1
Exhibit 99.1
FORM OF
PERCENTAGE LEASE AGREEMENT
DATED AS OF , 1997
BETWEEN
----------------------------------------------------
AS LESSOR
AND
REALTY HOTEL LESSEE CORP.
AS LESSEE
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TABLE OF CONTENTS
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ARTICLE I............................................................................................ 1
1.1 Leased Property................................................................ 1
1.2 Term........................................................................... 2
1.3 Building Contracts.............................................................. 3
1.4 Assignment and Assumption...................................................... 3
ARTICLE II........................................................................................... 3
ARTICLE III.......................................................................................... 13
3.1 Rent........................................................................... 13
3.2 Payment of Percentage Rent..................................................... 14
3.3 Confirmation of Percentage Rent................................................ 15
3.4 Additional Charges............................................................. 16
3.5 Annual Revenue Projections..................................................... 16
3.6 Annual Capital Expenditures Budget............................................. 17
3.7 Capital Expenditure Fund....................................................... 17
3.8 Application of Capital Expenditure Fund........................................ 18
3.9 Unbudgeted Capital Expenditures................................................ 18
3.10 Agent Method for Purchases
of Capital Expenditures........................................................ 18
ARTICLE IV........................................................................................... 20
4.1 Payment of Taxes and Impositions............................................... 20
4.2 Utility Charges................................................................ 21
4.3 Insurance Premiums............................................................. 21
ARTICLE V............................................................................................ 21
ARTICLE VI........................................................................................... 22
6.1 Ownership of the Leased Property............................................... 22
6.2 Lessee's Personal Property..................................................... 22
ARTICLE VII.......................................................................................... 23
7.1 Condition of the Leased Property............................................... 23
(i)
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7.2 Use of the Leased Property..................................................... 24
7.3 Lessor to Grant Easements, Etc................................................. 25
7.4 Compliance with Ground Lease................................................... 25
ARTICLE VIII......................................................................................... 25
8.1 Compliance with Legal, Insurance
Requirements, Lessor's Insurance and
Tax Obligations.............................................................. 25
8.2 Legal Requirements Covenants....................................................26
8.3 Environmental Covenants........................................................ 26
ARTICLE IX........................................................................................... 29
9.1 Maintenance and Repair......................................................... 29
9.2 Encroachments, Restrictions, Etc............................................... 29
ARTICLE X............................................................................................ 30
10.1 Alterations.................................................................... 30
10.2 Salvage........................................................................ 30
10.3 Joint Use Agreements........................................................... 31
ARTICLE XI........................................................................................... 31
11.1 Liens.......................................................................... 31
ARTICLE XII.......................................................................................... 31
12.1 Permitted Contests............................................................. 31
ARTICLE XIII......................................................................................... 32
13.1 General Insurance Requirements................................................. 32
13.2 Full Replacement Cost.......................................................... 34
13.3 Waiver of Subrogation.......................................................... 34
13.4 Waiver of Coinsurance.......................................................... 34
13.5 Form Satisfactory, Etc......................................................... 34
13.6 Increase in Limits............................................................. 35
13.7 Blanket Policy................................................................. 35
13.8 No Separate Insurance.......................................................... 35
13.9 Reports of Insurance Claims.................................................... 35
13.10 Failure to Obtain Insurance.................................................... 36
(ii)
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ARTICLE XIV.......................................................................................... 36
14.1 Insurance Proceeds............................................................. 36
14.2 Reconstruction in the Event of Damage or
Destruction Covered By Insurance............................................. 36
14.3 Reconstruction in the Event Of Damage or
Destruction Not Covered By Insurance......................................... 37
14.4 Lessee's Personal Property..................................................... 37
14.5 Abatement of Rent.............................................................. 37
14.6 Damage Near End of Term. ...................................................... 38
14.7 Waiver......................................................................... 38
ARTICLE XV........................................................................................... 38
15.1 Parties' Rights and Obligations................................................ 38
15.2 Total Taking................................................................... 38
15.3 Allocation of Award............................................................ 38
15.4 Partial Taking................................................................. 39
15.5 Temporary Taking............................................................... 39
ARTICLE XVI.......................................................................................... 40
16.1 Events of Default.............................................................. 40
16.2 Remedies....................................................................... 41
16.3 Waiver......................................................................... 44
16.4 Application of Funds........................................................... 45
16.5 Surrender...................................................................... 45
ARTICLE XVII......................................................................................... 45
17.1 Lessor's Right to Cure Lessee's Default.........................................45
ARTICLE XVIII........................................................................................ 46
18.1 Exculpation.....................................................................46
ARTICLE XIX.......................................................................................... 46
19.1 Reit Compliance................................................................ 46
19.2 Sublease Lessee Limitation..................................................... 47
19.3 Lessee Ownership Limitation.................................................... 47
19.4 Lessee Officer and Employee Limitation......................................... 47
(iii)
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ARTICLE XX........................................................................................... 47
20.1 Holding Over....................................................................47
ARTICLE XXI.......................................................................................... 48
21.1 Risk of Loss....................................................................48
ARTICLE XXII......................................................................................... 48
22.1 Indemnification.................................................................48
ARTICLE XXIII........................................................................................ 49
23.1 Subletting and Assignment...................................................... 49
23.2 Attornment..................................................................... 49
23.3 Management Agreement........................................................... 50
ARTICLE XXIV......................................................................................... 50
24.1 Officers' Certificates; Financial
Statements; Lessor's Estoppel
Certificates and Covenants................................................... 50
ARTICLE XXV.......................................................................................... 51
25.1 Books and Records; Lessor's Right to Inspect....................................51
ARTICLE XXVI......................................................................................... 51
26.1 No Waiver.......................................................................51
ARTICLE XXVII........................................................................................ 52
27.1 Remedies Cumulative.............................................................52
ARTICLE XXVIII....................................................................................... 52
28.1 Acceptance of Surrender.........................................................52
ARTICLE XXIX......................................................................................... 52
29.1 No Merger of Title..............................................................52
(iv)
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ARTICLE XXX.......................................................................................... 52
30.1 Conveyance by Lessor............................................................52
ARTICLE XXXI......................................................................................... 53
31.1 Quiet Enjoyment.................................................................53
ARTICLE XXXII........................................................................................ 53
32.1 Notices.........................................................................53
ARTICLE XXXIII....................................................................................... 53
33.1 Lessor May Grant Liens, Subordination.......................................... 53
33.2 Lessee's Right to Cure......................................................... 55
33.3 Breach by Lessor............................................................... 56
33.4 Lessee's Cooperation........................................................... 56
ARTICLE XXXIV........................................................................................ 56
34.1 Miscellaneous.................................................................. 56
34.2 Transition Procedures.......................................................... 56
34.3 Change of Franchise............................................................ 57
34.4 Waiver of Presentment, Etc..................................................... 57
ARTICLE XXXV......................................................................................... 58
35.1 Memorandum of Lease.............................................................58
ARTICLE XXXVI........................................................................................ 58
36.1 Lessor's Option to Terminate Lease..............................................58
ARTICLE XXXVII....................................................................................... 58
37.1 Compliance with Franchise Agreement.............................................58
(v)
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PERCENTAGE LEASE AGREEMENT
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THIS PERCENTAGE LEASE AGREEMENT (this "Lease"), made as of the
____ day of ______________, 199_, by and between _______________________, a
___________________________ ("Lessor") and Realty Hotel Lessee Corp., a Nevada
corporation ("Lessee"), provides as follows:
ARTICLE I
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1.1 GRANT. 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 (as hereinafter defined).
1.2 LEASED PROPERTY. The "Leased Property" is comprised of
Lessor's interest in the following:
(a) the ground leasehold interest described in Exhibit A
attached hereto and incorporated herein by reference (the "Land");
(b) 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 off-site),
parking areas and roadways appurtenant to such buildings, structures
and other improvements presently situated upon the Land (collectively,
the "Leased Improvements"), including the Facility;
(c) all easements, rights and appurtenances relating to the
Land and to the Leased Improvements;
(d) 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, now and hereafter
permanently affixed to or incorporated in the Leased Improvements,
including, without limitation, all furnaces, boilers, heaters,
electrical equipment, 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");
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(e) all existing leases of space within the Leased Property
(including any security deposits or collateral held by Lessor pursuant
thereto), which space leases, if any, are listed on Exhibit B attached
hereto and incorporated by reference; and
(f) all contract rights, trade names, logos and other
intangible property of Lessor with respect to the operation of the
existing hotel business conducted on the Leased Property, including
without limitation, all rights relating to the Franchise Agreement.
(g) the furniture, fixtures and equipment listed or referred
to on Exhibit C attached hereto and incorporated by reference.
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 CURRENT
AND FUTURE COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER MATTERS (NOT
LIMITED TO ITEMS 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.
1.3 TERM. (a) The term of the Lease (the "Term") shall
commence on the date that Lessor acquires the Leased Premises (the "Commencement
Date") and shall end on December 31, 2006, unless sooner terminated in
accordance with the provisions hereof.
(b) Subject to the conditions set forth below, Lessee shall
have the right, exercisable by delivering written notice to Sublessor at any
time during the last twelve (12) months of the Term but in no event later than
ninety (90) days prior to the expiration of the Term, to elect to extend the
term of this Lease for a period of five (5) years on the same terms and
conditions set forth herein except (i) that Lessee shall have no further right
to extend the term hereof, and (ii) Base Rent and Percentage Rent shall be
adjusted as the parties may agree, and if the parties do not, in the sole
discretion of each party, reach agreement on such adjustment in such rent by the
expiration of the Term, then the Base Rent for such extended term shall be equal
to the greater of (x) the then current Base Rent and (y) one hundred forty
percent (140%) of the initial Base Rent set forth above. The parties agree that
any adjusted rent calculation shall not be based on the net income or net
profits of Lessee.
1.4 BUILDING CONTRACTS. Lessee acknowledges and agrees that
the Leased Property is subject to the following contracts relating to the use,
operation and maintenance thereof:
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(a) Laundry Equipment Lease; and
(b) those certain service and other contracts
identified on EXHIBIT B attached hereto and made a part hereof
(collectively the "Service Contracts").
1.5 MANAGEMENT AGREEMENT; ASSIGNMENT AND ASSUMPTION. Upon the
execution and delivery of this Lease, (a) Lessee shall enter into the Hotel
Management Agreement in the form of EXHIBIT D attached hereto and made a part
hereof; (b) all of Lessor's right, title and interest in the Leases shall be
assigned to, and assumed by, Lessee, pursuant to an Assignment and Assumption of
Leases in the form of EXHIBIT E attached hereto and made a part hereof; and (c)
all of Lessor's rights and interests in the Service Contracts shall be assigned
to, and assumed by, Lessee pursuant to an Assignment and Assumption of Service
Contracts in the form of EXHIBIT F attached hereto and made a part hereof.
ARTICLE II
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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 (5%) 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). 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
of voting securities, partnership interests or other equity interests.
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"Audited Consolidated Financials". Consolidated Financials
audited by a firm of independent certified public accountants acceptable to
Lessor in its sole discretion.
"Award". Compensation, sums or anything of value awarded, paid
or received on a total or partial Condemnation.
"Base Rent". The annual sum of $1,000,000, payable in advance
in monthly installments as provided in Section 3.1(a), on or before the tenth
(10th) day of each calendar month of the Term; 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 (subject to adjustment as provided in Sections 14.5, 15.2, 15.4,
and 15.5).
"Business Day". Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which national banks in the City of Phoenix,
Arizona, or in the municipality wherein the Leased Property is located, are
closed.
"Capital Expenditures". As defined in Section 3.7.
"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". 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.
"Condemnor". Any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.
"Consolidated Financials". For any fiscal year (or other
period for which such statements are prepared) for Lessee and its consolidated
subsidiaries, a statement of financial position as of such fiscal year (or other
period) end date and statements of operations, cash flows and retained earnings
for the fiscal year (or other period) then ended, all in comparative form,
together with notes thereto, prepared in accordance with generally accepted
accounting principles.
"Consolidated Net Worth". The sum of consolidated
shareholders' equity of Lessee and any consolidated subsidiaries as shown on the
most recent Audited Consolidated Financials.
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"Consumer Price Index". The "U.S. City Average, All Items"
Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor (Base: 1982-1984=100), or
any successor index thereto. If (i) a significant change is made in the number
or nature (or both) of items used in determining the Consumer Price Index, or
(ii) the Consumer Price Index shall be discontinued for any reason, the Lessor
shall request that the Bureau of Labor Statistics furnish a new index comparable
to the Consumer Price Index, together with information which will make possible
a conversion to the new index in computing the adjusted Base Rent hereunder. If
for any reason the Bureau of Labor Statistics does not furnish an index and such
information, the parties will instead mutually select, accept and use such other
index or comparable statistic on the cost of living in Washington, D.C. that is
computed and published by an agency of the United States or a responsible
financial periodical of recognized authority.
"Date of Taking". The date the condemnor has the right to
possession of the Property being condemned.
"Encumbrance". As defined in Article XXXIV.
"Environmental Authority". Any federal, state, local or
foreign department, agency or other body or component of any Government that
administers, oversees or enforces any Environmental Laws.
"Environmental Laws". All federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees, injunctions and duties under the common law relating to
occupational health and safety, the protection of human health, and pollution of
the indoor and outdoor environment (including without limitation, ambient air,
surface water, ground water, (and 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, EPCRA, 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 fine or
criminal fine, and any court costs and reasonable amounts for attorney's fees,
fees for witnesses, consultants 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, the Leased
Property or any property used therein and arising out of:
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(a) Failure of Lessee, any Predecessor or
the 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 the 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 off-site property or facility;
(d) Identification of Lessee, or any
Predecessor as 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 the Leased
Property or any off-site property 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 the Leased Property, or
resulting from operation thereof.
"Environmental Liability". Either of an Identified
Environmental Liability or an Unidentified Environmental Liability.
"EPCRA". The Emergency Planning and Community Right
to Know Act, as amended.
"Event of Default". As defined in Section 16.1.
"Facility". The hotel and/or other facility offering
lodging and other services or amenities being operated or proposed to be
operated on the Leased Property which shall be included in the Leased
Improvements. The Facility is more particularly described on Exhibit D attached
hereto and incorporated by reference.
"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.
"Food and Beverage Revenues". Gross revenues,
receipts and income of any kind (whether on a cash or credit basis) paid,
collected or accrued and
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derived directly or indirectly by Lessee from: (i) the sale, for on-site
consumption at the Leased Property or through off-site catering services, of
food and nonalcoholic beverages, including sales attributable to guest rooms,
banquet rooms, meeting rooms, the restaurant, the lounge, the bar and other
similar rooms; (ii) the sale of wine, beer, liquor or other alcoholic beverages,
including sales attributable to the restaurant, the bar, the lounge, guest
rooms, meeting rooms, banquet rooms, off-site catering or any location at the
Leased Property; (iii) cover charges and audio-visual rental charges related to
banquet, ballroom or meeting room events, and (iv) banquet and meeting room
revenues, including room rental charges from such banquet and meeting rooms.
Such revenues shall not include the following:
(a) Room and Other Revenues as defined below;
(b) Any gratuities or service charges added to a
customer's xxxx or statement in lieu of a gratuity, which gratuity or
charge Lessee is obligated to pay to or which was paid directly to an
employee;
(c) Customary and reasonable credits, rebates,
refunds or negative adjustments to guests;
(d) Sales taxes and any additional taxes imposed on
the sale of alcoholic beverages; and
(e) Amounts attributable to customary and reasonable
allowances, give aways and promotions.
"Franchise Agreement". The franchise agreements or
license agreements currently in effect with Franchisor, and any amendments,
replacements or extensions thereof or other agreements relating thereto
hereafter implemented with the prior approval of Lessor, under which the
Facility is operated.
"Franchisor". Best Western International, Inc.,
InnSuites Licensing Corp. or such other national hotel franchisor approved by
Lessor in accordance with Section 34.3.
"Government". The United States of America, any
state, county, municipality, local government, district or territory thereof,
any foreign nation, any state, district, department, territory or other
political division thereof, or any administrative agency, board, commission,
bureau or political subdivision of any of the foregoing.
"Ground Lease". The ground lease between Lessor and
_______________________ dated as of ________________, as amended, executed
with respect to the Land.
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"Ground Rent". All rent payable by Lessor as
sublessee with respect to the Ground Lease.
"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 biphenyls, asbestos, radon and urea
formaldehyde.
"Impositions". Collectively, all taxes (including,
without limitation, all personal property, sales and use (including sales, rent
or occupancy taxes on Rent), single business, gross receipts, transaction,
privilege, rent or similar taxes as the same relate to or are imposed upon
Lessee, its personal property 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), 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 may be assessed or imposed on or with respect to or be a lien upon (a)
Lessor's interest in the Leased Property, (b) the Leased Property, or any part
thereof or any rent therefrom or any estate, right, title or interest therein,
or (c) any occupancy, operation, use or possession of, or sales from, or
activity conducted on or in connection with the Leased Property, or the leasing
or use of the Leased Property or any part thereof by Lessee. Notwithstanding the
foregoing, Impositions shall not include (1) any Real Estate Taxes on the Leased
Property, (2) any personal property taxes on Lessor's personal property, (3) any
tax based on net income (whether denominated as an income, franchise or capital
stock or other tax) imposed on Lessor or any other Person other than Lessee and
Affiliates of Lessee, (4) any net revenue tax of Lessor or any other Person
(other than Lessee or an Affiliate of Lessee), (5) any
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tax imposed with respect to the sale, exchange or other disposition by Lessor of
any Leased Property or the proceeds thereof, or (6) 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 any time during the Term hereof, is totally or
partially repealed, and a tax, assessment, tax levy or charge set forth in
clause (1) through (6) is levied, assessed or imposed expressly in lieu thereof.
"Indemnified Environmental Liability". As defined in
Section 8.3.
"Indemnified Party; Indemnitee". 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 or Article XXII.
"Insurance Requirements". All terms of any
insurance policy required by this Lease, any Franchisor or any Legal
Requirement, and all requirements of the issuer of any such policy as to such
policy and/or the Leased Property.
"Inventory". All inventories, supplies, guest
supplies, food and beverage inventory, and consumable merchandise used in
connection with the operation of the Facility, but excluding all such items to
the extent owned by concessionaires, tenants, subtenants, licensees or other
Persons occupying all or a portion of the Leased Property as permitted by this
Lease.
"Land". As defined in Section 1.1(a).
"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 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 Environmental Laws, and (b) any laws, rules or regulations that may (1)
require repairs, modifications or alterations in or to the 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
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encumbrances hereafter created by Lessor without the consent of Lessee), at any
time in force affecting the Leased Property.
"Lending Institution". Any insurance company,
investment banking company, credit company, federally insured commercial or
savings bank, national banking association, savings and loan association,
employees welfare, pension or retirement fund or system, corporate profit
sharing or pension trust, college or university, or real estate investment
trust, including any corporation qualified to be treated for federal tax
purposes as a real estate investment trust, such trust having a net worth of at
least $10,000,000 and REMIC, conduit lenders.
"Lessee". The Lessee designated on this Lease and its
permitted successors and assigns.
"Lessee Indemnified Party". Lessee and (i) any
Affiliate of Lessee; (ii) any Person against whom any liability may be asserted
as a result of a direct or indirect ownership interest (including a
shareholder's interest) in Lessee; (iii) the officers, directors, shareholders,
employees, agents and representatives of Lessee; and (iv) the respective heirs,
personal representatives, successors and assigns of any of the foregoing
Persons.
"Lessee's Personal Property". As defined in Section
6.2.
"Lessor". The Lessor designated on this Lease and
its successors and assigns.
"Lessor Indemnified Party". Lessor and (i) any
Affiliate of Lessor; (ii) any Person against whom any liability may be asserted
as a result of a direct or indirect ownership interest (including an interest as
a partner) in Lessor; (iii) the employees, agents and representatives of Lessor;
(iv) Realty ReFund Trust, its officers, trustees, shareholders, employees and
agents; and (v) the respective heirs, personal representatives, successors and
assigns of any of the foregoing Persons.
"Notice". A notice given pursuant to Article XXXII.
"Officer's Certificate". A certificate of Lessee in
form and substance reasonably acceptable to Lessor signed by the chief operating
officer and 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 1% per
month, but in no event greater than the maximum rate then permitted under
applicable law.
"Partial Fiscal Year". Any portion of a Fiscal Year
which falls during the Term hereof.
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"Payment Date". Any due date for the payment of any
installment of Rent.
"Percentage Rent". As defined in Section 3.1(b).
"Person". Any individual, corporation, general or
limited partnership, limited liability company, limited liability partnership,
stock company or association, joint venture, association, company, trust, bank,
trust company, land trust, real estate investment trust, business trust, or
other entity and government and agency and political subdivision thereof.
"Predecessor". Any Person whose liabilities arising
under any Environmental Law relating to the Leased Property have or may have
been retained or assumed by Lessee, either contractually or by operation of law.
"Primary Intended Use". As defined in Section
7.2(b).
"Prime Rate". The rate of interest announced
publicly by Citibank N.A., in New York, New York from time to time, as such
bank's base rate. If no such rate is announced or if such rate is discontinued,
then such other rate as Lessor may reasonably designate.
"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 any applicable interest and penalties thereon), including general and
special assessments, if any, and possessory interest taxes which are imposed
upon the Land and/or the Leased Property.
"Release". A "Release" as defined in CERCLA or in
any 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 and Other Revenues". All gross revenues,
receipts and income of any kind (whether on a cash or credit basis) paid,
collected or accrued and derived directly or indirectly by Lessee from: (i) the
rental of guest rooms; (ii) gift
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shop operations; (iii) fees collected from telephone, game room and guest
laundry services; and (iv) guaranteed no show reservations, space rentals
(excluding banquet and meeting room space rentals), discounts earned, vending
machines (but only to the extent of the net proceeds therefrom), valet services,
movie services (but only to the extent of the net proceeds therefrom), and
commissions earned; and (v) all other revenues in connection with the use or
operation of the Leased Property and all services or activities provided
thereon, including revenue derived from subtenants, concessionaires, and
licensees, all as determined in accordance with generally accepted accounting
principles. Notwithstanding the previous sentence, Room and Other Revenues shall
not include:
(a) The amount of any credits, rebates, refunds or
adjustments to customers, guests or patrons;
(b) Sales or use taxes;
(c) Interest income;
(d) Gratuities paid or payable to Persons other than
Lessee or its Affiliate;
(e) Gains from the sale of assets out of the ordinary
course of business; and
(f) Food and Beverage Revenues as defined above.
"XXXX". The Superfund Amendments and Reauthorization
Act of 1985, as amended.
"State". The State or Commonwealth of the United
States in which the Leased Property is located.
"Subsidiaries". Corporations in which Lessee owns,
directly or indirectly, more than fifty percent (50%) of the voting stock or
control, as applicable.
"Taking". A taking or voluntary conveyance during
the Term hereof of all or part of the 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 the Leased
Property whether or not the same shall have actually been commenced.
"Term". As defined in Section 1.3.
"TSCA". The Toxic Substances Control Act, as
amended.
"Unavoidable Delay". A delay due to strikes,
lock-outs, labor unrest, inability to procure materials, power failure, acts of
God, governmental
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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.
"Uneconomic For Its Primary Intended Use". A state
or condition of the Facility such that in the good faith judgment of Lessor it
is uneconomic to operate the Facility for its Primary Intended Use, taking into
account, among other relevant factors, the number of usable rooms and projected
revenues.
"Uniform System". 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 the Facility such that, in the good faith judgment of Lessor,
due to casualty damage or loss through Condemnation, the Facility cannot be
operated or 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 XXXII hereof or at such other place or to such other
Person, as Lessor from time to time may designate in a Notice, (A) the higher of
(i) Base Rent or (ii) Percentage Rent and (B) Additional Charges, during the
Term, as follows:
(a) BASE RENT: The annual sum of $____________,
payable in advance in consecutive monthly installments, on or before the tenth
(10th) day of each calendar month of the Term ("Base Rent") in an amount equal
to the product of the Base Rent multiplied by the applicable Monthly Factor,
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 (subject to adjustment as
provided in Sections 14.5, 15.2, 15.4, and 15.5); and provided, further, that
Base Rent shall be increased by increases in CPI as set forth in Subsection (c)
below.
(b) PERCENTAGE RENT: For each Fiscal Year and
Partial Fiscal Year during the Term commencing with the Fiscal Year or Partial
Fiscal Year ending December 31, 1997, Lessee shall pay percentage rent
("Percentage Rent"), if such Percentage Rent is in excess of Base Rent for such
Fiscal Year or Partial Fiscal Year, in an amount calculated as follows:
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(i) The sum of (A) __% of the first $_________ in Room and Other
Revenues for such Fiscal Year or Partial Fiscal Year, (B) __% of
all amounts above $_________ up to $_________ in Room and Other
Revenues for such Fiscal Year or Partial Fiscal Year, and (C) __%
of all Room and Other Revenues in excess of $_________ for such
Fiscal Year or Partial Fiscal Year (the preceding dollar figures
being referred to hereinafter as the "Threshold Amounts", such
Threshold Amounts to be prorated on a per diem basis for any
Partial Fiscal Year), plus
(ii) 5% of all Food and Beverage Revenues in excess of $200,000
for such Fiscal Year or Partial Fiscal Years.
(c) CPI ADJUSTMENTS TO THE THRESHOLD AMOUNTS AND BASE
RENT. For each Fiscal Year of the Term beginning on or after January 1, 1998,
the Threshold Amounts and Base Rent shall be adjusted from time to time as
follows:
If the most recently published Consumer Price Index as of the last day
of the last month (the "Comparison Month") of any Fiscal Year is
different than the average Consumer Price Index for the twelve (12)
month period prior thereto, each of Base Rent and the Threshold Amount
for the next Fiscal Year shall be adjusted by the percentage change in
the Consumer Price Index calculated by multiplying the Base Rent and
each Threshold Amount by the quotient obtained by dividing the Consumer
Price Index for the most recent Comparison Month by the Consumer Price
Index for the month which is exactly twelve (12) months prior thereto.
Adjustments in the Threshold Amounts and Base Rent
shall be effective on the first day of the first calendar month of the Fiscal
Year to which such adjusted Threshold Amounts apply. In the event of casualty
and corresponding payment of rent out of the proceeds of rental interruption
insurance provided pursuant to Section 13.1(c), the Percentage Rent shall be
based upon the higher of (i) actual revenues, (ii) revenues for the same period
in the previous Fiscal Year (whether or not during the Term), or (iii) projected
revenues used in computing the final insurance settlement.
(d) MONTHLY FACTORS. For purposes of this Section
3.1, the applicable Monthly Factors shall be as follows:
January - .___ April - .___ July - .___ October - .___
February - .___ May - .___ August - .___ November - .___
March - .___ June - .___ September - .___ December - .___
3.2 PAYMENT OF PERCENTAGE RENT. Percentage Rent shall
be due and payable quarterly on or before the thirtieth (30th) day after the
last day of each quarter during the Term. Additionally, an Officer's
Certificate, setting forth the
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calculation of such rent payment for such quarter, shall be delivered to Lessor
quarterly, together with such quarterly Percentage Rent payment after each
quarter of each Fiscal Year (or part thereof) during the Term. Such quarterly
payment shall be based on the formula set forth in Section 3.1(b), but, in
calculating the Revenue Computations for each quarter, gross Room and Other
Revenues for the year to date shall be annualized by dividing such sum by the
number of months which have passed year to date (including the current month)
and multiplying the result by 12. The resulting Percentage Rent amount shall be
multiplied by the number of months that have passed year-to-date (including the
current month) and divided by twelve (12). Payments of Base Rent and Percentage
Rent for the year to date shall be subtracted from the result to arrive at the
Percentage Rent payment due for that quarter. In no event, however, shall the
Percentage Rent for any quarter exceed the amount arrived at by applying the sum
of the Monthly Factors for the months that comprise the particular quarter to
the Annualized Revenue. The Revenue Computations shall be appropriately adjusted
to calculate Percentage Rent for partial years. There shall be no reduction in
the Base Rent regardless of the result of the Revenue Computations.
In addition, on or before March 1 of each year,
commencing with March 1, 1998, Lessee shall deliver to Lessor an Officer's
Certificate reasonably acceptable to Lessor setting forth the computation (based
on audited financial statements of Lessee) 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, with the delivery of the
Officer's Certificate, the amount of Percentage Rent due and payable for the
Fiscal Year then ended as shown in the Officer's Certificate, if any, that
exceeds the amount actually paid as Percentage Rent by Lessee for such Fiscal
Year. 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 quarter's Percentage
Rent payments; provided, however, that no Event of Default exists.
The obligation to pay Percentage Rent shall survive the
expiration or earlier termination of the Term. 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 computation
of Percentage Rent due and payable, shall be made not later than ninety (90)
days after such expiration or termination date. Within such ninety (90) day
period, Lessee shall deliver to Lessor an Officer's Certificate setting forth
the final Percentage Rent amount payable to Lessor and payment of the amount
due, if any.
3.3 CONFIRMATION OF PERCENTAGE RENT. Lessee shall
utilize, or cause to be utilized, an accounting system for the Leased Property
in accordance with generally accepted accounting principles consistently applied
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
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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. In the event of a conflict between generally accepted accounting
principles and the Uniform System, the Uniform System shall prevail. Lessor (or
its accountants or representatives), at its expense (except as provided herein),
shall have the right from time to time 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, subject to any prohibitions or limitations on
disclosure of any such data under Legal Requirements. 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 calculated at the
Overdue Rate from the due date for the last quarterly payment of Percentage Rent
for the Fiscal Year to the date of payment thereof; provided, however, that as
to any audit that is commenced more than two (2) 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
three percent (3%), Lessee shall pay the cost of such audit and examination. Any
proprietary information obtained by Lessor pursuant to the provisions of this
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 or purchasers, their respective attorneys,
accountants and other representatives, or pursuant to any Legal Requirements.
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, costs and expenses
necessary to perform its obligations hereunder and under the Franchise
Agreement, and (b) in the event of any failure on the part of Lessee to timely
pay any of those items referred to in clause (a) of this Section 3.4, 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 3.4 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
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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 (which charges are not payable to
Lessor), 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 ANNUAL REVENUE PROJECTIONS. No later than thirty
(30) days prior to the commencement of each Fiscal Year, Lessee shall submit
Annual Revenue Projections for such Fiscal Year to Lessor. The Annual Revenue
Projections shall be subject to Lessor's prior approval as to form and content
and shall be in such form and shall contain such information as Lessee included
in its annual revenue projections in accordance with its past practice, and
shall, in any event, include the following:
(a) Lessee's reasonable estimate of Room and Other
Revenues for the Fiscal Year itemized on a monthly basis, as such
estimates may be revised or replaced from time to time by Lessee; and
(b) A projection of the Percentage Rent payable for
such Fiscal Year.
3.6 ANNUAL CAPITAL EXPENDITURES BUDGET. Subject to
the provisions of Sections 8.1, 9.2 and 19.1(a), Lessor, at its sole expense,
shall be responsible for all Capital Expenditures as defined in this Section
3.6, provided, however, Lessor shall not be obligated to make any Capital
Expenditure the need for which Lessor disputes or objects to in good faith. Not
later than forty-five (45) days prior to the commencement of each Fiscal Year or
Partial Fiscal Year, Lessee shall submit to Lessor for Lessor's approval,
Lessee's proposed Annual Capital Expenditures Budget. The Annual Capital
Expenditures Budget (the "Capital Expenditures Budget") shall be subject to
Lessor's approval and shall contain the following:
(a) Lessee's estimate of the amounts to be expended
during the upcoming Fiscal Year to renew, replace or refurbish FF&E, and a
reasonably detailed description of the expenses to be incurred, and Lessee's
estimate of the amount that will be expended during the upcoming Fiscal Year on
capital repairs, replacements and improvements to the Leased Improvements,
together with a reasonably detailed description of the capital repairs,
replacements and improvements that will be undertaken. The expenditures referred
to in this Section 3.6 are referred to in this Lease as "Capital Expenditures".
(b) A capital renewal program showing the major
anticipated Capital Expenditures and that will be incurred over the ensuing
three (3) year and five (5) year periods. If Lessor shall not give its approval
to the Annual Capital
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Expenditures Budget, Lessee shall revise the Annual Capital Expenditures Budget,
as may be required to obtain Lessor's consent thereto.
3.7 CAPITAL EXPENDITURE FUND. Lessor shall
establish and maintain an account to provide a reserve for the Capital
Expenditures costs at the Facility and each other facility covered by a
Percentage Lease. Such Account shall be funded with an initial balance of
_____________________ and 00/100 Dollars ($_________) upon or prior to the
execution of this Percentage Lease Agreement. In addition, Lessor shall deposit
in such account a quarterly amount equal to four percent (4%) of the Room and
Other Revenues for each such Facility.
3.8 APPLICATION OF CAPITAL EXPENDITURE FUND. When
amounts are budgeted and agreed to be spent for Capital Expenditures, Lessee
shall be responsible for the implementation of the Capital Expenditure program
and shall make periodic draws on the Capital Expenditure Fund by the
presentation to Lessor of appropriate documentation establishing the amounts to
be paid in accordance with the Capital Expenditure Budget, and including such
supporting documentation as Lessor may reasonably require. Lessor and Lessee
shall cooperate in good faith to accomplish such implementation as quickly as
practicable in accordance with sound business practices.
3.9 UNBUDGETED CAPITAL EXPENDITURES. No
disbursements shall be made from the Capital Expenditure Fund which are not in
accordance with the Capital Expenditure Budget. However, Lessor and Lessee
recognize that, in certain circumstances, Capital Expenditures which were not
budgeted may be necessary. In the following circumstances, disbursements shall
be made for Capital Expenditures from the Capital Expenditures Fund even though
such expenditures were not included in the Capital Expenditure Budget:
(i) When Lessor and Lessee agree to an addition to
the Capital Expenditure Budget;
(ii) When, due to circumstances beyond the control of
Lessee or Lessor, expenditures for a project exceed the budgeted
amount;
(iii) When the Capital Expenditure is necessary on an
emergency basis for any reason including the comfort and safety of
guests or employees; and
(iv) For DE MINIMIS Capital Expenditures not in
excess of $10,000 per item and not in excess, on an aggregate basis, of
$25,000 per year.
3.10 AGENT METHOD FOR PURCHASES OF CAPITAL
EXPENDITURES. (a) Lessor hereby retains Lessee as an independent contractor on
the terms contained
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in this Agreement to act for and on behalf of Lessor as Lessor's agent in
connection with the implementation of the Capital Expenditure program for the
Facility. Lessee's cost analysis shall be based upon the plans and furnishings
set forth in the specifications and other written information agreed to be
implemented under the Capital Expenditure Budget. Lessee will be responsible for
negotiating purchases of Capital Expenditures on Lessor's behalf. All purchases
will be based on Lessee's actual cost, net of trade discounts (including cash
discounts, where applicable).
(b) Lessor acknowledges and agrees that purchase
orders relating to any Capital Expenditure for the Project will be executed by
Lessee as agent for and on behalf of Lessor. Lessor further acknowledges and
agrees that Lessee shall have no liability under this Agreement or otherwise for
payment of the Capital Expenditure or for freight or storage related to the
Capital Expenditure provided that no expenditures shall be made except in
accordance with the Budget and as provided above. All down payments as well as
payment of all vendor invoices are the responsibility and obligation of Lessor.
Lessor acknowledges that a delay on the part of Lessor relating to any required
deposits or payments can result in delivery delays of the Capital Expenditure.
The timing of the making of all purchase orders and delivery schedules will be
established by mutual agreement of Lessor and Lessee.
(c) Lessee shall not be obligated under any
circumstances to (but in its discretion may) use its own funds for the purpose
of making down payments (either at the time purchase orders are processed or
otherwise) or making progress or final payments to Capital Expenditure vendors.
Taxes, warehouse, delivery, redelivery, restocking, installation and similar
charge, including, but not limited to delivery and storage costs, shall be
obligations of Lessor and Lessor agrees to perform such obligations in a timely
manner. All vendor invoices shall be addressed to and issued directly to Lessor.
(d) Lessor shall designate a representative
authorized to act on its behalf with respect to the Leased Property.
(e) Lessor agrees to reimburse Lessee for all
out-of-pocket expenses (including long distance and messenger fees) incurred by
Lessee on behalf of or in connection with the Capital Expenditures for the
Facility. All such reimbursements shall be paid monthly as incurred upon receipt
of bills or other evidence reasonably satisfactory to Lessor.
(f) Lessor shall furnish to Lessee from time to time
all information, take such actions and process such draws as may be reasonably
requested by Lessee or otherwise required under this Agreement in a timely
manner as reasonably necessary for the orderly progress of work under this
Agreement. Lessee shall have no responsibility or be liable in any manner
whatsoever for any delay caused by information to be supplied or actions to be
taken by Lessor, its agents or other independent contractors working on or at
the Facility or caused by Lessor's failure to timely pay vendors.
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(g) If Lessor desires to change, modify or alter the
quantity or specifications of any Capital Expenditure purchased by Lessee in
writing, Lessee will endeavor to satisfy any such request. Lessor acknowledges
and understands that Lessee's ability to comply with requested changes,
modifications or alterations is subject to acceptance and performance on the
part of the vendors and supplier with whom Lessee has entered into agreements
for and on behalf of Lessor. Lessee assumes no liability or responsibility for
its inability to comply with Lessor's request for changes, modifications or
alterations under this paragraph.
(h) Lessor acknowledges and agrees that Lessee shall
not be responsible or liable to Lessor for any losses incurred or damages
suffered by Lessor due to delays, failures or omissions of third party vendors
in delivery of Capital Expenditure. Lessor agrees to hold Lessee harmless for
any such losses or damages. Lessor assumes ownership of Capital Expenditure at
the time of shipment of Capital Expenditure from any third party vendor or
manufacturer and any claims Lessor may have against any freight company in
connection with the delivery or shipment of the Capital Expenditure are the
responsibility of Lessor.
(i) LESSOR ACKNOWLEDGES AND AGREES THAT LESSEE
MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, RELATING TO QUALITY, FITNESS
OR CAPACITY OF THE WORK DONE PURSUANT TO CAPITAL EXPENDITURES. Lessor, as
purchaser of the Capital Expenditure, shall have the benefit of any guarantees
and warranties, either express or implied, from vendors and suppliers of the
Capital Expenditure, but Lessee shall have no liability for any such third party
guarantees or warranties. Lessee will use its best efforts on Lessor's behalf to
obtain proper service for the replacement or correction of unsatisfactory
Capital Expenditure, but Lessee does not warrant its ability to obtain such
service and Lessee shall have no obligation or responsibility to replace or
correct any such unsatisfactory Capital Expenditure.
(j) Except with respect to matters arising from
Lessee's misconduct or Lessee's negligence, Lessor agrees to indemnify and hold
Lessee, its directors and officers harmless from and against any and all claims,
suits, costs, liabilities, obligations, losses and damages whatsoever arising
out of or in connection with the work done pursuant to Capital Expenditures, the
use of results of Capital Expenditures in or at the Project and the payment of
any and all sales, use or other taxes (excepting federal, state and local income
taxes relating to Lessee's business).
(k) Lessor shall be responsible for and shall pay
all applicable sales and use taxes arising as a result of the purchase or use of
the Capital Expenditures or Lessor shall deliver appropriate exemption
certificates.
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ARTICLE IV
----------
4.1 PAYMENT OF TAXES AND IMPOSITIONS. Lessor shall
pay all property taxes (including the items in clauses (1) through (6) of the
definition of "Impositions" set forth in Article II). Subject to Article XII
relating to permitted contests, each party will pay, or cause to be paid, all
Impositions imposed on each of them, respectively, 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
the other party copies of official receipts or other satisfactory proof
evidencing such payments; provided, however, Lessee shall pay all Impositions in
respect of the Leased Property and this Lease (other than fees, property taxes
and taxes imposed on Lessor's income from the Leased Property). 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. Lessee 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, Lessor shall provide Lessee with copies of
assessment notices in sufficient time for Lessee to file a protest. Lessee may,
upon notice to Lessor, at Lessee's option and at Lessee's sole expense, protest,
appeal, or institute such other proceedings (in its or Lessor's name) as Lessee
may deem appropriate to effect a reduction of real estate or personal property
assessments for those Impositions to be paid by Lessee, and Lessor shall fully
cooperate with Lessee in such protest, appeal, or other action. 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, although Lessee is not liable for the amount of any (i)
Real Estate Taxes or (ii) personal property taxes attributable to personal
property owned by Lessor. 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.
4.2 UTILITY CHARGES. Lessee will be solely
responsible for obtaining 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 attributable to, or used on, under or in the Leased Property
during the Term as such charges become due.
4.3 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. Lessor shall pay or cause to be paid all premiums for the
insurance coverages required to be maintained by it under Article VIII.
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ARTICLE V
---------
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) 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, (c) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceedings affecting Lessor or any assignee or transferee
of Lessor, (d) any lawful or unlawful prohibition of, or restriction upon,
Lessee's use of Leased Property, or interference with such use, or (e) for any
other cause whether similar or dissimilar to any of the foregoing. 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) xxxxx, reduce, suspend or defer 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
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.
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. Throughout the
Term, Lessee will acquire, own, maintain and replace such personal property
(other than Capital Expenditures) and Inventory as is required to operate the
Leased Property as a hotel and, otherwise, in the manner contemplated by this
Lease. At all times during the Term Lessee shall maintain an adequate and
customary supply of inventory. 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 (collectively, the "Lessee's Personal Property").
Lessee, at the commencement of the Term, and from time to
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time thereafter, shall provide Lessor with an accurate list of all such items of
the Lessee's Personal Property. Lessee may, subject to the conditions set forth
in this Section 6.2 and Section 6.3, 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 (10) days following the expiration or earlier termination of
the Term 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(d), 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.
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," "where is" and with "all faults," in its
present condition. Lessee waives any claim or action against Lessor in respect
of the condition of the 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 CURRENT AND FUTURE COVENANTS, CONDITIONS,
RESTRICTIONS, EASEMENTS AND OTHER MATTERS (NOT LIMITED TO ITEMS 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. 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.
Notwithstanding the foregoing,
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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 Lessee
(or an Affiliate of Lessee which conveyed the Leased Property to Lessor) 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. All amounts recovered that are attributable to
the period after the Term shall belong to Lessor.
7.2 USE OF THE LEASED PROPERTY. (a) 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 the Facility under applicable local, state and federal law.
(b) Lessee shall use or cause to be used the Leased
Property only as a hotel facility (including food and beverage operations) of a
caliber consistent with its present use, 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 without the prior written consent of
Lessor, which consent may be granted, denied or conditioned in Lessor's sole
discretion. 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 the 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 the Leased Property of any insurance
board, association, organization or company necessary for the maintenance of
insurance, as herein provided, covering the Leased Property and Lessee's
Personal Property.
(c) Subject to the provisions of Articles XIV and
XV Lessee covenants and agrees that during the Term it will (1) maintain,
operate continuously the Leased Property as a hotel facility of the class
currently operated at the Leased Property, (2) keep in full force and effect and
comply with all the provisions of the Franchise Agreement, (3) not terminate or
amend the Franchise Agreement without the consent of Lessor, (4) maintain
appropriate certifications and licenses for such use and otherwise comply with
all Legal Requirements and (5) seek to maximize the gross revenues generated
therefrom consistent with sound business practices.
(d) Lessee shall not commit or suffer to be
committed any waste on the Leased Property, or in the Facility, nor shall Lessee
cause or permit any nuisance thereon.
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(e) 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, subject to Lessor's prior consent.
(f) Lessee shall not use, generate, handle, dispose
or store Hazardous Materials on the Leased Property, except in the normal course
of operations of the Leased Property as a hotel and in compliance with all
Environmental Laws.
(g) Lessee shall not enter into any collective
bargaining agreements with respect to any of the employees at the Leased
Property without the prior consent of Lessor, which shall not be unreasonably
withheld or delayed, unless required by law.
(h) Lessee hereby assumes and agrees to perform all
of the obligations of Lessor under all leases in effect at the Leased Property
as of the date of commencement of the Term.
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 (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 the Leased Property to third parties, (b) release
existing easements or other rights in the nature of easements which are for the
benefit of the Leased Property, (c) dedicate or transfer unimproved portions of
the Leased Property for road, highway or other public purposes, (d) execute
petitions to have the Leased Property annexed to any municipal corporation or
utility district, (e) execute amendments or additions to any covenants and
restrictions affecting the 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 interests
in the Leased Property), but only upon delivery to Lessor of an Officer's
Certificate stating that such grant, release, dedication, transfer, petition or
amendment is beneficial to the proper conduct of the business of Lessee on the
Leased Property and does not materially reduce the value of the Leased Property.
7.4 COMPLIANCE WITH GROUND LEASE. Lessee shall
comply with the provisions of the Ground Lease and shall take no action, or omit
to take any action, that would cause or result in any default thereunder.
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ARTICLE VIII
------------
8.1 COMPLIANCE WITH LEGAL, INSURANCE REQUIREMENTS,
LESSOR'S INSURANCE AND TAX OBLIGATIONS. Subject to Article XII relating to
permitted contests, Lessee, at its expense, will promptly (a) comply and cause
the Leased Property to comply with all applicable Legal Requirements and
Insurance Requirements in respect of the use, operation, maintenance, repair and
restoration of the Leased Property; provided, however, that Lessor shall be
responsible for the cost of compliance with Insurance Requirements presented to
Lessor in writing including Franchisor requirements which are related to the
leased real and personal property, as more fully set forth in Article XIII, and
shall be responsible for all Capital Expenditures and the items in clauses (1)
through (6) of the definition of "Impositions" set forth in Article II, unless
the need for such Capital Expenditure is the result of Lessee's negligence,
misconduct or an Alteration made by or commenced by Lessee other than
Alterations contained in the Capital Expenditure Budget, 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 REQUIREMENTS COVENANTS. Lessee covenants
and agrees that the Leased Property and Lessee's Personal Property shall not be
used for any unlawful purpose, and that Lessee shall not permit or suffer to
exist any unlawful use of the 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 subtenants, invitees or others to so comply with all
Legal Requirements). Lessee may, however, upon prior Notice to Lessor, and
subject to the provisions of Article XII, 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 pending the prosecution
of any such proceeding may legally be delayed 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 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
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liability and Lessee both (a) furnishes to Lessor security reasonably
satisfactory to Lessor against any loss or injury to Lessor 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:
(a) 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, subject to
Lessor's obligation to pay for Capital Expenditures, 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 the Leased Property; (3) all Releases at, on, in,
under or in any way affecting the Leased Property, or any Release known by
Lessee at, on, in or under any property adjacent to or near the Leased Property;
and (4) all facts, events or conditions that could reasonably lead to the
occurrence of any of the above-referenced matters.
(b) 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.
(c) 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 failures to act of
Lessee.
(d) 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(b) or
(c) (an "Indemnified Environmental Liability"), 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 unless
such counsel has been approved by the Indemnifying Party, which approval shall
not be unreasonably withheld. The Indemnifying Party shall not be liable for any
settlement of any such Proceeding made without its consent, which shall
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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 final, nonappealable judgment for an
adversarial 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 Indemnitee seeks indemnification shall be computed net of (a) any
actual income tax benefit resulting therefrom to such Indemnitee, (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 Indemnitee 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 Indemnitee agrees to use its reasonable
efforts to pursue, or assign to Lessee, any claims or rights it may have against
any third party which would materially reduce the amount of damages otherwise
incurred by such Indemnitee.
Notwithstanding anything to the contrary contained
in this Lease, if Lessor shall become entitled to the possession of the Leased
Property by virtue of the termination of this Lease or repossession of the
Leased Property, then Lessor may assign its indemnification rights under Section
8.3 of this Lease (but not any other rights hereunder) to any Person to whom the
Lessor subsequently transfers the 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;
(1) 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 the Leased Property;
(2) Such indemnification rights shall be limited to
Indemnified Environmental Liabilities relating to or specifically
affecting the Leased Property; and
(3) 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.
(e) At any time any Indemnitee has reason to believe
circumstances exist which could reasonably result in an Indemnified
Environmental Liability, upon reasonable prior written notice to Lessee stating
such Indemnitee's basis for such belief, an Indemnitee shall be given immediate
access to the Leased
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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; provided that such access may be conditioned or restricted as
may be reasonably necessary to ensure compliance with Legal Requirements and the
safety of personnel and facilities or to protect confidential or privileged
information. All Indemnitees requesting such immediate access and cooperation
shall endeavor to coordinate such efforts to result in as minimal interruption
of the operation of the Leased Property as practicable.
ARTICLE IX
----------
9.1 MAINTENANCE AND REPAIR. (a) Subject to
Lessor's obligation to make Capital Expenditures and performance of Lessor's
obligations under Subsection 9.1(c), Lessee, at its sole expense, shall keep the
Leased Property 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). Except as otherwise provided in Section 9.1(b), Article XIV or Article
XV, and subject to Lessor's obligation to make Capital Expenditures, Lessee
shall, 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. Lessee, however, shall be
permitted upon prior written notice to Lessor to prosecute claims against
Lessor's predecessors in title for breach of any representation or warranty or
for any latent defects in the Leased Property to be maintained by Lessee unless
Lessor is already diligently pursuing or elects to diligently pursue such a
claim. All repairs shall, to the extent reasonably achievable, be at 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.
(b) Lessee shall, 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 the 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 provided in Subsection 9.1(a)), damage by casualty or
Condemnation, and Lessor's obligations with respect to Capital Expenditures.
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(c) Lessor shall be responsible for and pay for
items of a capital nature and to make Capital Expenditures, all as required by
and provided in Section 3.6.
9.2 ENCROACHMENTS, RESTRICTIONS, ETC. If, as a
result of any act or omission by Lessee, any of the Leased Improvements, at any
time, materially encroach upon any property, street or right-of-way adjacent to
the Leased Property, or violate the agreements or conditions contained in any
lawful restrictive covenant or other agreement affecting the Leased Property, or
any part thereof, or impair the rights of others under any easement or
right-of-way to which the Leased Property is subject (each of the foregoing
conditions being referred to herein as an "Encroachment"), 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, 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 of the Leased Improvements were operated prior to the assertion of such
violation, impairment or encroachment. If any such alteration is required for
any reason other than Lessee's willful misconduct or gross negligence, the cost
of such alterations shall be treated as Capital Expenditures and be performed
pursuant to Section 3.6. Any such alteration shall be made in conformity with
the applicable requirements of Article X. Nothing contained herein shall be
construed as imposing on Lessee any liability for, or responsibility for
remedying the effects of, any Encroachment occurring other than as a result of
any willful misconduct or gross negligence of Lessee. 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.
ARTICLE X
---------
10.1 ALTERATIONS. Lessee shall have the right, but
not the obligation, with the prior approval of Lessor (which approval may not be
unreasonably withheld) to make additions, modifications or improvements to the
Leased Property in connection with the Primary Intended Use (collectively
"Alterations"), provided that such action shall not significantly alter the
character or purposes or significantly detract from the value or operating
efficiency thereof and will not impair the revenue-producing capability of the
Leased Property or adversely
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affect the ability of Lessee to comply with the provisions of this Lease. As a
condition of its approval, Lessor may retain the right to separately approve all
plans and specifications related to any additions, modifications or
improvements. Lessor may further require Lessee to obtain appropriate completion
bonds and to provide for the removal of any improvements upon the termination of
this Lease. The cost of such Alterations shall, subject to Lessor's obligations
to make Capital Expenditures, be paid by Lessee, and all such Alterations shall
be included under the terms of this Lease and upon expiration or earlier
termination of the 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 or alterations required or
permitted by Article 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. If Lessee constructs
additional improvements that are connected to the Leased Property or share
maintenance facilities, HVAC (as defined in Section 13.1(b)), 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
----------
11.1 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 the 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 Impositions upon Lessor which
Lessee is not required to pay hereunder, (e) subleases permitted by Article
XXIII 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 sixty (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
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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 XXXIV of this Lease, or result from Lessor's wrongful failure to pay for
Capital Expenditures.
ARTICLE XII
-----------
12.1 PERMITTED CONTESTS. Lessee shall have the
right 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 Article 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 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 the 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 the 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 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.
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ARTICLE XIII
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13.1 GENERAL INSURANCE REQUIREMENTS. Lessee shall
at all times keep the Leased Property and the Facility (including all personal
property) insured with the kinds and amounts of insurance described below and in
compliance with any Franchise requirements; provided, however, that as to both
Lessor's and Lessee's insurance requirements, the kinds and amounts of insurance
required are reasonably available for purchase from insurance companies (i)
authorized to write insurance in the State and (ii) with a minimum financial
stability rating (A.M. Bests Rating) of ["A minus 7"] (or as otherwise
reasonably acceptable to Lessor). The insurance shall be maintained in the
amounts set forth below with deductibles in amounts reasonably acceptable to
Lessor. The policies shall name Lessor and Lessee as insureds or as additional
named insureds, as the case may be. Losses shall be payable to Lessor and/or its
lenders except that Lessee's Business Interruption Insurance and Personal
Property Insurance shall name Lessor as loss payee. Any loss adjustment shall
require the written mutual consent of Lessor and Lessee, each acting reasonably
and in good faith. Evidence of insurance shall be provided to each party on the
date hereof, and evidence of renewal shall be provided, no later than thirty
(30) days prior to expiration of any policy required hereunder. The policies on
the Leased Property, including the Leased Improvements, Fixtures and all
personal property shall include:
(a) Lessor shall provide building insurance on the
"Special Form" (formerly "All Risk" form) in an amount and carry such
risks as are reasonably acceptable to Lessor, and personal property
insurance on its property as is reasonably acceptable to it;
(b) Lessor shall provide insurance on the
"Comprehensive Coverage Form" for loss or damage (direct and indirect)
from steam boilers, pressure vessels, electrical and mechanical
systems, heating, ventilation and air conditioning ("HVAC") systems or
similar apparatus, now or hereafter installed in the Facility, in an
amount reasonably determined by Lessor from time to time;
(c) Lessee shall provide loss of income/business
interruption insurance/rent insurance on the "Special Form", with
proceeds to be in an amount not less than one year of gross rent and
other charges hereunder;
(d) Lessee shall provide commercial general liability
insurance, with amounts not less than [$1,000,000], together with
excess liability coverage of not less than [$3,000,000], covering each
of the following: bodily injury, death, or property damage liability
per occurrence, personal and advertising injury, general aggregate,
products and completed operations, and "all risk legal liability"
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(including, but not limited to, liquor law or "dram shop" liability),
all with respect to Lessor, Lessee and the Leased Property;
(e) Except to the extent Lessee is required to pay
for the same, or otherwise required to be provided by Lessor hereunder,
Lessor shall provide insurance covering such other hazards and in such
amounts as may be customary for comparable properties in the vicinity
of the Leased Property and reasonably acceptable to Lessor and is
available from insurance companies, insurance pools or other
appropriate companies authorized to do business in the State, and each
with a minimum financial stability rating (A.M. Bests Rating) of ["A
minus 7,"] at rates which are economically practicable in relation to
the risks covered as may be reasonably requested by Lessee;
(f) Lessee shall provide fidelity bonds with limits
and deductibles as may be reasonably requested by Lessor, covering
Lessee's employees and other crime insurance as may be reasonably
required by Lessor;
(g) Lessee shall provide workmen's compensation
insurance to the extent required by law;
(h) Lessee shall provide vehicle liability and
physical damage insurance for owned, non-owned, and hired vehicles, in
the amount of $1,000,000; and
(i) Lessee shall provide such other insurance as
Lessor may reasonably request for facilities such as the Leased
Property and the operation thereof, consistent with Lessee's and
Lessor's obligations hereunder.
13.2 FULL REPLACEMENT COST. The term "full
replacement cost" as used herein shall mean the actual replacement cost of the
Leased Property requiring replacement from time to time including an increased
cost of construction endorsement, if available, and the cost of debris removal
in an amount not to exceed twenty-five percent (25%) of the cost of
construction. In the event either party believes that full replacement cost has
increased or decreased at any time during the Lease Term, it shall have the
right to have such full replacement cost redetermined. Lessee shall obtain such
additional insurance as may be required as a result of such redetermination as
full replacement cost.
13.3 WAIVER OF SUBROGATION. All insurance policies
covering the Leased Property, the Fixtures, the Facility or any personal
property, including, without limitation, contents, fire, property and "special
perils" insurance shall expressly waive any right of subrogation on the part of
the insurer of one party to this Lease against the other party to this Lease.
Such policies will include such waiver
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clause or endorsement so long as the same are obtainable without unreasonable
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 WAIVER OF COINSURANCE. All insurance policies
covering the Leased Property, the Fixtures, the Facility or any personal
property, and all insurance covering loss of income and business interruption,
shall expressly waive any coinsurance penalty and resulting reduction in
insurance proceeds, provided that a waiver of coinsurance is applicable with
respect to a given insurance policy.
13.5 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 Lessee and by insurance companies satisfactory to
Lessor and Lessee. Each party 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. All premiums therefor, shall be paid and such policies or
binders delivered and followed with duplicate policies as issued thereof to the
other party prior to their effective date (and, with respect to any renewal
policy, thirty (30) days prior to the expiration of the existing policy), and in
the event of the failure of the party required to provide such insurance either
to effect such insurance as herein called for or to pay the premiums therefor,
or to deliver such policies or certificates thereof at the times required, the
other party shall be entitled, but shall have no obligation, to effect such
insurance and pay the premiums therefor, which premiums shall be repayable upon
written demand therefor. Each insurer mentioned in this Article XIII shall
agree, by endorsement to the policy or policies issued by it, or by independent
instrument, that it will give thirty (30) days' written notice before the policy
or policies in question shall be materially altered, not renewed or cancelled.
13.6 INCREASE IN LIMITS. If either Lessor or Lessee
at any time deems the limits of bodily 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
proper and reasonable limits for such insurance to be carried; provided,
however, that such limits shall not be reduced below a minimum aggregate limit
of $3,000,000. Thereafter, such insurance shall be carried with the limits thus
agreed on until further change pursuant to the provisions of this Section.
13.7 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; provided, however, that the coverage
afforded 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.
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13.8 NO SEPARATE INSURANCE. Neither Lessee nor
Lessor on its own initiative, or pursuant to the request or requirement of any
third party, shall (i) take out separate insurance concurrent in form or
contributing in the event of loss, with that required in this Article, or (ii)
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, 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. The party obtaining such
separate insurance shall immediately notify the other party of the obtaining of
any such separate insurance or of the increasing of any of the amounts of the
then existing insurance.
13.9 REPORTS OF INSURANCE CLAIMS. Lessee shall
promptly investigate and make a written report to the appropriate insurance
company as to all accidents, claims for damage relating to the ownership,
operation, and maintenance of the Leased Improvements, any damage or destruction
to the Leased Improvements and the estimated cost of repair thereof and shall
prepare any and all reports required by any insurance company in connection
therewith. Lessee shall submit such proposed filings and reports relating to
such claims to Lessor for its review and approval, which approval shall not be
unreasonably withheld or delayed, prior to submitting same to the appropriate
insurance company. All other adjustments, settlements and compromises shall be
made only with the prior written consent of Lessor.
13.10 FAILURE TO OBTAIN INSURANCE. In the event
that Lessee shall fail to obtain or maintain any such insurance, Lessor shall
have the right but not the obligation, to obtain such insurance and to charge
the premium cost of such to Lessee as Additional Charges.
ARTICLE XIV
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14.1 INSURANCE PROCEEDS. All proceeds payable by
reason of any loss or damage to the Leased Property, or any portion thereof, and
insured under any policy of insurance required by Article XIII of this Lease
shall be paid by the payor to Lessor. If for any reason such proceeds are paid
to any Person other than Lessor, the recipient shall surrender all proceeds to
Lessor to be held in trust by Lessor in an interest-bearing account (subject to
the provisions of Section 14.6). The net proceeds shall be made available for
reconstruction or repair, as the case may be, of any damage to or destruction of
the 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. Any excess proceeds of
insurance remaining after the completion of the restoration or reconstruction of
the Leased Property shall be paid to Lessor. If Lessor is not required to, and
elects not to, repair and restore, and the Lease is terminated as described in
Section 14.2(a), all such insurance proceeds shall be retained by Lessor. All
salvage resulting from any risk covered by insurance shall belong to Lessor.
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14.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR
DESTRUCTION COVERED BY INSURANCE. (a) If during the Term the Leased Property is
totally or partially damaged or destroyed by a risk covered by the insurance
described in Article XIII and the Facility thereby is rendered Unsuitable for
its Primary Intended Use or following such casualty the Facility is Uneconomic
for its Primary Intended Use, Lessor shall, at Lessor's option, either (1)
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, or (2) terminate this Lease by Notice to Lessee given within ninety
(90) days of the date of such damage or destruction. If Lessor determines to
terminate this Lease, the Lease will terminate as of the date specified in
Lessor's notice not later than sixty (60) days after such notice without further
liability hereunder (other than liability stated to survive the expiration or
termination hereof) and Lessor shall be entitled to retain all insurance
proceeds.
(b) Except as provided in Section 14.6, if during
the Term the Leased Property is partially damaged or destroyed by a risk covered
by the insurance described in Article XIII, but the Facility is not thereby
rendered Unsuitable for its Primary Intended Use, provided the Facility is not
unecomonic for its Primary Intended Use, Lessor 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 this Lease to the
extent it can reasonably do so with the net insurance proceeds actually received
in respect to such damage or destruction. Such damage or destruction shall not
terminate this Lease; provided, however, that if Lessor cannot within a
reasonable time, obtain all necessary government approvals, including building
permits licenses and conditional use permits, after diligent efforts to do so,
in order to be able to perform all required repair and restoration work and to
operate the Facility for its Primary Intended Use in substantially the same
manner as that existing immediately prior to such damage or destruction and
otherwise in accordance with the terms of this Lease, this Lease shall terminate
on the date which is thirty (30) days after Lessor shall have notified the
Lessee of the passage in such Lessor's reasonable determination of such
reasonable period of time.
(c) If Lessor elects to repair or restore the Leased
Property, and the cost of the repair or restoration exceeds the net amount of
proceeds received by Lessor from the insurance required under Article XIII,
Lessor shall be obligated to contribute any excess amounts needed to restore the
Leased Property.
14.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR
DESTRUCTION NOT COVERED BY INSURANCE. Except as provided in Section 14.6 below,
if during the Term the Facility is totally or materially destroyed by a risk not
covered by the insurance described in Article XIII (whether or not actually
obtained or in full force), whether or not such damage or destruction renders
the Facility Unsuitable for its Primary Intended Use, Lessor at its option shall
either (a) repair, rebuild or restore the Facility at Lessor's sole expense to
substantially the same condition it was in immediately before such damage or
destruction and such damage or destruction shall not terminate this Lease, or
(b) terminate this Lease by Notice to Lessee given within
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ninety (90) days of the date of such destruction and this Lease will terminate
as of the date specified in Lessor's notice not later than sixty (60) days after
such notice. If such damage or destruction is not material, Lessor 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.
14.4 LESSEE'S PERSONAL 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.
14.5 ABATEMENT OF RENT. In the event of a casualty,
except as otherwise provided herein, this Lease shall remain in full force and
effect and Lessee's obligation to make rental payments and to pay all other
charges required by this Lease (whether through the payment of insurance
proceeds to Lessor or otherwise) shall remain unabated.
14.6 DAMAGE NEAR END OF TERM. Notwithstanding any
provisions of Section 14.2 or 14.3 to the contrary, if damage to or destruction
of the Facility occurs during the last twenty-four (24) months of the Term, and
such damage or destruction cannot be repaired or restored within the earlier of
(i) twelve (12) months, or (ii) the expiration of the Term, then Lessee shall
have the right to terminate this Lease by giving written notice to Lessor within
60 days after the date of damage or destruction, whereupon all accrued Rent
shall be paid immediately.
14.7 WAIVER. Lessee hereby waives any statutory
rights of termination that may arise by reason of any damage or destruction of
the Facility that Lessor is obligated to restore or may restore under any of the
provisions of this Lease.
ARTICLE XV
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15.1 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.
15.2 TOTAL TAKING. If (i) title to the fee of the
whole of the Leased Property or (ii) the entire ground lease is condemned by any
Condemnor, this Lease shall cease and terminate as of the Date of Taking by the
Condemnor. If title to the fee of less than the whole of the Leased Property is
so taken or condemned, which nevertheless renders the 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 that is thirty
(30) days after the Date of Taking, to terminate this Lease as of the Date of
Taking. Upon such date, if such Notice has been given, this Lease shall
thereupon cease and terminate. All Rent paid or payable by Lessee
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hereunder shall be apportioned as of the Date of Taking, and Lessee shall
promptly pay Lessor such amounts. In the event of any such termination, the
provisions of Section 15.6 shall apply.
15.3 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 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 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.
15.4 PARTIAL TAKING. If title to less than the
whole of the Leased Property is condemned, and the 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 each fails to timely elect
to terminate this Lease as provided in Section 15.3 hereof, Lessor at its cost
(not to exceed the net Condemnation Award) shall with all reasonable dispatch
after the payment of such award to Lessor 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. During and after the restoration of the
untaken portion of the Leased Property, 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, and the revenues affected by such partial
Taking. In the event Base Rent is abated, the Threshold Amounts shall also be
reduced accordingly. If Lessor and Lessee are unable to agree upon the amount of
such abatement and for reduction within thirty (30) days after such partial
Taking, the matter may be submitted by either party to a court of competent
jurisdiction for resolution.
15.5 TEMPORARY TAKING. If the whole or any part
of the Leased Property or of Lessee's interest under this Lease is condemned by
any Condemnor for its temporary use or occupancy, this Lease shall not terminate
by reason thereof, and Lessee shall continue to pay, in the manner and at the
terms herein specified, the full amounts of Rent and Additional Charges, but, if
the entire Leased Property is so condemned, only to the extent of net proceeds
of condemnation awards. 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
as in this Section 15.5 described, the entire amount of any Award made for such
Condemnation allocable to the Term, whether paid by way of damages, rent or
otherwise, shall be paid to Lessee. Lessor
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covenants that upon the termination of any such period of temporary use or
occupancy it will, at its sole expense, restore the 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 Lessor shall not be
required to make such restoration.
ARTICLE XVI
-----------
16.1 EVENTS OF DEFAULT. If any one or more of the
following events (individually, an "Event of Default") occurs:
(a) Lessee fails to make payment of the Base Rent
when the same becomes due and payable and such condition continues for
a period of ten (10) days after receipt by the Lessee of Notice thereof
from Lessor; or
(b) Lessee fails to make payment of Percentage Rent
when the same becomes due and payable and such condition continues for
a period of ten (10) days after receipt by the Lessee of Notice thereof
from Lessor; or
(c) 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 thirty (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 thirty (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 one hundred eighty (180) days after such
Notice; or
(d) Lessee shall file a petition in bankruptcy or
reorganization for an arrangement pursuant to any federal or state
bankruptcy law or any similar federal or state law, or shall be
adjudicated a bankrupt or shall make an assignment for the benefit of
creditors or shall admit in writing its inability to pay its debts
generally as they become due, or if a petition or answer proposing the
adjudication of the Lessee as a bankrupt or its reorganization pursuant
to any federal or state bankruptcy law or any similar federal or state
law shall be filed in any court and the Lessee shall be adjudicated a
bankrupt and such adjudication shall not be vacated or set aside or
stayed within sixty (60) days after the entry of an order in respect
thereof, 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
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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 sixty (60) days
after such appointment; or
(e) without Lessor's consent, 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
(f) 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 an
proceeding (unless Lessee is contesting such lien or attachment in good
faith in accordance with Article XII hereof); or
(g) except as a result of damage, destruction or a
partial or complete Condemnation, Lessee voluntarily ceases operation
of the Leased Property for a period in excess of ten (10) consecutive
days;
(h) the Franchise Agreement with respect to the
Facility on the Leased Premises is terminated by the Franchisor as a
result of any action or failure to act by the Lessee; or
(i) Lessee shall breach the terms of Section 7.2(f),
Article 19, Section 23.1. or Section 24.2;
then, and in any such event, Lessor may, so long as such Event of Default
continues, 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 by
giving Lessee the shortest Notice of such termination permitted by law.
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.
No Event of Default (other than a failure to make a
payment of money) shall be deemed to exist under clause (c) during any time the
curing thereof is prevented by an Unavoidable Delay, provided that upon the
cessation of such unavoidable Delay, Lessee remedies such default or Event of
Default without further delay.
16.2 REMEDIES. (a) If any one or more Events of
Default shall occur and be continuing, then Lessor shall have the right, in
addition to all other rights or remedies available at law or in equity, at its
election:
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(i) To give Lessee written notice of Lessor's
intention to terminate this Lease on the earliest date permitted by law
or on any later date specified in such notice, in which case Lessee's
right to possession of the Leased Property shall cease and this Lease
will be terminated on such date, except as to liability of Lessee
expressly, stated herein to survive the termination of this Lease,
including, without limitation, liability pursuant to Section 16.2(d);
or
(ii) Without further demand or notice, to reenter and
take possession of the Leased Property or any part of the Leased
Property, repossess the same, expel Lessee and those claiming through
or under Lessee, and remove the effects of both or either, using such
force for such purposes as may be Lawful and necessary, without being
liable for prosecution, without being deemed guilty of any manner of
trespass, and without prejudice to any remedies for arrears or future
payments of Base Rent, Percentage Rent, Additional Charges or other
amounts payable under this Lease or as a result of any preceding breach
of covenants or conditions; or
(iii) To cure any Event of Default and to charge
Lessee for the cost of effecting such cure, including, without
limitation, reasonable attorneys fees and interest on the amount so
advanced at the overdue Rate, provided that Lessor shall have no
obligation to cure any such Event of Default.
(b) Should Lessor elect to reenter as provided in
Section 16.2(a)(ii), or should Lessor take possession pursuant to legal
proceedings or pursuant to any notice provided by law while an Event of Default
is continuing, Lessor may, from time to time, without terminating this Lease,
relet the Leased Property or any part of the Leased Property in Lessor's or
Lessee's name, but for the account of Lessee, for such term or terms (which may
be greater or less than the period which would otherwise have constituted the
balance of the Term of this Lease) and on such conditions and upon such other
terms (which may include concessions of free rent and alteration and repair of
the Leased Improvements) as Lessor, in its reasonable discretion, may determine
and Lessor may collect and receive the rent. No such reentry or taking
possession of the Leased Property by Lessor will be construed as an election on
Lessor's part to terminate this Lease unless a written notice of such intention
is given to Lessee. No notice from Lessor under this Article 16 or under a
forcible or unlawful entry and detainer statute or similar law will constitute
an election by Lessor to terminate this Lease unless such notice specifically so
states. Lessor reserves the right following any such reentry or reletting to
exercise its right to terminate this Lease by giving Lessee such written notice,
in which event this Lease will terminate as specified in such notice.
(c) In the event that Lessor does not elect to
terminate this Lease as permitted in Section 16.2(a)(i), but elects instead to
take possession as
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provided in Section 16.2(a)(ii), Lessee shall pay to Lessor Base Rent,
Percentage Rent, Additional Charges and other sums as provided in this Lease
which would be payable under this Lease if such repossession had not occurred,
less the net proceeds, if any, of any reletting of the Leased Property, after
deducting all of Lessor's expenses in connection with such reletting, including,
without limitation, all repossession costs, brokerage commissions, attorneys
fees, expenses of employees, alteration and repair costs and expenses of
preparation for such reletting. If, in connection with any reletting, the new
lease term extends beyond the existing Term of this Lease, or the premises
covered by such new lease include other premises not part of the Leased
Property, a fair apportionment of the rent received from such reletting and the
expenses incurred in connection with such reletting as provided in this
Paragraph will be made in determining the net proceeds from such reletting, and
any rent concessions will be equally apportioned over the term of the new lease.
Lessee shall pay such rent and other sums to Lessor monthly on the date on which
the Base Rent and Additional Charges, and, in the case of Percentage Rent,
quarterly on the day on which Percentage Rent, would have been payable under
this Lease if possession had not been retaken, and Lessor shall be entitled to
receive such rent and other sums from Lessee on each such day.
(d) If an Event of Default has occurred and this
Lease is terminated by Lessor, Lessee shall remain liable to Lessor for damages
in an amount equal to Base Rent, Percentage Rent, Additional Charges and other
amounts which would have been owing by Lessee for the balance of the Term of
this Lease had this Lease not been terminated, less the net proceeds, if any, of
any reletting of the Leased Property by Lessor subsequent to such termination,
after deducting all of Lessor's expenses in connection with such reletting,
including, but without limitation, the expenses enumerated in Section 16.2(c)
(which expenses, if the reletting is for a term that will extend beyond the
existing Term, will be apportioned as described in Section 16.2(c)). Lessor
shall be entitled to collect such damages from Lessee monthly on the day on
which Base Rent or Additional Changes, and quarterly on the day on which
Percentage Rent would have been payable under this Lease if this Lease had not
been terminated, and Lessor shall be entitled to receive such Base Rent and
other amounts from Lessee on each such day. Alternatively, at the option of
Lessor, in the event this Lease is so terminated, Lessor shall be entitled to
recover against Lessee as damages for loss of the bargain and not as a penalty:
(i) The worth at the time of award of the unpaid Base
Rent and Percentage Rent which had been earned at the time of
termination;
(ii) The worth at the time of award of the amount, if
any, by which the unpaid Base Rent, Percentage Rent and all Additional
Charges which would have been earned after termination until the time
of award exceeds the amount of rental loss that Lessee proves could
have been reasonable avoided;
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(iii) The worth at the time of award of the amount,
if any, by which the unpaid Base Rent, Percentage Rent and Additional
Charges for the balance of the Term (had the same not been so
terminated by Lessor) after the time of award exceeds the amount of
such rental loss during such period that Lessee proves could be
reasonably avoided; and
(iv) 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
events would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in clauses (i) and
(ii) above shall be computed by adding interest from the date of termination
until the time of the award computed at the Overdue Rate on the date on which
this Lease is terminated. The worth at the time of award of the amount referred
to in clause (iii) above shall be computed by using a discount rate of the
Federal Reserve Bank of New York at the time of the award plus one percent (1%).
(e) Percentage Rent for the purposes of this Section
16.2 shall be a sum equal to (i) the average of the annual amounts of the
Percentage Rent for the three (3) Fiscal Years immediately preceding the Fiscal
Year in which the termination, re-entry or repossession takes place, or (ii) if
three (3) Fiscal Years shall not have elapsed, the average of the Percentage
Rent during the preceding Fiscal Years during which the Lease was in effect, or
(iii) if one (1) Fiscal Year has not elapsed, the amount derived by analyzing
the Percentage Rent from the effective date of this Lease.
(f) Any suit or suits for the recovery of the
amounts and damages set forth in Sections 16.2(c) or (d) may be brought by,
Lessor, from time to time, at Lessor, a election, and nothing in this Lease will
be deemed to require Lessor to await the date upon which this Lease or the Term
of this Lease would have expired had there occurred no Event of Default. Each
right and remedy provided for in this Lease as a result of the occurrence of a
default is cumulative and is in addition to every other right or remedy provided
for in this Lease or now or after the date of the commencement of the Term
existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by Lessor of any one or more of the rights or remedies
provided for in this Lease or now or after the date of the commencement of the
Term existing at law or in equity or by statute or otherwise shall not preclude
the simultaneous or later exercise by Lessor of any or all other rights or
remedies provided for in this Lease or now or after the date of the commencement
of the Term existing at law or in equity or by statute or otherwise. All costs
incurred by Lessor in collecting any amounts and damages owing by Lessee
pursuant to the provisions of this Lease or to enforce any provision of this
Lease, including, but not limited to, reasonable attorneys' fees and related
costs, whether or
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not one or more actions are commenced by Lessor, shall also be recoverable by
Lessor from Lessee.
(g) Lessor shall have no obligation to mitigate
damage following the occurrence of an Event of Default.
16.3 WAIVER. Lessee hereby 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 16; (b)
the benefit of any laws now or hereafter in any force exempting property from
liability for rent or for debt; (c) any equity of redemption; and (d) except as
provided herein, any presentations, demands for payment or for performance, or
notice of non-performance.
16.4 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, to the extent permitted by applicable
law, be applied to Lessee's obligations in the order that Lessor may determine,
in Lessor's discretion.
16.5 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 to do so, immediately surrender to
Lessor the Leased Property 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 by reasonable force,
summary proceedings, ejectment or otherwise and may remove Lessee and all other
persons and any and all personal property from the Leased Property, subject to
rights of any hotel guests and to any requirement of law. Lessee hereby waives
any and all requirements of applicable law for service of notice to reenter 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.
ARTICLE XVII
------------
17.1 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 including, without limitation, Lessee's failure to
comply with the terms of the Franchise Agreement, and fails to cure the same
within the relevant time periods provided in Section 16.1, 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 the
Leased Property for such purpose and, subject to Section 16.2, take all such
action 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
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all costs and expenses (including, without limitation, reasonable attorney's
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 Lessor, 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 EXCULPATION. In the event of (a) a sale or
transfer of all or any part of the Leased Property (by operation of law or
otherwise), (b) the making of a lease of all or substantially all of the Leased
Property or (c) a sale or transfer (by operation of Law or otherwise) of the
leasehold estate under any such lease, (i) the seller, transferor or lessor, as
the case may be, shall be and hereby is automatically and entirely released and
discharged, from and after the date of such sale, transfer or lease, of all
liability in respect of the performance of any of the terms of this Lease on the
part of Lessor thereafter to be performed and (ii) the term "Lessor" shall
thereafter mean only the purchaser, transferee or lessee, as the case may be,
and the covenants and agreements of Lessor shall thereafter be binding upon such
purchaser, transferee or lessee.
Lessee shall look solely to Lessor's estate and
interest in the Leased Property for the satisfaction of any right of Lessee for
the collection of a judgment or other judicial process or arbitration award
requiring the payment of money by Lessor, and no other property or assets of
Lessor. Lessor's agents, incorporators, subscribers, shareholders, officers,
directors, members, partners, principals (disclosed or undisclosed) an
affiliates, whether directly or through Lessor or through any receiver,
assignee, trustee in bankruptcy or through anyone else, shall not be subject to
levy, lien, execution, attachment, or other enforcement procedure for the
satisfaction of Lessee's rights and remedies under of with respect to or arising
from or in connection with this Lease.
ARTICLE XIX
-----------
19.1 REIT COMPLIANCE. Lessee acknowledges that the
general partner of the general partner of Lessor (the "REIT") intends to
continue to qualify as a real estate investment trust under the Code, and that
pursuant to Lessor's limited partnership agreement, Lessor may not take or omit
to take any action, or engage in any business or business transaction or
relationship, that would or could result in the REIT being disqualified from
treatment as a real estate investment trust. As a material inducement to Lessor
to enter into this Lease, Lessee hereby agrees that it shall not take or omit to
take any action, or engage in any business or business transaction or
relationship, that would or could result in the REIT being disqualified from
treatment as a real estate investment trust under the Code. Without limiting the
generality of the foregoing, Lessee agrees that:
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(A) PERSONAL PROPERTY LIMITATION. Anything
contained in this Lease to the contrary notwithstanding, the average of the
adjusted tax bases of the items of personal property that are leased to Lessee
under this Lease at the beginning and at the end of any Fiscal Year shall not
exceed 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. This Section
19.1(a) 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.
(B) SUBLEASE RENT LIMITATION. Anything contained in
this Lease to the contrary notwithstanding, Lessee shall not sublet the Leased
Property on any basis such that the rental to be paid by the sublessee
thereunder would be based, in whole or in part, on either (i) the income or
profits derived by the business activities of the sublessee, or (ii) any other
formula such that any portion of the Rent would fail to qualify as "rents from
real property" within the meaning of Section 856(d) of the Code, or any similar
or successor provision thereto.
19.2 SUBLEASE LESSEE LIMITATION. Anything contained
in this Lease to the contrary notwithstanding, Lessee shall not sublease the
Leased Property to any Person in which Realty ReFund Trust, owns, directly or
indirectly a ten percent (10%) or more interest, within the meaning of Section
856(d)(2)(B) of the Code, or any similar or successor provisions thereto.
19.3 LESSEE OWNERSHIP LIMITATION. Anything
contained in this Lease to the contrary notwithstanding, neither Lessee or an
Affiliate of Lessee shall acquire, directly or indirectly, a 10% or more
interest in Realty ReFund Trust, within the meaning of Section 856(d)(2)(B) of
the Code, or any similar or successor provision thereto.
19.4 LESSEE OFFICER AND EMPLOYEE LIMITATION. If a
Person serves as both (a) a director of Lessee (or any Person who furnishes or
renders services to the tenants of the Leased Property, or manages or operates
the Leased Property) and (b) a trustee and officer (or employee) of the REIT,
that Person shall not receive any compensation for serving as a director of
Lessee (or any Person who furnishes or renders services to the tenants of the
Leased Property, or manages or operates the Leased Property). Furthermore, if a
Person serves as both (a) a trustee of the REIT and (b) a director and officer
(or employee) of Lessee (or any Person who furnishes or renders services to the
tenants of the Leased Property, or manages or operates the Leased Property),
that Person shall not receive any compensation for serving as a director of
Lessee (or any Person who furnishes or renders services to the tenants of the
Leased Property, or manages or operates the Leased Property).
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ARTICLE XX
----------
20.1 HOLDING OVER. If Lessee for any reason
remains in possession of the 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 the aggregate of 105% of
(a) one-twelfth of the aggregate Base Rent and Percentage Rent 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 the Leased Property. During such period, Lessee
shall be obligated to perform and observe all of the terms, covenants and
conditions of this Lease, but shall have no rights hereunder other than the
right, to the extent given by law to tenants at sufferance, to continued
occupancy and use of the Leased Property. Nothing contained herein shall
constitute the consent, express or implied, of Lessor to the holding over of
Lessee after the expiration or earlier termination of this Lease.
ARTICLE XXI
-----------
21.1 RISK OF LOSS. During the Term, the risk of loss
or of decrease in the enjoyment and beneficial use of the Leased Property in
consequences of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequences of
foreclosures, attachments, levies or executions is retained by Lessor, and, in
the absence of negligence, misconduct or breach of this Lease by Lessee, Lessee
shall in no event be answerable or accountable therefor.
ARTICLE XXII
------------
22.1 INDEMNIFICATION. Notwithstanding the existence
of any insurance provided for in Article XIII, and without regard to the policy
limits of any such insurance, Lessee will protect, indemnify, hold harmless and
defend any Lessor Indemnified Party 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 any
Lessor Indemnified Party 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 or negligence
by Lessee, its agents, invitees, employees or guests, or any other person other
than Lessor, of the 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
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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, (e) the nonperformance of any of the terms and
provisions of any and all existing and future subleases of the Leased Property
to be performed by the landlord thereunder, and (f) the sale of or consumption
of alcoholic beverages on or in the Leased Property, (g) claims of Franchisor
and Managers. Any amounts that become payable by Lessee under this Article shall
be paid within ten days after demand therefor by Lessor, and if not timely paid,
shall bear a late charge (to the extent permitted by law) at the Overdue Rate
from the expiration of such ten (10) day period 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 any Lessor
Indemnified Party or may compromise or otherwise dispose of the same as Lessee
sees fit. Nothing herein shall be construed as indemnifying any Lessor
Indemnified Party against its own grossly negligent acts or omissions or willful
misconduct.
Lessor shall indemnify and hold any Lessee
Indemnified Party from and against any and all liabilities, losses, interest,
damages, costs or expenses (including, without limitation, reasonable attorneys'
fees) assessed against, levied upon or collected from any Lessee Indemnified
Party arising out of the negligence, misconduct or breach of this Lease by
Lessor.
Lessee's and Lessor's liability under the provisions
of this Article shall survive any termination of this Lease.
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ARTICLE XXIII
-------------
23.1 SUBLETTING AND ASSIGNMENT. Except as
expressly permitted herein, Lessee shall not mortgage, assign, sublet, or
otherwise transfer its interest in the Facility and, subject to the provisions
of Article XIX and Section 23.2 and any other express conditions or limitations
set forth herein, Lessee may, but only with the prior written consent of Lessor,
which may be granted or withheld in Lessor's sole and absolute discretion, (a)
assign this Lease, (b) sublet all or any part of the Leased Property, or (c)
sublet any retail or restaurant portion of the Leased Improvements in the normal
course of the Primary Intended Use; 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
Rent payable under this Lease. In the case of a subletting, the sublessee shall
comply with the provisions of Section 23.2, 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.
23.2 ATTORNMENT. Lessee shall insert in each
sublease permitted under Section 23.1 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.
23.3 MANAGEMENT AGREEMENT. Notwithstanding anything
contained in this Article XXIII to the contrary, Lessee may, with the prior
written consent of Lessor (which consent may be withheld in the sole and
absolute direction of Lessor), enter into an agreement (a "Management
Agreement") with any third party to assign responsibility for the management
and/or operation of all or any part of the Leased Property, including any retail
or restaurant portion of the Leased Improvements, provided, however, that Lessee
shall not enter into any Management Agreement which will materially diminish the
actual or potential Rent payable under
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this Lease. Notwithstanding the above, 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. Lessor hereby consents to Lessee's entering into
a Management Agreement with InnSuites Innternational Hotels, Inc.
ARTICLE XXIV
------------
24.1 OFFICERS' CERTIFICATES; FINANCIAL STATEMENTS;
LESSOR'S ESTOPPEL CERTIFICATES AND COVENANTS. (a) At any time and from time to
time upon not less than twenty (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 there is any existing default or
Event of Default thereunder by Lessor or Lessee, and such other information as
may be reasonably requested by Lessor or Lessor's lender. Any such certificate
furnished pursuant to this Article may be relied upon by Lessor, any lender and
any prospective purchaser of the Leased Property.
(b) Lessee will furnish the following statements to
Lessor:
(1) on or before the twentieth (20th) 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, and such other information
as may be requested by Lessor or required by Lessor's lender, each in
form acceptable to Lessor; and
(2) the most recent Consolidated Financials of Lessee
within forty-five (45) days after each quarter of any Fiscal Year (or,
in the case of the final quarter in any Fiscal Year, the most recent
Audited Consolidated Financials of Lessee within ninety (90) days)
after such final quarter; and
(3) with reasonable promptness, such information
respecting the financial condition and affairs of Lessee as may be
requested by Lessor.
(c) At any time and from time to time upon not less
than twenty (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
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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.
ARTICLE XXV
-----------
25.1 BOOKS AND RECORDS; LESSOR'S RIGHT TO INSPECT.
Lessee shall keep full and adequate books of account and other records
reflecting the results of operation of the Facility on an accrual basis, all in
accordance with the Uniform System and generally accepted accounting principles.
The books of account and all other records relating to or reflecting the
operation of the Facility shall be available to Lessor and its representatives
and its auditors or accountants, at all reasonable times for examination, audit,
inspection and transcription. All of such books and records pertaining to the
Facility including, without limitation, books of account, guest records and
front office records, at all times shall be the property of Lessee, (subject to
the terms of Section 35.2) but shall not be removed from the Facility or
Lessee's offices by Lessee without Lessor approval.
Lessee shall permit Lessor and its authorized
representatives as frequently as reasonably requested by Lessor to inspect the
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 XXVI
------------
26.1 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 XXVII
-------------
27.1 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.
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ARTICLE XXVIII
--------------
28.1 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.
ARTICLE XXIX
------------
29.1 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 XXX
-----------
30.1 CONVEYANCE BY LESSOR. If Lessor or any successor
owner of the Leased Property conveys the Leased Property in accordance with the
terms hereof other than as security for a debt, and the grantee or transferee of
the 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
the Leased Property and all such future liabilities and obligations shall
thereupon be binding upon the new owner.
ARTICLE XXXI
------------
31.1 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 all liens and
encumbrances subject to which the Leased Property was conveyed to Lessor or
hereafter consented to by Lessee or provided for herein. Notwithstanding the
foregoing, Lessee shall have the right by separate and independent action to
pursue any claim it may have against Lessor as a result of a breach by Lessor of
the covenant of quiet enjoyment contained in this Section.
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ARTICLE XXXII
-------------
32.1 NOTICES. All notices, demands, requests,
consents, approvals and other communications ("Notice" or "Notices") hereunder
shall be in writing and personally served, mailed (by registered or certified
mail, return receipt requested and postage prepaid) or sent by facsimile
transmission, addressed to Lessor at x/x Xxxxxx XxXxxx Xxxxx, 0000 Xxxxxxxxxx
Building, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xx. Xxxxxxx X.
Xxxxx, with copy to Xxxxx X. Xxxxxxx, Esq., Xxxxxxxx Xxxx & Xxxxx LLP, 0000 Xxx
Xxxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, and addressed to Lessee
at 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Mr.
J.R. Chase and Xx. Xxxxx Xxxx, with a copy to Xx. Xxxxx X. Xxxxx at the same
address, or to such other address or addresses as either party may hereafter
designate, Notice by personal delivery or facsimile transmission shall be
effective upon receipt, and 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.
ARTICLE XXXIII
--------------
33.1 LESSOR MAY GRANT LIENS, SUBORDINATION. Without
the consent of Lessee, Lessor may, from time to time, directly or indirectly,
create or otherwise cause to exist, modify or extend any lien, encumbrance,
superior lease or title retention agreement ("Encumbrance") upon the Leased
Property, or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing. This Lease and Lessee's
interest herein shall be subordinate to each and every Encumbrance unless the
holder thereof elects otherwise.
(a) The subordination provisions herein contained
shall be self-operative and no further instrument of subordination shall be
required. In confirmation of such subordination, Lessee shall execute and
deliver promptly any certificate that Lessor or its successors in interest may
request. Lessee hereby constitutes and appoints Lessor or its successors in
interest as Lessee's attorney-in-fact to execute and deliver any such
certificate or certificates for and on behalf of Lessee. Notwithstanding any
provision in this Lease or any separate agreement with Lessee, Lessee covenants
and agrees that Lessee shall not do any act, or refrain from doing any act, if
doing such act, or refraining from doing such act, would constitute a default or
breach of any Encumbrance.
(b) This Lease has been, or may be, assigned as
collateral security. After Lessee receives notice of such assignment and so long
as the obligations secured by such assignment remain outstanding, Lessee (i)
will not pay any Rent under this Lease more than thirty (30) days in advance of
its due date without the prior written consent of the holder of any such
assignment (the
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"Assignee"), (ii) will not surrender or consent to the modification of any of
the terms of the Lease nor to the termination hereof by Lessor without the
Assignee's prior written consent, (iii) will continue to pay Rent under this
Lease to the Lessor or as directed by Lessor in accordance with the terms of
this Lease (unless and until notified otherwise in writing by the Assignee in
case of an event of default under the Assignee's mortgage or other Encumbrance,
in which event Lessee will pay the rent due under this Lease directly to the
Assignee or the Assignee's designee) and (iv) will not seek to terminate this
Lease or seek or assert any set-off or counterclaim against Rent by reason of
any act or omission of the Lessor, until Lessee shall have given written notice
of such act or omission to the Assignee (at the Assignee's last address
furnished to Lessee) and until a reasonable period of time shall have elapsed
following the giving of such notice, during which period the Assignee shall have
the right, but shall not be obligated, to remedy such act or omission. Any
payments made to the Assignee by Lessee shall not affect or impair the other
rights and remedies the Assignee may have under said mortgage or Encumbrance or
otherwise against the Lessor.
(c) Lessee agrees, at the election of the holder of
any interest superior to this Lease pursuant to the terms hereof ("Holder") to
fully and completely attorn to, from time to time, and to recognize Holder or
any person, or such person's successors or assigns, who acquires the interest of
Lessor under the Lease as Lessee's lessor under this Lease (collectively,
"Successor Landlord") upon the then executory terms of this Lease. The foregoing
provisions of this paragraph shall inure to the benefit of any such Successor
Landlord, shall apply notwithstanding that, as a matter of law, the Lease may
automatically terminate, shall be self-operative upon any such demand, and no
further instrument shall be required to give effect to said provisions. Lessee
however, upon demand of any such Successor Landlord agrees to execute, from time
to time, lessor or any instruments to evidence and confirm the provisions of
this paragraph, satisfactory to lessor or any such Successor Landlord. Upon such
attornment and the acceptance thereof in writing by such Successor Landlord,
this Lease shall continue in full force and effect as a direct lease between
such Successor Landlord and Lessee upon all of the then executory terms of the
Lease, except that such Successor Landlord shall not be:
(i) liable for any act or omission of any prior
lessor (including Lessor); or
(ii) liable for the return of any security deposit
(unless actually received by such Successor Lessor); or
(iii) bound by any waiver or forbearance of any prior
lessor (including Lessor); or
(iv) be liable for any damages or other relief
attributable to any latent or patent defects in construction; or
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(v) bound by any covenant to perform or complete any
construction or to pay any sum to Lessee; or
(vi) subject to any offsets or defenses which might
have against any prior Lessor (including Lessor); or
(vii) bound by any Rent which Lessee might have paid
for more than the current quarter to any prior lessor (including
Lessor); or
(viii) bound by any amendment or modification of the
Lease made without its consent.
(d) Lessor shall request of each Holder that such
Holder enter into a so-called "non-disturbance agreement" with Lessee on such
Holder's standard form, and Lessor shall use best efforts to obtain such
non-disturbance agreement.
33.2 LESSEE'S RIGHT TO CURE. Subject to the
provisions of Section 33.3, 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. 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 34.2 shall survive
the termination of this Lease with respect to the Leased Property.
33.3 BREACH BY LESSOR. It shall be a breach of this
Lease if Lessor: [(i)] fails to observe or perform any term, covenant or
condition of this Lease on its part to be performed and such failure continues
for a period of thirty (30) days after Notice thereof from Lessee, unless such
failure cannot with due diligence be cured without a period of thirty (30) days,
in which case such failure shall not be deemed to continue if Lessor, within
such thirty (30) day period, proceeds promptly and with due diligence to cure
the failure and diligently completes the curing thereof, or [(ii) defaults under
the Ground Lease if such default is not cured within thirty (30) days after
Notice thereof from the ground lessor of the Ground Lease.] 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.
33.4 LESSEE'S COOPERATION. In connection with the
termination of this Lease due to the expiration of the Term or otherwise, Lessee
shall cooperate
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with Lessor in transferring possession of the Leased Property to a new tenant,
including, without limitation, cooperating with the transfer of any licenses or
permits necessary for the operation of the Facility.
ARTICLE XXXIV
-------------
34.1 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 in
recordable form 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.
34.2 TRANSITION PROCEDURES. Upon the expiration or
termination of the Term of this Lease, for whatever reason, Lessor and Lessee
shall do the following (and the provisions of this Section 35.2 shall survive
the expiration or termination of this Lease until they have been fully
performed) and, in general, shall cooperate in good faith to effect an orderly
transition of the management of the Facility.
(a) TRANSFER OF LICENSES. Upon the expiration or
earlier termination of the Term, Lessee shall use its best efforts (i) to
transfer to Lessor or Lessor's nominee, to the extent assignable or
transferable, the Franchise Agreement, any liquor licenses, and all other
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 (collectively,
"Licenses"), or (ii) if such transfer is prohibited by law or Lessor otherwise
elects, to cooperate with Lessor or Lessor's nominee in connection with the
processing by Lessor of Lessor's nominee of any applications for, all Licenses;
provided, in either case, except in the case of a termination resulting from an
Event of Default by Lessee, 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.
(b) LEASES AND CONCESSIONS. Lessee shall assign to
Lessor or Lessor's nominee simultaneously with the termination of this Lease,
and the assignee
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shall assume any and all subleases and concession agreements in effect with
respect to the Facility which Lessor elects to have assigned and to assume.
(c) BOOKS AND RECORDS. Any and all books, records
files and keys for the Facility kept by Lessee pursuant to this Lease or
otherwise shall be delivered promptly to Lessor or Lessor's nominee,
simultaneously with the termination of this Agreement, but such books and
records shall thereafter be available to Lessee at all reasonable times for
inspection, audit, examination, and transcription for a period of three (3)
years and Lessee may retain (on a confidential basis) copies or computer records
thereof.
(d) TRANSITION ADJUSTMENTS. Lessee shall pay all
accounts payable and accrued expenses relating to the Leased Property as of the
date of termination of this Lease, to the extent such accounts payable and
accrued expenses are required to be paid by Lessee under this Lease, and Lessee
shall be entitled to receive and retain all accounts receivable, and an amount
equal to all prepaid expenses paid by Lessee, as of the date of this
termination. All advance bookings deposits and credits shall be paid to Lessor.
(e) The provisions of this Section 34.2 shall survive
the termination or expiration of this Lease.
34.3 CHANGE OF FRANCHISE. Lessee may not change
the existing franchise covering the Leased Property with the prior written
consent of Lessor, which consent may be given or withheld at Lessor's sole
discretion.
34.4 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.
ARTICLE XXXV
------------
35.1 MEMORANDUM OF LEASE. Lessor and Lessee shall
promptly upon the request of either enter into a short form memorandum of this
Lease, 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 XXXVI
-------------
36.1 LESSOR'S OPTION TO TERMINATE LEASE. In the
event Lessor enters into a bona fide contract to sell the Leased Property to a
non-Affiliate, Lessor
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may terminate the Lease by giving not less than thirty (30) days' prior Notice
to Lessee of Lessor's election to terminate this Lease effective upon the
closing under such contract. In the event a closing under such contract does not
occur, this Lease shall continue to be in full force and effect. Effective upon
such closing, this Lease shall terminate 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. As compensation for the early termination of
its leasehold estate under this Article XXXVI, Lessor shall within ninety (90)
days of such closing pay to Lessee the fair market value of Lessee's leasehold
estate hereunder as of the closing of the sale of the Leased Property.
For the purposes of this Article, fair market value
of the leasehold estate means, as applicable, an amount equal to the price that
a willing buyer not compelled to buy would pay a willing seller not compelled to
sell for Lessee's leasehold estate under this Lease provided, however, that such
amount shall not be less than six percent (6%) of the total of Room and Other
Revenues for the twelve (12) months immediately preceding such termination nor
more than $300,000.00.
ARTICLE XXXVII
--------------
37.1 COMPLIANCE WITH FRANCHISE AGREEMENT. To the
extent any of the provisions of the Franchise Agreement impose a greater
obligation on Lessee than the corresponding provisions of this Lease, then
Lessee shall be obligated to comply with, and the provisions of this Lease are
deemed modified to the extent necessary to comply with, the provisions of the
Franchise Agreement, it being the intent of the parties hereto that Lessee
comply in every respect with the provisions of the Franchise Agreement so as to
avoid any default thereunder. In addition, and notwithstanding any other
provisions to the contrary contained in this Lease, in the event that Franchisor
terminates the Franchise Agreement for any reason Lessor shall have the right to
terminate this Lease in which case neither party shall thereafter have any
liability to the other, provided, however, should Lessor elect to terminate this
Lease, due to a termination of the Franchise Agreement for other than a default
by Lessee under Section 16.1(h) of this Lease, then Lessor shall pay a
termination fee equal to two and one-half percent (2.50%) of the total of Room
and Other Revenues for the twelve (12) months immediately preceding such
termination.
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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"
___________________________, a ________
By:
---------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
"LESSEE"
REALTY HOTEL LESSEE CORP., a Nevada
corporation
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[CORPORATE SEAL]
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SCHEDULE OF EXHIBITS
--------------------
A. Description of Land
B. Schedule of Leases and Service Contracts
C. Inventory of Furniture, Fixtures and Equipment
D. Hotel Management Agreement
E. Assignment and Assumption of Leases
F. Assignment and Assumption of Service Contracts
G. Memorandum of Lease
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EXHIBIT A
---------
DESCRIPTION OF LAND
-------------------
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EXHIBIT B
---------
SCHEDULE OF LEASES AND SERVICE CONTRACTS
----------------------------------------
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EXHIBIT C
---------
INVENTORY OF FURNITURE, FIXTURES AND EQUIPMENT
----------------------------------------------
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EXHIBIT D
---------
HOTEL MANAGEMENT AGREEMENT
--------------------------
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EXHIBIT E
---------
ASSIGNMENT AND ASSUMPTION OF LEASES
-----------------------------------
THIS ASSIGNMENT AND ASSUMPTION OF LEASES is
made as of the ____ day of ____________, 199_, by and between
____________________, a ____________________________ ("Assignor"), and REALTY
HOTEL LESSEE CORP., a Nevada corporation ("Assignee").
W I T N E S S E T H:
-------------------
WHEREAS, Assignor, as Lessor, and Assignee, as
Lessee, entered into that certain Percentage Lease Agreement of even date
herewith (the "Lease Agreement"), relating to that certain hotel building known
as the ______________________________ (the "Hotel Building"), situated on
certain real property located in _______________, ______________ as described on
EXHIBIT A attached hereto and made a part hereof (the "Land"); and
WHEREAS, the Lease Agreement contemplates that
Assignor shall assign to Assignee all its right, title and interest in the
certain leases and other instruments relating to the Hotel Building;
NOW, THEREFORE, in consideration of the mutual
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by each of the parties hereto,
Assignor and Assignee do hereby agree as follows:
1. ASSIGNMENT. Assignor hereby gives, grants,
bargains, sells, conveys, transfers and sets over unto Assignee, its successors
and assigns, as of the Effective Date (as hereinafter defined), all of
Assignor's right, title and interest in and to the following instruments
(collectively the "Lease Instruments"):
(a) [List Leases]
2. ASSUMPTION. Assignee hereby accepts the
foregoing assignment and, in consideration thereof, Assignee hereby covenants
and agrees that, on and after the Effective Date, Assignee will assume, observe,
perform, fulfill and be bound by all terms, covenants, conditions and
obligations under each of the Lease Instruments which arise on and after the
Effective Date and are to be observed, performed and fulfilled by the sublessor
named therein on and after the Effective Date in the same manner and to the same
extent as if Assignee were the sublessor named therein.
3. INDEMNIFICATION. (a) Assignor hereby
indemnifies Assignee, and agrees to defend and hold harmless Assignee from and
against any and all liability, loss, damage and expense, including, without
limitation, reasonable
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attorneys fees, which Assignee may or shall incur under the Lease Instruments by
reason of any failure or alleged failure of Assignor to have complied with or to
have performed, before the Effective Date, the obligations of the sublessor
thereunder which were to be performed before the Effective Date.
(b) Assignee hereby indemnifies Assignor, and agrees
to defend and hold harmless Assignor from and against any and all liability,
loss, damage and expense, including without limitation reasonable attorneys'
fees, which Assignor may or shall incur under the Lease Instruments by reason of
any failure or alleged failure of Assignee to comply with or to perform, on or
after the Effective Date, all the obligations of the sublessor thereunder which
are to be performed on or after the Effective Date.
4. EFFECTIVE DATE. The "Effective Date", as used
herein, shall mean the date upon which this document is fully executed and
delivered.
5. SUCCESSORS AND ASSIGNS. The terms and conditions
of this agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be duly executed as of the date set forth above.
"ASSIGNOR"
_________________________, a ____________
By:
--------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
"ASSIGNEE"
REALTY HOTEL LESSEE CORP., a Nevada
corporation
By:
--------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[CORPORATE SEAL]
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75
STATE OF _______________ )
) SS:
COUNTY OF _____________ )
BEFORE me, a Notary Public in and for said County and
State, personally appeared __________________, ____________ of ____________, who
acknowledged that he did sign the foregoing instrument for and on behalf of
___________________ and that the same is his free act and deed individually and
as such officer and the free act and deed of ________________.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal at ______________, _________________ this ____ day of
______________, 199_.
--------------------------------
Notary Public
(Seal)
STATE OF _______________ )
) SS:
COUNTY OF ______________ )
BEFORE me, a Notary Public in and for said County
and State, personally appeared ___________________, _____________ of REALTY
HOTEL LESSEE CORP., a Nevada corporation, who acknowledged that he did sign the
foregoing instrument on behalf of such corporation and that the same is his free
act and deed individually and as such officer and the free act and deed of such
corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal at ______________, ________________ this ____ day of ____________,
199_.
--------------------------------
Notary Public
(Seal)
This instrument prepared by:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxx Xxxx & Xxxxx LLP
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
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EXHIBIT F
---------
ASSIGNMENT AND ASSUMPTION
-------------------------
OF
--
SERVICE AND OTHER CONTRACTS
---------------------------
THIS ASSIGNMENT AND ASSUMPTION OF SERVICE
AND OTHER CONTRACTS is made as of the ____ day of _______________, 199_, by and
between _________________________________________________, a ___________________
___________ ("Assignor"), and REALTY HOTEL LESSEE CORP., a Nevada corporation
("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor, as Lessor, and Assignee, as
Lessee, entered into that certain Percentage Lease Agreement of even date
herewith (the "Lease Agreement"), relating to that certain hotel building known
as the ______________________________ (the "Hotel Building"), situated on
certain real property located in _______________, ______________ as described on
EXHIBIT A attached hereto and made a part hereof (the "Land"); and
WHEREAS, the Lease Agreement contemplates that
Assignor shall assign and convey to Assignee all its right, title and interest
in certain service and other contracts upon the consummation of the transactions
set forth in the Lease Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by each of the parties hereto,
Assignor and Assignee do hereby agree as follows:
1. ASSIGNMENT. Assignor hereby assigns to Assignee,
its successors and assigns, as of the Effective Date (as hereinafter defined),
all of Assignor's right, title and interest in and to each of the service and
other contracts relating to the Hotel Building as set forth on EXHIBIT A
attached hereto and made a part hereof (the "Contracts").
2. ASSUMPTION. Assignee hereby accepts the
foregoing assignment and, in consideration thereof, Assignee hereby covenants
and agrees that, on and after the Effective Date, Assignee will assume, observe,
perform, fulfill and be bound by all terms, covenants, conditions and
obligations of each of the Contracts which arise on and after the Effective Date
and are to be observed, performed and fulfilled by Assignor on and after the
Effective Date, in the same manner and to the same extent as if Assignee,
instead of Assignor, were originally named therein.
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3. INDEMNIFICATION. (a) Assignor hereby
indemnifies Assignee, and agrees to defend and hold harmless Assignee from and
against any and all liability, loss, damage and expense, including without
limitation reasonable attorneys fees, which Assignee may or shall incur under
any of the Contracts by reason of any failure or alleged failure of Assignor to
have complied with or to have fully performed, before the Effective Date, all
obligations on its part to have been performed, complied with or discharged
under any of the terms and conditions contained in any of the Contracts which
were to be performed before the Effective Date.
(b) Assignee hereby indemnifies Assignor, and
agrees to defend and hold harmless Assignor from and against any and all
liability, loss, damage and expense, including without limitation reasonable
attorneys' fees, which Assignor may or shall incur under any of the Contracts by
reason of any failure or alleged failure of Assignee to comply with or to
perform, on or after the Effective Date, all obligations on its part to be
performed or complied with under any of the terms and conditions contained in
any of the Contracts which are to be performed on or after the Effective Date.
4. EFFECTIVE DATE. The "Effective Date", as used
herein, shall mean the date upon which this document is fully executed and
delivered.
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5. SUCCESSORS AND ASSIGNS. The terms and conditions
of this agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be duly executed as of the day and year first set forth
above.
"ASSIGNOR"
__________________________, a ___________________
By:
---------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
"ASSIGNEE"
REALTY HOTEL LESSEE CORP., a Nevada
corporation
By:
---------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[CORPORATE SEAL]
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79
EXHIBIT A
---------
Schedule of Service and Other Contracts
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EXHIBIT G
---------
MEMORANDUM OF LEASE
-------------------
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