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EXHIBIT 10.2
AGREEMENT TO LEASE
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THIS AGREEMENT TO LEASE (this "Agreement") is entered into as of the
14th day of May, 1998, by and between HOSPITALITY PROPERTIES TRUST, a Maryland
real estate investment trust ("HPT"), and CANDLEWOOD HOTEL COMPANY, INC., a
Delaware corporation ("Candlewood").
W I T N E S S E T H:
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WHEREAS, pursuant to a Purchase and Sale Agreement, dated as of the date
hereof (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Purchase Agreement"), by and among HPT and Candlewood
and certain of its wholly owned subsidiaries, HPT, either directly or through a
wholly owned subsidiary (such entity, "Landlord"), is planning to acquire
certain properties, as more particularly described in the Purchase Agreement;
and
WHEREAS, subject to and upon the terms and conditions set forth in this
Agreement, pursuant to a Lease Agreement in the form attached hereto as Exhibit
A (the "Lease"), HPT has agreed to lease or cause Landlord to lease to a wholly
owned subsidiary of Candlewood, ("Tenant"), and Candlewood has agreed to cause
Tenant to lease from Landlord, all of the Properties (this and other capitalized
terms used and not otherwise defined herein having the meanings ascribed to such
terms in the Purchase Agreement and/or the 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. CERTAIN DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Purchase Agreement
and/or the Lease.
2. AGREEMENT TO LEASE. Subject to and upon the terms and conditions
hereinafter set forth, on the initial Closing Date, Landlord and Tenant shall
each execute and deliver the Lease with respect to the Properties acquired on
such date and such date shall be the Commencement Date under the Lease. On each
Closing Date thereafter, Landlord and Tenant shall each execute and deliver an
amendment to the Lease with respect to the Properties acquired on such date in
the form attached hereto as Exhibit B (each an "Amendment").
3. MINIMUM RENT. The Minimum Rent payable under the Lease, as amended by
any Amendments, shall be, with respect to each Property, the amount set forth in
Exhibit C.
4. REPRESENTATIONS OF TENANT, ETC. As an inducement to Landlord to enter
into the Lease and any Amendments, Candlewood shall cause Tenant to represent
and warrant to Landlord, as of each Closing Date, that:
(a) STATUS AND AUTHORITY OF TENANT, ETC. Tenant is a corporation
duly organized and validly existing under the laws of its state of incorporation
and has all requisite
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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 Lease, and any Amendments thereto, and to
transact the business in which it is engaged or presently proposes to engage.
Tenant 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 TENANT, ETC. Tenant has taken all necessary
action (corporate or other) under its charter documents to authorize the
execution, delivery and performance of the Lease, as amended by any Amendments,
and the Lease, as so amended, constitutes the valid and binding obligation and
agreement of Tenant 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 the Lease, as amended by any Amendments, by Tenant, nor compliance
with the terms and provisions 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 Tenant pursuant to the terms of any indenture, mortgage, deed of
trust, note, evidence of indebtedness, agreement or other instrument to which
Tenant 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 Tenant or any of its properties, and none of
Tenant 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 Tenant, and no such material litigation or
proceeding is, to the knowledge of Tenant, threatened against Tenant, and, to
the knowledge of Tenant, no investigation looking toward such a proceeding has
begun or is contemplated.
(e) DISCLOSURE. To the knowledge of Tenant, neither this Agreement
nor any other document, certificate or statement furnished to HPT by or on
behalf of Tenant 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 Tenant, there is no fact or condition which
materially and adversely affects the business, operations, affairs, properties
or condition of Tenant which has not been set forth in this Agreement or in the
other documents, certificates or statements furnished to HPT in connection with
the transactions contemplated hereby.
Tenant's liability with respect to the representations and warranties
set forth in this Agreement shall survive the Commencement Date.
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5. REPRESENTATIONS OF LANDLORD. As an inducement to the Tenant to enter
into the Lease and any Amendments, HPT shall cause Landlord to represent to
Tenant, as of each Closing Date, that:
(a) STATUS AND AUTHORITY OF LANDLORD. Landlord 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. 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 Lease, as amended by
any Amendments, and the Lease, as so amended, 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. Neither the execution, delivery or
performance of the Lease, as amended by any Amendments, by Landlord, nor
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, to the knowledge of Landlord, no investigation looking toward such a
proceeding has begun or is contemplated.
Landlord's liability with respect to the representations and warranties
set forth in this Agreement shall survive the Commencement Date.
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6. ADDITIONAL TENANT OBLIGATIONS. On or before the Commencement Date,
Candlewood shall cause each of the following to be delivered to HPT (the
obligation of Landlord to enter into the Lease and any Amendments being subject
to such delivery):
(a) A security agreement with respect to all tangible personal
property owned by Tenant and used in connection with the operation of the
Properties leased on such date, such security agreement to create a first lien
and security interest in such property and to be otherwise in the form attached
hereto as Exhibit D;
(b) Such financing statements as Landlord may reasonably require to
perfect the interests and liens granted pursuant to the security agreement
described in paragraph (a) above;
(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 and to be otherwise in the form attached hereto as Exhibit E;
(d) A stock pledge agreement with respect to all of the issued and
outstanding stock of Tenant, together with a stock power in blank, such stock
pledge and security agreement to create a first lien and security interest in
such shares and to be in the form attached hereto as Exhibit F; and
(e) A guaranty agreement with respect to Tenant's obligations under
the Lease, as amended by the Amendments, in the form attached hereto as Exhibit
G.
7. CONDITION PRECEDENT. The obligations of the parties hereunder with
respect to each Property shall be subject to the consummation of the
transactions contemplated by the Purchase Agreement with respect to such
Property.
8. NOTICES. All notices required or desired to be given hereunder shall
be given in the manner provided in Section 11.4 of the Purchase Agreement.
9. ASSIGNMENT. Candlewood shall not assign or transfer, directly or
indirectly, its rights under this Agreement without the prior written consent of
HPT, which consent may be given or withheld by HPT in HPT's sole discretion. HPT
shall not assign or transfer, directly or indirectly, its rights under this
Agreement other than to a wholly owned subsidiary of HPT without the prior
written consent of Candlewood, which consent may be given or withheld by
Candlewood in Candlewood's sole discretion.
10. DEFAULT.
(a) DEFAULT BY CANDLEWOOD. If Candlewood shall fail to perform any of
the covenants and agreements contained herein to be performed by Candlewood and
such failure continues for a period of ten (10) days after notice thereof from
HPT, HPT may terminate this Agreement and/or pursue any and all remedies
available to HPT at law or in equity, including, but not limited to, a suit for
specific performance or other equitable relief. A default by the Candlewood
Parties under the Purchase Agreement shall be deemed a default by Candlewood
under this Agreement.
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(b) DEFAULT BY HPT. If HPT 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 Candlewood,
Candlewood may terminate this Agreement and/or pursue any and all remedies
available to Candlewood at law or in equity, including, but not limited to, a
suit for specific performance or other equitable relief. A default by the
Purchaser under the Purchase Agreement shall be deemed a default by HPT under
this Agreement.
11. EXPENSES. Tenant shall pay its and HPT's expenses incident to the
negotiation, preparation and carrying out of this Agreement, including, without
limitation, all reasonable fees and expenses of HPT's counsel. Tenant shall also
pay the cost of all recording fees, transfer fees and other like costs and
expenses incident to this Agreement.
12. 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 HPT or Candlewood until a public announcement of the transactions
contemplated by this Agreement has been made.
13. 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.
14. 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.
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15. 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 other, 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.
16. 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.
17. 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 laws.
18. 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.
19. 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.
20. 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.
21. NONLIABILITY OF TRUSTEES, ETC. THE DECLARATION OF TRUST ESTABLISHING
HPT, 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 "HOSPITALITY 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 HPT
SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, HPT. ALL PERSONS DEALING WITH HPT, IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF HPT FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.
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IN WITNESS WHEREOF, HPT and Candlewood have executed this Agreement
under seal as of the date above first written.
HOSPITALITY PROPERTIES TRUST
By:/s/ Xxxx X. Xxxxxx
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Its President
CANDLEWOOD HOTEL COMPANY, INC.
By:/s/ Xxxxxx Xxxxxxxxx
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Its (Vice) President
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