving rights, if any, under this Agreement pertaining to the
Development Assets to the Tenant and (c) if Prime is not one of the Developer
Parties, Developer may assign this Agreement to Prime, provided that upon such
assignment becoming effective (i) Prime is the then owner of the Development
Property and (ii) Prime shall have (x) assumed all of Developer's obligations
hereunder, (y) given notice of such assignment to Investor and (z) entered into
such assumption agreements as Investor shall reasonably require. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, successors and permitted assigns. This
Agreement is not intended and shall not be construed to create any rights in or
to be enforceable in any part by any other persons. Prior to the Closing,
Developer shall not sell, assign, lease or otherwise transfer all or any
substantial part of the Development Property unless this Agreement is assigned
to the purchaser, assignee, tenant or other transferee in accordance with its
terms.
11.7 SEVERABILITY. If any provision of this Agreement shall be held
or deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it
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114
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. If under any applicable law any option or
right provided for under the terms and provisions of this Agreement would
(absent the provisions of this Section 11.7) be void, voidable or unenforceable
(under the so-called "Rule Against Perpetuities" or any comparable rule of law,
statute or constitutional provision) by reason of the fact that, under the other
terms and provisions of this Agreement, such option will continue in effect
beyond, or might be exercised at a time after the expiration of, a fixed period
of years in excess of 21 years (or such other number of years as may be
proscribed by such rule of law, statute or constitutional provision) after the
date hereof, then, notwithstanding any other provision of this Agreement to the
contrary, such option or election shall not continue in effect beyond, and may
not be exercised at any time after, (a) the date that is 21 years after the date
of death of the last to survive of the living individuals who are members on the
date hereof of the law firms of Xxxxxxxx & Worcester LLP, Boult Xxxxxxxx Xxxxxxx
& Xxxxx, PLC and Xxxxxxx Xxxx & Xxxxxxxxx and the descendants who are living on
the date hereof of such individuals or (b) such earlier date after which such
option cannot in any lawful manner whatsoever be validly continued in effect or
exercised.
11.8 COUNTERPARTS, ETC. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof.
11.9 GOVERNING LAW. (a) This Agreement shall be interpreted,
construed, applied and enforced in accordance with the laws of The Commonwealth
of Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts, regardless of (i) where
this Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or (iii)
where any breach of any provision of this Agreement occurs, or any cause of
action otherwise accrues; or (iv) where any action or other proceeding is
instituted or pending; or (v) the nationality, citizenship, domicile, principal
place of business, or jurisdiction of organization or domestication of any
party; or (vi) whether the laws of the forum jurisdiction otherwise would apply
the laws of a jurisdiction other than The Commonwealth of Massachusetts; or
(vii) any combination of the foregoing.
(b) To the maximum extent permitted by applicable law, any action
to enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as is provided by law; and the parties consent
to the jurisdiction of said court or courts located in The Commonwealth of
Massachusetts and to service of process by registered mail, return receipt
requested, or by any other manner provided by law.
11.10 PERFORMANCE ON BUSINESS DAYS. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time
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115
for payment or performance shall automatically be extended to the first Business
Day following such date.
11.11 ATTORNEYS' FEES. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees incurred in connection therewith, in preparation therefor and on
appeal therefrom, which amounts shall be included in any judgment therein.
11.12 SECTION AND OTHER HEADINGS. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.13 NONLIABILITY OF TRUSTEES. THE DECLARATION OF TRUST
ESTABLISHING THE INVESTOR, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO
(THE "DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HPT SUITE PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE INVESTOR SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE INVESTOR. ALL
PERSONS DEALING WITH THE INVESTOR, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE INVESTOR FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
11.14 EXECUTION BY SHOLODGE. ShoLodge hereby joins in the making of
this Agreement for the purpose of agreeing to be bound hereby and to cause
Developer to fully and faithfully perform its obligations hereunder.
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116
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
DEVELOPER PARTIES:
SHOLODGE, INC.
By:
---------------------------------
Its (Vice) President
VIRGINIA INNS, INC.
By:
---------------------------------
Its (Vice) President
INVESTOR:
HPT SUITE PROPERTIES TRUST
By:
---------------------------------
Its (Vice) President
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117
SCHEDULE A
APPROVED PLANS
118
SCHEDULE B
DEVELOPMENT PROPERTY
119
SCHEDULE C
EXISTING PROPERTY
120
SCHEDULE D
ADDITIONAL PERMITTED ENCUMBRANCES
WITH RESPECT TO THE EXISTING ASSETS
1. Zoning regulations and ordinances.
2. Financing statements, chattel mortgages and liens on personalty filed
more than five years prior to the Closing Date and not renewed, or
filed against property or equipment no longer located at the Existing
Property or not owned by Investor.
3. Rights of utility companies to lay, maintain, install and repair pipes,
lines, poles, conduits, cable boxes and related equipment on, over and
under the Existing Property and the Real Property of which it forms a
part.
4. Revocability of lack of right to maintain vaults, coal chutes,
excavations or sub-surface equipment beyond the line of the property.
5. Any lien, encumbrance, charge or other matter caused, suffered or
permitted by Tenant, Assignor or Assignee (or anyone claiming by,
through or under any of them) or resulting from or in connection with
breach of the Lease.
6. Any state of facts which an accurate survey would disclose.
7. Rights of tenants or persons in possession.
8. Any other matter not caused by Investor's affirmative act after the
date hereof.
ADDITIONAL PERMITTED ENCUMBRANCES
WITH RESPECT TO THE DEVELOPMENT PROPERTY
None.
121
SCHEDULE E
CURRENT ENVIRONMENTAL REPORT
Phase One Environmental Site Assessment Proposed Xxxxxx Suites Hotel Westfields
Parcel 21, Lot 3 Chantilly, Virginia by Piedmont Geotechnical, Inc. dated May 6,
1998
122
EXHIBIT A
FORM OF SURVEYOR'S CERTIFICATE
SURVEYOR'S CERTIFICATE
TO: Hospitality Properties Trust
and its assignees or nominees
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
RE: Survey Entitled " "
---------------------------------------
dated , 2000, prepared by
---------------
The undersigned hereby certifies that the above-referenced survey was
prepared from an actual on-the-ground instrument survey of the subject premises;
that the same accurately shows the location of the boundaries of the subject
premises and the location of all streets, highways, alleys and public ways
crossing or abutting said premises; that the dimensions of the improvements and
the locations thereof with respect to the boundaries are accurately shown as the
same were situated on ______________, 2000; that there are no encroachments by
improvements appurtenant to adjoining premises upon the subject premises, nor
from the subject premises, unless shown thereon; that all buildings and
structures, if any, lie wholly within all applicable building restriction lines,
if any, and do not violate any restriction or other recorded agreements set
forth in the title insurance commitment for the subject premises dated
____________, 2000, issued to you by _________ Title Insurance Company,
Commitment No. _______ (the "Title Policy"); that all easements and rights of
way which are appurtenant to or burden the subject premises and (i) are referred
to in the Title Commitment or (ii) are apparent from a visual inspection are
delineated thereon, and are located other than through the existing building
shown hereon; that all parking spaces, if any, are delineated thereon; and that,
except as otherwise shown thereon, the subject premises are not located (x)
within any flood hazard or flood way area or district as designed by Federal,
state or municipal authority or (y) within any area subject to regulation by
Federal, state or municipal authority as inland or coastal wetlands, beach,
estuary or the like.
Access to and egress from the subject premises and the improvements and
structures thereon to ________ Street, a public way, are provided by the means
indicated thereon. Municipal water, storm sewer facilities and telephone, gas
and electric services of public utilities are available in the locations
indicated thereon.
The undersigned hereby certifies that the square footage of each parcel
delineated on the above-referenced survey is as set forth thereon, that all such
parcels are contiguous without any strips, gaps or gores existing between any of
said parcels, and that said parcels, when combined, form and create one complete
and uninterrupted parcel without any strips, gaps or gores.
123
This survey is made in accordance with the "Minimum Standard Detail
Requirements for Land Title Surveys" jointly established and adopted by ALTA and
ACSM in 1992.
Dated: , 200
------------- -- --------------------------
Registered Land Surveyor
#
---------- ---------------
[Surveyor's Seal]
000
XXXXXXX X
XXXX XX XXXXXXX XXXXXXXX DEED
[City, State]
SPECIAL WARRANTY DEED
_________________, a __________ corporation, having a place of business
at __________________________, as grantor ("Grantor"),
IN CONSIDERATION OF TEN DOLLARS ($10.00), and other good and valuable
consideration, the receipt of which is hereby acknowledged by Grantor, hereby
grants, bargains, sells, conveys and confirms to HPT SUITE PROPERTIES TRUST, a
Maryland real estate investment trust, having a place of business at 000 Xxxxxx
Xxxxxx, Xxxxxx, XX 00000, as grantee ("Grantee"),
all that certain land and improvements thereon, as more particularly described
on Exhibit A attached hereto, subject to all matters of record.
To have and to hold unto Grantee and its assigns and, subject to all matters of
record, Grantor warrants and will defend the title to the premises unto Grantee
and its assigns, against all persons whomsoever lawfully claiming or to claim
the same, or any part thereof, by, through or under Grantor, but against none
other.
WITNESS the execution hereof, under seal, as of the ___ day of _____,
200_.
GRANTOR:
---------------------------
By:
------------------------
Name:
Title:
SEAL
ATTEST:
By:
------------------------------
Name/Title:
000
XXXXX XX
-----------------
XXXXXX XX
----------------
Xx this ____ day of _________, 200_, before me personally appeared
________, to me personally known, who, being duly sworn, did say that he is the
_________ President of ________________, that the seal affixed to this
instrument is the seal of such corporation, and that the said instrument was
signed and sealed in behalf of such corporation by authority of its Board of
Directors, and the said ___________ acknowledged said instrument to be the free
act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in ______, __ that day and year first above written.
My commission as Notary Public will expire on:
--------------------------
Notary Public
126
EXHIBIT A TO FORM OF LIMITED WARRANTY DEED
THE PREMISES
[See attached copy.]
127
EXHIBIT C
FORM OF XXXX OF SALE FOR DEVELOPMENT ASSETS
XXXX OF SALE,
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Exchange Option Agreement (the "Option
Agreement") dated as of July 9, 2000 between ________________________________
(the "Developer") and HPT Suite Properties Trust (the "Investor"). Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
such terms in the Option Agreement.
FOR AND IN CONSIDERATION of the mutual covenants herein contained and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the Developer, in connection with the
Developer's conveyance on this date of the Development Assets does do hereby
grant, bargain, sell, assign, transfer, deliver and convey unto Investor, all of
the Developer's right, title and interest in and to the following described
personal property relating to the Development Property (collectively, the
"Personal Property"): (a) the FF&E; (b) the Contracts; (c) the Documents; (d)
the Improvements; (e) the Intangible Property; and (f) the Tenant Leases owned
by the Investor in connection with or relating to the Hotel at the Development
Property.
TO HAVE AND TO HOLD all of the Personal Property unto the Investor, its
successors and assigns, forever.
(i) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
(ii) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.
(iii) This Agreement shall be governed by and construed in
accordance with the laws of the state, commonwealth or district in which the
Development Property is located.
(iv) The Developer hereby represents and warrants to the Investor
that the Developer's right, title and interest in and to the Personal Property
is free and clear of all liens and encumbrances made by the Developer.
(v) The Developer shall indemnify and hold harmless the Investor
from and against all liabilities, cost, loss and damage arising under and
relating to the Personal Property prior to the date hereof.
(vi) The Investor hereby assumes and agrees to be bound by all of
the Developer's liabilities and obligations under and relating to the Personal
Property arising after the date hereof and agrees to perform and observe all of
the covenants and agreements set forth
128
therein. The Investor shall indemnify and hold harmless the Developer from and
against all liabilities, cost, loss and damage arising under and relating to the
Personal Property from and after the date hereof.
(v) THE DECLARATION OF TRUST ESTABLISHING THE INVESTOR, A COPY OF
WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED
WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND,
PROVIDES THAT THE NAME "HPT SUITE PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER
THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY,
AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE INVESTOR
SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, THE INVESTOR. ALL PERSONS DEALING WITH THE
INVESTOR, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE INVESTOR FOR THE
PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
IN WITNESS WHEREOF, the Developer and the Investor have caused this
Agreement to be executed under seal as of the ______ day of __________, 200_.
DEVELOPER:
VIRGINIA INNS, INC.
By:
--------------------------------
Its (Vice) President
INVESTOR:
HPT SUITE PROPERTIES TRUST
By:
--------------------------------
Its (Vice) President
129
EXHIBIT D
FORM OF AMENDMENT TO LEASE
AMENDMENT TO LEASE AGREEMENT
AND AMENDMENT TO INCIDENTAL DOCUMENTS
THIS _________AMENDMENT TO LEASE AGREEMENT AND AMENDMENT TO INCIDENTAL
DOCUMENTS (this "Amendment") is entered into as of _______, 200_, by and between
HPT SUITE PROPERTIES TRUST, a Maryland real estate investment trust (the
"Landlord") and XXXX ROCK HOLDING CORP., a Delaware corporation (the "Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant are parties to the Lease;
WHEREAS, Landlord and the Developer Parties are parties to the Option,
which Option was entered into as a condition to Landlord entering into the
Consent;
WHEREAS, pursuant to the Option, at the Closing thereunder, Landlord
and Tenant are to enter into this Amendment (a copy of the form of this
Amendment being attached as an Exhibit thereto), and the Developer Parties are
to cause Tenant to enter into this Amendment;
WHEREAS, if there is an Event of Default under the Option the same
under certain circumstances would constitute an Event of Default under the
Lease;
WHEREAS, simultaneously herewith the Closing under the Option is taking
place; and
WHEREAS, the parties wish to amend certain terms and conditions of the
Lease and Incidental Documents, all as more particularly set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Capitalized terms used in this Agreement shall have the
meanings set forth below or in the Section of this Agreement referred to below:
"AMENDMENT" shall have the meaning ascribed thereto in the first
paragraph hereof.
"ASSIGNOR" shall mean Suite Tenant, Inc., a Tennessee corporation, all
of whose issued and outstanding stock is owned by ShoLodge.
"CONSENT" shall mean that certain Consent To Assignment, Fifth
Amendment To Lease Agreement And Amendment To Incidental Documents of even date
with the Option among Assignor, Tenant and Landlord.
130
"DEVELOPER PARTIES" is a collective reference to Virginia Inns, Inc.
and ShoLodge.
"EXCHANGE PROPERTY" shall mean the real property described in Exhibit A
hereto.
"HPT" shall mean Hospitality Properties Trust, a Maryland real estate
investment trust.
"LEASE" shall mean the Lease Agreement, dated as of November 19, 1997
between Assignor and Landlord as amended by two (2) letters dated November 19,
1997, the First Amendment to Lease Agreement, dated as of March 5, 1999, the
Second Amendment to Lease Agreement and First Amendment to Incidental Documents,
dated as of June 29, 1999, a letter dated June 29, 1999, the Third Amendment to
Lease Agreement dated as of March 3, 2000, the Fourth Amendment to Lease
Agreement and Amendment to Incidental Documents dated as of May 11, 2000 and the
Consent, as assigned by Assignor to Assignee simultaneously with the execution
and delivery of the Consent, as the same may heretofore or hereafter be amended
or modified in accordance with the terms thereof.
"OPTION" shall mean that certain Exchange Option Agreement dated July
9, 2000 among Landlord and the Developer Parties.
"ORIGINAL PROPERTY" shall have the meaning ascribed to the term
"Existing Property" in the Option.
"PRIME" shall mean Prime Hospitality Corp., a Delaware corporation.
"SHOLODGE" shall mean ShoLodge, Inc., a Tennessee corporation.
"TENANT" shall have the meaning ascribed thereto in the first paragraph
hereof.
2. Capitalized terms used but not defined herein shall have the
meaning ascribed thereto in the Lease.
3. The term "Applicable Percentage" as used in the Lease with
respect to the Exchange Property shall mean (a) three percent (3%) with respect
to any portion of the current Fiscal Year remaining after the date hereof, (b)
four percent (4%) with respect to the next Fiscal Year and (c) five percent (5%)
with respect to each Fiscal Year thereafter during the Term.
4. The term "Base Year" as used in the Lease with respect to the
Exchange Property shall mean the twelve (12) months commencing on the earlier of
(a) the first day of the month in which the anniversary of the Hotel at the
Exchange Property first opening for business shall occur and (b) January 1,
2003.
5. The Minimum Rent per Accounting Period due under the Lease is
hereby increased by an amount equal to one-twelfth (1/12th) of the Additional
Rent due for the Original Property for the 12-month period ending on the date
hereof. Such increase shall be effective immediately; provided, however, any
Additional Rent paid with respect to the Existing Property for the period
commencing on the date hereof and ending upon the expiration of the current
Accounting Period shall be applied to such increase and shall be initially based
upon the Total
131
Hotel Sales for the year on which Tenant currently bases its payment of
Additional Rent. If there is an overpayment or underpayment of such increase in
Minimum, Rent, the same shall be reconciled in the manner provided for
reconciliation of Additional Rent under the Lease.
6. Nothing contained herein shall: (a) reduce or relieve Tenant
from its obligations to (i) pay Additional Rent with respect to the Original
Property for the period ending on the date hereof, or (ii) provide audited
statements of Total Hotel Sales for such Original Property for all periods
during the Term ending on the date hereof or (b) reduce Landlord's right to
audit such statements.
7. Exhibit A to the Lease is hereby amended so that from and
after the date hereof Exhibit A-_____ of the Lease which contains a description
of the Original Property is replaced with Exhibit A hereto.
8. Exhibit B to the Lease is hereby amended such that the
restricted trade area for the Exchange Property shall be five (5) miles.
9. Exhibit C to the Lease is hereby amended such that the
Allocable Rent Per Accounting Period for the Exchange Property shall equal the
Minimum Rent per Accounting Period allocated to the Original Property plus the
increase in Minimum Rent provided for in Section 4 above.
10. Notwithstanding anything to the contrary set forth in the
Lease, the first Officer's Certificate and audit of the Exchange Property shall
not be required until the first April 30 after the Fiscal Year in which this
Amendment is executed and delivered.
11. The Security Agreement is hereby amended so that from and
after the date hereof Exhibit A-_____ thereof which contains a description of
the Original Property shall be deemed replaced with Exhibit A attached hereto.
12. Each of the Incidental Documents is hereby amended so that
each reference therein to the Lease or any Incidental Document shall mean the
Lease and such Incidental Document as amended by this Amendment.
13. The Tenant and Prime represent and warrant that no Default or
Event of Default has occurred and is continuing under the Lease or any other
Incidental Document.
14. As amended hereby the Lease and the Incidental Documents shall
remain in full force and effect in accordance with their respective terms and
provisions.
15. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
16. Tenant agrees to reimburse HPT and Landlord for all reasonable
fees and expenses, including without limitation, legal fees and expenses,
incurred by HPT and Landlord in connection with the execution and delivery of
this Amendment and the consummation of the
132
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
under seal as of the date above first written.
HPT SUITE PROPERTIES TRUST
By:
--------------------------------
Its (Vice) President
XXXX ROCK HOLDING CORP.
By:
--------------------------------
Its (Vice) President
[
PRIME HOSPITALITY CORP. hereby joins in the foregoing to evidence its
agreement to be bound by the terms hereof applicable to it.
PRIME HOSPITALITY CORP.
By:
--------------------------------
Its (Vice) President
133
EXHIBIT A
THE EXCHANGE PROPERTY
134
EXHIBIT E
FORM OF XXXX OF SALE FOR EXISTING ASSETS
XXXX OF SALE,
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Exchange Option (the "Option Agreement") dated
July 9, 2000, between ("Developer") and HPT Suite Properties Trust, (the
"Investor"). Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to such terms in the Option Agreement.
FOR AND IN CONSIDERATION of the mutual covenants herein contained and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the Investor, in connection with the
Investor's conveyance on this date of the Existing Assets does hereby grant,
bargain, sell, assign, transfer, deliver and convey unto the Developer, without
recourse or representation, all of the Investor's right, title and interest in
and to the following described personal property relating to the Existing Assets
(collectively, the "Personal Property"): (a) the FF&E; (b) the Contracts; (c)
the Documents; (d) the Improvements; (e) the Intangible Property; and (f) the
Tenant Leases owned by Investor in connection with or relating to the Hotel at
the Existing Property.
TO HAVE AND TO HOLD all of the Personal Property unto the Developer,
its successors and assigns, forever.
(i) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
(ii) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.
(iii) This Agreement shall be governed by and construed in
accordance with the laws of the state, commonwealth or district in which the
Existing Property is located.
(iv) The Developer hereby assumes and agrees to be bound by all of
the Investor's liabilities and obligations under and relating to the Personal
Property arising after the date hereof and agrees to perform and observe all of
the covenants and agreements set forth therein. The Developer shall indemnify
and hold harmless the Investor from and against all liabilities, cost, loss and
damage arising under and relating to the Personal Property from and after the
date hereof.
(v) THE DECLARATION OF TRUST ESTABLISHING THE INVESTOR, A COPY OF
WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED
WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND,
PROVIDES THAT THE NAME "HPT SUITE PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER
THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY,
AND
135
THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE INVESTOR SHALL
BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF,
OR CLAIM AGAINST, THE INVESTOR. ALL PERSONS DEALING WITH THE INVESTOR, IN ANY
WAY, SHALL LOOK ONLY TO THE ASSETS OF THE INVESTOR FOR THE PAYMENT OF ANY SUM OR
THE PERFORMANCE OF ANY OBLIGATION.
IN WITNESS WHEREOF, the Investor and the Developer have caused this
Agreement to be executed under seal as of the ______ day of __________, 200_.
DEVELOPER:
-----------------------------------
Its (Vice) President
INVESTOR:
HPT SUITE PROPERTIES TRUST
By:
--------------------------------
Its (Vice) President
136
EXHIBIT N
PURCHASE PRICE ALLOCATION
Present Value of HPT Lease Guaranty
Deposit $11,000,000
less reserve for operating deficits $ 9,382,375
-----------
Purchase Price $ 1,617,625
137
EXHIBIT P
MINIMUM ANNUAL RENT
Before July 1, 2011
Texas Property Amount
-------------- ------
Grand Prairie, TX $1,087,572
Houston (Hobby Airport), TX 982,812
San Antonio (Crossroads), TX 841,860
----------
Total $2,912,244
After June 30, 2011
Texas Property Amount
-------------- ------
Grand Prairie, TX $1,168,068
Houston (Hobby Airport), TX 1,055,556
San Antonio (Crossroads), TX 904,176
----------
Total $3,127,800
138
EXHIBIT R
PRIME DEVELOPMENT SITE
(attach legal description of
Utica, Michigan property)
139
EXHIBIT S
UNCURED OBJECTIONS
See Exhibits to the Indemnity Agreement
140
EXHIBIT T
TEXAS RENT CALCULATION
