EXHIBIT 10.16
First Amendment to Lease - Buckhead (Lenox Park)
and
First Amendment to Agreement of Guaranty
FIRST AMENDMENT TO LEASE
This First Amendment to Lease (the "Amendment") is made and entered into as
of the 1st day of August, 1998 by and between CNL Hospitality Partners, L.P., a
Delaware limited partnership ("Landlord"), and STC Leasing Associates, LLC, a
Georgia limited liability company ("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant made and entered into that certain Lease dated
as of the 1st day of August, 1998 (the "Lease") with respect to the certain
hotel (being a Residence Inn) located in Buckhead, Georgia; and
WHEREAS, Landlord and Tenant desire to amend the Lease as more particularly
hereinafter set forth.
NOW THEREFORE, in consideration of the premises hereof and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant do hereby agree as follows:
1. Recitals: Capitalized Terms: The above recitals are true and correct and
are incorporated herein by this reference. Capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed thereto in the Lease.
2. Amendments to the Lease: The Lease is hereby amended and modified as
follows:
a. Paragraph 8.1(j) is hereby deleted and the following new paragraph
8.1(j) is hereby inserted in lieu, instead and in place thereof:
(j) Garage Keepers Liability Insurance. Garage keepers legal liability
insurance covering both comprehensive and collision-type losses with a limit of
liability in an amount not less than $100,000.00 per occurrence.
b. Paragraph 11.3 of the Lease is hereby deleted and the following new
paragraph 11.3 is hereby inserted in lieu, instead and in place thereof:
11.3 The Reserve. Tenant shall establish a separate interest bearing
reserve account (the "Reserve") in a bank designated by Landlord and reasonably
approved by Tenant. All interest earned on the Reserve shall be added to and
remain part of the Reserve. The purpose of the Reserve is to cover the cost of
the following, to the extent carried out in accordance with this Agreement: (i)
replacements, renewals and additions to FF&E at the Hotel; and (ii) repairs,
renovations, renewals, additions, alterations, improvements or replacements and
maintenance to the leased Premises, all of which are routine and which are
normally capitalized under generally accepted accounting principals, such as
exterior and interior repainting, resurfacing building walls, floors, roofs and
parking areas, and replacing folding walls and the like.
Both Tenant and Landlord shall be signatories on the Reserve and either
party shall be authorized to withdraw funds from such account; provided,
however, Landlord agrees that it shall not make any withdrawals therefrom so
long as Tenant is not in default hereunder. Deposits to the Reserve shall be
made as follows: (a) for each month during the first Lease Year during the Term
hereof three percent (3%) of the Gross Receipts (as defined in Section 4.2
hereof) for such month shall be deposited in the Reserve; (b) for each month
during the second Lease Year during the Term hereof four percent (4%) of the
gross Receipts for such month shall be deposited in the Reserve; and (c) for
each month during the third Lease Year and each Lease Year thereafter during the
Term hereof, five percent (5%) of Gross Receipts for such month shall be
deposited in the Reserve. Deposits to the Reserve with respect to any such month
shall be made in arrears within twenty-one (21) days after the end of such
month. Within sixty (60) days after the close of each Lease Year, Tenant shall
notify Landlord of the balance in the Reserve and of the account in which the
Reserve is maintained. Tenant may only withdraw funds from the Reserve contained
in the Approved Reserve Budget and, if not, only with the prior approval of
Landlord. (Which funds shall not be withdrawn to cover Major Repairs as
described in, and the cost of which shall be borne by Landlord, as set forth in
Section 11.2 hereof.) Not later than sixty (60) days prior to the commencement
of each calendar year during the Term hereof, Tenant shall submit to Landlord a
detailed budget of expenses for the forthcoming calendar year (the "Reserve
Budget"). Such Reserve Budget shall reflect by line item the projected budget
expenses for the Premises and assumptions on the basis of which such line items
were prepared in narrative form if necessary, including separate items for all
projected expenditures for replacements, substitutions and additions to Tenant's
Personal Property. Tenant shall provide to Landlord reasonable additional
detail, information and assumptions used in the preparation of the Reserve
Budget as requested by Landlord. Tenant shall review the Reserve Budget with
Landlord, and subject to Landlord's approval, Tenant shall implement such
Reserve Budget for the successive calendar year (during which it shall, if
approved by Landlord, be referred to as the ("Approved Reserve Budget").
Landlord shall have the right to disapprove any Reserve expenditures but
Landlord agrees that it will not unreasonably withhold its consent and that it
will consent to any expenditures required under the Franchise Agreement. Pending
resolution of any dispute, the specific disputed item, of the Reserve Budget
shall be suspended and replaced for the calendar year in question by an amount
equal to the lesser of (a) that proposed by Tenant for such calendar year or (b)
such budget item for the calendar year prior thereto. Tenant shall not make any
expenditures from the Reserve, nor shall Tenant deviate from the Approved
Reserve Budget without the prior approval of Landlord, except in the case of
emergency where immediate action is necessary to prevent imminent danger to
person or property. All funds in the Reserve, all interest earned thereon and
all property purchased with funds from the Reserve shall be and remain the
property of Landlord. Following expiration or early termination of this
Agreement and payment in full on all contracts entered into prior to such
expiration or termination for work to be done or FF&E to be supplied in
accordance with this Section 11.3 out of the Reserve, control over the Reserve
shall be transferred from Tenant to Landlord.
3. Joinder of Guarantors: Amendment to Agreement of Guaranty: The
Guarantors hereby join in the execution of the Amendment to acknowledge and
consent to the amendment to the Lease contained herein. Further, Landlord,
Tenant and Guarantors acknowledge that the Agreement of Guaranty by Stormont
Trice Corporation, a Georgia corporation, Stormont Trice Development
Corporation, a Georgia corporation and Stormont Trice Management Corporation, a
Georgia corporation, to and in favor of Landlord dated August 1, 1998 has been
amended by that certain First Amendment to Agreement of Guaranty of even date
herewith and that the Guaranty as amended is and remains in full force and
effect.
4. Effective Date: This Amendment shall be effective as of, and relate back
to August 1, 1998. All references in the Lease to the "FF&E Reserve" shall mean
and refer to the "Reserve" as defined in paragraph 2(b) hereof.
5. Lease in Full Force and Effect: Except as hereby amended and modified,
the Lease shall remain in full force and effect in strict accordance with the
terms thereof.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be
duly executed on or as of the day and year first above written.
Signed, sealed and delivered
in the presence of: CNL HOSPITALITY PARTNERS, L.P.
a Delaware limited partnership
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Executive Vice President
(CORPORATE SEAL)
"LANDLORD"
STC LEASING ASSOCIATES, LLC
a Georgia Limited Liability Company
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
----------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Its: Authorized Member
(CORPORATE SEAL)
"TENANT"
STORMONT TRICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Chairman
(CORPORATE SEAL)
STORMONT TRICE DEVELOPMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Chairman
(CORPORATE SEAL)
STORMONT TRICE MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Its: Chairman
(CORPORATE SEAL)
"GUARANTORS"
FIRST AMENDMENT TO AGREEMENT OF GUARANTY
This First Amendment to Agreement of Guaranty (the "Amendment") is made and
executed as of the 1st day of August, 1998 by and among Stormont Trice
Corporation, a Georgia corporation, Stormont Trice Development Corporation, a
Georgia corporation and Stormont Trice Management Corporation, a Georgia
corporation (each a "Guarantor" and collectively the "Guarantors") in favor of
CNL Hospitality Partners, L.P., a Delaware Limited Partnership ("Landlord").
WITNESSETH
WHEREAS, the Guarantors made and executed that certain Agreement of
Guaranty dated as of the 1st day of August, 1998 in favor of Landlord with
respect to that certain Residence Inn in Buckhead, Georgia (the "Agreement") as
a material inducement to Landlord, to enter into that certain Lease Agreement
dated as of August 1, 1998 as amended by First Amendment to Lease of even date
herewith (the "Lease") between Landlord and STC Leasing Associates, LLC,
("Tenant") concerning the Premises, and that certain Lease Agreement dated as of
August 1, 1998 between Landlord and Tenant concerning the Residence Inn -
Gwinnett Place (the "Other Lease"), and for other good and valuable
consideration including, but not limited to, the financial benefits that would
inure to each Guarantor from the business success of Tenant; and
WHEREAS, the Guarantors desire to further amend the Agreement in certain
respects as more particularly hereinafter set forth.
NOW THEREFORE, in consideration of the premises hereof and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Guarantors do hereby agree as follows:
1. Recitals: Capitalized Terms: The above recitals are true and correct and
are incorporated herein by this reference. Capitalized terms not otherwise
defined herein shall have the meaning ascribed thereto in the Lease.
2. Net Operating Income: The penultimate sentence of the Agreement which
reads as follows:
"For purposes hereof, "Shortfall" shall mean the amount that Base Rent
exceeds net operating income as defined in Exhibit "A" hereto as determined on a
cumulative basis for each 12-month period following the Commencement Date of the
Lease (and during which this Guaranty exists)."
is hereby deleted in its entirety and the following two sentences are
hereby inserted in lieu, instead and in place thereof:
"For purposes hereof, "Shortfall" shall mean the amount that Base Rent
exceeds Net Operating Income (as hereinafter defined), as determined on a
cumulative basis for each 12-month period following the Commencement Date of the
Lease (and during which this Guaranty exists). Net Operating Income shall mean
and refer to EBITDA (earnings before interest, taxes, depreciation and
amortization), as calculated in accordance with the Uniform System of Accounts
and shall specifically contemplate as expenses, franchise fees and other fees
and costs; provided, however, for purposes of determining Net Operating Income,
management fees paid for each 12-month measurement period (which are subordinate
to Rent) shall be added back to EBITDA and amounts funded into the Reserve
pursuant to Section 11.3 of the Lease for each 12-month measurement period, as
aforesaid, shall be deducted from EBITDA."
3. Except as hereby amended and modified, the Agreement shall remain in
full force and effect in strict accordance with the terms thereof.
IN WITNESS WHEREOF, Guarantors and Landlord have executed this Amendment in
manner and form sufficient to bind them as of the day and year first above
written.
STORMONT TRICE CORPORATION,
a Georgia Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Chairman
(CORPORATE SEAL)
STORMONT TRICE DEVELOPMENT CORPORATION,
a Georgia Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Chairman
(CORPORATE SEAL)
STORMONT TRICE MANAGEMENT CORPORATION,
a Georgia Corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Its: Chairman
(CORPORATE SEAL)
"GUARANTORS"
CNL HOSPITALITY PARTNERS, L.P.,
a Delaware Limited Partnership
By: CNL Hospitality GP Corporation,
a Delaware Corporation
By: /s/ C. Xxxxx Xxxxxxxxxx
-------------------------
Name: C. Xxxxx Xxxxxxxxxx
Its: Vice President
"LANDLORD"
