FIRST AMENDMENT TO LEASE AGREEMENT
(Sleep Inn, Sarasota, Florida)
This First Amendment to Lease Agreement (this "First Amendment") is entered
into by and between Host Ventures, Inc., a Maryland corporation ("Lessor"), and
Crossroads Hospitality Tenant Company, L.L.C., a Delaware limited liability
company ("Lessee"), and is dated effective as of March 14th, 1997 (the
"Effective Date").
RECITALS
A. Lessor, or its predecessor-in-interest, and Lessee have previously
entered into that certain Lease Agreement (Sleep Inn, Sarasota, Florida) (the
"Lease Agreement") dated September 6, 1996, by and between Lessor, as Lessor,
and Lessee, as Lessee, and covering the "Leased Property" known as the Sleep Inn
Motel, Sarasota, Florida.
X. Xxxxxx and Lessee now desire to modify and amend the Lease Agreement
in certain respects as provided hereinbelow.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as
follows:
1. As of the Effective Date, the Lease Agreement is amended by the
deletion therefrom of Sections 3.1(A) and (B) in their entirety, and in place of
and substitution therefor, new Sections 3.1(A) and (B) added, as follows:
(A) BASE RENT: Beginning with March 31, 1997, in consecutive monthly
installments, on or before the last day of each calendar month of the Term
("Base Rent") an amount corresponding to the amounts set forth on EXHIBIT D
attached hereto and made a part hereof, provided, however, that the first
and last monthly payments of Base Rent shall be pro-rated as to any partial
month (subject to adjustment as provided in Sections 5.2, 14.5, 15.3, 15.5,
and 15.6). If required by any mortgagee of Lessor and at the request of
Lessor, Base Rent payments shall in a timely fashion be wired or mailed to
an account designated by any such mortgagee for such Base Rent payments.
(B) PERCENTAGE RENT: For each Fiscal Year during the Term commencing
with the Fiscal Year beginning January 1, 1997, Tenant shall pay percentage
rent ("Percentage Rent") on a quarterly basis within twenty (20) days
after the end of each calendar quarter and in an amount calculated in
accordance with the formula set forth on EXHIBIT E attached hereto and made
a part hereof. If required by any mortgagee of Lessor and at the request of
Lessor, Percentage Rent payments shall in a timely fashion be wired or
mailed to an account designated by any such mortgagee for such Percentage
Rent payments.
2. As of the Effective Date, the Lease Agreement is hereby amended by the
deletion therefrom of the introductory paragraph of Section 3.3 in its entirety,
and, in place of and in substitution thereof, a new introductory paragraph added
as follows:
3.3 ANNUAL BUDGET. The Lessee shall, on or before sixty (60) days
after the Commencement Date, submit the Annual Budget for 1996 (or the
remainder thereof) to the Lessor for Lessor's approval within thirty (30)
days of its receipt of such Annual Budget. For all Fiscal Years
thereafter, not later than October 31 of each Fiscal Year, Lessee shall
submit the Annual Budget for the next fiscal year to Lessor for Lessor's
approval. The Annual Budget for 1996 and all Fiscal Years thereafter shall
by month and quarter contain the following:
3. As of the Effective Date, the Lease Agreement is hereby amended by the
deletion therefrom of Section 25(b) in its entirety, and, in place of and in
substitution therefor, a new Section 25 (b) added, as follows:
(b) Lessee will furnish the following to Lessor:
(1) with reasonable promptness, such information respecting
the financial condition and affairs of Lessee including audited
financial statements prepared by Coopers & Xxxxxxx, L.L.C. or such other
certified independent accounting firm as may be approved by Lessor, as
Lessor may reasonably request from time to time, provided, however that
in the absence of special and/or nonrecurring circumstances Lessee shall
only be required to furnish audited financial information to Lessor no
more than once per Fiscal Year; and
(2) the most recent Financials of Lessee within 25 days after
each quarter of any Fiscal Year (or, in the case of the final quarter in
any Fiscal Year, the most recent audited Financials of Lessee within 60
days); and
(3) on or about the 15th day of each month, a true, complete and
correct cash flow statement with respect to the Leased Property in the form
attached hereto as EXHIBIT K and incorporated herein by reference (and
attached hereto as Rider 1), reflecting (a) a detailed accounting of Gross
Revenues, Gross Room Revenues (and other cash receipts of any kind
whatsoever) and all Operating Expenses (as defined in Section 48 hereof),
and other cash payments and disbursements (of any kind whatsoever), and (b)
year-to-date summaries of same, together with an Officer's Certificate
stating that such cash flow statement is true, complete and correct; and
(4) on or about the 15th day of each month, an Officer's
Certificate stating that all Operating Expenses (as defined in Section 48
hereof) with respect to the Leased Property which have accrued as of the
last day of the month preceding the delivery of the cash flow statement
referred to in (3) above have been fully paid or otherwise reserved or
provided for by Lessee; and
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(5) within seventy-five (75) days after the end of each Fiscal
Year, with a report setting forth (a) the Net Operating Income (as defined
in Section 48 hereof) for such Fiscal Year, (b) the average occupancy rate
of the Leased Property during such Fiscal Year, and (c) the capital
repairs, replacements and improvements performed at the Leased Property
during such Fiscal Year and the cost of same; and
(6) on an annual basis, copies of all reports submitted to
governmental authorities and agencies (including, but not limited to,
reports relating to sales, use and occupancy taxes) and any franchisor.
4. As of the Effective Date, the Lease Agreement is hereby amended by the
deletion therefrom of SECTION 40(B) in its entirety, and, in the place of and in
substitution therefor, a new SECTION 40(B) added, as follows:
(B) Not later than October 31 of each Fiscal Year, Lessee shall
submit to Lessor for Lessor's approval pursuant to the provisions of
Section 3.3 hereof, a Capital Expenditure Budget for the next Fiscal Year
as part of Lessee's submission to Lessor of the Annual Budget. The purpose
for the Capital Expenditure Budget shall be to keep the Leased Property
competitive with any hotel or hotels similar in nature and type to the
Leased Property in the area of the Competitive Set and to keep the Leased
Property in compliance with the applicable provisions of the Franchise
Agreement. The Capital Expenditure Budget shall include without
limitation, the expenditures required, necessary and/or anticipated for the
repair, replacement or refurbishment of carpet, soft goods, FF&E and
structural and mechanical items, alterations to the Leased Property (but
only in accordance with Section 10.1 hereof), reconstruction in the event
of damages or destruction of the Leased Property (but only in accordance
with Section 14 hereof), restoration pursuant to a Taking (but only in
accordance with Section 15 of this Lease), other required or desirable
capital improvements to the Leased Property or any of the components, other
required or desirable capital improvements to the Leased Property or any of
the components, other required or desired working capital, and such other
items characterized as capital expenditures under the Uniform System
(excluding, however, items required to be maintained at Lessor's cost
pursuant to Section 9.1.2 of this Lease). Lessor shall maintain a separate
interest bearing account referred to as the Capital Expenditure Reserve
Account from which all costs and expenses reflected in an approved Capital
Expenditure Budget should be paid; provided, however, Lessee shall be an
authorized signatory on such account. For the first four (4) years of the
Term hereof, Lessor shall, within five (5) days of its receipt of the
monthly profit and loss statement described in Section 25(b)(3) hereof,
fund into the Capital Expenditure Reserve Account (or if required by its
mortgagee, all or portions thereof into a similar account designated by
such mortgagee), an amount equal to four percent (4%) of the Gross Room
Revenues for the preceding month (pro-rated for any partial calendar
month); provided this amount will be increased to six percent (6%) for
years five (5) and thereafter during the Term hereof. Lessee understands
and agrees that after the approval by Lessor of
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any annual Capital Expenditure Reserve Budget, no monies can be expended
from the Capital Expenditure Reserve Account for the applicable year
which were not reflected in that year's annual Capital Expenditure
Budget (or if such expenditures were reflected on the applicable budget,
but were underestimated) without the prior written consent of Lessor,
which will not be unreasonably withheld or delayed; provided, that in
the event of an emergency necessitating expenditures for the protection
of life or health or the protection of the Leased Property (a) Lessee
shall immediately pay or incur the costs and expenses in its reasonable
judgment necessary to insure such protection and irrespective of whether
such sums are reflected on the applicable Capital Expenditure Budget,
and (b) Lessor shall fund additional monies into the Capital expenditure
Revenue Account with regard to same if monies in said account are
insufficient to pay the costs and expenses associated with such
emergency. In addition to those statements required by Section 25
hereof, Lessee agrees during the Term hereof to provide to Lessor
monthly reports and invoices as to the expenditures made from the
Capital Expenditure Reserve Account for the operations of the Leased
Property for the immediately preceding month.
5. PARAGRAPH INTENTIONALLY OMITTED.
[SPACE INTENTIONALLY LEFT BLANK]
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6. Except as amended hereby, the Lease Agreement remains unchanged, in
full force and effect, and the binding obligation of Lessor and Lessee.
Capitalized terms used herein and not otherwise defined shall have the meanings
asserted thereto in the Lease Agreement.
Executed effective as of the aforementioned Effective Date.
Lessor:
HOST VENTURES, INC., a Maryland corporation
By: /s/ Xxxxxxx X. XxXxxxx
--------------------------------
Xxxxxxx X. XxXxxxx, President
LESSEE:
CROSSROADS HOSPITALITY TENANT
COMPANY, L.L.C., a Delaware limited
liability company
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxx, President
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