Exhibit 10.S
SECOND AMENDMENT OF GROUND LEASES
THIS SECOND AMENDMENT OF GROUND LEASES (this "Amendment") is entered
into as of this 21st day of March, 1997, by and among COURTYARD BY MARRIOTT
LIMITED PARTNERSHIP, a Delaware limited partnership with its principal address
at 00000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Tenant"), HOST RESTAURANTS,
INC., a Delaware corporation with its principal address at 00000 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000 ("HRI"), NEWARK PROPERTIES, INC., a Delaware
corporation with its principal address at 00000 Xxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000 ("Newark"), CASA XXXXX OF MARYLAND, INC., a California
corporation with its principal address at 00000 Xxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000 ("Casa Xxxxx") and ESSEX HOUSE CONDOMINIUM CORPORATION, a
Delaware corporation with its principal address at 00000 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000 ("Essex House") (HRI, Newark, Casa Xxxxx and Essex
House are sometimes each referred to herein, with respect only to the Leases
described herein to which such corporation is a party, as "Landlord" and
collectively as "Landlords").
RECITALS:
A. HRI is the landlord and Tenant is the legal or beneficial tenant
under the ground lease agreements identified in part I of Exhibit A attached
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hereto, Newark is the landlord and Tenant is the tenant under the ground lease
agreements identified in part II of Exhibit A attached hereto, Casa Xxxxx is the
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landlord and Tenant is the tenant under the ground lease agreements identified
in part III of Exhibit A attached hereto, and Essex House is the landlord and
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Tenant is the tenant under the ground lease agreements identified in part IV of
Exhibit A attached hereto (such ground lease agreements listed in parts I, II,
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III and IV of said Exhibit A being hereinafter referred to each as a "Lease" and
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collectively as the "Leases," and the land that is subject to each Lease, as
described on Exhibit B attached hereto being hereinafter referred to as the
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"Leased Premises").
B. The Leased Premises and the Courtyard by Marriott hotels located
thereon (the "Hotels") are subject to certain mortgage indebtedness of Tenant
(the "Existing Debt") in the original principal amount of $350,000,000, which
had an outstanding principal balance immediately prior to the date hereof of
approximately $282,000,000. The Existing Debt is, on the date hereof, being
refinanced through a loan (the "Loan") by Xxxxxx Brothers Holdings Inc., doing
business as Xxxxxx Capital, a division of Xxxxxx Brothers Holdings Inc.
("Lender") to Tenant in the original principal amount of approximately Three
Hundred Twenty-Five Million Dollars ($325,000,000).
C. The Loan is being made pursuant to that certain Loan Agreement
dated as of the date hereof by and between Tenant, as borrower, and Lender, as
lender (the "Loan Agreement").
D. All of Lender's rights under the Loan Agreement and all other Loan
Documents (as defined below), including, without limitation, the Mortgages (as
defined below), may be assigned by Lender, along with mortgage loans made to
other borrowers, to, among others, an institutional trustee (the "Trustee"), as
trustee for the benefit of the holders from time to time of certain commercial
mortgage-backed certificates (the "Certificates") pursuant to Section 9 of the
Loan Agreement, and may be serviced by a professional loan servicing company
selected by Lender (the "Servicer") on behalf of the Trustee. Upon assignment
of the Loan Documents to the Trustee, the term "Lender" as used herein will mean
the Trustee and the Servicer (on behalf of the Trustee), as applicable.
E. The Loan will be secured by, among other things, mortgage, deed of
trust, or similar liens on each of the Leased Premises and the Hotels located
thereon, including, without limitation, (a) those certain Mortgages (or Fee and
Leasehold Mortgages), Open-End Mortgage, Deed to Secure Debt, Assignment of
Leases and Rentals, Security Agreement and Fixture Filing and (b) those certain
Deeds of Trust (or Fee and Leasehold Deeds of Trust), Assignment of Leases and
Rentals, Security Agreement and Fixture Filing, dated as of even date herewith
by Tenant to or for the benefit of Lender, as to Tenant's leasehold interest in
the Leased Premises and its ownership interest in the Improvements (as defined
in each applicable Lease) thereon, and by Landlord, to or for the benefit of
Lender, as to Landlord's fee simple interest in the Leased Premises and its
reversionary interest, if any, in the Improvements thereon (each a "Mortgage"
and collectively the "Mortgages").
F. Pursuant to the Subordination Agreement (as hereafter defined),
Landlord has agreed to subordinate to payment of the "Senior Obligations" (as
hereinafter defined) its right to receive certain payments of "Rental" and
"Deferred Rental" (as defined in any applicable Lease) in the manner described
in the Subordination Agreement (as hereinafter defined).
G. Except for provisions regarding the payment of Rental, as
reflected on Schedule A to the various Leases, the terms and conditions of the
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Leases are substantially identical in all material respects.
H. The parties hereto desire to clarify certain provisions of each of
the Leases, and to amend certain other provisions thereof, as more fully set
forth herein.
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NOW THEREFORE, in consideration of these premises, and for other good
and valuable consideration, the receipt and sufficiency of which each of the
parties acknowledges, the parties agree as follows:
ARTICLE 1. Amendments to and Clarifications of Leases
Each Landlord is entering into this Amendment only as to the Leases to
which it is a party, and any future amendments to any Lease shall be required to
be executed in writing only between Tenant and Landlord from time to time under
such Lease, without the need for any other "Landlord" hereunder that is not a
party to such Lease to join therein or to consent thereto. A representative
form of one of the Leases is attached hereto as Exhibit C. The amendments
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herein sometimes refer to particular sections of Exhibit C. If the Section
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numbering in any Lease differs from the Section numbering in Exhibit C, the
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amendments herein shall be deemed to be amendments to the corresponding sections
of such other Lease. From and after the date hereof, each of the Leases shall
be deemed to be amended and clarified in the following respects.
1.1 Certain Definitions
Certain definitions contained in each Lease shall be deemed amended or
modified as follows (and all definitions defined in this Amendment shall be
deemed to be incorporated into each Lease, with the same effect as if set forth
in full therein):
"Affiliates" has the meaning ascribed to it in the Loan Agreement.
"Amendment" shall mean this Second Amendment of Ground Leases.
"Allocated Loan Amount" means, for the Hotel that is located on the
Leased Premises that is subject to any applicable Lease, the amount set forth
for such Hotel on Exhibit D attached hereto.
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"Applicable Percentages" as to the Hotel located on the Leased
Premises described in any applicable Lease, means the quotient of (a) the
Allocated Loan Amount, as of the date hereof, of such Hotel divided by (b) the
Allocated Loan Amounts, as of the date hereof, of all Hotels that are subject to
the lien of any Mortgage on the date such calculation is to be made (ignoring
any Hotels that Tenant intends to have released from the lien of a Mortgage as
of such date).
"Bona Fide Institutional Lender" shall be deemed to include, in
addition to the types of entities described in the definitions described in each
Lease, (1) Lender and its Affiliates and any of their respective successors and
assigns, (2) the Trustee, and its successors and assigns, (3) the Servicer, on
behalf of the Trustee, and its successors, sub-servicers and assigns, (4) any
entity or trust that is
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qualified under the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, as a "Real Estate Mortgage Investment
Conduit" or "REMIC", (5) public or private bondholders or certificate holders
represented by an institutional trustee that have made a loan to Tenant or have
purchased a loan made to Tenant, and (6) any Affiliate of Tenant that is formed
for the purpose of making a loan to Tenant that will be assigned
contemporaneously with the making thereof to another Bona Fide Institutional
Lender.
"Certificates" has the meaning set forth in Recital D hereof.
"Collateral Assignment" means that certain Collateral Assignment of
Management Agreement and Subordination Agreement dated as of the date hereof by
and among Tenant, Lender, and the Manager relating to the Management Agreement.
"Defeasance Period" has the meaning ascribed to it in Section 2.5(a)
of the Loan Agreement.
"Defeased Note" has the meaning ascribed to it in Section
2.5(a)(iv)(D) of the Loan Agreement.
"Deferred Ground Rent" means any payment of Rental or Deferred Rental
under any Lease that is not paid when due as a result of the subordination
provisions of the Subordination Agreement.
"Existing Debt" has the meaning set forth in Recital B hereof.
"Fee Mortgage" shall mean the applicable Mortgage and any other
mortgage, deed of trust, deed to secure debt or similar lien instrument signed
by a Landlord for the purpose of granting a lien on Landlord's interest in the
Leased Premises to secure indebtedness of Tenant.
"Foreclosure" means a foreclosure of any applicable Mortgage
(including, without limitation, a Fee Mortgage), a sale of the property and
assets that are encumbered thereby under a power of sale contained therein, any
similar procedure under which Lender or a third party becomes owner of the
Leased Premises in complete or partial satisfaction of the debt secured by a
Mortgage (including, without limitation, a Fee Mortgage) or any conveyance in
lieu of any of the foregoing.
"Foreclosure Purchaser" means any transferee of a Lease pursuant to a
Foreclosure and, if such transferee is Lender, the Trustee or an affiliate of
either, the next subsequent transferee that is not an affiliate of Lender or the
Trustee.
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"General Partner" means CBM One Corporation, a Delaware corporation,
which is the general partner of Tenant.
"Gross Revenues" shall have the meaning ascribed to it in the
Management Agreement, as it exists on the date hereof, so long as the Leased
Premises are operated as a hotel. At such time as the Leased Premises are no
longer operated as a hotel, the definition of "Gross Revenues" contained in each
applicable Lease (ignoring this Amendment) will again be operative.
"Hotel," as used in any applicable Lease, means the Improvements
(which are currently operated as Courtyard by Marriott hotels).
"Hotels" has the meaning set forth in Recital B hereof.
"Improvements" has the meaning ascribed to it in each applicable
Lease.
"Lease" has the meaning set forth in Recital A hereof.
"Leased Premises" has the meaning set forth in Recital A hereof.
"Leasehold Mortgage," as defined in each Lease, shall be deemed to
include, without limitation, the applicable Mortgage.
"Leasehold Mortgage Amount" shall include, without limitation, the
amount of all principal, interest, yield maintenance premiums, if any, release
premiums, if any, defeasance deposits, if any, trustee fees, servicer fees,
costs of administration and enforcement and other amounts payable under the Loan
Agreement and the Mortgage Note.
"Leasehold Mortgagee," as defined in each Lease, shall be deemed to
include, without limitation, Lender, as the mortgagee or beneficiary under the
applicable Mortgage, and its successors and assigns thereunder.
"Lender" means the lender from time to time under the Loan Agreement,
including, without limitation, Xxxxxx Brothers Holdings Inc., doing business as
Xxxxxx Capital, a division of Xxxxxx Brothers Holdings Inc., the Trustee (as the
assignee of Lender), and the Servicer (acting on behalf of the Trustee).
"Loan" means the $325,000,000 loan evidenced by the Mortgage Note and
made pursuant to the Loan Agreement.
"Loan Agreement" has the meaning ascribed to in Recital C hereof.
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"Loan Documents" means the Loan Agreement, the Mortgage Note, each of
the Mortgages, and all other documents relating to, securing, or delivered in
connection with the Loan Agreement.
"Management Agreement" means that certain Management Agreement dated
as of January 4, 1997 by and between Tenant, as owner of 50 Hotels, and the
Manager, as manager thereof.
"Manager" means Courtyard Management Corporation, a Delaware
corporation, and its permitted successors and assigns.
"Mortgage" and "Mortgages" have the meanings set forth in Recital E
hereof. The use of the term "Mortgage" in any applicable Lease shall mean the
Mortgage that encumbers the Leased Premises that is subject to that Lease.
"Mortgage Note" means the promissory note described in Section 2.2 of
the Loan Agreement; provided, however, that if the principal amount of such
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promissory note shall be divided at any time into one or more Defeased Notes and
one or more Undefeased Notes pursuant to Section 2.5 of the Loan Agreement,
"Mortgage Note" shall mean, collectively, all such Undefeased Note[s] and
Defeased Note[s].
"Mortgagee" means the mortgagee or beneficiary from time to time under
the applicable Mortgage or any other Fee Mortgage or Leasehold Mortgage
affecting the applicable Leased Premises.
"Opening Date" for any Hotel that is subject to a Lease, shall mean
the date set forth for such Hotel on Exhibit E as the Opening Date.
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"Payment Priorities" has the meaning ascribed to it in Section 1.4
hereof.
"Refinancing" has the meaning ascribed to it in the Management
Agreement.
"Release Price" has the meaning ascribed to it in the Loan Agreement.
"Rent Commencement Date" shall mean for any Hotel that is subject to a
Lease, the date set forth for such Hotel on Exhibit E as the Rent Commencement
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Date.
"Senior Obligations" has the meaning ascribed to it in the
Subordination Agreement.
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"Servicer" has the meaning set forth in Recital D hereof.
"Subordination Agreement" means that certain Marriott Ground Lease
Rental Subordination Agreement of even date herewith entered into by Landlords
for the benefit of the holders from time to time of the Senior Obligations.
"Trustee" has the meaning set forth in Recital D hereof.
"Undefeased Note" has the meaning ascribed to it in Section
2.5(a)(iv)(D) of the Loan Agreement.
1.2 Other Capitalized Terms
Capitalized terms that are used herein and are not defined in Section
1.1 hereof shall have the meanings ascribed to them (a) where such capitalized
terms are introduced in bold face and placed in quotation marks herein or (b) in
the documents to which reference is made herein for ascertaining the definition
thereof.
1.3 Tenant Owns Improvements
The Improvements (as defined in the applicable Lease) are the sole
property of Tenant, subject only to Landlord's reversionary interest, if any, in
any Improvements.
1.4 Amendment to Section 3.03
Tenant's obligation under Section 3.03 of any Lease to safeguard the
Improvements and to restore the Leased Premises to an unimproved condition upon
the termination of such Lease in the events described in said Section 3.03 shall
be (A) limited to the amount by which (i) the aggregate amount of net insurance
proceeds or net Awards available to Tenant exceeds (ii) the Allocated Loan
Amount required to be paid to Lender under the Loan Agreement upon a
condemnation or casualty affecting the applicable Hotel, plus accrued interest
on the Loan, and (B) limited to the amount necessary to eliminate any hazardous
condition on the Leased Premises or to prevent imminent and substantial physical
deterioration of the Improvements thereon ("Stabilization"). If Tenant does
not, in fact, pay for the costs of Stabilization, the reasonable cost to
Landlord to effect such Stabilization shall be deemed to be additional Rental of
the kind referred to in Section 5.13 of the Lease, as modified by Section 1.9
hereof, which shall be paid only in accordance with the applicable payment
priorities set forth in Section 5.02 of the Management Agreement and the
provisions of the Subordination Agreement (the "Payment Priorities"). The
obligation to remove Improvements under Section 3.03 shall not apply to any
Foreclosure Purchaser. Landlord shall in all events have the right to
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safeguard the Improvements if (a) Landlord believes such action is necessary or
desirable to avoid liability on the part of Landlord and its Affiliates and (b)
if Tenant or the Foreclosure Purchaser does not do so. Any amounts reasonably
expended by Landlord in so doing shall be considered additional Rental of the
kind referred to in Section 5.13 of the Lease, as modified by Section 1.9
hereof, which shall be paid only in accordance with the Payment Priorities.
1.5 Amendment to Section 4.05
(a) So long as the Manager is an Affiliate of Landlord, Landlord
agrees that delivery by Tenant to Landlord of the reports delivered by the
Manager to Tenant pursuant to the third sentence of Section 9.01 of the
Management Agreement will satisfy Tenant's obligations under the second sentence
of Section 4.05(a) of any such Lease.
(b) Section 4.05(a) is further modified to provide that: "If, at any
time, Landlord and Manager are not Affiliates, Tenant shall deliver to Landlord
all such financial reports and statements concerning the operations of the
Leased Premises as Landlord shall reasonably request, including without
limitation, such reports as are necessary for Landlord to determine whether
there are sufficient revenues from the operation of the Leased Premises to pay
Rental, Deferred Rental, Deferred Ground Rent, and other sums then owing to
Landlord."
(c) At any time that the Manager is an Affiliate of Landlord, the
first sentence of Section 4.05(b) shall be deemed to be omitted in its entirety
and the penultimate sentence of Section 4.05(b) shall be deemed to be amended to
read in its entirety as follows: "Landlord shall bear the cost of all such
audits."
1.6 Amendment to Section 5.01(b)
So long as the Mortgage or any other Fee Mortgage signed by Landlord
to secure the obligations of Tenant in respect of Qualified Debt (as defined in
the Management Agreement) shall be in effect, the first sentence of Section
5.01(b) shall be deemed to be amended in its entirety to read as follows:
"During the term of each applicable Lease, Landlord agrees that it
shall not assign, transfer, pledge, convey, mortgage or encumber, or permit the
assignment, transfer, pledge, conveyance, mortgaging or encumbrance of any or
all of Landlord's Interest (each a "Transfer"), other than pursuant to a written
instrument (1) which provides that such Transfer is both subject and subordinate
to the Lease, the applicable Mortgage and the Subordination Agreement (2)
whereby the transferee assumes Landlord's obligations under the Subordination
Agreement with respect to the Lease which is to be the subject of the Transfer,
and (3) whereby Landlord confirms that it will remain liable to make any payment
required under Section 2.4 of the Subordination Agreement in the event that the
transferee fails to
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do so; provided, however, that the foregoing shall not apply to, and nothing in
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this Section 5.01 shall prohibit, sales or transfers of equity interests in
Landlord or any transfer which may occur, by operation of law or otherwise, as
part of a "Reorganization" as defined in Section 368 of the Internal Revenue
Code of 1986, as amended."
1.7 Amendment to Section 5.05
Section 5.05 of each Lease is amended in the following respect:
Tenant shall not have the right under Section 5.05(a) of such Lease to replace
any Improvements or to demolish, raze, or otherwise remove the same unless it
shall first have paid to the Landlord the amount that would be payable by Tenant
under Section 1.16 if Tenant were assigning its interest in such Lease. The
immediately preceding sentence shall not apply to Lender or to a Foreclosure
Purchaser. As to any Foreclosure Purchaser (other than Lender or an affiliate
thereof), the following shall apply instead: Any Foreclosure Purchaser (other
than Lender or an affiliate thereof) that becomes the "Tenant" under any Lease
shall not have the right under Section 5.05(a) of the applicable Lease to
replace any Improvements or to demolish, raze, or otherwise remove the same
unless it shall have paid to Landlord all amounts due and owing under the Lease
from and after the date on which such Foreclosure Purchaser first became the
"Tenant" under the Lease.
1.8 Amendment to Section 5.10
The following is added to each Lease as Sections 5.10(d) and 5.10(e):
"(d) In the event any Affiliate of Landlord shall cease to be
the manager of the Improvements, Tenant agrees to establish a reserve
or reserves with Landlord for the payment, prior to delinquency, of
all real property taxes and assessments, and all other taxes and
assessments of any kind or nature whatsoever (all of which taxes,
assessments and other charges are hereinafter referred to as
"Impositions") as follows: Tenant shall pay to Landlord, on each day
installments of Rental are payable under this Lease, an amount equal
to one-thirteenth (1/13th) of (i) the amount Landlord reasonably
estimates will be needed to pay the annual Impositions, and (ii) the
annual premiums for insurance required to be maintained pursuant to
Article VII of this Lease. Tenant agrees to cause all bills,
statements or other documents relating to Impositions or insurance to
be sent or mailed directly to Landlord upon request. Upon receipt of
such bills, statements or other documents,
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and provided Tenant has deposited sufficient funds with Landlord,
Landlord shall pay such amounts as may be due thereunder out of the
funds so deposited. If at any time and for any reason the funds
deposited with Landlord are or will be insufficient to pay such
amounts as may then or subsequently be due, Landlord shall notify
Tenant and Tenant shall immediately deposit an amount equal to such
deficiency with Landlord. Nothing contained herein shall cause
Landlord to be obligated to pay any amounts in excess of the amount of
funds deposited with Landlord. Should Tenant fail to deposit with
Landlord sufficient sums to pay fully any Imposition or insurance
premium before it becomes delinquent, Landlord may, at Landlord's
election, but without any obligation so to do, advance any amounts
required to make up the deficiency. All such advances that are made in
connection with any Lease that is subject to the Subordination
Agreement shall be treated as additional Rental of the kind referred
to in Section 5.13 of the Lease, as modified by Section 1.9 hereof,
which shall be paid only in accordance with the Payment Priorities.
(e) Landlord agrees that the provisions of Section 5.10(d) shall
be deemed satisfied if reserves to pay Impositions and insurance
premiums are established by Tenant with any Leasehold Mortgagee."
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1.9 Amendment to Section 5.13
Notwithstanding anything in Section 5.13 of the Lease or elsewhere
therein to the contrary, Landlord shall not make any payment under the Lease
that would cause the unpaid amount of all additional Rental payable at any time
under Section 5.13 of all of the Leases that are subject to the Subordination
Agreement, taken in the aggregate, to exceed $10 million at any time.
Landlord agrees, for the benefit of Tenant and any Leasehold
Mortgagee, that, if Landlord at any time redeems the Leased Premises from a
foreclosure sale for the non-payment of any Impositions or other charges, as
permitted by Section 5.13(c) of each Lease the liens of each Leasehold Mortgage
in effect immediately prior to such foreclosure, and the respective priorities
thereof, shall be reinstated, provided, that Landlord is reimbursed for the cost
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of the redemption upon the earlier of (a) 12 months following payment thereof by
Landlord or (b) prior to a subsequent foreclosure by the applicable Leasehold
Mortgagee. Landlord further agrees, at the cost and expense of Tenant or the
applicable Leasehold Mortgagees, to execute such further documentation as shall
be reasonably necessary to give full effect to the intention of this Section
1.9.
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1.10 Amendment of Section 6.01
(a) The following is added to each lease as Section 6.01A: "6.01A
Fee Subordination. If requested by Tenant, Landlord shall, to the extent of
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Landlord's right, title, and interest in the fee simple estate of the Leased
Premises, join with Tenant in the execution and delivery of one or more first
mortgages, first deeds of trust, or other proper instruments in the nature
thereof (each of which is designated hereinafter as a "Fee Mortgage," and the
holder of the debt secured thereby, or such holder's designee or nominee, is
referred to as the "Fee Mortgagee") mortgaging or pledging Landlord's fee simple
estate and reversionary interest in the Leased Premises to or for the benefit of
the Fee Mortgagee, and its successors and assigns; provided, however:
(i) Landlord shall have no personal liability for the repayment of
any loan secured by any loan documents described in this Section, nor shall it
have any liability as to any other covenants of such loan documents, and it
shall not be required to execute any loan documents that would subject Landlord
to personal liability to pay any indebtedness, or portion thereof, secured by
such loan documents or to comply with any other covenants of such loan
documents.
(ii) Landlord shall not be required to execute any Fee Mortgage or
other instrument encumbering Landlord's Interest, other than (i) the Mortgage
and (ii) a Fee Mortgage that pertains to a Qualified Refinancing (as defined in
the Management Agreement) that secures debt that matures (including extensions
thereof upon any exercise of extension options available under the applicable
loan documents) no later than April 10, 2022; provided, however, that if any
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such debt is not repaid by April 10, 2022, the lien of such Fee Mortgage on
Landlord's Interest shall not terminate but shall continue during the pendency
of any forbearance, "work out," or foreclosure period or proceedings.
(iii) Any loan to which this Section applies shall be obtained only
from a Bona Fide Institutional Lender other than Tenant or an Affiliate of
Tenant.
(iv) Any Fee Mortgage shall be a lien on Tenant's interest in this
Lease and the Leased Premises to the same extent it is a lien on Landlord's
interest.
(v) Any Fee Mortgage shall contain a provision that should there be
an uncured default under the Fee Mortgage, the Fee Mortgagee shall not have the
right to commence any foreclosure action thereunder, until the expiration of
thirty (30) days after delivery to Landlord pursuant to Section 12.03 of the
Lease of written notice of such default and the Fee Mortgagee's intent to
foreclose.
(vi) If any Fee Mortgage is foreclosed and if the proceeds of the
foreclosure sale exceed the unpaid principal and interest due on the Fee
Mortgage
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and the expenses of foreclosure, Landlord shall receive such excess, and the Fee
Mortgage shall protect this right of Landlord.
(vii) If any Fee Mortgage is foreclosed, the sale shall be of either
(A) the leasehold interest of the Tenant only, subject to this Lease, or (B) the
entire fee simple title to the mortgaged property, inclusive of the entire
interest of the Tenant and Landlord therein, but not the interest of Landlord
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only.
(viii) All costs and expenses, including, without limitation,
reasonable attorney's fees, incurred by Landlord in connection with the
transactions described in this Section 6.01A shall be paid by Tenant.
Any Fee Mortgage delivered in connection with this Section 6.01A shall
be treated as a Fee Mortgage and not a Leasehold Mortgage."
So long as the Leased Premises shall be subject to a Fee Mortgage that
is entitled to the benefits of the Subordination Agreement, the words "unpaid
principal and interest due on the Fee Mortgage" in Section 6.01A(vi) are deleted
and replaced with the following words: "full amount of all Senior Obligations
then owing."
1.11 Amendment to Section 6.02
The provisions of Section 6.02(d)(1) of each Lease, requiring the
Leasehold Mortgagee to pay Rental to Landlord as it becomes due, are subject to
the provisions of the Subordination Agreement, and any Rental that is not paid
because of the insufficiency of Available Cash Flow (as defined in the
Management Agreement) as of the date such Rental is due shall become Deferred
Ground Rent, and shall be payable only in accordance with the Payment
Priorities.
1.12 Lender Entitled to Benefits of Article VI
The "Mortgagee" or "Beneficiary", as the case may be, from time to
time under the Mortgage, including, without limitation, Lender, shall be
entitled to all of the rights of a "Leasehold Mortgagee" under Article VI of
each Lease.
1.13 Amendment to Section 6.03
The requirements of Section 6.03(a)(2) that Leasehold Mortgagee pay
Landlord past due Rental and other sums shall not apply to the Leasehold
Mortgagee or any Foreclosure Purchaser, but all such sums which are not then
paid by the Leasehold Mortgagee or any Foreclosure Purchaser shall continue to
be treated as Deferred Ground Rent and shall be repaid in accordance with the
Payment Priorities.
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1.14 Amendment of Section 7.05
Notwithstanding anything in Section 7.05 of any Lease to the contrary,
in the event of a damage to the Leased Premises by fire or other casualty at a
time when the Mortgage shall remain in effect, any applicable casualty insurance
proceeds shall be paid as follows: (1) first, to the applicable Mortgagee, in
an amount equal to the Allocated Loan Amount (as then calculated pursuant to the
applicable Mortgage), plus accrued and unpaid interest thereon, (or, if the
casualty occurs during the Defeasance Period, an amount equal to the applicable
"Defeasance Deposit" (as defined in the Loan Agreement) calculated as if the
Defeased Note were equal to the Allocated Loan Amount) (2) second, to Landlord
in an amount equal to the costs reasonably incurred by Landlord to eliminate any
hazardous condition on the Leased Premises or Improvements caused by such
casualty or to prevent imminent and substantial physical deterioration of the
Leased Premises or the Improvements, (3) third, to the applicable Mortgagee, up
to an amount which, when added to the amount paid to such Mortgagee pursuant to
clause (1) above, equals the Release Price (or, if such payment is made during
the Defeasance Period, in an amount when added to the amount paid to such
Mortgagee pursuant to clause (1) above, equals the balance of the applicable
Defeasance Deposit) and (4) the balance, if any, to the Borrower; Section 7.05
shall be deemed to be amended accordingly.
1.15 Satisfaction of Article VII Requirements
(a) The words "twenty five million dollars ($25,000,000) (which amount
shall be adjusted every three (3) years in accordance with the Price Index)"
that appear in Section 7.01 of any Lease are hereby deleted and replaced with
the following words: "Twenty-Five million ($25,000,000) (which amount shall be
adjusted every three (3) years in accordance with the Price Index) or, so long
as the Manager is the manager of the Hotel, such lesser amount as is customarily
carried by the Manager with respect to hotels that it manages"; provided,
--------
however, that if the Leased Premises ceases to be managed as a hotel by the
-------
existing Manager or one of its Affiliates, the original wording of Section 7.01
shall be restored.
(b) Landlord agrees that satisfaction by Tenant, as "Mortgagor" or
"Grantor", as applicable, under the Mortgage, of the requirements of Section 1.7
of the Mortgage will be deemed to be satisfaction of all of the requirements of
Section 7.02 of such Lease. Tenant shall not be required to carry earthquake
insurance except (i) if customarily carried by the Manager on behalf of
substantially all of the other hotels that it manages in the area in which the
Hotel is located or (ii) if required by Lender.
14
(c) So long as the Mortgage is in effect, Landlord shall have no right
to join in the adjustment of any insurance claim under the policies required
under Section 7.02 of such Lease or Section 1.7 of the Mortgage.
1.16 Restrictions on Tenant's Right to Assign or Terminate
Lease or Change the Use of the Lease Premises
Tenant shall not be entitled to exercise any right Tenant may have (x)
to assign or terminate any Lease, or (y) to change the use of the Leased
Premises, unless on or prior to the date such assignment, termination, or change
in use is to take effect, Tenant pays to Landlord an amount equal to the
Applicable Percentage of the aggregate amount of Deferred Ground Rent then owing
under the Leases then in effect; provided, however, that this provision shall
-------- -------
not apply to an assignment or termination of such Lease in connection with a
Foreclosure or a change in use of the Leased Premises following a Foreclosure;
and provided, further, however, that neither the applicable Mortgagee, nor any
-------- -------
Foreclosure Purchaser nor any replacement tenant succeeding to the interests
thereof under any applicable Lease shall be permitted to take any of the actions
described in clauses (x) or (y) above unless on or prior to the date such
assignment, termination, or change in use is to take effect, such party pays to
Landlord an amount equal to the aggregate amount of Rental and Deferred Rental
owing under such Lease to the extent arising from and after the date such party
became the "Tenant" under such Lease. Notwithstanding the foregoing, the
provisions of the second proviso in the immediately preceding sentence shall not
apply to Lender or any Foreclosure Purchaser that is an affiliate of Lender.
1.17 Amounts Owing upon Release of Lender Mortgage
The amount specified in Section 1.16 hereof shall also be due and
owing to Landlord upon a release of the lien of any applicable Mortgage.
1.18 Amendment of Section 8.03
Notwithstanding anything in Section 8.03(a) of any Lease to the
contrary, in the event of a Total Taking (as defined in the Lease) of the Leased
Premises at a time when the Mortgage shall remain in effect, any applicable
Award (as defined in the Lease) shall be paid as follows: (1) first, to the
applicable Mortgagee, in an amount equal to the Allocated Loan Amount (as then
calculated pursuant to the applicable Mortgage), plus accrued and unpaid
interest thereon, (or, if the Taking (as defined in the Lease) occurs during the
Defeasance Period, an amount equal to the applicable "Defeasance Deposit" (as
defined in the Loan Agreement) calculated as if the Defeased Note were equal to
the Allocated Loan Amount) (2) second, to Landlord in an amount equal to the
costs reasonably incurred by Landlord to eliminate any hazardous condition on
the Leased Premises or Improvements caused by such casualty or to prevent
imminent and substantial
15
physical deterioration of the Leased Premises or the Improvements, (3) third, to
the applicable Mortgagee, up to an amount which, when added to the amount paid
to such Mortgagee pursuant to clause (1) above, equals the Release Price (or, if
such payment is made during the Defeasance Period, in an amount when added to
the amount paid to such Mortgagee pursuant to clause (1) above, equals the
balance of the applicable Defeasance Deposit) and (4) the balance, if any, to
the Lender in accordance with Loan Documents. Section 8.03(a) shall be deemed to
be amended accordingly. For purposes of this Agreement, the Senior Obligations
will be deemed to have been "paid in full" on such date as all of the conditions
set forth in clauses (i) and (ii) of Section 2.1.2 of the Subordination
Agreement shall have been satisfied.
1.19 Amendment to Section 10.01
Landlord shall not declare an Event of Default under any Lease as a
result of non-payment of Rental under Section 10.01(a) that is not payable
because of the provisions of the Subordination Agreement, as long as such unpaid
Rental is paid when permitted in accordance with the Payment Priorities. So
long as (a) Tenant is an Affiliate of Host Marriott Corporation and (b) Landlord
is Marriott International, Inc. or an Affiliate thereof, notices of non-payment
of Rental under Section 10.01(a) shall be sent to each Mortgagee. If the
Manager is not an Affiliate of Landlord, a late charge equal to 3% of the amount
past due shall be imposed on all payments of Rental that are not paid when due
(subject to any extension of the due date pursuant to the terms of the
Subordination Agreement). All such late charges shall be deemed to be a part of
"Rental" for purposes of the Subordination Agreement.
1.20 Amendment of Section 12.13
Section 12.13 of each Lease is hereby amended in its entirety to read
as follows:
"Except as set forth in this Section 12.13, Landlord agrees to
look solely to Tenant's interest in the Improvements and the Leased
Premises for payment of any Minimum Rental, Percentage Rental, Rental,
Deferred Rental, Deferred Ground Rent or other amounts which may
become due and payable hereunder. Except for events or matters
described in clause (iii) (A) through (F) below, no other property of
Tenant or any partner, officer, director, shareholder or member of
Tenant shall be subject to levy, execution or enforcement for the
payment of the foregoing amounts or the satisfaction of Landlord's
remedies under this Lease; provided, however, that the foregoing
-------- -------
provisions of this Section 12.13 shall not (i)
16
prevent the failure to pay when due any amounts under this Lease, or
the failure to comply with any other covenants under this Lease, from
constituting a default under this Lease, (ii) except as expressly
limited hereby, limit or impair Landlord's enforcement of its remedies
under this Lease, or (iii) constitute a waiver by Landlord of any
rights to damages, other monetary relief, or any other remedy at law
or in equity, that Landlord may have against Tenant, or any other
party liable under this Lease (but in no event Lender or any affiliate
thereof), by reason of or in connection with any of the following: (A)
any fraud on the part of Tenant or intentional misrepresentation by
Tenant to Landlord, (B) failure of Tenant to apply any insurance
proceeds or condemnation awards in the manner required by this Lease
or any applicable Mortgage, (C) at any time that the Leased Premises
are not managed by an Affiliate of Landlord, failure by Tenant to
obtain and maintain any insurance coverage required by this Lease, (D)
the indemnities set forth in Section 5.02(c) of this Lease pertaining
to environmental conditions, (E) violation by Tenant of the terms of
Section 1.7 of the Amendment, or (F) the indemnities set forth in
Section 5.02(d) of this Lease regarding claims or actions brought
against Landlord in violation of Section 4.12 or 5.12 (Limitation of
Liability), as the case may be, of the applicable Mortgage. Tenant
(but in no event Lender or any affiliate thereof) shall indemnify,
defend and hold harmless Landlord from and against all claims,
demands, obligations and liabilities arising from or relating to the
matters set forth in clause (iii) above, including reasonable
attorneys' fees and expenses, whether or not suit is brought with
respect to such matters."
In no event shall Landlord have recourse to any limited partners,
officers, directors or shareholders of Tenant for any obligations or liabilities
of Tenant. Notwithstanding anything in this Section 12.13 to the contrary, no
Landlord shall be entitled to seek recourse against Lender or any affiliate
thereof that may become the "Tenant" under any Lease for any of the matters
described in this Section 12.13 or elsewhere in this Lease.
1.21 Additional Sections
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(a) The following is added as Section 5.02(c) to each Lease:
"Tenant agrees to indemnify and hold harmless Landlord from and
against any and all claims, suits, actions, debts, damages, costs,
losses, obligations, judgments, charges and expenses incurred by
Landlord (collectively, "Claims") resulting from a discharge on the
Leased Premises of hazardous substances or materials (a "Discharge"),
except that Tenant shall not be required to indemnify Landlord for
Claims relating to any such Discharges that occur during any period in
which the Leased Premises are under Management by an Affiliate of
Landlord and are not caused by Tenant or its officers, directors,
employees or agents (other than the Manager, or its officers,
directors, employees, or agents)."
(b) The following is added as Section 5.02(d) to each Lease:
"Tenant agrees to indemnify and hold harmless Landlord from any
Claims resulting from any actions, causes of action, suits,
proceedings or claims brought or asserted against Landlord in
violation of the provisions of Section 5.12 of the Mortgage."
1.22 Notices
The addresses for notices of the parties contained in Section 12.03 of
each Lease shall be amended to read as follows:
If to Landlord:
--------------
c/o Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Law Department: 52/923
Xxxxxxxx, Xxxxxxxx 00000
Attention: Assistant General Counsel, Courtyard Operations
Fax No.: (000) 000-0000
If to Tenant:
------------
18
Courtyard By Marriott Limited Partnership
c/o Host Marriott Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Dept. 923
Attention: Law Dept
Fax No.: (000) 000-0000
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with a copy to:
Courtyard by Marriott Limited Partnership
c/o Host Marriott Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Dept. 908
Attention: Asset Management
Fax No.:(000) 000-0000
If to Mortgagee
---------------
Xxxxxx Brothers Holdings Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Mortgage Loan Surveillance
Fax No.: (000) 000-0000
1.23 Certain Provisions Temporary
The provisions of Sections 1.4, 1.6, 1.10(d) and (e), 1.11 and 1.18
shall remain operative as to any Lease only so long as such Lease is subject to
the Subordination Agreement.
ARTICLE 2: Miscellaneous
2.1 First Amendment No Longer Effective; Leases Otherwise
In Effect
The terms of each First Amendment to Lease Agreement referred to in
Exhibit A attached hereto are terminated and of no force and effect from and
---------
after the date hereof. Except as specifically amended hereby, each of the
Leases is unmodified and is in full force and effect.
2.2 Construction
No term or provision of any Lease or of this Amendment shall be
construed more strictly against one party hereto or thereto than against any
other party hereto or thereto. The parties hereto have been represented by
competent counsel and all played an equal role in the negotiation and drafting
hereof.
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2.3 Headings
Headings of particular sections are inserted only for the convenience
of the parties and are in no way to be construed as a part of this Amendment or
as a limitation on the scope of the particular section to which they refer.
2.4 Applicable Law
The laws of the state in which the Leased Premises are situated shall
govern the validity, performance, and enforcement hereof.
2.5 Counterparts
This Amendment may be executed in several counterparts, each of which
shall be an original and all of which shall constitute one and the same
instrument.
ARTICLE 3: ESTOPPEL AND CONSENT OF LANDLORD
Each Landlord hereby consents to the granting of the Mortgage as to
the Leased Premises under each Lease to which it is a party and certifies, with
respect to each such Lease, for the benefit of Tenant, Lender and the successors
and assigns of each of them that:
(a) Each such Lease is in full force and effect, and has not been
amended or supplemented, except as amended hereby, and constitutes the entire
agreement between Landlord and Tenant with respect to the Land.
(b) The original commencement date and expiration date of the initial
term of each such Lease is correctly set forth on Exhibit E attached hereto.
---------
(c) Rental currently payable under such Lease is correctly set forth
on Exhibit E attached hereto.
---------
(d) As of the date hereof, there are no outstanding abatements of any
rent (including any fixed, percentage or additional rent) due under such Lease.
(e) To the best of such Landlord's knowledge, such Landlord has
completed all of its construction obligations (if any) under such Lease with
respect to the Leased Premises.
(f) Such Landlord is not insolvent and is able to pay its debts as
they mature; to the best of such Landlord's knowledge, there are no actions,
voluntary or otherwise, pending or threatened against such Landlord under any
bankruptcy, reorganization, insolvency or similar federal or state law.
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(g) All fixed rent, additional rent and other charges required to be
paid under such Lease have been paid through March 28, 1997, and no rental has
been prepaid more than 31 days in advance.
(h) Such Landlord is not aware of the existence of (i) any material
default by Tenant or such Landlord under such Lease, (ii) any event or condition
which, with the passage of time, the giving of notice, or both, would constitute
a material default by Tenant or such Landlord under such Lease, or (iii) any
dispute, action, suit, claim or right of set-off pending or, to such Landlord's
knowledge, threatened with respect to such Lease.
(i) Except pursuant to the Mortgages, such Landlord has not assigned,
conveyed, transferred, sold, encumbered or mortgaged its interest in the Lease
or the Hotel and there are no mortgages, deeds of trust or other security
instruments encumbering Landlord's fee interest in the Hotel.
(j) Upon written notice to such Landlord that the Loan has been
assigned to the Trustee, specifying the name and address of the Trustee, such
Landlord will recognize the Trustee as a "Leasehold Mortgagee" under such Lease
entitled to all rights and privileges accorded a "Leasehold Mortgagee" under
such Lease.
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IN WITNESS WHEREOF, this Second Amendment of Ground Leases has been
duly executed and delivered by the parties hereto as of the day and year first
above written.
TENANT:
COURTYARD BY MARRIOTT LIMITED
PARTNERSHIP
By: CBM One Corporation,
general partner
By:
---------------------------
Name: Xxxxxxx X.X. Xxxxxx
Title: Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
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LANDLORDS:
HOST RESTAURANTS, INC.
By:
-----------------------------
Name: Xxxxx X. Best
Title: Vice President
NEWARK PROPERTIES, INC.
By:
-----------------------------
Name: Xxxxx X. Best
Title: Vice President
ESSEX HOUSE CONDOMINIUM
CORPORATION,
By:
-----------------------------
Name: Xxxxx X. Best
Title: Vice President
CASA XXXXX OF MARYLAND, INC.
By:
-----------------------------
Name: Xxxxx X. Best
Title: Vice President
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