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EXHIBIT 10.3
SECOND AMENDMENT TO LEASE AGREEMENT
AND FIRST AMENDMENT TO INCIDENTAL DOCUMENTS
THIS SECOND AMENDMENT TO LEASE AGREEMENT AND FIRST AMENDMENT TO
INCIDENTAL DOCUMENTS (this "Amendment") is entered into as of June 29, 1999, by
and among (i) HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment
trust ("HPT"); (ii) HPT SUITE PROPERTIES TRUST, a Maryland real estate
investment trust (the "Landlord"); (iii) SHOLODGE, INC., a Tennessee
corporation, ("Sho"); and (iv) SUITE TENANT, INC., a Tennessee corporation (the
"Tenant").
W I T N E S S E T H:
WHEREAS, pursuant to a Purchase and Sale Agreement, dated as of October
24, 1997 (the "Original Purchase Agreement"), and an Agreement to Lease, dated
as of October 24, 1997 (the "Original Agreement to Lease"), HPT acquired from
Sho and certain of its affiliates certain hotel properties and the Landlord and
the Tenant entered into a Lease Agreement, dated as of November 19, 1997, as
amended by First Amendment to Lease Agreement, dated as of March 5, 1999 (as so
amended, the "Lease"); and
WHEREAS, the obligations of the Tenant under the Lease are secured and
guaranteed by certain undertakings and agreements of Sho and the Tenant pursuant
to the Incidental Documents (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in the
Lease); and
WHEREAS, on the date hereof, the Landlord is acquiring from Sho and
certain of its affiliates six additional Xxxxxx Suites hotels pursuant to a
Purchase and Sale Agreement dated as of the date hereof (the "New Purchase
Agreement"); and
WHEREAS, pursuant to the New Purchase Agreement and an Agreement to
Lease, dated as of the date hereof (the "New Agreement to Lease"), the parties
wish to amend certain terms and conditions of the Lease and Incidental Documents
to subject such additional Xxxxxx Suites hotel properties to the terms and
conditions thereof, all as more particularly set forth herein; and
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WHEREAS, the transactions contemplated by this Amendment are
of direct substantial and material benefit to Sho;
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. The definition of "Applicable Percentage" set forth in the Lease is
hereby deleted in its entirety and the following inserted in its place:
"Applicable Percentage" shall mean (i) with respect to the
Properties described in Exhibit A-1 through A-14, (a) three
percent (3%) with respect to the 1998 Fiscal Year; (b) four
percent (4%) with respect to the 1999 Fiscal Year; and (c) five
percent (5%) with respect to each Fiscal Year thereafter during
the Term; (ii) with respect to the Properties located in Colorado
Springs, Colorado and Overland Park, Kansas, (a) four percent
(4%) with respect to any portion of the 1999 Fiscal Year
occurring during the Term and (c) five percent (5%) with respect
to each Fiscal year thereafter during the Term; and (iii) with
respect to the Properties located in Charlotte, North Carolina,
Alpharetta, Georgia, Irving, Texas and Dulles/Sterling, Virginia,
(a) three percent (3%) with respect to any portion of the 1999
Fiscal Year occurring during the Term; (b) four percent (4%) with
respect to the 2000 Fiscal Year; and (c) five percent (5%) with
respect to each Fiscal Year thereafter during the Term.
2. 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
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respect to each Property described in Exhibit A-1 through A-14
and located in Arizona, the thirteen (13) Accounting Periods
commencing July 13, 1998; and (iii) with respect to each
Property described in Exhibit A-15 through A-20, the 2000
Fiscal Year.
3. 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 One Million Six
Hundred Thirty-Six Thousand Nine Hundred Twenty-Three Dollars
($1,636,923) per Accounting Period.
4. The definition of "Purchase Agreement" set forth in the Lease is
hereby deleted in its entirety and the following inserted in its place:
"PURCHASE AGREEMENT" shall mean, collectively, the Purchase and
Sale Agreement, dated as of October 24, 1997, and the Purchase
and Sale Agreement, dated as of June 29, 1999, as they may be
amended, restated, supplemented or otherwise modified from time
to time.
5. The definition of "Retained Funds" set forth in the Lease is hereby
deleted in its entirety and the following inserted in its place:
"RETAINED FUNDS" shall mean a cash amount equal to Twenty-One
Million Two Hundred Eighty Thousand Dollars ($21,280,000).
6. Section 2.3 of the Lease is hereby amended by deleting the date
"January 31, 2008" appearing therein and inserting the date "June 30, 2011" in
its place.
7. Section 3.1.2.(c) of the Lease is hereby amended by deleting the
name "Deloitte & Touche LLP" appearing therein and inserting the name "Ernst &
Young LLP" in its place.
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8. Exhibit A to the Lease is hereby amended by adding Exhibits A-15
through A-20 attached hereto as Exhibit A at the end thereof and all references
in the Lease to "Exhibit A-1 through A-14" are hereby amended to refer to
"Exhibit A-1 through A-20".
9. Exhibit B to the Lease is hereby deleted in its entirety and Exhibit
B to this Amendment inserted in its place.
10. Exhibit C to the Lease is hereby deleted and Exhibit C to this
Amendment inserted in its place.
11. Notwithstanding anything to the contrary set forth in the Lease,
the first Officer's Certificate and audit of the properties under the New
Purchase Agreement shall not be required until April 30, 2001.
12. Section 10(b) of the Guaranty is hereby amended by deleting the
dollar amount "Eighteen Million Five Hundred Thousand Dollars ($18,500,000)"
appearing therein and inserting the dollar amount "Twenty-Eight Million Five
Hundred Thousand Dollars ($28,500,000)" in its place.
13. The Security Agreement is hereby amended by adding Exhibits A-15
through A-20 attached hereto as Exhibit A at the end thereof and all references
in the Security Agreement to "Exhibit A-1 through A-14" are hereby amended to
refer to "Exhibit A-1 through A-20".
14. All references in the Lease to the Incidental Documents are hereby
amended to refer to the Incidental Documents as amended by this Amendment.
15. Each of the Incidental Documents is hereby amended so that each
reference therein to the Lease, the Original Purchase Agreement, the Original
Agreement to Lease or to any other Incidental Document shall mean the Lease,
such Original Agreement and such Incidental Document as amended by this
Amendment and shall include the New Purchase Agreement and the New Agreement to
Lease.
16. The Tenant and Sho represent and warrant that no Default or Event
of Default has occurred and is continuing under the Lease or any other
Incidental Document.
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17. As amended hereby the Lease and the Incidental Documents shall
remain in full force and effect in accordance with their respective terms and
provisions.
18. 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.
19. Tenant and Sho agree, jointly and severally, 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
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
under seal as of the date above first written.
HOSPITALITY PROPERTIES TRUST
By: /S/ Xxxx X. Xxxxxx
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Its President
HPT SUITE PROPERTIES TRUST
By: /S/ Xxxx X. Xxxxxx
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Its President
SHOLODGE, INC.
By: /S/ Xxxx Xxxxx
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Its President
SUITE TENANT, INC.
By: /S/ Xxxx Xxxxx
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Its President
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EXHIBIT A
EXHIBITS A-15 THROUGH A-20 OF THE LEASE
[See attached copies.]
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EXHIBIT B
RESTRICTED TRADE AREA
Property Area
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Tampa, FL 3 miles
San Antonio, Riverwalk, TX 3 miles
Fort Xxxxx, IN 10 miles
Albuquerque, NM 3 miles
El Paso, TX 3 miles
Hendersonville, TN 5 miles
Cumberland, GA 3 miles
Gwinett, GA 3 miles
Columbus, OH 3 miles
Xxxxxxx Xxxxxxx, XX 3 miles
Dallas, Galleria, TX 3 xxxxx
Xxxxxx, TX 5 miles
Tempe, AZ 3 miles
Tucson, AZ 3 miles
Overland Park, KS 3 miles
Dulles Airport/Sterling, VA 3 miles
Charlotte, NC 5 miles
Colorado Springs, CO 5 miles
Las Colinas/Irving, TX 5 miles
Alpharetta, GA 3 miles
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EXHIBIT C
ALLOCATION OF MINIMUM RENT
Property Allocable Rent Per Accounting Period
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Tampa, FL $ 33,168
San Antonio, Riverwalk, TX 108,706
Fort Xxxxx, IN 74,560
Albuquerque, NM 88,600
El Paso, TX 70,376
Tempe, AZ 77,446
Tucson, AZ 65,657
Hendersonville, TN 57,782
Cumberland, Smyrna, GA 73,835
Gwinett, Duluth, GA 87,156
Columbus, OH 103,195
Atlanta Airport, GA 79,360
Dallas, Galleria, TX 86,074
Austin, TX 71,008
Overland Park, KS 95,631
Dulles Airport/Sterling, VA 98,215
Charlotte, NC 87,877
Colorado Springs, CO 94,769
Las Colinas/Irving, TX 94,769
Alpharetta, GA 88,739
