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EXHIBIT 10.9
MASTER
LEASE AGREEMENT
DATED AS OF MAY 7, 1999
BETWEEN
XXXXXXX INNS, INC., SIGNATURE PROPERTIES, LLC,
SIGNATURE PROPERTIES OF ILLINOIS, L.P.,
SIE CORPORATION, AND
SI SPRINGFIELD CORPORATION
COLLECTIVELY,
AS LESSOR
AND
XXXXXXX HOSPITALITY, L.L.C.
AS LESSEE
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TABLE OF CONTENTS
SECTION Page
ARTICLE I.....................................................................1
1.1 Leased Property..............................................1
1.2 Term.........................................................2
ARTICLE II....................................................................3
Definitions...........................................................3
ARTICLE III..................................................................10
3.1 Rent........................................................10
3.2 Payment of Percentage Rent..................................12
3.3 Confirmation of Percentage Rent.............................13
3.4 Additional Charges..........................................13
3.5 Net Lease Provision.........................................14
3.6 Conversion of Property......................................14
ARTICLE IV...................................................................14
4.1 Payment of Impositions......................................14
4.2 Notice of Impositions.......................................15
4.3 Adjustment of Impositions...................................15
4.4 Utility Charges.............................................16
4.5 Insurance Premiums..........................................16
ARTICLE V....................................................................16
5.1 No Termination, Abatement, etc..............................16
5.2 Abatement Procedures........................................16
ARTICLE VI...................................................................17
6.1 Ownership of the Leased Property............................17
6.2 Lessee's Personal Property..................................17
6.3 Lessor's Lien...............................................17
ARTICLE VII..................................................................17
7.1 Condition of the Leased Property............................17
7.2 Use of the Leased Property..................................18
7.3 Lessor to Grant Easements, etc..............................19
ARTICLE VIII.................................................................20
8.1 Compliance with Legal and Insurance Requirements, etc.......20
8.2 Legal Requirement Covenants.................................20
8.3 Environmental Covenants.....................................20
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SECTION Page
ARTICLE IX...................................................................23
9.1 Maintenance and Repair......................................23
9.2 Encroachments, Restrictions, etc............................24
ARTICLE X....................................................................24
10.1 Alterations.................................................24
10.2 Salvage.....................................................25
10.3 Joint Use Agreements........................................25
ARTICLE XI...................................................................25
Liens ............................................................25
ARTICLE XII..................................................................26
Permitted Contests...................................................26
ARTICLE XIII.................................................................27
13.1 General Insurance Requirements..............................27
13.2 Replacement Cost............................................28
13.3 Waiver of Subrogation.......................................28
13.5 Increase in Limits..........................................28
13.6 Blanket Policy..............................................29
13.7 No Separate Insurance.......................................29
ARTICLE XIV..................................................................29
14.1 Insurance Proceeds..........................................29
14.2 Reconstruction in the Event of Damage or Destruction........29
14.3 Lessee's Property...........................................30
14.4 Non-Abatement of Rent.......................................30
14.5 Damage Near End of Term.....................................30
14.6 Waiver......................................................30
ARTICLE XV...................................................................30
15.1 Definitions.................................................30
15.2 Parties' Rights and Obligations.............................31
15.3 Total Taking................................................31
15.4 Allocation of Award.........................................31
15.5 Partial Taking..............................................31
15.6 Temporary Taking............................................31
ARTICLE XVI..................................................................32
16.1 Events of Default...........................................32
16.2 Surrender...................................................33
16.3 Damages.....................................................33
16.4 Waiver......................................................34
16.5 Application of Funds........................................35
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SECTION Page
ARTICLE XVII.................................................................35
Lessor's Right to Cure Lessee's Default..............................35
ARTICLE XVIII................................................................35
18.1 Personal Property Limitation................................35
18.2 Sublease Rent Limitation....................................35
18.3 Sublease Tenant Limitation..................................35
18.4 Lessee Ownership Limitation.................................36
ARTICLE XIX..................................................................36
Holding Over.........................................................36
ARTICLE XX...................................................................36
Risk of Loss.........................................................36
ARTICLE XXI..................................................................36
Indemnification......................................................36
ARTICLE XXII.................................................................37
22.1 Subletting and Assignment...................................37
22.2 Attornment..................................................38
ARTICLE XXIII................................................................38
Officer's Certificates; Financial Statements; Lessor's
Estoppel Certificates and Covenants..................................38
ARTICLE XXIV.................................................................39
Lessor's Right to Inspect............................................39
ARTICLE XXV..................................................................40
No Waiver............................................................40
ARTICLE XXVI.................................................................40
Remedies Cumulative..................................................40
ARTICLE XXVII................................................................40
Acceptance of Surrender..............................................40
ARTICLE XXVIII...............................................................40
No Merger of Title...................................................40
ARTICLE XXIX.................................................................40
Conveyance by Lessor.................................................40
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SECTION Page
ARTICLE XXX..................................................................41
Quiet Enjoyment......................................................41
ARTICLE XXXI.................................................................41
Notices ............................................................41
ARTICLE XXXII................................................................41
32.1 Lessor May Grant Liens......................................41
32.2 Lessee's Right to Cure......................................42
32.3 Breach by Lessor............................................42
ARTICLE XXXIII...............................................................43
33.1 Miscellaneous...............................................43
33.2 Transfer of Licenses........................................43
33.3 Waiver of Presentment, etc..................................43
ARTICLE XXXIV................................................................43
Memorandum of Lease..................................................43
ARTICLE XXXV.................................................................44
Lessor's Option to Purchase Assets of Lessee.........................44
ARTICLE XXXVI................................................................44
Lessor's Option to Terminate Lease...................................44
ARTICLE XXXVII...............................................................45
Furniture, Fixture and Equipment Reserve.............................45
ARTICLE XXXVIII...............................................................45
38.1 Trademark...................................................45
38.2 Protection of Trademark.....................................45
EXHIBIT A - Description of Leased Property
EXHIBIT B - Form of Supplement adding hotel property to Leased Properties
EXHIBIT C - Form of Supplement releasing one or more Individual Leased
Properties from the Lease
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MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT (hereinafter called "Lease"), made as of
the 7th day of May, 1999, by and between Xxxxxxx Inns, Inc., a Georgia
corporation; Signature Properties, LLC, a Kentucky limited liability company;
Signature Properties of Illinois, L.P., an Illinois limited partnership; SIE
Corporation, an Indiana corporation; and SI Springfield corporation, an Illinois
corporation (hereinafter collectively called "Lessor"), and Xxxxxxx Hospitality,
LLC, a Georgia limited liability company (hereinafter called "Lessee"), provides
as follows:
RECITALS:
Lessor owns the "Leased Property" (as hereinafter defined) which at the
date hereof consists of 25 operating hotel properties and may, in the future,
consist of additional or substituted hotel properties.
In furtherance of the purposes described herein, Lessor and Lessee wish
to enter into this Lease.
NOW, THEREFORE, Lessor, in consideration of the payment of rent by
Lessee to Lessor, the covenants and agreements to be performed by Lessee, and
upon the terms and conditions hereinafter stated, does hereby rent and lease
unto Lessee, and Lessee does hereby rent and lease from Lessor, the Leased
Property.
ARTICLE I
1.1 LEASED PROPERTY. The "Leased Property" is comprised of
Lessor's interest in the following:
(1) the parcels of land or ground leasehold interest
described in Exhibit "A" attached hereto and by reference incorporated
herein (the "Land");
(2) all buildings, structures and other improvements of
every kind including, but not limited to, alleyways and connecting
tunnels, sidewalks, utility pipes, conduits and lines (on-site and
offsite), parking areas and roadways appurtenant to such buildings and
structures presently situated upon the Land (collectively, the "Leased
Improvements");
(3) all easements, rights and appurtenances relating to
the Land and the Leased Improvements;
(4) all equipment, machinery, fixtures, and other items
of property required or incidental to the use of the Leased
Improvements as a hotel, including all components thereof, including,
without limitation, all furnaces, boilers, heaters, electrical
equipment,
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heating, plumbing, lighting, ventilating, refrigerating, incineration,
air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and
theft protection equipment, all of which to the greatest extent
permitted by law are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations
and additions thereto (collectively, the "Fixtures");
(5) all furniture and furnishings and all other items of
personal property (excluding Inventory and personal property owned by
Lessee) located on and used in connection with the operation of the
Leased Improvements as a hotel, together with all replacements,
modifications, alterations and additions thereto; and
(6) all existing leases of space within the Leased
Property (including any security deposits or collateral held by Lessor
pursuant thereto).
The land; improvements; related easements, rights and appurtenances; fixtures,
furniture and furnishings and related facilities comprising one or more
additional hotel properties may become Leased Property hereunder by virtue of
the execution and delivery by the parties hereto of a supplement to this Lease
in the form attached hereto as Exhibit B. Any of the foregoing comprising the
Leased Property attributable to any hotel property which is subject hereto may
be released from the provisions hereof and eliminated from the definition of
Leased Property hereunder by the execution and delivery by the parties hereto of
a supplement to this Lease in the form attached hereto as Exhibit C. As used
herein, the term Leased Property shall, unless the context clearly requires to
the contrary, mean all of the hotel properties comprising the Leased Property
collectively and each hotel property individually, and an "Individual Leased
Property" shall refer to a single specific hotel property which is subject to
the terms of this Lease. Lessor and Lessee acknowledge, covenant and agree that,
notwithstanding the fact that the Leased Property is comprised of a number of
Individual Leased Properties, this Lease shall be severable as to each
respective Individual Leased Property such that (except as may now or hereafter
otherwise be set forth in this Lease) any termination of this Lease as to one
Individual Leased Property (including, by way of illustration and not
limitation, termination arising by reason of a foreclosure of an Encumbrance
affecting an Individual Leased Property) shall not result in a termination of
this Lease as to any other Individual Leased Property.
THE LEASED PROPERTY IS DEMISED IN ITS PRESENT CONDITION WITHOUT REPRESENTATION
OR WARRANTY (EXPRESSED OR IMPLIED) BY LESSOR AND SUBJECT TO THE RIGHTS OF
PARTIES IN POSSESSION, AND TO THE EXISTING STATE OF TITLE INCLUDING ALL
COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER MATTERS OF RECORD
INCLUDING ALL APPLICABLE LEGAL REQUIREMENTS, THE LIEN OF FINANCING INSTRUMENTS,
MORTGAGES, DEEDS OF TRUST AND SECURITY DEEDS, AND INCLUDING OTHER MATTERS WHICH
WOULD BE DISCLOSED BY AN INSPECTION OF THE LEASED PROPERTY OR BY AN ACCURATE
SURVEY THEREOF.
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1.2 TERM. The term of the Lease (the "Term") shall commence on May
7, 1999 (the "Commencement Date"), and shall end on December 31, 2012, unless
sooner terminated in accordance with the provisions hereof.
ARTICLE II
DEFINITIONS. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, (a) the terms
defined in this article have the meanings assigned to them in this Article and
include the plural as well as the singular, (b) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as are at the time applicable, (c) all
references in this Lease to designated "Articles," "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease and (d) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Lease as a whole and not to any particular
Article, Section or other subdivision:
Additional Charges: As defined in Section 3.4.
Affiliate: As used in this Lease the term "Affiliate" of a person shall
mean (a) any person that, directly or indirectly, controls or is controlled by
or is under common control with such person, (b) any other person that owns,
beneficially, directly or indirectly, five percent or more of the outstanding
capital stock, shares or equity interests of such person, or (c) any officer,
director, employee, partner or trustee of such person or any person controlling,
controlled by or under common control with such person (excluding trustees and
persons serving in similar capacities who are not otherwise an Affiliate of such
person). The term "person" means and includes individuals, corporations, general
and limited partnerships, stock companies or associations, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts, or other entities and governments and agencies and political
subdivisions thereof. For the purposes of this definition, "control" (including
the correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person, through the ownership, direct or indirect, of
voting securities, partnership interests or other equity interests.
Average Daily Per Room Revenues: As Defined in Section 3.1(2)
Award: As defined in Section 15.1(3).
Base Rate: The rate of interest announced publicly by NationsBank,
N.A., in Atlanta, Georgia, from time to time, as such bank's base rate. If no
such rate is announced or becomes discontinued, then such other rate as Lessor
may reasonably designate.
Base Rent: As defined in Section 3.1(1).
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Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which national banks in the City of New York, New York, or in
the municipality wherein the Leased Property is located are closed.
CERCLA: The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
Code: The Internal Revenue Code of 1986, as amended.
Commencement Date: As defined in Section 1.2.
Condemnation, Condemnor: As defined in Section 15.1.
Consolidated Financials: For any fiscal year or other accounting period
for Lessee and its consolidated Subsidiaries, statements of earnings and
retained earnings and of changes in financial position for such period and for
the period from the beginning of the respective fiscal year to the end of such
period and the related balance sheet as at the end of such period, together with
the notes thereto, all in reasonable detail and setting forth in comparative
form the corresponding figures for the corresponding period in the preceding
fiscal year, and prepared in accordance with generally accepted accounting
principles and for those Consolidated Financials covering at or as of the end of
a Fiscal Year.
Consolidated Net Worth: At any time, the sum of the following for
Lessee and any consolidated Subsidiaries, on a consolidated basis determined in
accordance with generally accepted accounting principles:
(a) the amount of capital or stated capital (after
deducting the cost of any shares held in its treasury), plus
(b) the amount of capital surplus and retained earnings
(or, in the case of a capital or retained earnings deficit, minus the
amount of such deficit), minus
(c) the sum of the following (without duplication of
deductions with respect to items already deducted in arriving at
surplus and retained earnings): (1) unamortized debt discount and
expense; and (2) any write-up in the book value of assets resulting
from a revaluation thereof subsequent to the most recent Consolidated
Financials prior to the date thereof, except any net write-up in value
of foreign currency in accordance with generally accepted accounting
principles.
Date of Taking: As defined in Section 15.
Encumbrance: As defined in Section 32.1.
Environmental Authority: Any department, agency or other body or
component of any Government that exercises any form of jurisdiction or authority
under any Environmental Law.
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Environmental Authorization: Any license, permit, order, approval,
consent, notice, registration, filing or other form of permission or
authorization required under any Environmental Law.
Environmental Laws: All applicable federal, state, local and foreign
laws and regulations relating to pollution of the environment (including without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), including without limitation laws and regulations relating to
emissions, discharges, Releases or threatened Releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials. Environmental
Laws include but are not limited to CERCLA, FIFRA, RCRA, XXXX and TSCA.
Environmental Liabilities: Any and all obligations to pay the amount of
any judgment or settlement, the cost of complying with any settlement, judgment
or order for injunctive or other equitable relief, the cost of compliance or
corrective action in response to any notice, demand or request from an
Environmental Authority, the amount of any civil penalty or criminal fine, and
any court costs and reasonable amounts for attorney's fees, fees for witnesses
and experts, and costs of investigation and preparation for defense of any claim
or any Proceeding, regardless of whether such Proceeding is threatened, pending
or completed, that may be or have been asserted against or imposed upon Lessor,
Lessee, any Predecessor, any Leased Property or any property used therein and
arising out of:
(a) Failure of Lessee, any Predecessor or any Leased
Property to comply at any time with all Environmental Laws;
(b) Presence of any Hazardous Materials on, in, under, at
or in any way affecting any Leased Property;
(c) A Release at any time of any Hazardous Materials on,
in, at, under or in any way affecting the Leased Property or any
adjacent site or facility;
(d) Identification of Lessee, or any Predecessor as a
potentially responsible party under CERCLA or under any Environmental
Law similar to CERCLA;
(e) Presence at any time of any above-ground and/or
underground storage tanks, as defined in RCRA or in any applicable
Environmental Law on, in, at or under any Leased Property or any
adjacent site or facility; or
(f) Any and all claims for injury or damage to persons or
property arising out of exposure to Hazardous Materials originating or
located at any Leased Property, or resulting from operation thereof or
any adjoining property.
Event of Default: As defined in Section 16.1.
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Facility: Each hotel and/or other facility offering lodging and other
services or amenities being operated or proposed to be operated on an Individual
Leased Property.
FIFRA: The Federal Insecticide, Fungicide, and Rodenticide Act, as
amended.
Fiscal Year: The 12-month period from January 1 to December 31.
Fixtures: As defined in Section 1.1.
Government: The United States of America, any xxxxx, xxxxxxxx,
xxxxxxxxx, xxxxxx, xxxxxx, xxxx, xxxx or other political division thereof, any
foreign nation, any state, district, department, territory or other political
division thereof, or any political subdivision of any of the foregoing.
Hazardous Materials: All chemicals, pollutants, contaminants, wastes
and toxic substances, including without limitation:
(a) Solid or hazardous waste, as defined in RCRA or in
any Environmental Law;
(b) Hazardous substances, as defined in CERCLA or in any
Environmental Law;
(c) Toxic substances, as defined in TSCA or in any
Environmental Law;
(d) Insecticides, fungicides, or rodenticides, as defined
in FIFRA or in any Environmental Law; and
(e) Gasoline or any other petroleum product or byproduct,
polychlorinated biphenols, asbestos and urea formaldehyde.
Impositions: Collectively, all taxes (including, without limitation,
all ad valorem, sales and use, single business, gross receipts, transaction
privilege, rent or similar taxes as the same relate to or are imposed upon
Lessee or its business conducted upon the Leased Property), assessments
(including, without limitation, all assessments for public improvements or
benefit, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the Term), ground rents, water, sewer or
other rents and charges, excises, tax inspection, authorization and similar fees
and all other governmental charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character in
respect of the Leased Property or the business conducted thereon by Lessee
(including all interest and penalties thereon caused by any failure in payment
by Lessee), which at any time prior to, during or with respect to the Term
hereof may be assessed or imposed on or with respect to or be a lien upon (a)
any Leased Property, or any part thereof or any rent therefrom or any estate,
right, title or interest therein, or (b) any occupancy, operation, use or
possession of, or sales from, or activity conducted on or in connection with any
Leased Property, or the leasing or use of any Leased Property or any part
thereof by Lessee. Nothing contained in this definition of Impositions shall be
construed to require Lessee to pay (1) any tax based on net income (whether
denominated as a franchise or capital stock or other tax) imposed on Lessor or
any other person, or (2) any net revenue tax of Lessor or any other person, or
(3) any tax
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imposed with respect to the sale, exchange or other disposition by Lessor of any
Leased Property or the proceeds thereof, or (4) any single business, gross
receipts (other than a tax on any rent received by Lessor from Lessee),
transaction, privilege or similar taxes as the same relate to or are imposed
upon Lessor, except to the extent that any tax, assessment, tax levy, or charge
that Lessee is obligated to pay pursuant to the first sentence of this
definition and that is in effect at any time during the Term hereof is totally
or partially repealed, and a tax, assessment, tax levy or charge set forth in
any of clauses (1) through (4) is levied, assessed or imposed expressly in lieu
thereof.
Indemnified Environmental Liability: An Environmental Liability for
which indemnification is provided in Section 8.3.
Indemnified Party: Either of a Lessee Indemnified Party or a Lessor
Indemnified Party.
Indemnifying Party: Any party obligated to indemnify an Indemnified
Party pursuant to Section 8.3.
Individual Leased Property: As defined in Section 1.1. Any reference in
this Lease to the Leased Property or any portion or part thereof shall mean all
of the Leased Property, one or more Individual Leased Properties or any portion
or part of, or interest in, any Individual Leased Property.
Initial Per Room Revenues Amount: As defined in Section 3.1(2).
Insurance Requirements: All terms of any insurance policy required by
this Lease and all requirements of the issuer of any such policy.
Inventory: All "Inventories of Merchandise" and "Inventories of
Supplies" as defined in the Uniform System.
Land: As defined in Article I.
Lease: This Lease.
Leased Improvements; Leased Property: Each as defined in Section 1.1.
Legal Requirements: All federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either any of the Leased Property or the
maintenance, construction, use or alteration thereof (whether by Lessee or
otherwise), whether or not hereafter enacted and in force, including (a) all
laws, rules or regulations pertaining to the environment, occupational health
and safety and public health, safety or welfare, and (b) any laws, rules or
regulations that may (1) require repairs, modifications or alterations in or to
any Leased Property or (2) in any way adversely affect the use and enjoyment
thereof; and all permits, licenses and authorizations and regulations relating
thereto and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Lessee (other than encumbrances
created by Lessor without the consent of Lessee), at any time in force affecting
any Leased Property.
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Lessee: The Lessee designated in this Lease and its respective
permitted successors and assigns.
Lessee Indemnified Party: Lessee, any Affiliate of Lessee, any other
Person against whom any Indemnified Environmental Liability may be asserted as a
result of a direct or indirect ownership interest (including a stockholder's
interest) in Lessee, the officers, directors, stockholders, employees, agents
and representatives of any corporate Indemnified Party, and the respective
heirs, personal representatives, successors and assigns of any Indemnified
Party.
Lessee's Personal Property: As defined in Section 6.2.
Lessor: The parties who are collectively designated Lessor on this
Lease and their respective successors and assigns. For purposes of this Lease,
each reference to Lessor shall mean the party or parties who own the specific
hotel property or properties being referred to unless the context clearly
requires the contrary. Each party designated as a Lessor shall be (i) liable and
responsible for the obligations, duties and responsibilities of the Lessor
hereunder only with respect to and to the extent that such obligations, duties
and responsibilities are required or imposed with respect to the specific hotel
properties owned by such party which comprise part of the Leased Property, and
(ii) entitled to the rights, benefits and interests of the Lessor hereunder only
with respect to such specific hotel properties; provided, however, that
Signature Inns, Inc. (and its successor or assign) shall be jointly and
severally liable with each other party comprising the Lessor for the
obligations, duties and responsibilities of that party hereunder as a Lessor.
Lessor Indemnified Party: Lessor, any Affiliate of Lessor, any other
Person against whom any Indemnified Environmental Liability may be asserted as a
result of a direct or indirect ownership interest (including a stockholder's
interest) in Lessor, the officers, directors, stockholders, employees, agents
and representatives of any corporate Indemnified Party, and the respective
heirs, personal representatives, successors and assigns of any Indemnified
Party.
Notice: A notice given pursuant to Article XXXI.
Officer's Certificate: A certificate of Lessee signed by the chief
financial officer or another officer authorized so to sign by the board of
directors or by-laws of Lessee, or any other person whose power and authority to
act has been authorized by delegation in writing by any such officer.
Overdue Rate: On any date, a rate equal to the Base Rate plus five
percentage points per annum, but in no event greater than the maximum rate then
permitted under applicable law.
Payment Date: Any due date for the payment of any installment of Base
Rent.
Percentage Rent: As defined in Section 3.1(2).
Person: Any Government, natural person, corporation, partnership or
other legal entity. See definition of "Affiliate."
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Predecessor: Any Person whose liabilities arising under any
Environmental Law have or may have been retained or assumed by Lessee, either
contractually or by operation of law relating to the Leased Property.
Primary Intended Use: As defined in Section 7.2(2).
Proceeding: Any judicial action, suit or proceeding (whether civil or
criminal), any administrative proceeding (whether formal or informal), any
investigation by a governmental authority or entity (including a grand jury),
and any arbitration, mediation or other non-judicial process for dispute
resolution.
RCRA: The Resource Conservation and Recovery Act, as amended.
Real Estate Taxes: All real estate taxes, including general and special
assessments, if any, which are imposed upon the Land, and any improvements
thereon.
Release: A "Release" as defined in CERCLA or in any other Environmental
Law, unless such Release has been properly authorized and permitted in writing
by all applicable Environmental Authorities or is allowed by such Environmental
Law without authorizations or permits.
Rent: Collectively, the Base Rent, Percentage Rent, and Additional
Charges.
Room: A guest room or suite in any Facility which is available for
occupancy by customers or guests of the Lessee.
Room Revenues: Shall mean gross revenue from the rental of Rooms,
whether to individuals, groups or transients, together with any fees collected
for amenities including, but not limited to telephone (net of long distance
telephone expenses), laundry, movies or concessions, but excluding the
following:
(a) The amount of all credits, rebates or refunds to customers,
guests or patrons;
(b) All sales taxes or any other excise taxes imposed on the
rental of such guest rooms; and
(c) Revenues from the sale of any alcoholic beverages, if and to
the extent prohibited by applicable law of the jurisdiction in
which a particular Individual Leased Property is located.
XXXX: The Superfund Amendments and Reauthorization Act of 1986, as
amended.
State: The State or Commonwealth of the United States in which each
Individual Leased Property is located.
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Subsidiaries: Corporations, partnerships, limited liability companies
and any other form of business entity in which Lessee owns, directly or
indirectly, more than 50% of the voting stock, interest or control, as
applicable (individually, a "Subsidiary").
Taking: A taking or voluntary conveyance during the Term hereof of all
or part of any Leased Property, or any interest therein or right accruing
thereto or use thereof, as the result of, or in settlement of, any Condemnation
or other eminent domain proceeding affecting any Leased Property whether or not
the same shall have actually been commenced.
Term: As defined in Section 1.2.
Trademark: Signature Inn.(R)
TSCA: The Toxic Substances Control Act, as amended.
Unavoidable Delays: Delays due to strikes, lock-outs, labor unrest,
inability to procure materials, power failure, acts of God, governmental
restrictions, enemy action, civil commotion, fire, unavoidable casualty or other
causes beyond the control of the party responsible for performing an obligation
hereunder, provided that lack of funds shall not be deemed a cause beyond the
control of either party hereto unless such lack of funds is caused by the
failure of the other party hereto to perform any obligations of such party under
this Lease or any guaranty of this Lease.
Uneconomic for its Primary Intended Use: A state or condition of the
Facility such that, in the good faith judgment of Lessee, reasonably exercised
and evidenced by the resolution of the board of directors or other governing
body of Lessee, a Facility cannot be operated on a commercially practicable
basis for its Primary Intended Use, taking into account, among other relevant
factors, the number of usable rooms and projected revenues, such that Lessee
intends to, and shall, complete the cessation of operations from the Individual
Leased Property.
Uniform System: Shall mean the Uniform System of Accounts for Hotels
(8th Revised Edition, 1986) as published by the Hotel Association of New York
City, Inc., as same may hereafter be revised.
Unsuitable for its Primary Intended Use: A state or condition of a
Facility such that, in the good faith judgment of Lessee, reasonably exercised
and evidenced by the resolution of the board of directors or other governing
body of Lessee, due to casualty damage or loss through Condemnation, that
Facility cannot function as an integrated hotel facility consistent with
standards applicable to a well-maintained and operated hotel.
ARTICLE III
3.1 RENT. Lessee will pay to Lessor in lawful money of the United
States of America which shall be legal tender for the payment of public and
private debts, in immediately available funds, at Lessor's address set forth in
Article XXXI hereof or at such other place or to such other
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Person, as Lessor from time to time may designate in a Notice, all Base Rent,
Percentage Rent and Additional Charges, during the Term, as follows:
(1) Base Rent: The "Base Rent" shall be $394.00 per Room
per month multiplied by the number of Rooms comprising the Leased
Property on the first day of any calendar month during the Term, and
shall be payable on or before the twenty-fifth day of such calendar
month; provided however, that the first monthly payment of Base Rent
shall be payable on the Commencement Date and that the first and last
monthly payments of Base Rent shall be prorated as to any partial
month.
(2) Percentage Rent: Percentage rent ("Percentage Rent")
shall be determined as follows:
(i) First, by adding amounts equal to
37% of the Average Daily Per Room Revenues up to the
Initial Per Room Revenues Amount, 65% of the next
$10.00 in Average Daily Per Room Revenues and 70% of
the amount by which Average Daily Per Room Rentals
exceed the sum of the Initial Per Room Revenues
Amount plus $10.00;
(ii) Second, such sum shall be
multiplied by the number of the Rooms comprising the
Leased Property each day during the applicable
period;
(iii) Third, such product for each day
will then be added to the product for each other day
during the period for which the Percentage Rent is
being computed; and
(iv) Fourth, such product shall be
reduced by the amount of Base Rent paid with respect
to the period for which Percentage Rent is being
computed.
Anything to the contrary in this item b. notwithstanding, the
aggregate amount of Percentage Rent payable hereunder with
respect to the second, third and fourth quarters of 1999 and
any calendar year during the term of this Lease commencing
after December 31, 1999, when added to the amount of Base Rent
paid with respect to such calendar quarter or year, as
applicable, shall never exceed an amount equal to 47% of the
Room Revenues realized during such calendar quarter or year,
as applicable. The amount of Percentage Rent otherwise payable
with respect to the fourth quarter of any calendar year
commencing after December 31, 1999, during the Term shall be
reduced as appropriate to comply with the foregoing
limitation.
"Average Daily Per Room Revenues" means an amount determined
by dividing the total Room Revenues attributable to the Leased Property
received by the Lessee during any period for which the Percentage Rent
computation is to be made by the sum of the number of the Rooms
comprising the Leased Property each day during the applicable period.
For
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example, if the total Room Revenues for a Fiscal Year were $10,500,000
during which there were 614 Rooms during 180 days of the Fiscal Year
and 820 Rooms during 185 days of the Fiscal Year, the Average Per Room
Revenues for that Fiscal Year would be calculated by dividing
$10,500,000 by 262,220 (614 x 180 plus 820 x 185) and would be $40.0427
(even though the Average Daily Rate would be $57.20 per day if the
Lessee were realizing a 70% average occupancy during the Fiscal Year).
"Initial Per Room Revenues Amount" from the execution of this
Lease until December 31, 1999 shall be $35.00, subject to adjustment as
provided in the following paragraph.
The Initial Per Room Revenues Amount shall each be adjusted on
January 1 of each Fiscal Year beginning after December 31, 1999,
beginning with January 1, 2000, by adding to the Initial Per Room
Revenues Amount for the immediately preceding Fiscal Year a dollar
amount determined by multiplying the Initial Per Room Revenues Amount
in effect for the immediately preceding Fiscal Year by the percentage
increase, if any, in the CPI (as herein below defined) for the
immediately preceding Fiscal Year as compared to the CPI for the next
preceding Fiscal Year. The term "CPI" means the Consumer Price Index
for all Urban Consumers - U. S. City Average for all Items (1982-84 =
100) of the Bureau of Labor Statistics of the United States Department
of Labor. If the CPI published by the Department of Labor, Bureau of
Labor Statistics is changed so that it affects the calculations
hereunder, the CPI shall be converted in accordance with a conversion
factor published by the United States Department of Labor, Bureau of
Labor Statistics. If the CPI is discontinued or revised, Lessor and
Lessee shall in good faith agree upon a suitable substitute.
3.2 PAYMENT OF PERCENTAGE RENT. Percentage Rent, if any, shall be
paid quarterly. An Officer's Certificate shall be delivered to Lessor, together
with each quarterly Percentage Rent payment, if any, setting forth the
calculation of such rent payment for such quarter, within 30 days after each of
the first three quarters of each Fiscal Year (or part thereof) in the Term.
There shall be no reduction in the Base Rent regardless of the result of the
Percentage Rent computation.
In addition, on or before March 1 of each year, commencing with March
1, 2000, Lessee shall deliver to Lessor an Officer's Certificate reasonably
acceptable to Lessor setting forth the computation of the actual Percentage Rent
that accrued for each quarter of the Fiscal Year that ended on the immediately
preceding December 31 and shall pay to Lessor Percentage Rent, if due and
payable, for the last quarter of the applicable Fiscal Year. Such computation
shall also be accompanied by a report prepared (at the expense of Lessee) by the
same accounting firm serving as independent auditors of the financial statements
of the Lessor which shall state that (i) such firm has reviewed the computation
of Percentage Rent, (ii) it has examined the Room Revenues recorded for such
Fiscal Year in accordance with generally accepted auditing standards, and (iii)
that the amount of Room Revenues has been recorded properly, free from any
material misstatements, and the amount of Percentage Rent for such Fiscal Year
has been accurately computed in accordance with the terms of this Lease.
Additionally, if the annual Percentage Rent due and payable for any Fiscal Year
(as shown in the applicable Officer's Certificate) exceeds the amount actually
paid as Percentage Rent by Lessee for such year, Lessee also shall pay such
excess to Lessor at the time such
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certificate is delivered. If the Percentage Rent actually due and payable for
such Fiscal Year is shown by such certificate to be less than the amount
actually paid as Percentage Rent for the applicable Fiscal Year, Lessor, at its
option, shall reimburse such amount to Lessee or credit such amount against the
next month's Base Rent and, to the extent necessary, the next quarter's
Percentage Rent payments.
Any difference between the annual Percentage Rent due and payable for
any Fiscal Year (as shown in the applicable Officer's Certificate) and the total
amount of quarterly payments for such Fiscal Year actually paid by Lessee as
Percentage Rent, if payable by Lessee to Lessor, shall bear interest at the
Overdue Rate, which interest shall accrue from the close of such Fiscal Year
until the amount of such difference shall be paid or otherwise discharged by
credit to Lessee. Any such interest payable to Lessor shall be deemed to be and
shall be payable as Additional Charges.
The obligation to pay Percentage Rent shall survive the expiration or
earlier termination of the Term, and a final reconciliation, taking into
account, among other relevant adjustments, any adjustments which are accrued
after such expiration or termination date but which related to Percentage Rent
accrued prior to such termination date, and Lessee's good faith best estimate of
the amount of any unresolved contractual allowances, shall be made not later
than two years after such expiration or termination date, but Lessee shall
advise Lessor within 60 days after such expiration or termination date of
Lessee's best estimate at that time of the approximate amount of such
adjustments, which estimate shall not be binding on Lessee or have any legal
effect whatsoever.
3.3 CONFIRMATION OF PERCENTAGE RENT. Lessee shall utilize, or
cause to be utilized, an accounting system for the Leased Property in accordance
with its usual and customary practices, and in accordance with generally
accepted accounting principles and the Uniform System, that will accurately
record all data necessary to compute Percentage Rent, and Lessee shall retain,
for at least four years after the expiration of each Fiscal Year (and in any
event until the reconciliation described in Section 3.2 for such Fiscal Year has
been made), reasonably adequate records conforming to such accounting system
showing all data necessary to compute Percentage Rent for the applicable Fiscal
Years. Lessor, at its expense (except as provided herein below), shall have the
right from time to time by its accountants or representatives to audit the
information that formed the basis for the data set forth in any Officer's
Certificate provided under Section 3.2 and, in connection with such audits, to
examine all Lessee's records (including supporting data and sales and excise tax
returns) reasonably required to verify Percentage Rent. If any such audit
discloses a deficiency in the payment of Percentage Rent, and either Lessee
agrees with the result of such audit or the matter is otherwise determined or
compromised, Lessee shall forthwith pay to Lessor the amount of the deficiency,
as finally agreed or determined, together with interest at the Overdue Rate from
the date when said payment should have been made to the date of payment thereof;
provided, however, that as to any audit that is commenced more than two years
after the date Percentage Rent for any Fiscal Year is reported by Lessee to
Lessor, the deficiency, if any, with respect to such Percentage Rent shall bear
interest at the Overdue Rate only from the date such determination of deficiency
is made unless such deficiency is the result of gross negligence or willful
misconduct on the part of Lessee. If any such audit discloses that the
Percentage Rent actually due from Lessee for any Fiscal Year exceed those
reported by Lessee by more than 3%, Lessee shall pay the cost of such audit and
examination. Any proprietary information obtained by Lessor pursuant to the
provisions of this
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Section shall be treated as confidential, except that such information may be
used, subject to appropriate confidentiality safeguards, in any litigation
between the parties and except further that Lessor may disclose such information
to prospective lenders and as may be required for it to comply with its
disclosure obligations under applicable corporate and securities laws. The
obligations of Lessee contained in this Section shall survive the expiration or
earlier termination of this Lease.
3.4 ADDITIONAL CHARGES. In addition to the Base Rent and
Percentage Rent, (a) Lessee also will pay and discharge as and when due and
payable all other amounts, liabilities, obligations and Impositions that Lessee
assumes or agrees to pay under this Lease, and (b) in the event of any failure
on the part of Lessee to pay any of those items referred to in clause (a) of
this Section 3.3, Lessee also will promptly pay and discharge every fine,
penalty, interest and cost that may be added for non-payment or late payment of
such items (the items referred to in clauses (a) and (b) of this Section 3.3
being additional rent hereunder and being referred to herein collectively as the
"Additional Charges"), and Lessor shall have all legal, equitable and
contractual rights, powers and remedies provided either in this Lease or by
statute or otherwise in the case of non-payment of the Additional Charges as in
the case of non-payment of the Base Rent. If any installment of Base Rent,
Percentage Rent or Additional Charges (but only as to those Additional Charges
that are payable directly to Lessor) shall not be paid on its due date, Lessee
will pay Lessor on demand, as Additional Charges, a late charge (to the extent
permitted by law) computed at the Overdue Rate on the amount of such
installment, from the due date of such installment to the date of payment
thereof. To the extent that Lessee pays any Additional Charges to Lessor
pursuant to any requirement of this Lease, Lessee shall be relieved of its
obligation to pay such Additional Charges to the entity to which they would
otherwise be due and Lessor shall pay same from monies received from Lessee.
3.5 NET LEASE PROVISION. The Rent shall be paid absolutely net to
Lessor, so that this Lease shall yield to Lessor the full amount of the
installments of Base Rent, Percentage Rent and Additional Charges throughout the
Term, all as more fully set forth in Article V, but subject to any other
provisions of this Lease that expressly provide for adjustment or abatement of
Rent or other charges or expressly provide that certain expenses or maintenance
shall be paid or performed by Lessor.
3.6 CONVERSION OF PROPERTY. Lessee represents and warrants to
Lessor that (a) it does not contemplate that there will be any material revenues
from sales of food or beverages in connection with the operation of the Leased
Property and (b) all revenues currently generated by the Leased Property are
included within the definition of Room Revenues. Lessee further covenants that
it will not engage in any operations involving the sale of food or beverages
(other than providing continental breakfasts as part of the room rental and
vending machine services) or providing other ancillary services not being
provided at the date of this Lease without the prior written consent of the
Lessor, which consent Lessor may withhold or condition upon, without limitation,
adjustment to the Rent payable under this Lease.
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ARTICLE IV
4.1 PAYMENT OF IMPOSITIONS. Subject to Article XII relating to
permitted contests, Lessee will pay, or cause to be paid, all Impositions (other
than Real Estate Taxes and personal property taxes, which shall be paid by
Lessor), before any fine, penalty, interest or cost may be added for
non-payment, such payments to be made directly to the taxing or other
authorities where feasible, and will promptly furnish to Lessor copies of
official receipts or other satisfactory proof evidencing such payments. Lessee's
obligation to pay such Impositions shall be deemed absolutely fixed upon the
date such Impositions become a lien upon the Leased Property or any part
thereof. If any such Imposition may, at the option of the taxpayer, lawfully be
paid in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Lessee may exercise the option to pay the same (and any
accrued interest on the unpaid balance of such Imposition) in installments and
in such event, shall pay such installments during the Term hereof (subject to
Lessee's right of contest pursuant to the provisions of Article XII) as the same
respectively become due and before any fine, penalty, premium, further interest
or cost may be added thereto. Lessor, at its expense, shall, to the extent
required or permitted by applicable law, prepare and file all tax returns in
respect of Lessor's net income, gross receipts, sales and use, single business,
transaction privilege, rent, ad valorem, franchise taxes, Real Estate Taxes,
personal property taxes and taxes on its capital stock, and Lessee, at its
expense, shall, to the extent required or permitted by applicable laws and
regulations, prepare and file all other tax returns and reports in respect of
any Imposition as may be required by governmental authorities. If any refund
shall be due from any taxing authority in respect of any Imposition paid by
Lessee, the same shall be paid over to or retained by Lessee if no Event of
Default shall have occurred hereunder and be continuing. Any such funds retained
by Lessor due to an Event of Default shall be applied as provided in Article
XVI. Lessor and Lessee shall, upon request of the other, provide such data as is
maintained by the party to whom the request is made with respect to the Leased
Property as may be necessary to prepare any required returns and reports.
Lessor, or Lessee, on behalf of Lessor, shall file all personal property tax
returns in such jurisdictions where it is legally required to so file. Lessor,
to the extent it possesses the same, and Lessee, to the extent it possesses the
same, will provide the other party, upon request, with cost and depreciation
records necessary for filing returns for any property so classified as personal
property. Where Lessor is legally required to file personal property tax
returns, Lessee shall provide Lessor with copies of assessment notices in
sufficient time for Lessor to file a protest. Lessor may, upon notice to Lessee,
at Lessor's option and at Lessor's sole expense, protest, appeal, or institute
such other proceedings (in its or Lessee's name) as Lessor may deem appropriate
to effect a reduction of any assessments for those Impositions to be paid by
Lessor, and Lessee, at Lessor's expense as aforesaid, shall fully cooperate with
Lessor in such protest, appeal, or other action. Lessor hereby agrees to
indemnify, defend, and hold harmless Lessee from and against any claims,
obligations, and liabilities against or incurred by Lessee in connection with
such cooperation. Xxxxxxxx to Lessor for reimbursement of Real Estate Taxes or
personal property taxes paid by Lessee shall be accompanied by copies of a xxxx
therefor and payments thereof which identify the real or personal property with
respect to which such payments are made. Lessor, however, reserves the right to
effect any such protest, appeal or other action and, upon notice to Lessee,
shall control any such activity, which shall then go forward at Lessor's sole
expense. Upon such notice, Lessee, at Lessor's expense, shall cooperate fully
with such activities.
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4.2 NOTICE OF IMPOSITIONS. Lessor shall give prompt Notice to
Lessee of all Impositions payable by Lessee hereunder of which Lessor at any
time has knowledge, provided that Lessor's failure to give any such Notice shall
in no way diminish Lessee's obligations hereunder to pay such Impositions, but
such failure shall obviate any default hereunder for a reasonable time after
Lessee receives Notice of any Imposition which it is obligated to pay during the
first taxing period applicable thereto.
4.3 ADJUSTMENT OF IMPOSITIONS. Impositions imposed in respect of
the tax-fiscal period during which the Term terminates shall be adjusted and
prorated between Lessor and Lessee, whether or not such Imposition is imposed
before or after such termination, and Lessee's obligation to pay its prorated
share thereof after termination shall survive such termination.
4.4 UTILITY CHARGES. Lessee will be solely responsible for
obtaining and maintaining utility services to the Leased Property and will pay
or cause to be paid all charges for electricity, gas, oil, water, sewer and
other utilities used in the Leased Property during the Term.
4.5 INSURANCE PREMIUMS. Lessee will pay or cause to be paid all
premiums for the insurance coverages required to be maintained by it under
Article XIII.
ARTICLE V
5.1 NO TERMINATION, ABATEMENT, ETC. Except as otherwise
specifically provided in this Lease, Lessee, to the extent permitted by law,
shall remain bound by this Lease in accordance with its terms and shall neither
take any action without the written consent of Lessor to modify, surrender or
terminate the same, nor seek nor be entitled to any abatement, deduction,
deferment or reduction of the Rent, or setoff against the Rent, nor shall the
obligations of Lessee be otherwise affected by reason of (a) any damage to, or
destruction of, any Leased Property or any portion thereof from whatever cause
or any Taking of the Leased Property or any portion thereof, (b) the lawful or
unlawful prohibition of, or restriction upon, Lessee's use of any Leased
Property, or any portion thereof, or the interference with such use by any
Person or by reason of eviction by paramount title, (c) any claim which Lessee
has or might have against Lessor by reason of any default or breach of any
warranty by Lessor under this Lease or any other agreement between Lessor and
Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceedings affecting Lessor or any assignee or transferee
of Lessor, or (e) for any other cause whether similar or dissimilar to any of
the foregoing other than a discharge of Lessee from any such obligations as a
matter of law. Lessee hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law to
(1) modify, surrender or terminate this Lease or quit or surrender the Leased
Property or any portion thereof, or (2) entitle Lessee to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Lessee
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Lessee hereunder shall be separate and independent covenants and
agreements and the Rent and all other sums payable by Lessee hereunder shall
continue to be payable in all events unless the obligations to pay the same
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shall be terminated pursuant to the express provisions of this Lease or by
termination of this Lease other than by reason of an Event of Default.
5.2 ABATEMENT PROCEDURES. In the event of a partial Taking as
described in Section 15.5, the Lease shall not terminate, but the Base Rent
shall be abated in the manner and to the extent that is fair, just and equitable
to both Lessee and Lessor, taking into consideration, among other relevant
factors, the number of usable Rooms, the amount of square footage, or the
revenues affected by such partial Taking. If Lessor and Lessee are unable to
agree upon the amount of such abatement within 30 days after such partial
Taking, the matter may be submitted by either party to a court of competent
jurisdiction for resolution.
ARTICLE VI
6.1 OWNERSHIP OF THE LEASED PROPERTY. Lessee acknowledges that the
Leased Property is the property of Lessor and that Lessee has only the right to
the possession and use of the Leased Property upon the terms and conditions of
this Lease.
6.2 LESSEE'S PERSONAL PROPERTY. Lessee will acquire and maintain
throughout the Term such Inventory as is required to operate each Facility in
the manner contemplated by this Lease. Lessee may (and shall as provided herein
below), at its expense, install, affix or assemble or place on any parcels of
the Land or in any of the Leased Improvements, any items of personal property
(including Inventory) owned by Lessee. Lessee, at the commencement of the Term,
and from time to time thereafter, shall provide Lessor with an accurate list of
all such items of Lessee's personal property (collectively, "Lessee's Personal
Property"). Subject to the option of the Lessor provided in Article XXXV below,
Lessee may, subject to the conditions set forth below, remove any of Lessee's
Personal Property set forth on such list at any time during the Term or upon the
expiration or any prior termination of the Term. All of Lessee's Personal
Property not removed by Lessee within ten days following the expiration or
earlier termination of the Term or purchased by Lessor pursuant to such option,
shall be considered abandoned by Lessee and may be appropriated, sold, destroyed
or otherwise disposed of by Lessor without first giving Notice thereof to
Lessee, without any payment to Lessee and without any obligation to account
therefor. Lessee will, at its expense, restore the Leased Property to the
condition required by Section 9.1(4), including repair of all damage to the
Leased Property caused by the removal of Lessee's Personal Property, whether
effected by Lessee or Lessor. Lessee may make such financing arrangements, title
retention agreements, leases or other agreements with respect to the Lessee's
Personal Property as it sees fit provided that Lessee first advises Lessor of
any such arrangement and such arrangement expressly provides that in the event
of Lessee's default thereunder, Lessor may assume Lessee's obligations and
rights under such arrangement. Such financing arrangements shall also provide
that they will be assumable by the Lessor in the event of its purchase of
Lessee's Personal Property subject thereto in the event of Lessor's purchase
thereof pursuant to the terms of this Lease.
6.3 LESSOR'S LIEN. To the fullest extent permitted by applicable
law, Lessor is granted a lien and security interest on all Lessee's Personal
Property now or hereinafter placed in or upon the Leased Property, and such lien
and security interest shall remain attached to such Lessee's Personal
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Property until payment in full of all Rent and satisfaction of all of Lessee's
obligations hereunder; provided, however, Lessor shall subordinate its lien and
security interest to that of any non-Affiliate of Lessee which finances such
Lessee's Personal Property, such subordination to be satisfactory to Lessor in
the exercise of reasonable discretion. Lessee shall, upon the request of Lessor,
execute such financing statements or other documents or instruments reasonably
requested by Lessor to perfect the lien and security interests herein granted.
ARTICLE VII
7.1 CONDITION OF THE LEASED PROPERTY. Lessee acknowledges receipt
and delivery of possession of the Leased Property. Lessee has examined and
otherwise has knowledge of the condition of the Leased Property and has found
the same to be satisfactory for its purposes hereunder. Lessee is leasing the
Leased Property "as is" in its present condition. Lessee waives any claim or
action against Lessor in respect of the condition of the Leased Property. LESSOR
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE
LEASED PROPERTY, OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN
OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT
ALL SUCH RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED
PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO IT. Provided,
however, to the extent permitted by law, Lessor hereby assigns to Lessee all of
Lessor's rights to proceed against any predecessor in title other than Lessor
(or any Affiliate of Lessor, or any partnership of which any Affiliate or former
Affiliate of Lessee served as general or managing partner, which previously held
title to any of the Leased Property) for breaches of warranties or
representations or for latent defects in the Leased Property. Lessor shall fully
cooperate with Lessee in the prosecution of any such claim, in Lessor's or
Lessee's name, all at Lessee's sole cost and expense. Lessee hereby agrees to
indemnify, defend and hold harmless Lessor from and against any claims,
obligations and liabilities against or incurred by Lessor in connection with
such cooperation.
7.2 USE OF THE LEASED PROPERTY.
(1) Lessee covenants that it will proceed with all due
diligence and will exercise its best efforts to obtain and to maintain
all approvals needed to use and operate the Leased Property and each
Facility under applicable local, state and federal law. Lessee
represents to Lessor that Lessee presently has such certificates,
licenses, permits and other authorizations reasonably required to
conduct the Primary Intended Uses thereof.
(2) Lessee shall use or cause to be used the Leased
Property only as hotel facilities, and for such other uses as may be
necessary or incidental to such use or such other use as otherwise
approved by Lessor (the "Primary Intended Use"). Lessee shall not use
the Leased Property or any portion thereof for any other use, or
include in the Primary Intended Use such ancillary uses such as sales
of food or beverages, without the prior written consent of Lessor,
which consent may be granted, denied or conditioned in Lessor's sole
discretion.
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No use shall be made or permitted to be made of the Leased Property,
and no acts shall be done, which will cause the cancellation or
increase the premium of any insurance policy covering the Leased
Property or any part thereof (unless another adequate policy
satisfactory to Lessor is available and Lessee pays any premium
increase), nor shall Lessee sell or permit to be kept, used or sold in
or about any Leased Property any article which may be prohibited by law
or fire underwriter's regulations. Lessee shall, at its sole cost,
comply with all of the requirements pertaining to any Leased Property
of any insurance board, association, organization or company necessary
for the maintenance of insurance, as herein provided, covering such
Leased Property and Lessee's Personal Property.
(3) Subject to the provisions of Articles XIV and XV,
Lessee covenants and agrees that during the Term it will (1) operate
continuously the Leased Property as hotel facilities, (2) maintain
appropriate certifications and licenses for such use and (3) use its
best efforts to maximize the gross revenues generated therefrom
consistent with sound business practices. Lessor further covenants and
agrees that it will operate the Leased Property in such a manner as
will maintain at least the standards of quality that have been
heretofore established in the ownership and operations of the Leased
Property by Affiliates of the Lessor prior to the date of this Lease.
Lessee will engage in (and commit resources for) such promotional and
advertising activities with respect to the Leased Property as shall be
reasonably required or advisable, under all of the facts and
circumstances, to effectively and efficiently promote the business and
operations of the Leased Properties.
(4) Lessee shall not commit or suffer to be committed any
waste on any Leased Property, or in any Facility, nor shall Lessee
cause or permit any nuisance thereon.
(5) Lessee shall neither suffer nor permit the Leased
Property or any portion thereof, or Lessee's Personal Property, to be
used in such a manner as (1) might reasonably tend to impair Lessor's
(or Lessee's, as the case may be) title thereto or to any portion
thereof, or (2) may reasonably make possible a claim or claims of
adverse usage or adverse possession by the public, as such, or of
implied dedication of the Leased Property or any portion thereof,
except as necessary in the ordinary and prudent operation of the
Facility on such Leased Property.
(6) Lessee or any Affiliate of Lessee shall not own, or
have any interest in, any hotel or motel property in which Lessor or an
Affiliate of Lessor does not have an interest. Neither Lessee nor an
Affiliate of Lessee shall operate or manage any hotel or motel that is
within a 20-mile radius of any hotel or motel property in which Lessor
or an Affiliate of Lessor has an interest on the date Lessee or its
Affiliate would otherwise commence operating or managing such property,
other than pursuant to this Lease or another lease, agreement or
arrangement with Lessor or an Affiliate of Lessor. Lessor agrees to
notify Lessee promptly of the location of any hotel or motel property
in which Lessor or an Affiliate of Lessor has an interest.
7.3 LESSOR TO GRANT EASEMENTS, ETC. Lessor will, from time to
time, so long as no Event of Default has occurred and is continuing, at the
request of Lessee and at Lessee's cost and expense
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(but subject to the approval of Lessor, which approval shall not be unreasonably
withheld or delayed), (a) grant easements and other rights in the nature of
easements with respect to any Leased Property to third parties, (b) release
existing easements or other rights in the nature of easements which are for the
benefit of any Leased Property, (c) dedicate or transfer unimproved portions of
any Leased Property for road, highway or other public purposes, (d) execute
petitions to have any Leased Property annexed to any municipal corporation or
utility district, (e) execute amendments to any covenants and restrictions
affecting any Leased Property and (f) execute and deliver to any person any
instrument appropriate to confirm or effect such grants, releases, dedications,
transfers, petitions and amendments (to the extent of its interest in the Leased
Property), but only upon (i) delivery to Lessor of an Officer's Certificate
stating that such grant, release, dedication, transfer, petition or amendment is
not detrimental to the proper conduct of the business of Lessee on such Leased
Property and does not materially reduce the value of such Leased Property, and
(ii) obtaining all necessary consents or approvals of any lender holding a
mortgage or other security interest in the Leased Property in question.
ARTICLE VIII
8.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS, ETC. Subject
to Article XII relating to permitted contests, Lessee, at its expense, will
promptly (a) comply with all applicable Legal Requirements and Insurance
Requirements in respect of the use, operation maintenance, repair and
restoration of the Leased Property, and (b) procure, maintain and comply with
all appropriate licenses and other authorizations required for any use of the
Leased Property and Lessee's Personal Property then being made, and for the
proper erection, installation, operation and maintenance of the Leased Property
or any part thereof.
8.2 LEGAL REQUIREMENT COVENANTS. Lessee covenants and agrees that
none of the Leased Property or Lessee's Personal Property shall be used for any
unlawful purpose, and that Lessee shall not permit or suffer to exist any
unlawful use of any Leased Property by others. Lessee shall acquire and maintain
all appropriate licenses, certifications, permits and other authorizations and
approvals needed to operate the Leased Property in its customary manner for the
Primary Intended Use, and any other lawful use conducted on the Leased Property
as may be permitted from time to time hereunder. Lessee further covenants and
agrees that Lessee's use of the Leased Property and maintenance, alteration, and
operation of the same, and all parts thereof, shall at all times conform to all
Legal Requirements, unless the same are finally determined by a court of
competent jurisdiction to be unlawful (and Lessee shall cause all such
sub-tenants, invitees or others to so comply with all Legal Requirements).
Lessee may, however, upon prior Notice to Lessor, contest the legality or
applicability of any such Legal Requirement or any licensure or certification
decision if Lessee maintains such action in good faith, with due diligence,
without prejudice to Lessor's rights hereunder, and at Lessee's sole expense.
If, by the terms of any such Legal Requirement, compliance therewith may legally
be delayed pending the prosecution of any such proceeding without the incurrence
of any lien, charge or liability of any kind against the Facility or Lessee's
leasehold interest therein and without subjecting Lessee or Lessor to any
liability, civil or criminal, for failure so to comply therewith, Lessee may
delay compliance therewith until the final determination of such proceeding. If
any lien, charge or civil or criminal liability would be incurred by reason of
any such
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delay, Lessee, on the prior written consent of Lessor, which consent shall not
be unreasonably withheld, may nonetheless contest as aforesaid and delay as
aforesaid provided that such delay would not subject Lessor to criminal
liability and Lessee both (a) furnishes to Lessor security reasonably
satisfactory to Lessor against any loss or injury by reason of such contest or
delay and (b) prosecutes the contest with due diligence and in good faith.
8.3 ENVIRONMENTAL COVENANTS. In addition to, and not in diminution
of, Lessee's covenants and undertakings in Sections 8.1 and 8.2 hereof, Lessee
covenants and undertakes with Lessor as follows:
(1) At all times hereafter until such time as all
liabilities, duties or obligations of Lessee to the Lessor under the
Lease have been satisfied in full, Lessee shall fully comply with all
Environmental Laws applicable to the Leased Property and the operations
thereon. Lessee agrees to give Lessor prompt written notice of (1) all
Environmental Liabilities; (2) all pending, threatened or anticipated
Proceedings, and all notices, demands, requests or investigations,
relating to any Environmental Liability or relating to the issuance,
revocation or change in any Environmental Authorization required for
operation of any Leased Property; (3) all Releases at, on, in, under or
in any way affecting any Leased Property, or any Release known by
Lessee at, on, in or under any property adjacent to any Leased
Property; and (4) all facts, events or conditions that could reasonably
lead to the occurrence of any of the above-referenced matters.
(2) Lessor hereby agrees to defend, indemnify and save
harmless any and all Lessee Indemnified Parties from and against any
and all Environmental Liabilities other than Environmental Liabilities
which were caused by the acts or negligent failures to act of Lessee.
(3) Lessee hereby agrees to defend, indemnify and save
harmless any and all Lessor Indemnified Parties from and against any
and all Environmental Liabilities caused by the acts or negligent
failure of Lessee.
(4) If any Proceeding is brought against any Indemnified
Party in respect of an Environmental Liability with respect to which
such Indemnified Party may claim indemnification under either Section
8.3(2) or (3), the Indemnifying Party, upon request, shall at its sole
expense resist and defend such Proceeding, or cause the same to be
resisted and defended by counsel designated by the Indemnified Party
and approved by the Indemnifying Party, which approval shall not be
unreasonably withheld; provided, however, that such approval shall not
be required in the case of defense by counsel designated by any
insurance company undertaking such defense pursuant to any applicable
policy of insurance. Each Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel will be
at the sole expense of such Indemnified Party. The Indemnifying Party
shall not be liable for any settlement of any such Proceeding made
without its consent, which shall not be unreasonably withheld, but if
settled with the consent of the Indemnifying Party, or if settled
without its consent (if its consent shall be unreasonably withheld), or
if there be a
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final, nonappealable judgment for an adversary party in any such
Proceeding, the Indemnifying Party shall indemnify and hold harmless
the Indemnified Parties from and against any liabilities incurred by
such Indemnified Parties by reason of such settlement or judgment.
For purposes of this Section 8.3, all amounts for which any
Indemnified Party seeks indemnification shall be computed net of (a)
any actual income tax benefit resulting therefrom to such Indemnified
Party, (b) any insurance proceeds received (net of tax effects) with
respect thereto, and (c) any amounts recovered (net of tax effects)
from any third parties based on claims the Indemnified Party has
against such third parties which reduce the damages that would
otherwise be sustained; provided that in all cases, the timing of the
receipt or realization of insurance proceeds or income tax benefits or
recoveries from third parties shall be taken into account in
determining the amount of reduction of damages. Each Indemnified Party
agrees to use its reasonable efforts to pursue, or assign to the
Indemnifying Party, any claims or rights it may have against any third
party which would materially reduce the amount of damages otherwise
incurred by such Indemnified Party.
Notwithstanding anything to the contrary contained in this
Agreement, if Lessor shall become entitled to the possession of any
Leased Property by virtue of the termination of the Lease or
repossession of the Leased Property, then Lessor may assign its
indemnification rights under Section 8.3 of this Agreement (but not any
other rights hereunder) to any Person to whom the Lessor subsequently
transfers such Leased Property, subject to the following conditions and
limitations, each of which shall be deemed to be incorporated into the
terms of such assignment, whether or not specifically referred to
therein:
(i) The indemnification rights referred to in
this section may be assigned only if a known Environmental
Liability then exists or if a Proceeding is then pending or,
to the knowledge of Lessee or Lessor, then threatened with
respect to any Leased Property.
(ii) Such indemnification rights shall be limited
to Environmental Liabilities relating to or specifically
affecting such Leased Property.
(iii) Any assignment of such indemnification
rights shall be limited to the immediate transferee of Lessor,
and shall not extend to any such transferee's successors or
assigns.
(5) At any time any Indemnified Party has reasons to
believe circumstances exist which could reasonably result in an
Environmental Liability, upon reasonable prior written notice to the
Indemnifying Party stating such Indemnified Party's basis for such
belief, an Indemnified Party shall be given immediate access to the
Leased Property (including, but not limited to, the right to enter
upon, investigate, drill xxxxx, take soil borings, excavate, monitor,
test, cap and use available land for the testing of remedial
technologies), Lessee's employees, and to all relevant documents and
records regarding the matter as to which a responsibility, liability or
obligation is asserted or which is the subject of any Proceeding;
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provided that such access may be conditioned or restricted as may be
reasonably necessary to ensure compliance with law and the safety of
personnel and facilities or to protect confidential or privileged
information. All Indemnified Parties requesting such immediate access
and cooperation shall endeavor to coordinate such efforts to result in
as minimal interruption of the operation of such Leased Property as
practicable.
ARTICLE IX
9.1 MAINTENANCE AND REPAIR.
(1) Lessee, at its sole expense, will keep the Leased
Property and all private roadways, sidewalks and curbs appurtenant
thereto that are under Lessee's control, including windowpanes and
plate glass, parking lots, swimming pool, mechanical, electrical and
plumbing systems and equipment (including conduit and ductware), and
non-load bearing interior walls in good order and repair, except for
ordinary wear and tear (whether or not the need for such repairs
occurred as a result of Lessee's use, any prior use, the elements or
the age of the Leased Property, or any portion thereof), and, except as
otherwise provided in Section 9.1(2), Article XIV or Article XV, with
reasonable promptness, make all necessary and appropriate repairs,
replacements, and improvements thereto of every kind and nature,
whether interior or exterior, ordinary or extraordinary, foreseen or
unforeseen or arising by reason of a condition existing prior to the
commencement of the Term of this Lease (concealed or otherwise), or
required by any governmental agency having jurisdiction over the Leased
Property, except as to the physical structure of the Leased
Improvements. All repairs shall, to the extent reasonably achievable,
be a least equivalent in quality to the original work. Lessee will not
take or omit to take any action, the taking or omission of which might
materially impair the value or the usefulness of the Leased Property or
any part thereof for its Primary Intended Use.
(2) Notwithstanding Lessee's obligations under Section
9.1(1) above, unless caused by Lessee's negligence or willful
misconduct or that of its employees or agents, Lessor shall be required
to bear the cost of maintaining any underground utilities (to the
extent not maintained by any other Person) and the structural elements
of the Leased Improvements including the roof of each Facility (but
excluding windowpanes and plate glass); provided Lessee shall give
Lessor reasonable advance Notice of the need for such maintenance as
soon as Lessee becomes aware thereof. Failure of Lessee to give such
Notice shall render Lessee responsible for all maintenance costs which
could have been avoided had such Notice been timely given. Except as
set forth in the first sentence of this subparagraph (b), Lessor shall
not under any circumstances be required to build or rebuild any
improvement on the Leased Property, or to make any repairs,
replacements, alterations, restorations or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary,
foreseen or unforeseen, or to make any expenditure whatsoever with
respect thereto, in connection with this Lease, or to maintain the
Leased Property in any way. Lessee hereby waives, to the extent
permitted by law, the right to make repairs at the expense of Lessor
pursuant to any law in effect at the time of the execution of this
Lease or hereafter
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enacted. Lessor shall have the right to give, record and post, as
appropriate, notices of nonresponsibility under any mechanic's lien
laws now or hereafter existing.
(3) Nothing contained in this Lease and no action or
inaction by Lessor shall be construed as (i) constituting the request
of Lessor, expressed or implied, to any contractor, subcontractor,
laborer, materialman or vendor to or for the performance of any labor
or services or the furnishing of any materials or other property for
the construction, alteration, addition, repair or demolition of or to
any Leased Property or any part thereof, or (ii) giving Lessee any
right, power or permission to contract for or permit the performance of
any labor or services which could result in the creation of any claim
against Lessor in respect thereof or to make any agreement that may
create, or in any way be the basis for any right, title, interest,
lien, claim or other encumbrance upon the estate of Lessor in the
Leased Property, or any portion thereof.
(4) Lessee will, upon the expiration or prior termination
of the Term, vacate and surrender the Leased Property to Lessor in the
condition in which the Leased Property was originally received from
Lessor, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this Lease and except for
ordinary wear and tear (subject to the obligation of Lessee to maintain
the Leased Property in good order and repair, as would a prudent owner,
during the entire Term of the Lease), or damage by casualty or
Condemnation (subject to the obligations of Lessee to restore or repair
as set forth in the Lease.)
9.2 ENCROACHMENTS, RESTRICTIONS, ETC. If any of the Leased
Improvements, at any time, materially encroach upon any property, street or
right-of-way adjacent to any Leased Property, or violate the agreements or
conditions contained in any lawful restrictive covenant or other agreement
affecting such Leased Property, or any part thereof, or impair the rights of
others under any easement or right-of way to which such Leased Property is
subject, then promptly upon the request of Lessor or at the behest of any person
affected by any such encroachment, violation or impairment, Lessee shall, at its
expense and upon written notice to Lessor, subject to its right to contest the
existence of any encroachment, violation or impairment and in such case, in the
event of an adverse final determination, either (a) obtain valid and effective
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation or impairment, whether the same shall affect
Lessor or Lessee or (b) make such changes in the Leased Improvements, and take
such other actions, as Lessee in the good faith exercise of its judgment deems
reasonably practicable to remove such encroachment, and to end such violation or
impairment, including, if necessary, the alteration of any of the Leased
Improvements, and in any event take all such actions as may be necessary in
order to be able to continue the operation of the Leased Improvements for the
Primary Intended Use substantially in the manner and to the extent the Leased
Improvements were operated prior to the assertion of such violation, impairment
or encroachment. Any such alteration shall be made in conformity with the
applicable requirements of Article X. Lessee's obligations under this Section
9.2 shall be in addition to and shall in no way discharge or diminish any
obligation of any insurer under any policy of title or other insurance held by
Lessor.
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ARTICLE X
10.1 ALTERATIONS. Lessee shall have the right to make additions,
modifications or improvements to any Leased Property from time to time as
Lessee, in its discretion, may deem to be desirable for its permitted uses and
purposes, provided that such action will not noticeably alter the character or
purposes or noticeably detract from the value or operating efficiency thereof
and will not noticeably impair the revenue-producing capability of the Leased
Property or adversely affect the ability of the Lessee to comply with the
provisions of this Lease. In the case of any such additions, modifications or
improvements to any Leased Property, Lessee shall prosecute the performance
thereof with all due diligence and on a continuous basis, in a good and
workmanlike manner, so as to complete the performance thereof as expeditiously
as reasonably practicable. In the event of any such additions, modifications or
improvements having an estimated cost in excess of $100,000, such work shall be
conducted under the supervision of a qualified architect, engineer and/or
contractor reasonably satisfactory to Lessor, shall be completed substantially
in accordance with plans and specifications previously approved in writing by
Lessor, and shall be commenced only after Lessee shall have furnished to Lessor
such assurances of payment and performance as may reasonably be required by
Lessor under the circumstances. The cost of such additions, modifications or
improvements to the Leased Property shall be paid by Lessee, and all such
additions, modifications and improvements shall, without payment by Lessor at
any time, be included under the terms of this Lease and upon expiration or
earlier termination of this Lease shall pass to and become the property of
Lessor.
10.2 SALVAGE. All materials which are scrapped or removed in
connection with the making of repairs required by Articles IX or X shall be or
become the property of Lessor or Lessee depending on which party is paying for
or providing the financing for such work.
10.3 JOINT USE AGREEMENTS. Subject to Section 7.2(2) hereof, if
Lessee constructs additional improvements that are connected to any Leased
Property or share maintenance facilities, HVAC, electrical, plumbing or other
systems, utilities, parking or other amenities, the parties shall enter into a
mutually agreeable cross-easement or joint use agreement to make available
necessary services and facilities in connection with such additional
improvements, to protect each of their respective interests in the properties
affected, and to provide for separate ownership, use, and/or financing of such
improvements.
ARTICLE XI
LIENS. Subject to the provision of Article XII relating to permitted
contests, Lessee will not directly or indirectly create or allow to remain and
will promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon any Leased Property or any attachment, levy,
claim or encumbrance in respect of the Rent, not including, however, (a) this
Lease, (b) the matters, if any, included as exceptions in the title policy
insuring Lessor's interest in the Leased Property, (c) restrictions, liens and
other encumbrances which are consented to in writing by Lessor or any easements
granted pursuant to the provisions of Section 7.3 of this Lease, (d) liens for
those taxes upon Lessor which Lessee is not required to pay hereunder, (e)
subleases permitted
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by Article XXII hereof, (f) liens for Impositions or for sums resulting from
noncompliance with Legal Requirements so long as (1) the same are not yet
payable or are payable without the addition of any fine or penalty or (2) such
liens are in the process of being contested as permitted by Article XII, (g)
liens of mechanics, laborers, materialmen, suppliers or vendors for sums either
disputed or not yet due provided that (1) the payment of such sums shall not be
postponed under any related contract for more than 60 days after the completion
of the action giving rise to such lien and such reserve or other appropriate
provisions as shall be required by law or generally accepted accounting
principles shall have been made therefor or (2) any such liens are in the
process of being contested as permitted by Article XII hereof, and (h) any liens
which are the responsibility of Lessor pursuant to the provisions of Article
XXXII of this Lease.
ARTICLE XII
PERMITTED CONTESTS. Lessee shall have the right, upon prior written
notice to Lessor, to contest the amount or validity of any Imposition to be paid
by Lessee or any Legal Requirement or Insurance Requirement or any lien,
attachment, levy, encumbrance, charge or claim ("Claims") not otherwise
permitted by Article XI, by appropriate legal proceedings in good faith and with
due diligence (but this shall not be deemed or construed in any way to relieve,
modify or extend Lessee's covenants to pay or its covenants to cause to be paid
any such charges at the time and in the manner as in this Lease provided), on
condition, however, that such legal proceedings shall not operate to relieve
Lessee from its obligations hereunder and shall not cause the sale or risk the
loss of the Leased Property, or any part thereof, or cause Lessor or Lessee to
be in default under any mortgage, deed of trust or security deed encumbering the
Leased Property or any part thereof or interest therein. Upon the request of
Lessor, Lessee shall either (a) provide a bond or other assurance reasonably
satisfactory to Lessor that all Claims which may be assessed against such Leased
Property together with interest and penalties, if any, thereon will be paid, or
(b) deposit within the time otherwise required for payment with a bank or trust
company as trustee upon terms reasonably satisfactory to Lessor, as security for
the payment of such Claims, money in an amount sufficient to pay the same,
together with interest and penalties in connection therewith, as to all Claims
which may be assessed against or become a Claim on such Leased Property, or any
part thereof, in said legal proceedings. Lessee shall furnish Lessor and any
lender of Lessor with reasonable evidence of such deposit within five days of
the same. Lessor agrees to join in any such proceedings if the same be required
to legally prosecute such contest of the validity of such Claims; provided,
however, that Lessor shall not thereby be subjected to any liability for the
payment of any costs or expenses in connection with any proceedings brought by
Lessee; and Lessee covenants to indemnify and save harmless Lessor from any such
costs or expenses. Lessee shall be entitled to any refund of any Claims and such
charges and penalties or interest thereon which have been paid by Lessee or paid
by Lessor and for which Lessor has been fully reimbursed. In the event that
Lessee fails to pay any Claims when due or to provide the security therefor as
provided in this paragraph and to diligently prosecute any contest of the same,
Lessor may, upon ten days' advance Notice to Lessee, pay such charges together
with any interest and penalties and the same shall be repayable by Lessee to
Lessor as Additional Charges at the next Payment Date provided for in this
Lease; provided, however, that should Lessor reasonably determine that the
giving of such Notice would risk loss to the Leased Property or cause damage to
Lessor, then Lessor shall give such Notice as is practical under the
circumstances. Lessor
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reserves the right to contest any of the Claims at its expense not pursued by
Lessee. Lessor and Lessee agree to cooperate in coordinating the contest of any
claims.
ARTICLE XIII
13.1 GENERAL INSURANCE REQUIREMENTS. During the Term of this Lease,
Lessee shall at all times keep the Leased Property insured with the kinds and
amounts of insurance described below. This insurance shall be written by
companies authorized to issue insurance in the State. The policies (other than
Workers' Compensation Insurance) must name Lessor as an additional insured.
Losses shall be payable to Lessor or Lessee as provided in this Lease. Any loss
adjustment shall require the written consent of Lessor and Lessee, each acting
reasonably and in good faith. Evidence of insurance shall be deposited with
Lessor. The policies on the Leased Property, including the Leased Improvements,
Fixtures and Lessee's Personal Property, shall include:
(1) Building insurance on the "Special Form" (formerly
"All Risk" form) (excluding earthquake and flood in an amount not less
than 100% of the then full replacement cost thereof (as defined in
Section 13.2) or such other amount which is acceptable to Lessor, and
personal property insurance on the "Special Form" in the full amount of
the replacement cost thereof;
(2) Loss of income insurance on the "Special Form," with
respect to Percentage Rent attributable to each Individual Leased
Property (determined on the basis of the average Percentage Rent
attributable to the operations of each Individual Leased Property in
question over the prior three Fiscal Years or if three Fiscal Years
have not elapsed, the average of the Percentage Rent for an Individual
Leased Property determined by reference to the Percentage Rent during
the preceding Fiscal Years during which the Lease was in effect) for
the benefit of Lessor, and business interruption insurance on the
"Special Form" in the amount of one year of gross profit, for the
benefit of Lessee;
(3) Commercial general liability insurance, with amounts
not less than $6,000,000 covering each of the following: bodily injury,
death, or property damage liability per occurrence, personal and
advertising injury, general aggregate, products and completed
operations, with respect to and insuring Lessor, and "all risk legal
liability" (including liquor law or "dram shop" liability) with respect
to and insuring Lessor and Lessee;
(4) Insurance covering such other hazards and in such
amounts as may be customary for comparable properties in the area of
the Leased Property and is available from insurance companies,
insurance pools or other appropriate companies authorized to do
business in the State at rates which are economically practicable in
relation to the risks covered as may be reasonably requested by Lessor;
(5) Fidelity bonds with limits and deductibles as may be
reasonably requested by Lessor, covering Lessee's employees in job
classifications normally bonded under prudent hotel management
practices in the United States or otherwise required by law;
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(6) Workers' compensation insurance to the extent
necessary to protect Lessor and the Leased Property against Lessee's
workers' compensation claims and as may be required by law, including
coverage for all persons employed by Lessee on the Leased Property
(such insurance to be in accordance with the requirements of applicable
local, state and federal law);
(7) Vehicle liability insurance for owned, non-owned, and
hired vehicles, in the amount of $1,000,000;
(8) Such other insurance (reasonably available from
insurance companies) as Lessor may reasonably request for facilities
such as the Leased Property and the operation thereof; and
Notwithstanding anything in this Lease to the contrary, Lessor shall be
obligated to pay the premiums and other costs of the insurance required hereby
other than Workers' Compensation insurance.
13.2 REPLACEMENT COST. The term "full replacement cost" as used
herein shall mean the actual replacement cost of an Individual Leased Property
requiring replacement from time to time including an increased cost of
construction endorsement, if available, and the cost of debris removal. In the
event either party believes that full replacement cost (the then replacement
cost less such exclusions) has increased or decreased at any time during the
Lease Term, it shall have the right to have such full replacement cost
redetermined.
13.3 WAIVER OF SUBROGATION. All insurance policies carried by
Lessor or Lessee covering the Leased Property, the Fixtures, the Facility or
Lessee's Personal Property, including, without limitation, contents, fire and
casualty insurance, shall expressly waive any right of subrogation on the part
of the insurer against the other party. The parties hereto agree that their
policies will include such waiver clause or endorsement so long as the same is
obtainable without extra cost, and in the event of such an extra charge, the
other party, at its election, may pay the same, but shall not be obligated to do
so.
13.4 FORM SATISFACTORY, ETC. All of the policies of insurance
referred to in this Article XIII shall be written in a form satisfactory to
Lessor and by insurance companies satisfactory to Lessor. Lessor agrees that it
will not unreasonably withhold its approval as to the form of the policies of
insurance or as to the insurance companies selected by Lessee. Each insurer
mentioned in this Article XIII shall agree, by endorsement to the policy or
policies issued by it, or by independent instrument furnished to Lessor, that it
will give to Lessor 30 days' written notice before the policy or policies in
question shall be materially altered, allowed to expire or canceled.
13.5 INCREASE IN LIMITS. If either Lessor or Lessee at any time
deems the limits of the personal injury or property damage under the
comprehensive public liability insurance then carried to be either excessive or
insufficient, Lessor or Lessee shall endeavor in good faith to agree on the
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proper and reasonable limits for such insurance to be carried and such insurance
shall thereafter be carried with the limits thus agreed on until further change
pursuant to the provisions of this Section.
13.6 BLANKET POLICY. Notwithstanding anything to the contrary
contained in this Article XIII, Lessee's obligations to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Lessee; provided,
however, that the coverage afforded to Lessor will not be reduced or diminished
or otherwise be different from that which would exist under a separate policy
meeting all other requirements of this Lease by reason of the use of such
blanket policy of insurance, and provided further that the requirements of this
Article XIII are otherwise satisfied.
13.7 NO SEPARATE INSURANCE. Lessee shall not on Lessee's own
initiative or pursuant to the request or requirement of any third party, take
out separate insurance concurrent in form or contributing in the event of loss
with that required in this Article to be furnished by Lessee, or increase the
amount of any then existing insurance by securing an additional policy or
additional policies, unless all parties having an insurable interest in the
subject matter of the insurance, including in all cases Lessor, are included
therein as additional insureds, and the loss is payable under such additional
separate insurance in the same manner as losses are payable under this Lease.
Lessee shall immediately give Notice to Lessor that Lessee has obtained any such
separate insurance or of the increasing of any of the amounts of the then
existing insurance.
ARTICLE XIV
14.1 INSURANCE PROCEEDS. All proceeds payable by reason of any loss
or damage to any Leased Property, or any portion thereof, and insured under any
policy of insurance required or permitted by Article XIII of this Lease shall be
paid to Lessor and held in trust by Lessor in an interest-bearing account
(subject to the provisions of Section 14.5) and shall be made available for
reconstruction or repair, as the case may be, of any damage to or destruction of
such Leased Property, or any portion thereof, and shall be paid out by Lessor
from time to time for the reasonable costs of such reconstruction or repair upon
satisfaction of reasonable terms and conditions; provided, that loss of income
insurance payable to Lessor or due Lessor under the terms of this Lease shall
remain the sole property of Lessor. Any excess proceeds of insurance remaining
after the completion of the restoration or reconstruction of such Leased
Property shall be retained by Lessor for its own account. If neither Lessor nor
Lessee is required or elects to repair and restore, and the Lease is terminated,
all such insurance proceeds shall be retained by Lessor. All salvage resulting
from any risk covered by insurance shall belong to Lessor.
14.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION
(1) Except as provided in Section 14.5, if during the
Term any Leased Property is totally or partially damaged or destroyed
(regardless of whether such damage or destruction is by a risk covered
by the insurance described in Article XIII), Lessee shall restore the
Facility to substantially the same condition as existed immediately
before the damage or destruction and otherwise in accordance with the
terms of the Lease. In
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connection with Lessee's restoration of the Facility, any insurance
proceeds shall be paid out by Lessor from time to time for the
reasonable costs of such restoration upon satisfaction of reasonable
terms and conditions, and any excess proceeds remaining after such
restoration shall be retained by Lessor.
(2) If the cost of the repair or restoration exceeds the
amount of any proceeds received by Lessor from the insurance required
under Article XIII, Lessee shall be obligated to contribute any excess
amounts needed to restore the Facility prior to commencing work
thereon.
14.3 LESSEE'S PROPERTY. All insurance proceeds payable by reason of
any loss of or damage to any of Lessee's Personal Property shall be paid to
Lessee; provided, however, no such payments shall diminish or reduce the
insurance payments otherwise payable to or for the benefit of Lessor hereunder.
14.4 NON-ABATEMENT OF RENT. This Lease shall remain in full force
and effect and, except to the extent Lessor is entitled to receive the proceeds
of business interruption insurance with respect to lost Percentage Rent,
Lessee's obligation to make rental payments and to pay all other charges
required by this Lease with respect to such Individual Leased Property shall
remain unabated during any period required for repair and restoration.
14.5 DAMAGE NEAR END OF TERM. Notwithstanding any provisions of
Section 14.2 appearing to the contrary, if damage to or destruction of the
Facility occurs during the last 6 months of the Term, then Lessee shall have the
right to terminate this Lease as to such Individual Leased Property by giving
written notice to Lessee within 30 days after the date of damage or destruction,
whereupon all accrued Rent attributable to such Individual Leased Property shall
be paid immediately.
14.6 WAIVER. Lessee hereby waives any statutory rights of
termination that may arise by reason of any damage or destruction of the
Facility that Lessee is obligated to restore or may restore under any of the
provisions of this Lease.
ARTICLE XV
15.1 DEFINITIONS.
(1) "Condemnation" means a Taking resulting from (1) the
exercise of any governmental power, whether by legal proceedings or
otherwise, by a Condemnor, and (2) a voluntary sale or transfer by
Lessor to any Condemnor, either under threat of condemnation or while
legal proceedings for condemnation are pending.
(2) "Date of Taking" means the date the Condemnor has the
right to possession of the property being condemned.
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(3) "Award" means all compensation, sums or anything of
value awarded, paid or received on a total or partial Condemnation.
(4) "Condemnor" means any public or quasi-public
authority, or private corporation or individual, having the power of
Condemnation.
15.2 PARTIES' RIGHTS AND OBLIGATIONS. If during the Term there is
any Condemnation of all or any part of the Leased Property or any interest in
this Lease, the rights and obligations of Lessor and Lessee shall be determined
by this Article XV.
15.3 TOTAL TAKING. If title to the fee of the whole of any
Individual Leased Property is condemned by any Condemnor, this Lease shall cease
and terminate as to such Individual Leased Property as of the Date of Taking by
the Condemnor. If title to the fee of less than the whole of the Individual
Leased Property is so taken or condemned, which nevertheless renders such
Individual Leased Property Unsuitable or Uneconomic for its Primary Intended
Use, Lessee and Lessor shall each have the option, by notice to the other, at
any time prior to the Date of Taking, to terminate this Lease as to such
Individual Leased Property as of the Date of Taking. Upon such date, if such
Notice has been given, this Lease shall thereupon cease and terminate as to such
Individual Leased Property but it shall continue as to all other Leased Property
subject hereto. All Base Rent, Percentage Rent and Additional Charges paid or
payable by Lessee hereunder as to such Individual Leased Property shall be
apportioned as of the Date of Taking, and Lessee shall promptly pay Lessor such
amounts.
15.4 ALLOCATION OF AWARD. The total Award made with respect to the
Leased Property or for loss of rent, or for Lessor's loss of business beyond the
Term of this Lease, shall be solely the property of and payable to Lessor. Any
Award made for loss of business during the remaining Term of this Lease, if any,
for the taking of Lessee's Personal Property, or for removal and relocation
expenses of Lessee in any such proceedings shall be the sole property of and
payable to Lessee. In no event will any Award payable to Lessee diminish the
Award payable to Lessor. In any Condemnation proceedings Lessor and Lessee shall
each seek its Award in conformity herewith, at its respective expense; provided,
however, Lessee shall not initiate, prosecute or acquiesce in any proceedings
that may result in a diminution of any Award payable to Lessor.
15.5 PARTIAL TAKING. If title to less than the whole of an
Individual Leased Property is condemned, and the Individual Leased Property is
still suitable for its Primary Intended Use, and not Uneconomic for its Primary
Intended Use, or if Lessee or Lessor is entitled but neither elects to terminate
this Lease as to such Individual Leased Property as provided in Section 15.3
hereof, Lessee at its cost shall with all reasonable dispatch restore the
untaken portion of any Leased Improvements so that such Leased Improvements
constitute a complete architectural unit of the same general character and
condition (as nearly as may be possible under the circumstances) as the Leased
Improvements existing immediately prior to the Condemnation. Lessor shall
contribute to the cost of restoration that part of its Award specifically
allocated to such restoration, if any, together with severance and other damages
awarded for the taken Leased Improvements; provided, however, that the amount of
such contribution shall not exceed such cost.
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15.6 TEMPORARY TAKING. If the whole or any part of an Individual
Leased Property or of Lessee's interest under this Lease attributable thereto is
condemned by any Condemnor for its temporary use or occupancy, this Lease shall
not terminate as to such Individual Leased Property by reason thereof, and
Lessee shall continue to pay, in the manner and at the terms herein specified,
the full amounts of Base Rent and Additional Charges attributable to such
Individual Leased Property. In addition, Lessee shall pay Percentage Rent at a
rate equal to the average Percentage Rent attributable to such Individual Leased
Property during the last three preceding Fiscal Years (or if three Fiscal Years
shall not have elapsed, the average during the preceding Fiscal Years). Except
only to the extent that Lessee may be prevented from so doing pursuant to the
terms of the order of the Condemnor, Lessee shall continue to perform and
observe all of the other terms, covenants, conditions and obligations hereof on
the part of the Lessee to be performed and observed, as though such Condemnation
had not occurred. In the event of any Condemnation described in this Section
15.5, the entire amount of any Award made for such Condemnation allocable to the
Term of this Lease, whether paid by way of damages, rent or otherwise, shall be
paid to Lessee. Lessee covenants that upon the termination of any such period of
temporary use or occupancy it will, at its sole cost and expense (subject to
Lessor's contribution as set forth below), restore the Individual Leased
Property as nearly as may be reasonably possible to the condition in which the
same was immediately prior to such Condemnation, unless such period of temporary
use or occupancy extends beyond the expiration of the Term, in which case Lessee
shall not be required to make such restoration. If restoration is required
hereunder, Lessor shall contribute to the cost of such restoration that portion
of its entire Award that is specifically allocated to such restoration in the
judgment or order of the court, if any, and Lessee shall fund the balance of
such costs in advance of restoration in a manner reasonably satisfactory to
Lessor.
ARTICLE XVI
16.1 EVENTS OF DEFAULT. If any one or more of the following events
(individually, an "Event of Default") occurs:
(1) if Lessee fails to make any payment of Rent or other
sum payable by Lessee to Lessor hereunder when the same becomes due and
payable for a period of ten days after receipt by the Lessee of Notice
from the Lessor thereof; or
(2) if Lessee fails to observe or perform any other term,
covenant or condition of this Lease and such failure is not cured by
Lessee within a period of 30 days after receipt by the Lessee of Notice
thereof from Lessor, unless such failure cannot with due diligence be
cured within a period of 30 days, in which case it shall not be deemed
an Event of Default if Lessee proceeds promptly and with due diligence
to cure the failure and diligently completes the curing thereof
provided, however, in no event shall such cure period extend beyond 90
days after such Notice; or
(3) if Lessee shall file a petition under any Chapter of
the United States Bankruptcy Code, as amended, or under any similar law
or statute of the United States or any State, or there shall be filed
against Lessee a petition in bankruptcy or insolvency or a similar
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proceeding, which petition or proceeding is not dismissed within sixty
(60) days following the filing thereof, or if Lessee shall be adjudged
insolvent in any proceedings filed against Lessee, or if a receiver of
the Lessee or of the whole or substantially all of the assets of the
Lessee shall be appointed in any proceeding brought by the Lessee or if
any such receiver, trustee or liquidator shall be appointed in any
proceeding brought against the Lessee and shall not be vacated or set
aside or stayed within 60 days after such appointment; or
(4) if Lessee is liquidated or dissolved, or begins
proceedings toward such liquidation or dissolution, or, in any manner,
permits the sale or divestiture of substantially all of its assets; or
(5) if the estate or interest of Lessee in the Leased
Property or any part thereof is voluntarily or involuntarily
transferred, assigned, conveyed, levied upon or attached in any
proceeding (unless Lessee is contesting such lien or attachment in good
faith in accordance with Article XII hereof); or
(6) if, except as a result of damage, destruction or a
partial or complete Condemnation, Lessee voluntarily ceases operations
on any Leased Property for a period in excess of five days without the
consent or Lessor;
then, and in any such event, Lessor may exercise one or more remedies available
to it herein or at law or in equity, including but not limited to its right to
terminate this Lease either in whole or in respect of any Individual Leased
Property (without thereby affecting the remainder thereof) by giving Lessee not
less than ten days' Notice of such termination.
If litigation is commenced with respect to any alleged default
under this Lease, the prevailing party in such litigation shall receive, in
addition to its damages incurred, such sum as the court shall determine as its
reasonable attorneys' fees, and all costs and expenses incurred in connection
therewith.
16.2 SURRENDER. If an Event of Default occurs (and the event giving
rise to such Event of Default has not been cured within the curative period
relating thereto as set forth in Section 16.1) and is continuing, whether or not
this Lease has been terminated pursuant to Section 16.1, Lessee shall, if
requested by Lessor so to do, immediately surrender to Lessor the Leased
Property or any Individual Leased Property specified by Lessor (without
affecting this Lease in respect of the remainder thereof) including, without
limitation, any and all books, records, files, licenses, permits and keys
relating thereto, and quit the same and Lessor may enter upon and repossess the
Leased Property or any Individual Leased Property specified by Lessor (without
affecting this Lease in respect of the remainder thereof) by summary
proceedings, ejectment or otherwise, and may remove Lessee and all other persons
and any and all personal property from the Leased Property or any Individual
Leased Property specified by Lessor (without affecting this Lease in respect of
the remainder thereof), subject to rights of any hotel guests and to any
requirement of law. Lessee hereby waives any and all requirements of applicable
laws for service of notice to re-enter any of the Leased Property. Lessor shall
be under no obligation to, but may if it so chooses, relet the Leased Property
or otherwise mitigate Lessor's damages.
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16.3 DAMAGES. None of (a) the termination of this Lease (either in
whole or in respect of any Individual Leased Property or Properties), (b) the
repossession of the Leased Property (either in whole or in respect of any
Individual Leased Property or Properties), (c) the failure of Lessor to relet
all or any portion of the Leased Property, nor (d) the reletting of all or any
portion thereof, shall relieve Lessee of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. In the event of any such termination, Lessee shall forthwith pay to
Lessor all Rent due and payable with respect to the Leased Property to and
including the date of such termination.
Lessee shall forthwith pay to Lessor, at Lessor's option, as
and for liquidated and agreed current damages for Lessee's default, either:
(a) Without termination of Lessee's right to possession
of the Leased Property, each installment of Rent and other sums payable by
Lessee to Lessor under the Lease as the same becomes due and payable, which Rent
and other sums shall bear interest at the Overdue Rate, and Lessor may enforce,
by action or otherwise, any other term or covenant of this Lease; or
(b) the sum of:
(1) the unpaid Rent which had been earned at the
time of termination, repossession or reletting, and
(2) the worth (computed by discounting such
amount at the discount rate of the Federal Reserve Bank of New
York at the time of award plus 1%) at the time of termination,
repossession or reletting of the amount by which the unpaid
Rent for the balance of the Term after the time of
termination, repossession or reletting, exceeds the amount of
such rental loss that Lessee proves could be reasonably
avoided, and
(3) any other amount necessary to compensate
Lessor for all the detriment proximately caused by Lessee's
failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result
therefrom.
Percentage Rent for the purposes of this Section 16.3 shall be a sum equal to
the average of the annual amounts of the Percentage Rent for the three Fiscal
Years immediately preceding the Fiscal Year in which the termination, re-entry
or repossession takes place, or if three Fiscal Years shall not have elapsed,
the average of the Percentage Rent during the preceding Fiscal Years during
which the Lease was in effect.
16.4 WAIVER. If this Lease is terminated pursuant to Section 16.1,
Lessee waives, to the extent permitted by applicable law, (a) any right to a
trial by jury in the event of summary proceedings to enforce the remedies set
forth in this Article XVI, and (b) the benefit of any laws now or hereafter in
force exempting property from liability for rent or for debt and Lessor waives
any right to "xxxxxx the corporate veil" of Lessee other than to the extent
funds shall have been distributed to any stockholders of Lessee in a manner
which does not comply with applicable state corporate law
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or are inappropriately paid to any Affiliate of Lessee following a default
resulting in an Event of Default.
16.5 APPLICATION OF FUNDS. Any payments received by Lessor under
any of the provisions of this Lease during the existence or continuance of any
Event of Default shall be applied to Lessee's obligations in the order that
Lessor may determine or as may be prescribed by the laws of the State.
ARTICLE XVII
LESSOR'S RIGHT TO CURE LESSEE'S DEFAULT. If Lessee fails to make any
payment or to perform any act required to be made or performed under this Lease
and fails to cure the same within the relevant time periods provided in Section
16.1 (or sooner in the case of an emergency in the reasonable judgment of
Lessor), Lessor, without waiving or releasing any obligation of Lessee, and
without waiving or releasing any obligation or default, may (but shall be under
no obligation to) at any time thereafter make such payment or perform such act
for the account and at the expense of Lessee, and may, to the extent permitted
by law, enter upon any Leased Property for such purpose and, subject to Section
16.4, take all such actions thereon as, in Lessor's opinion, may be necessary or
appropriate therefor. No such entry shall be deemed an eviction of Lessee. All
sums so paid by Lessor and all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses, in each case to the extent
permitted by law) so incurred, together with a late charge thereon (to the
extent permitted by law) at the Overdue Rate from the date on which such sums or
expenses are paid or incurred by Lessors, shall be paid by Lessee to Lessor on
demand. The obligations of Lessee and rights of Lessor contained in this Article
shall survive the expiration or earlier termination of this Lease.
ARTICLE XVIII
18.1 PERSONAL PROPERTY LIMITATION. Anything contained in this Lease
to the contrary notwithstanding, if the average of the adjusted tax bases of the
items of personal property that are leased to the Lessee under this Lease at the
beginning and at the end of any Fiscal Year (as projected at least one month
prior to the end of such Fiscal Year) exceeds 15% of the average of the
aggregate adjusted tax bases of the Leased Property at the beginning and at the
end of such Fiscal Year, then a portion of such personal property will be sold
by Lessor to Lessee at the Lessor's depreciated cost for such property before
the end of the Fiscal Year and the amount payable by Lessee to Lessor hereunder
shall be adjusted accordingly. This Section 18.1 is intended to ensure that the
Rent qualifies as "rents from real property," within the meaning of Section
856(d) of the Code, or any similar or successor provisions thereto, and shall be
interpreted in a manner consistent with such intent.
18.2 SUBLEASE RENT LIMITATION. Anything contained in this Lease to
the contrary notwithstanding, Lessee shall not sublet the Leased Property or any
part thereof on any basis such that the rental to be paid by the sublessee
thereunder would fail to qualify as "rents from real
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property" within the meaning of Section 856(d) of the Code, or any similar or
successor provision thereto.
18.3 SUBLEASE TENANT LIMITATION. Anything contained in this Lease
to the contrary notwithstanding, Lessee shall not sublease the Leased Property
or any part thereof to any person in which Xxxxxxx Inns, Inc. owns, directly or
indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B)
of the Code, or any similar or successor provisions thereto. For purposes of
this Section, the rules prescribed by Section 318(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), shall apply for determining the ownership
of stock except that "10 percent" shall be substituted for "50 percent" in
subparagraph (C) of Section 318(a)(2) and 318 (a)(3).
18.4 LESSEE OWNERSHIP LIMITATION. Anything contained in this Lease
to the contrary notwithstanding, neither Lessee nor an Affiliate of the Lessee
shall acquire, directly or indirectly, a 10% or more interest in Xxxxxxx Inns,
Inc., within the meaning of Section 856(d)(2)(B) of the Code, or any similar or
successor provision thereto. For purposes of this Section, the rules prescribed
by Section 318(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
shall apply for determining the ownership of stock except that "10 percent"
shall be substituted for "50 percent" in subparagraph (C) of Section 318(a)(2)
and 318 (a)(3).
ARTICLE XIX
HOLDING OVER. If Lessee for any reason remains in possession of any
Leased Property after the expiration or earlier termination of the Term, such
possession shall be as a tenant at sufferance during which time Lessee shall pay
as rental each month two times the aggregate of (a) one-twelfth of the aggregate
Base Rent and Percentage Rent attributable to such Leased Property payable with
respect to the last Fiscal Year of the Term, (b) all Additional Charges accruing
during the applicable month and (c) all other sums, if any, payable by Lessee
under this Lease with respect to such Leased Property. Nothing contained herein
shall constitute the consent, express or implied, of Lessor to the holding over
of Lessee after the expiration of earlier termination of this Lease.
ARTICLE XX
RISK OF LOSS. During the Term, the risk of loss or of decrease in the
enjoyment and beneficial use of any Leased Property in consequence of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosures, attachments, levies or executions
(other than those caused by Lessor and those claiming from, through or under
Lessor) is assumed by Lessee, and, in the absence of gross negligence, willful
misconduct or breach of this Lease by Lessor pursuant to Section 32.3, Lessor
shall in no event be answerable or accountable therefor, nor shall any of the
events mentioned in this Section entitle Lessee to any abatement of Rent except
as specifically provided in this Lease.
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ARTICLE XXI
INDEMNIFICATION. Notwithstanding the existence of any insurance
provided for in Article XIII, and without regard to the policy limits of any
such insurance provided for in Article XIII, but subject to Section 16.4, Lessee
will protect, indemnify, hold harmless and defend Lessor from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses), to the extent permitted by law, imposed upon or incurred by or
asserted against Lessor as owner of the Leased Property by reason of: (a) any
accident, injury to or death of persons or loss of or damage to property
occurring on or about the Leased Property or adjoining sidewalks, including
without limitation any claims under liquor liability, "dram shop" or similar
laws, (b) any past, present or future use, misuse, non- use, condition,
management, maintenance or repair by Lessee of such Leased Property or Lessee's
Personal Property or any litigation, proceeding or claim by governmental
entities or other third parties to which Lessor is made a party or participant
related to such use, misuse, non-use, condition, management, maintenance, or
repair thereof by Lessee, including Lessee's failure to perform obligations
(other than Condemnation proceedings), (c) any Impositions that are the
obligations of Lessee pursuant to the applicable provisions of this Lease, (d)
any failure on the part of Lessee to perform or comply with any of the terms of
this Lease, and (e) the non-performance of any of the terms and provisions of
any and all existing and future subleases of any Leased Property to be performed
by the landlord thereunder. Any amounts that become payable by Lessee under this
Section shall be paid within ten days after liability therefor on the part of
Lessee is determined by litigation or otherwise, and if not timely paid, shall
bear interest on the amount of such payment (to the extent permitted by law) at
the Overdue Rate from the date of such determination to the date of payment.
Lessee, at its expense, shall contest, resist and defend any such claim, action
or proceeding asserted or instituted against Lessor or may compromise or
otherwise dispose of the same as Lessee sees fit. Nothing herein shall be
construed as indemnifying Lessor against its own grossly negligent acts or
omissions or willful misconduct.
Lessor shall indemnify, save harmless and defend Lessee from and
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses imposed upon or incurred by or asserted against
Lessee as a result of the gross negligence or willful misconduct of Lessor
arising in connection with this Lease.
Lessee's or Lessor's liability for a breach of the provisions of this
Article shall survive any termination of this Lease.
ARTICLE XXII
22.1 SUBLETTING AND ASSIGNMENT. Subject to the provisions of
Article XVIII and Section 22.2 and any other express conditions or limitations
set forth herein, Lessee may, but only with the prior written consent of Lessor
(which consent shall not be unreasonably withheld unless there has been a change
of control of the Lessee or such transaction results in a change of control in
the assignee or sublessee, in which event such consent shall be at the sole and
absolute discretion of the Lessor), (a) assign this Lease or sublet all or any
part of the Leased Property to an Affiliate of
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Lessee, or (b) sublet any retail or restaurant portion of the Leased
Improvements in the normal course of the Primary Intended Use previously
approved by Lessor under Section 7.2; provided that any subletting to any party
other than an Affiliate of Lessee shall not individually as to any one such
subletting, or in the aggregate, materially diminish the actual or potential
Percentage Rent payable under this Lease. Any other assignment or transfer by
Lessee shall be made only with the prior written consent of Lessor, which such
consent shall be at the sole and absolute discretion of Lessor. Any transfer of
the stock of Lessee which individually or in the aggregate results in a change
of control shall be deemed a transfer for purposes of the prior sentence. In the
case of a subletting, the sublessee shall comply with the provisions of Section
22.2, and in the case of an assignment, the assignee shall assume in writing and
agree to keep and perform all of the terms of this Lease on the part of Lessee
to be kept and performed and shall be, and become, jointly and severally liable
with Lessee for the performance thereof. An original counterpart of each such
sublease and assignment and assumption, duly executed by Lessee and such
sublessee or assignee, as the case may be, in form and substance satisfactory to
Lessor, shall be delivered promptly to Lessor. In case of either an assignment
or subletting made during the Term, Lessee shall remain primarily liable, as
principal rather than as surety, for the prompt payment of the Rent and for the
performance and observance of all of the covenants and conditions to be
performed by Lessee hereunder. As used herein, a change of control shall be
deemed to have occurred when (i) any Person other than any existing stockholder
becomes the beneficial owner of 50% or more of the outstanding common stock of
the subject Person, (ii) the membership of the Board of the subject Person is
changed as a result of a contested election for directors so that the nominees
for directors in such election designated by the pre-election board of directors
or any nominating or other committee fail to be elected or to constitute a
majority of persons who are elected in such election, (iii) there is a merger,
liquidation, dissolution, consolidation, reorganization or reverse stock split
as a result of which there is a material change in the control of the subject
Person, or (iv) there is a lease, sale, exchange, transfer or other disposition
of all or substantially all of the assets of the subject Person as a result of
which there is a material change in the control of the subject Person.
22.2 ATTORNMENT. Lessee shall insert in each sublease permitted
under Section 22.1 provisions to the effect that (a) such sublease is subject
and subordinate to all of the terms and provisions of this Lease and to the
rights of Lessor hereunder (b) if this Lease terminates before the expiration of
such sublease, the sublessee thereunder will, at Lessor's option, attorn to
Lessor and waive any right the sublessee may have to terminate the sublease or
to surrender possession thereunder as a result of the termination of this Lease,
and (c) if the sublessee receives a written Notice from Lessor or Lessor's
assignees, if any, stating that an uncured Event of Default exists under this
Lease, the sublessee shall thereafter be obligated to pay all rentals accruing
under said sublease directly to the party giving such Notice, or as such party
may direct. All rentals received from the sublessee by Lessor or Lessor's
assignees, if any, as the case may be, shall be credited against the amounts
owing by Lessee under this Lease.
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ARTICLE XXIII
OFFICER'S CERTIFICATES; FINANCIAL STATEMENTS; LESSOR'S ESTOPPEL
CERTIFICATES AND COVENANTS.
(1) At any time and from time to time upon not less than
20 days' notice by Lessor, Lessee will furnish to Lessor an Officer's
Certificate certifying that this Lease is unmodified and in full force
and effect (or that this Lease is in full force and effect as modified
and setting forth the modifications), the date to which the Rent has
been paid, whether to the knowledge of Lessee any default or Event of
Default exists hereunder by Lessor or Lessee, and such other
information as may be reasonably requested by Lessor. Any such
certificate furnished pursuant to this Section may be relied upon by
Lessor, any lender and any prospective purchaser of the Leased Property
or any part thereof.
(2) Lessee will furnish the following statements to
Lessor:
(i) with reasonable promptness, an Officer's
Certificate certifying as to such information respecting the
financial condition and affairs of Lessee including, if and to
the extent otherwise obtained by Lessee, financial statements
audited by an independent accounting firm, as Lessor may
reasonably request from time to time; and
(ii) an Officer's Certificate certifying as to
the most recent Consolidated Financials of Lessee within 45
days after each quarter of any Fiscal Year (or, in the case of
the final quarter in any Fiscal Year, the most recent
Consolidated Financials of Lessee within 90 days); and
(iii) on or about the 15th day of each month, a
detailed profit and loss statement for the Leased Property for
the preceding month, a balance sheet for the Leased Property
as of the end of the preceding month, and a detailed
accounting of revenues for the Leased Property for the
preceding month, each in form acceptable to Lessor.
(3) At any time and from time to time upon not less than
20 days' notice by Lessee, Lessor will furnish to Lessee or to any
person designated by Lessee an estoppel certificate certifying that
this Lease is unmodified and in full force and effect (or that this
Lease is in full force and effect as modified and setting forth the
modifications), the date to which Rent has been paid, whether to the
knowledge of Lessor there is any existing default or Event of Default
on Lessee's part hereunder, and such other information as may be
reasonably requested by Lessee.
(4) Lessee covenants that if at any time during the Term
when Lessee's Consolidated Net Worth is less than an amount then equal
to three months' Base Rent it will not, without the prior written
consent of Lessor, (i) make any distributions of assets (including but
not limited to dividend payments) to any of its stockholders (ii) pay
any compensation to any of
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its executive officers or directors in excess of compensation which is,
on a pro rata basis, greater than the compensation paid to Lessor's
executive officers, or (iii) make any capital expenditures in excess of
$25,000 other than those required or necessary to meet Lessee's
obligations under this Lease.
ARTICLE XXIV
LESSOR'S RIGHT TO INSPECT. Lessee shall permit Lessor and its
authorized representatives as frequently as reasonably requested by Lessor to
inspect any of Leased Property and Lessee's accounts and records pertaining
thereto and make copies thereof, during usual business hours upon reasonable
advance notice, subject only to any business confidentiality requirements
reasonably requested by Lessee.
ARTICLE XXV
NO WAIVER. No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment
of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of any such term. To the extent permitted by law, no waiver
of any breach shall affect or alter this Lease, which shall continue in full
force and effect with respect to any other then existing or subsequent breach.
ARTICLE XXVI
REMEDIES CUMULATIVE. To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Lessor or Lessee now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy and the exercise or beginning of the exercise by Lessor or Lessee of
any one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Lessor or Lessee of any or all of such
other rights, powers and remedies.
ARTICLE XXVII
ACCEPTANCE OF SURRENDER. No surrender to Lessor of this Lease or of the
Leased Property or any part thereof, or of any interest therein, shall be valid
or effective unless agreed to and accepted in writing by Lessor and no act by
Lessor or any representative or agent of Lessor, other than such a written
acceptance by Lessor, shall constitute an acceptance of any such surrender.
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ARTICLE XXVIII
NO MERGER OF TITLE. There shall be no merger of this Lease or of the
leasehold estate created hereby by reason of the fact that the same person or
entity may acquire, own or hold, directly or indirectly (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (b) the fee estate in the Leased Property.
ARTICLE XXIX
CONVEYANCE BY LESSOR. If Lessor or any successor owner of any Leased
Property conveys such Leased Property in accordance with the terms hereof other
than as security for a debt, and the grantee or transferee of such Leased
Property expressly assumes all obligations of Lessor hereunder arising or
accruing from and after the date of such conveyance or transfer, Lessor or such
successor owner, as the case may be, shall thereupon be released from all future
liabilities and obligations of Lessor under this Lease arising or accruing from
and after the date of such conveyance or other transfer as to such Leased
Property and all such future liabilities and obligations shall thereupon be
binding upon the new owner.
ARTICLE XXX
QUIET ENJOYMENT. So long as Lessee pays all Rent as the same becomes
due and complies with all of the terms of this Lease and performs its
obligations hereunder, in each case within the applicable grace periods, if any,
Lessee shall peaceably and quietly have, hold and enjoy the Leased Property for
the term hereof, free of any claim or other action by Lessor or anyone claiming
by, through or under Lessor, but subject to the terms and provisions of this
Lease and all liens and encumbrances existing at the date of this Lease or
hereafter consented to by Lessee or provided for herein.
ARTICLE XXXI
NOTICES. All notices, demands, requests, consents, approvals and other
communications ("Notice" or "Notices") hereunder shall be in writing and served,
either in person, by telefax or by a nationally recognized overnight delivery
service, or mailed (by registered or certified mail, return receipt requested
and postage prepaid), addressed to Lessor at its principal office, 0 Xxxxxxxxx
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000, Telephone No. 000-000-0000,
Telefax No. 000-000-0000, Attention: President, and addressed to Lessee at 0
Xxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000, Telephone No.
000-000-0000, Telefax No. 000-000-0000, Attention: President, or to such other
address or addresses as either party may hereafter designate. Personally
delivered Notice shall be effective upon receipt. Notice given by mail shall be
complete at the time of deposit in the U.S. Mail system, but any prescribed
period of Notice and any right or duty to do any act or make any response within
any prescribed period or on a date certain after the service of such Notice
given by mail shall be extended five days.
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ARTICLE XXXII
32.1 LESSOR MAY GRANT LIENS. Without the consent of Lessee, Lessor
may, from time to time, directly or indirectly, create or otherwise cause to
exist any lien, encumbrance or title retention agreement ("Encumbrance") upon
any Leased Property, or any portion thereof or interest therein, whether to
secure any borrowing or other means of financing or refinancing. Lessor shall
use its good faith efforts in negotiating with the proposed holder of any such
Encumbrance to cause (but Lessor shall have no obligation to Lessee to so cause)
the documentation relating thereto to (a) contain the right to prepay (whether
or not subject to a prepayment penalty); and (b) contain the agreement by the
holder of the Encumbrance that it will (1) give Lessee the same notice, if any,
given to Lessor of any default or acceleration of any obligation underlying any
such Encumbrance or any sale in foreclosure under such Encumbrance, (2) permit
Lessee to cure any such default on Lessor's behalf within any applicable cure
period, and (3) permit Lessee to appear by its representative and to bid at any
sale in foreclosure made with respect to any such Encumbrance. For purposes of
any assignment of rents or other pledge or grant of a security interest in the
rents or income from one or more, but less than all Individual Leased
Properties, the Percentage Rent attributable to any Individual Leased Property
for this purpose shall mean the difference between (i) Percentage Rent for any
period determined as provided in Section 3.1(2) hereof with respect to all
Leased Properties and Rooms covered hereby, and (ii) Percentage Rent determined
as provided in Section 3.1(2) hereof using all of the Leased Properties and the
Rooms thereof except for the Individual Leased Properties and Rooms attributable
thereto which are the subject of such assignment, pledge or grant. Upon the
reasonable request of Lessor, Lessee shall subordinate this Lease to the lien of
a new mortgage on any Individual Leased Property, on the condition that the
proposed mortgagee executes a non-disturbance agreement recognizing this Lease
and Lessee's rights hereunder, which non-disturbance agreement shall be in such
form and substance as are reasonably acceptable to such mortgagee. Lessee agrees
to attorn to and recognize the holder of any such Encumbrance or other purchaser
at foreclosure as the successor landlord under this Lease with respect to any
such Individual Leased Property so foreclosed.
32.2 LESSEE'S RIGHT TO CURE. Subject to the provisions of Section
32.3, if Lessor breaches any covenant to be performed by it under this Lease,
Lessee, after Notice to and demand upon Lessor, without waiving or releasing any
obligation hereunder, and in addition to all other remedies available to Lessee,
may (but shall be under no obligation at any time thereafter to) make such
payment or perform such act for the account and at the expense of Lessor;
provided Lessee is not in default hereunder. All sums so paid by Lessee and all
costs and expenses (including, without limitation, reasonable attorneys' fees)
so incurred, together with interest thereon at the Overdue Rate from the date on
which such sums or expenses are paid or incurred by Lessee, shall be paid by
Lessor to Lessee on demand or, following entry of a final, nonappealable
judgment against Lessor for such sums, may be offset by Lessee against the Base
Rent payments next accruing or coming due. The rights of Lessee hereunder to
cure and to secure payment from Lessor in accordance with this Section 32.2
shall survive the termination of this Lease with respect to the Leased Property.
Notwithstanding anything to the contrary in this Section 32.2, Lessee shall have
no recourse against any of the assets of the Lessor with respect to any
liability or obligation Lessor may have hereunder except for its interest in the
Individual Leased Property with respect to which Lessee may have taken action to
cure a default by Lessor.
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32.3 BREACH BY LESSOR. It shall be a breach of this Lease if Lessor
fails to observe or perform any material term, covenant or condition of this
Lease on its part to be performed and such failure continues for a period of 30
days after Notice thereof from Lessee, unless such failure cannot with due
diligence be cured within a period of 30 days, in which case such failure shall
not be deemed to continue if Lessor, within such 30-day period, proceeds
promptly and with due diligence to cure the failure and diligently completes the
curing thereof. The time within which Lessor shall be obligated to cure any such
failure also shall be subject to extension of time due to the occurrence of any
Unavoidable Delay. Notwithstanding anything in this Section 32.3 or elsewhere in
this Lease to the contrary, Lessor shall have no liability hereunder except with
respect to, and Lessee shall have no recourse against any of the assets of
Lessor except for its interest in the Leased Property.
ARTICLE XXXIII
33.1 MISCELLANEOUS. Anything contained in this Lease to the
contrary notwithstanding, all claims against, and liabilities of, Lessee or
Lessor arising prior to any date of termination of this Lease shall survive such
termination. If any term or provision of this Lease or any application thereof
is invalid or unenforceable, the remainder of this Lease and any other
application of such term or provisions shall not be affected thereby. If any
late charges or any interest rate provided for in any provision of this Lease
are based upon a rate in excess of the maximum rate permitted by applicable law,
the parties agree that such charges shall be fixed at the maximum permissible
rate. Neither this Lease nor any provision hereof may be changed, waived,
discharged or terminated except by a written instrument signed by Lessor and
Lessee. All the terms and provisions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. The headings in this Lease are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof. This Lease shall be
governed by and construed in accordance with the laws of the State, but not
including its conflicts of laws rules.
33.2 TRANSFER OF LICENSES. Upon the expiration or earlier
termination of the Term, Lessee shall use its best efforts to transfer to Lessor
or Lessor's nominee, or to cooperate with Lessor or Lessor's nominee in
connection with the processing by Lessor or Lessor's nominee of any applications
for, all licenses, operating permits and other governmental authorizations and
all contracts, including contracts with governmental or quasi-governmental
entities, that may be necessary for the operation of the Facility; provided that
the costs and expenses of any such transfer or the processing of any such
application shall be paid by Lessor or Lessor's nominee. Lessee shall also
cooperate with Lessor or Lessor's nominee in effecting a transfer or duplication
and delivery of all relevant records, data, files and other information
necessary or useful in the continued operation of the Leased Property.
33.3 WAIVER OF PRESENTMENT, ETC. Lessee waives all presentments,
demands for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, and notices of acceptance and waives all notices
of the existence, creation, or incurring of new or additional obligations,
except as expressly granted herein.
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ARTICLE XXXIV
MEMORANDUM OF LEASE. Lessor and Lessee shall promptly upon the request
of either enter into a short form memorandum of this Lease with respect to any
Individual Leased Property, in form suitable for recording under the laws of the
State in which reference to this Lease, and all options contained herein, shall
be made. Lessee shall pay all costs and expenses of recording such memorandum of
this Lease.
ARTICLE XXXV
LESSOR'S OPTION TO PURCHASE ASSETS OF LESSEE. Effective on not less
than 90 days' prior Notice given at any time within 180 days before the
expiration of the Term, but not later than 90 days prior to such expiration, or
upon such shorter Notice period as shall be appropriate if this Lease is
terminated prior to its expiration date, Lessor (or its assignee or nominee)
shall have the option to purchase all (but not less than all) of the assets of
Lessee, tangible and intangible, relating to the Leased Property (other than
this Lease), at the expiration or termination of this Lease for an amount
(payable in cash on the expiration date of this Lease or otherwise setoff
against obligations of Lessee hereunder) equal to the Fair Market Value thereof
as appraised in conformity with Article XXXVI, except that the appraisers need
not be members of the American Institute of Real Estate Appraisers, but rather
shall be appraisers having at least ten years' experience in evaluating similar
assets.
ARTICLE XXXVI
LESSOR'S OPTION TO TERMINATE LEASE. In the event Lessor enters into a
bona fide contract to sell any Leased Property to a non-Affiliate of Lessor,
Lessor may terminate the Lease with respect to such Leased Property by giving
not less than 30 days' prior Notice to Lessee of Lessor's election to terminate
this Lease effective upon the closing under such contract. Effective upon such
closing, this Lease shall terminate as to such Leased Property and be of no
further force and effect except as to any obligations of the parties existing as
of such date that survive termination of this Lease; provided, however, that the
termination of this Lease with respect to such Leased Property shall not affect
the effectiveness of this Lease with respect to all of the other Leased
Property. In the event that during any period of 12 consecutive months within
the first five years of the Term, this Lease shall be terminated pursuant to
this Article XXXVI as to Leased Properties representing an aggregate of 25% of
the total Rooms of all Leased Property at the beginning of such period, Lessor
shall, as compensation for the early termination of its leasehold estate under
this Article XXXVI, within 90 days of such closing, either (a) pay to Lessee an
amount equal to the Fair Market Value of Lessee's leasehold estate in such
Leased Property so terminated hereunder as of the closing of the sale of the
Leased Property or (b) offer to lease to Lessee one or more substitute hotel
facilities pursuant to one or more leases that would create for the Lessee
leasehold estates that have an aggregate Fair Market Value of no less than 85%
of the Fair Market Value of the original leasehold estate, both such values as
determined as of the closing of the sale of such Leased Property. In the event
Lessor and Lessee are unable to agree upon the Fair Market Value of an original
or replacement leasehold estate, Lessee shall provide to Lessor a Notice of the
name of a person selected to act as appraiser on its behalf.
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Within 10 days after Notice, Lessor shall by Notice to Lessee appoint a second
person as appraiser on its behalf. The appraisers thus appointed, each of whom
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto) with at least five years' experience in the
State appraising property similar to such Leased Property, shall, within 45 days
after the date of the Notice appointing the first appraiser, proceed to appraise
the leasehold estate in such Leased Property to determine the Fair Market Value
thereof as of the relevant date (giving effect to the impact, if any, of
inflation from the date of their decision to the relevant date); provided,
however, that if only one appraiser shall have been so appointed, then the
determination of such appraiser shall be final and binding upon the parties. If
two appraisers are appointed and if the difference between the amounts so
determined does not exceed 5% of the lesser of such amounts, then the Fair
Market Value shall be an amount equal to 50% of the sum of the amounts so
determined. If the difference between the amounts so determined exceeds 5% of
the lesser of such amounts, then such two appraisers shall have 20 days to
appoint a third appraiser. If no such appraiser shall have been appointed within
such 20 days or within 90 days of the original request for a determination of
Fair Market Value, whichever is earlier, either Lessor or Lessee may apply to
any court having jurisdiction to have such appointment made by such court. Any
appraiser appointed by the original appraisers or by such court shall be
instructed to determine the Fair Market Value within 45 days after appointment
of such appraiser. The determination of the appraiser which differs most in the
terms of dollar amount from the determinations of the other two appraisers shall
be excluded, and 50% of the sum of the remaining two determinations shall be
final and binding upon Lessor and Lessee as the Fair Market Value of the
leasehold estate in such Leased Property. This provision for determining by
appraisal shall be specifically enforceable to the extent such remedy is
available under applicable law, and any determination hereunder shall be final
and binding upon the parties except as otherwise provided by applicable law.
Lessor and Lessee shall each pay the fees and expenses of the appraiser
appointed by it and each shall pay one-half of the fees and expenses of the
third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.
ARTICLE XXXVII
FURNITURE, FIXTURE AND EQUIPMENT RESERVE. Lessor covenants that it
will, at its own cost and expense, refurbish and replace the furniture, fixtures
and equipment that constitute Leased Property in connection with the Primary
Intended Use as required.
ARTICLE XXXVIII
38.1 TRADEMARK. Lessee is the owner of the Trademark and agrees to
use the Trademark in connection with the operation of the Facilities. Lessee
further agrees that during the Term or any renewal thereof, Lessee will not use,
or license any other party to use, the Trademark in connection with the
operation or ownership of any hotel properties which (i) are not the subject of
this Lease or any other Lease by and between the Lessee and the Lessor or (ii)
are not owned by Lessor or in which Lessor has no material direct or indirect
financial interest (any such use being referred to herein as an "Unrelated Use")
if the Lessor shall object in writing within thirty (30) days after Notice
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from Lessee of its proposed Unrelated Use. Any such objection shall be given
only with the vote of a majority of the members of the Board of Directors of
Lessor who are not officers or employees of Lessor or Lessee or members of the
immediate families of any officers or employees of the Lessor or Lessee.
38.2 PROTECTION OF TRADEMARK. Lessee shall challenge all
unauthorized uses or infringements of the Trademark, and Lessee shall prosecute
any person or firm who unlawfully uses or attempts to use the Trademark in
connection with the operation of hotel properties, or other facilities which may
be competitive with the Leased Property or any portion thereof, or would
otherwise materially affect the value or results of operations of the Leased
Property or the prospects or goodwill of the Lessor. Lessee shall also seek to
cancel registrations or applications for registration of trademarks that
infringe or reasonably appear to infringe on the trademark. The costs and
expenses (including reasonable attorneys fees) incurred by Lessee in connection
with any such actions shall be reimbursed to it in full by Lessor provided that
the Trademark is then being used by Lessee only in connection with the Leased
Property.
38.3 INDEMNIFICATION. Lessee agrees that it will indemnify Lessor
and hold Lessor harmless from all fines, suits, proceedings, claims, demands, or
actions of any kind or nature, from anyone whomsoever, arising or growing out of
or otherwise connected with the use of the Trademark in connection with Lessee's
operation of the Leased Property.
38.4 OPTION TO PURCHASE OR LICENSE. At the expiration of the Term
or upon the earlier termination of this Lease with respect to all of the Leased
Property for any reason, Lessor shall have the option to either purchase the
Trademark or obtain an assignable, paid-up royalty, license to use the Trademark
at a price of $50,000. Such option shall be exercised by Lessor giving Notice to
Lessee of Lessor's exercise of the option not less than 30 days prior to the end
of the Term (or such shorter Notice period as may be practical under the
circumstances if it is not practical to provide at least 30 days' Notice). In
such event, Lessee shall prepare, execute and deliver to Lessor on or before the
last day of the Term such documentation and instruments as shall be necessary or
appropriate to convey all of Lessee's right, title and interest in the Trademark
to Lessor or to license the use of the Trademark to Lessor, as the case may be.
In addition, in the event that this Lease is terminated with respect to any
Individual Leased Property which the Lessor thereafter desires to sell or lease
to a third person, the Lessee will, upon the request of Lessor, enter into a
non-exclusive license agreement with such purchaser if such purchaser agrees to
enter into a license agreement mutually acceptable to Lessee, Lessor and such
purchaser which provides for the imposition, maintenance and enforcement of
physical and operational standards of quality which are consistent with those
being maintained by the Lessee and which are reasonably necessary to protect the
enforceability and value of the Trademark.
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IN WITNESS WHEREOF, the parties have executed this Lease under seal by
their duly authorized officers as of the date first above written.
"LESSOR"
XXXXXXX INNS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Attest: Xxxxx X. Xxxxxxx, President
/s/ Xxxxxx X. Xxxxxx
----------------------------
Secretary
SIGNATURE PROPERTIES, LLC
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Attest: Xxxxx X. Xxxxxxx, President/Manager
/s/ Xxxxxx X. Xxxxxx
----------------------------
Secretary SIGNATURE PROPERTIES OF
ILLINOIS, L.P.
By: Xxxxxxx Investments, Inc.,
General Partner
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Attest: Xxxxxx X. Xxxxxxx, President
/s/ Xxxxxx X. Xxxxxx
----------------------------
Secretary SIE CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Attest: Xxxxx X. Xxxxxxx, President
/s/ Xxxxxx X. Xxxxxx
----------------------------
Secretary SI SPRINGFIElD CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Attest: Xxxxx X. Xxxxxxx, President
/s/ Xxxxxx X. Xxxxxx
----------------------------
Secretary
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"LESSEE"
Xxxxxxx Hospitality, LLC
By: /s/Xxxxxx X. Xxxxxxx
-------------------------------------
Attest: Xxxxxx X. Xxxxxxx, President/Manager
/s/ Xxxxxx X. Xxxxxx
----------------------------
Secretary
STATE OF GEORGIA )
) ss.
COUNTY OF DEKALB )
The foregoing instrument was acknowledged before me this 7th day of
May, 1999, by Xxxxx X. Xxxxxxx, as President of Xxxxxxx Inns, Inc.
/s/ Xxxxxxxx X. Xxxxx
------------------------
Notary Public
My commission expires: [Notary Seal]
November 3, 2002
----------------
STATE OF GEORGIA )
) ss.
COUNTY OF DEKALB )
The foregoing instrument was acknowledged before me this 7th day of
May, 1999, by Xxxxx X. Xxxxxxx, as Manager of Signature Properties, LLC.
/s/ Xxxxxxxx X. Xxxxx
------------------------
Notary Public
My commission expires: [Notary Seal]
November 3, 2002
----------------
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54
STATE OF GEORGIA )
) ss.
COUNTY OF DEKALB )
The foregoing instrument was acknowledged before me this 7th day of
May, 1999, by Xxxxxx X. Xxxxxxx, as President of Xxxxxxx Investments, Inc.,
General Partner of Signature Properties of Illinois, L.P.
/s/ Xxxxxxxx X. Xxxxx
----------------------------------
Notary Public
My commission expires: [Notary Seal]
November 3, 2002
-----------------------
STATE OF GEORGIA )
) ss.
COUNTY OF DEKALB )
The foregoing instrument was acknowledged before me this 7th day of
May, 1999, by Xxxxx X. Xxxxxxx, as President of SIE Corporation.
/s/ Xxxxxxxx X. Xxxxx
----------------------------------
Notary Public
My commission expires: [Notary Seal]
November 3, 2002
-----------------------
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STATE OF GEORGIA )
) ss.
COUNTY OF DEKALB )
The foregoing instrument was acknowledged before me this 7th day of
May, 1999, by Xxxxx X. Xxxxxxx, as President of SI Springfield Corporation.
/s/ Xxxxxxxx X. Xxxxx
----------------------------------
Notary Public
My commission expires:
November 3, 2002
------------------------ [Notary Seal]
STATE OF GEORGIA )
) ss.
COUNTY OF DeKALB )
The foregoing instrument was acknowledged before me this 7th day of
May, 1999, by Xxxxxx X. Xxxxxxx, as President and Manager of Xxxxxxx
Hospitality, LLC.
/s/ Xxxxxxxx X. Xxxxx
----------------------------------
Notary Public
My commission expires:
November 3, 2002
------------------------ [Notary Seal]
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EXHIBIT B
SUPPLEMENT TO MASTER LEASE AGREEMENT
THIS SUPPLEMENT is entered into as of the __ day of ____, 199__ by and
between Lessor and Lessee (as defined in that certain Master Lease Agreement
dated as of the 7th day of May, 1999, as heretofore amended and supplemented
heretofore, referred to herein as the "Lease") for the purpose of adding to the
Leased Property covered thereby the following described property:
(herein referred to as the "Added Leased Property"). All capitalized terms used
herein shall, except as may be otherwise provided herein, have the meanings
ascribed to them in the Lease.
NOW, THEREFORE, Lessor, in consideration of the payment of rent by
Lessee to Lessor, the covenants and agreements to be performed by Lessee, and
upon the terms and conditions stated in the Lease, as supplemented hereby, does
hereby rent and lease unto Lessee, and Lessee does hereby rent and lease from
Lessor, the Added Leased Property. It is understood and agreed that by the
execution and delivery of this Supplement, the Added Leased Property shall be
included within the definition of Leased Property under and subject to the terms
of the Lease, and all of the provisions of the Lease, including the various
representations, warranties, covenants and conditions contained therein, shall
apply to the Added Leased Property as fully and completely as if the Lease had
been executed and delivered as of the date of this Supplement (without thereby
extending the Term of the Lease) and the Added Leased Property were included
among the Leased Property described therein.
Except as supplemented hereby, the Lease shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Supplement to the
Lease under seal by their duly authorized officers as of the date first above
written.
"LESSOR"
XXXXXXX INNS, INC.
By:
-------------------------------
Attest: , President
------------------
--------------------------
Secretary
57
SIGNATURE PROPERTIES, LLC
By:
-------------------------------
Attest: , Manager
------------------
--------------------------
Secretary SIGNATURE PROPERTIES OF
ILLINOIS, L.P.
By:
--------------------------------
Attest: General Partner
--------------------------
Secretary SIE CORPORATION
By:
-------------------------------
Attest: , President
------------------
--------------------------
Secretary SI SPRINGFIElD CORPORATION
By:
-------------------------------
Attest: , President
------------------
--------------------------
Secretary
"LESSEE"
XXXXXXX HOSPITALITY, LLC
By:
-------------------------------
Attest: , Manager
------------------
--------------------------
Secretary
58
EXHIBIT C
SUPPLEMENT TO MASTER LEASE AGREEMENT
THIS SUPPLEMENT is entered into as of the __ day of ____, 199__ by and
between Lessor and Lessee (as defined in that certain Master Lease Agreement
dated as of the 7th day of May, 1999, as heretofore amended and supplemented
heretofore, referred to herein as the "Lease") for the purpose of terminating
the Lease as to the following Individual Leased Property only:
(herein referred to as the "Released Leased Property"). All capitalized terms
used herein shall, except as may be otherwise provided herein, have the meanings
ascribed to them in the Lease.
NOW, THEREFORE, Lessee, in consideration of the payment of Ten Dollars
($10.00) and other good and valuable consideration, and as pursuant to the terms
of the Lease, does hereby release, waive, terminate, quit claim, grant, sell and
convey unto Lessor all of Lessee's right title and interest in and to the
Released Leased Property under the terms of the Lease or otherwise. It is
understood and agreed that by the execution and delivery of this Supplement, the
Released Leased Property shall be eliminated from the definition of Leased
Property under and subject to the terms of the Lease and the Lease shall be
terminated as to the Released Property. The release of the Released Leased
Property from the Lease shall not affect the rights, duties and obligations of
the parties hereto under the terms of the Lease with respect to all of the
Leased Property remaining subject thereto which shall be all of the Leased
Property described therein other than the Released Leased Property.
Except as supplemented hereby, the Lease shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Supplement to the
Lease under seal by their duly authorized officers as of the date first above
written.
"LESSOR"
XXXXXXX INNS, INC.
By:
------------------------------
Attest: , President
-------------------
--------------------------
Secretary
59
SIGNATURE PROPERTIES, LLC
By:
---------------------------------
Attest: , Manager
--------------------
--------------------------
Secretary SIGNATURE PROPERTIES OF
ILLINOIS, L.P.
By:
---------------------------------
Attest: General Partner
--------------------------
Secretary SIE CORPORATION
By:
---------------------------------
Attest: , President
------------------
--------------------------
Secretary SI SPRINGFIELD CORPORATION
By:
---------------------------------
Attest: , President
------------------
--------------------------
Secretary
"LESSEE"
Xxxxxxx Hospitality, LLC
By:
---------------------------------
Attest: , Manager
--------------------
----------------------------
Secretary
