EXHIBIT 10.15
Lease Agreement between CNL Hospitality Properties, L.P. and
STC Leasing Associates, LLC, dated August 1, 1998,
relating to the Xxxxxxxxx Xxx - Xxxxxxxx Xxxxx
XXXXXXXXX XXX - XXXXXXXX XXXXX
LEASE AGREEMENT
Between
CNL HOSPITALITY PARTNERS, L.P.
a Delaware Limited Partnership Corporation,
as Landlord,
and
STC LEASING ASSOCIATES, LLC,
a Georgia Limited Liability Company,
as Tenant,
Dated
as of
August 1, 1998
LEASE AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I.................................................................1
AGREEMENT TO LEASE...............................................1
1.1 Demise.........................................1
1.2 Condition......................................1
1.3 Quiet Enjoyment................................2
ARTICLE II................................................................2
TERM.............................................................2
2.1 Initial Term...................................2
2.2 Commencement Date..............................2
2.3 Option to Renew................................2
ARTICLE III...............................................................3
USE AND OPERATION OF PREMISES....................................3
3.1 Permitted Use..................................3
3.2 Standard of Operation..........................3
3.3 Compliance with Laws...........................4
3.4 Hazardous Materials and Sewage Prohibited......4
3.5 Conflicting Businesses Prohibited..............5
3.6 Continuous Operations..........................6
3.7 Compliance With Restrictions, Etc..............6
3.8 Affiliate......................................6
3.9 Additional Covenants of Tenant.................7
ARTICLE IV................................................................8
RENT.............................................................8
4.1 Base Rent......................................8
4.2 Percentage Rent................................8
4.3 Payment of Percentage Rent.....................9
4.4 Additional Rentals/Earn Out...................10
4.5 Financial Statements..........................10
4.6 Records.......................................11
4.7 Audit.........................................12
4.8 Landlord Advances.............................12
4.9 Sales Tax.....................................12
4.10 Payment of Rent...............................12
4.11 Past Due Rent.................................13
4.12 No Abatement of Rent..........................13
4.13 Security for Tenant's Performance.............13
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ARTICLE V................................................................14
TAXES AND ASSESSMENTS...........................................14
5.1 Obligation to Pay Taxes.......................14
5.2 Tax and Insurance Escrow Account..............15
ARTICLE VI...............................................................15
UTILITIES.......................................................15
ARTICLE VII..............................................................16
AGREEMENTS, FEES, ETC...........................................16
ARTICLE VIII.............................................................16
INSURANCE.......................................................16
8.1 Insurance by Tenant...........................16
8.2 Carriers and Features.........................19
8.3 Failure to Procure Insurance..................19
8.4 Waiver of Subrogation.........................19
8.5 No Separate Insurance.........................20
ARTICLE IX...............................................................20
DAMAGE OR DESTRUCTION...........................................20
9.1 Restoration and Repair........................20
9.2 Insufficient Insurance Proceeds...............20
9.3 Escrow of Insurance Proceeds..................21
9.4 Abatement of Rent.............................22
ARTICLE X................................................................22
ADDITIONS, ALTERATIONS AND REMOVALS.............................22
10.1 Prohibition...................................22
10.2 Permitted Renovations.........................22
10.3 Additions, Expansions and Structural
Alterations................................24
ARTICLE XI................................................................24
MAINTENANCE AND REPAIRS..........................................24
11.1 Repairs by Tenant..............................24
11.2 Landlord's Obligation..........................24
11.3 The FF&E Reserve...............................26
ARTICLE XII...............................................................27
LANDLORD'S RIGHT TO INSPECT......................................27
ARTICLE XIII..............................................................28
ASSIGNMENT, TRANSFER AND SUBLETTING BY TENANT....................28
13.1 Transfers Prohibited Without Consent...........28
13.2 Indirect Transfer Prohibited Without Consent...28
13.3 Adequate Assurances............................28
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ARTICLE XIV...............................................................29
LANDLORD'S INTEREST NOT SUBJECT TO LIENS.........................29
14.1 Liens, Generally...............................29
14.2 Mechanics Liens................................30
14.3 Contest of Liens...............................30
14.4 Notices of Commencement of Construction........30
ARTICLE XV................................................................31
CONDEMNATION.....................................................31
15.1 Complete Taking................................31
15.2 Partial Taking.................................31
15.3 Award..........................................31
15.4 Disputes.......................................32
ARTICLE XVI...............................................................32
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE....................32
16.1 Subordination..................................32
16.2 Attornment.....................................33
16.3 Rights of Mortgagees and Assignees.............33
ARTICLE XVII..............................................................34
END OF TERM......................................................34
17.1 Surrender of Premises..........................34
17.2 Holding Over...................................34
ARTICLE XVIII.............................................................34
LIABILITY OF LANDLORD; INDEMNIFICATION...........................34
18.1 Liability of Landlord..........................34
18.2 Indemnification of Landlord....................34
18.3 Notice of Claim or Suit........................35
18.4 Limitation on Liability of Landlord............35
ARTICLE XIX...............................................................36
DEFAULT..........................................................36
19.1 Events of Default..............................36
19.2 Remedies on Default............................37
19.3 Landlord May Cure Tenant Defaults..............40
19.4 Landlord's Lien................................41
19.6 Rights Cumulative..............................42
ARTICLE XX................................................................42
REIT REQUIREMENTS................................................42
ARTICLE XXI...............................................................43
NOTICES..........................................................43
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ARTICLE XXIII.............................................................44
MISCELLANEOUS....................................................44
23.1 "Net" Lease....................................44
23.2 Estoppel Certificates..........................44
23.3 Brokerage......................................44
23.4 No Partnership or Joint Venture................44
23.5 Entire Agreement...............................45
23.6 Waiver.........................................45
23.7 Time...........................................45
23.8 Costs and Attorneys' Fees......................45
23.9 Approval of Landlord...........................45
23.10 Captions and Headings..........................46
23.11 Severability...................................46
23.12 Successors and Assigns.........................46
23.13 Applicable Law.................................46
23.14 Recordation of Memorandum of Lease.............46
23.15 Waiver of Jury Trial...........................46
23.16 Guaranty.......................................46
23.17 Landlord's Option to Terminate Lease...........47
23.18 Treatment of Lease.............................48
23.19 Landlord's Option to Acquire the Tenant's
Personal Property; Transfer of Licenses......48
23.20 Tenant's Representations.......................49
23.21 No Merger of Title.............................51
23.22 Additional Obligations relating to the
Franchise Agreement..........................51
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LEASE AGREEMENT
THIS LEASE AND AGREEMENT (the "Lease") made and entered into as of this
1st day of August, 1998 by and between CNL Hospitality Partners, L.P., a
Delaware Limited Partnership (the "Landlord") and STC Leasing Associates, LLC, a
Georgia Limited Liability Company (the "Tenant");
W I T N E S S E T H:
WHEREAS, Landlord is the record owner of fee simple title to that
certain parcel of real property located in Gwinnett County, Georgia more
particularly and legally described on Exhibit A attached hereto (the "Land"),
upon which there has been constructed and located certain improvements in the
nature of a 132 suite Residence Inn by Marriott, together with related paved
parking and appurtenant improvements known as "Residence Inn" Gwinnett Place
(together the "Improvements"); and
WHEREAS, Landlord is also the owner of the items of personal property
more particularly described on Exhibit B attached hereto (the "FF&E") and
WHEREAS, Tenant desires to lease from Landlord, and Landlord has agreed
to lease to Tenant, all of the Land and Improvements and FF&E (together the
"Premises"), upon the terms and conditions as more particularly hereinafter
provided and described;
NOW, THEREFORE, for and in consideration of the premises hereof, the
sums of money to be paid hereunder, and the mutual and reciprocal obligations
undertaken herein, the parties hereto do hereby covenant, stipulate and agree as
follows:
ARTICLE I
AGREEMENT TO LEASE
1.1 Demise. Landlord, for and in consideration of the rents herein
reserved and required to be paid by Tenant and of the covenants, promises and
agreements herein contained, does hereby demise, let and lease unto Tenant, and
Tenant, for and in consideration of the foregoing demise by Landlord and of the
covenants, promises and agreements herein contained does hereby hire, lease and
take as Tenant from Landlord the entire Premises, upon those terms and
conditions hereinafter set forth together with and subject to easements,
restrictions and reservations of record. The subject demise does not include the
Tenant's operating supplies, inventory and equipment, more particularly
described on Exhibit C attached hereto (the "Tenant's Personal Property").
1.2 Condition. Tenant acknowledges and agrees that the Premises are and
shall be leased by Landlord to Tenant and from Landlord by Tenant in its present
"as is" condition, subject to the existing state of title and all applicable
legal or governmental requirements, and Landlord makes absolutely no
representations or warranties whatsoever with respect to the Premises or the
condition thereof. Tenant acknowledges that Landlord has not investigated and
does not warrant or represent to Tenant that the Premises are fit for the
purposes intended by Tenant or for any other purpose or purposes whatsoever, and
Tenant acknowledges that the Premises are to be leased to Tenant in their
existing condition, i.e., "as-is", and "where-is", without any representation or
warranty as to habitability or fitness for any particular purpose, on and as of
the Commencement Date defined in Section 2.2 below. Tenant, however, represents
and acknowledges that all permits, licenses and approvals required by any
governmental or quasi-governmental, body, department, commission, board, bureau,
instrumentality or officer, or otherwise appropriate with respect to the
construction, operation, leasing, maintenance or use of the Premises or any part
thereof, have been issued and are valid and in full force and effect and that no
provision, condition or limitation of any of the same has been breached or
violated. Tenant acknowledges that Tenant shall, except as otherwise provided
herein in Section 11.2, be solely responsible for any and all actions, repairs,
permits, approvals and costs required for the rehabilitation, renovation, use,
occupancy and operation of the Premises in accordance with applicable
governmental requirements, foreseen or unforeseen, including, without
limitation, all governmental charges and fees, if any, which may be due or
payable to applicable authorities. Tenant agrees that, by leasing the Premises,
Tenant warrants and represents that Tenant has examined and approved all things
concerning the Premises which Tenant deems material to Tenant's leasing and use
of the Premises. Tenant further acknowledges and agrees that (a) neither
Landlord nor any agent of Landlord has made any representation or warranty,
express or implied, concerning the Premises or which have induced Tenant to
execute this Lease and (b) any other representations and warranties are
expressly disclaimed by Landlord.
1.3 Quiet Enjoyment. Landlord covenants and agrees that so long as
Tenant shall timely pay all rents due to Landlord from Tenant hereunder and
keep, observe and perform all covenants, promises and agreements on Tenant's
part to be kept, observed and performed hereunder, Tenant shall and may
peacefully and quietly have, hold and occupy the Premises free of any
interference from Landlord; subject, however, and nevertheless to the terms,
provisions and conditions of this Lease.
ARTICLE II
TERM
2.1 Initial Term. The initial term of this Lease (sometimes the
"Initial Term") shall, unless sooner terminated as elsewhere provided in this
Lease, commence on the Commencement Date (as hereinafter defined) and terminate
and expire at 11:59 p.m. on August 31, 2017. For purposes of this Lease the word
"Term" shall mean and refer to the Initial Term and each five (5) year extension
of this Lease duly exercised and effective pursuant to Section 2.3 hereof.
2.2 Commencement Date. For the purposes of this Lease, the
"Commencement Date" shall be August 1, 1998.
2.3 Option to Renew. Tenant shall have and is hereby granted three (3)
options to extend this Lease for an additional five (5) years each, upon the
same terms, covenants, conditions and rental as set forth herein; provided that
Tenant is not in default hereunder at the
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commencement of the respective additional period and provided Tenant has
simultaneously extended the term of the Other Lease. Tenant may exercise each
such five (5) year option successively by giving written notice to Landlord not
less than twelve (12) months nor more than eighteen (18) months prior to the
respective expiration of the initial Term of this Lease or of the then
applicable option period. Should Tenant fail to give Landlord such timely
written notice during the required period, all remaining rights of renewal shall
automatically expire.
ARTICLE III
USE AND OPERATION OF PREMISES
3.1 Permitted Use. Tenant covenants and agrees that it shall,
throughout the Term of this Lease, continuously use and occupy the Premises
solely and exclusively as a limited service inn, for the accommodation of hotel
guests, with appropriate amenities for the same and for no other purpose without
interruption except for reasonable interruptions in respect to portions of the
Premises for reasonable periods for repairs, renovations, replacements and
rebuilding all of which shall be carried out pursuant to, and in accordance with
the applicable provisions of this Lease (the foregoing being referred to as the
"Permitted Use"). Without the prior written consent of the Landlord, no
Affiliate of Tenant may be a subtenant or concessionaire in the Premises.
3.2 Standard of Operation. Throughout the Term of this Lease, Tenant
shall continuously operate the Premises in full compliance with the terms hereof
and of that certain Franchise Agreement between Tenant and Marriott
International, Inc. dated May 23, 1996 (for so long as the same is in effect)
and thereafter pursuant to any other franchise agreement approved by Landlord
(for the purposes hereof, the aforesaid Marriott Franchise Agreement and any
subsequent franchise agreement are hereinafter together referred to as a
"Franchise Agreement"). In the absence of a Franchise Agreement, Tenant shall
continuously operate the Premises as a first-class extended stay hotel. Tenant
shall endeavor and use good faith efforts to maximize Gross Receipts and gross
operating profit for the Premises. Tenant shall further provide, or cause to be
provided, all group services, facilities and benefits generally available to
Residence Inns by Marriott operated elsewhere by Residence Inns by Marriott
System Standards or the standards of any successor franchisor or licensor, if
any. Tenant may, at its option and at its expense, engage a manager for the
Premises; provided however, that any manager and any management agreement for
the Premises shall be subject to Landlord's prior approval, shall be subordinate
to this Lease (and accordingly all management fees shall be subordinate to rent
hereunder) and shall terminate and expire, if not sooner, upon the expiration or
earlier termination of this Lease. For purposes of Landlord's approval of a
manager as required by the preceding sentence, the Landlord hereby agrees that
any manager, (a) the principals of which are, and the majority of the beneficial
interest of which are held and owned by, and the power to direct all operations
and the day-to-day management is lodged in, Xxxxxxx X. Xxxxxxxx, and/or Xxxxxx
X. Xxxxx and/or Xxxxx X. Xxxxxxxx, Xx., and (b) which is actually and primarily
involved in the business of managing hotels and actually manages at least four
(4) hotels and 1000 rooms, shall be acceptable, provided the management
agreement with such manager shall still require the Landlord's approval. The
terms of Section 23.9 are not applicable to Landlord's approval herein.
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3.3 Compliance with Laws. Tenant shall at all times at its sole cost
and expense, keep and maintain the Premises in compliance with all applicable
laws, ordinances, statutes, rules, regulations, orders, directions and
requirements of all federal, state, county and municipal governments and of all
other governmental agencies or authorities having or claiming jurisdiction over
the Premises or the business activities conducted thereon or therein and of all
of their respective departments, bureaus, agencies or officers, and of any
insurance underwriting board or insurance inspection bureau having or claiming
such jurisdiction or any other body exercising similar functions and of all
insurance companies from time to time selected by Tenant to write policies of
insurance covering the Premises and any business or business activity conducted
thereon or therein whether the same are currently existing or promulgated
hereafter. Tenant agrees to give Landlord notice of any of the foregoing matters
affecting the Premises which is or are enacted, passed, promulgated, made,
issued or adopted a copy of which is served upon, or received by Tenant or a
copy of which is posted on or fastened or attached to the Premises, within ten
(10) days after service, receipt, posting, fastening or attaching. At the same
time, the Tenant will inform Landlord as to the work or steps which Tenant
proposes to do or take in order to comply therewith.
Notwithstanding the generality of the foregoing, Tenant shall, at its
sole expense, maintain the Premises in full compliance with all applicable
federal, state or municipal laws, ordinances, rules and regulations currently in
existence or hereafter enacted or rendered governing accessibility for the
disabled or handicapped, including, but not limited to, any applicable
provisions of The Architectural Barriers Act of 1968, The Rehabilitation Act of
1973, The Fair Housing Act of 1988, The Americans With Disabilities Act, the
accessibility code(s), if any, of the State in which the Premises is located,
and all regulations and guidelines promulgated under any all of the foregoing,
as the same may be amended from time to time (collectively the "Accessibility
Laws").
In addition, Tenant shall not suffer or permit the Premises to be used
by the public, as such without restriction or in such manner as might tend to
impair Landlord's title to, or its reversionary interest in, the Premises or in
such manner as might make possible a claim or claims of adverse usage or adverse
possession by the public, as such or of implied dedication of the Premises or
any portion thereof.
3.4 Hazardous Materials and Sewage Prohibited. Except as permitted by
applicable law, Tenant shall at all times during the Term of this Lease keep the
Premises free of Hazardous Materials (as hereinafter defined). Neither Tenant
nor any of its employees, agents, invitees, licensees, contractors, guests, or
subtenants (if permitted) shall use, generate, manufacture, refine, treat,
process, produce, store, deposit, handle, transport, release, or dispose of
Hazardous Materials in, on or about the Premises or the groundwater thereof, in
violation of any federal, state or municipal law, decision, statute, rule,
ordinance or regulation currently in existence or hereafter enacted or rendered.
Tenant shall give Landlord prompt written notice of any claim received by Tenant
from any person, entity, or governmental agency that a release or disposal of
Hazardous Materials has occurred on the Premises or the groundwater thereof. As
used herein, the Term "Hazardous Materials" shall mean and be defined as any and
all toxic or hazardous
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substances, chemicals, materials or pollutants, of any kind or nature, which are
regulated, governed, restricted or prohibited by any federal, state or local
law, decision, statute, rule, or ordinance currently in existence or hereafter
enacted or rendered, and shall include (without limitation), all oil, gasoline
and petroleum based substances.
Tenant shall not discharge or permit to be discharged into any septic
facility or sanitary sewer system serving the Premises any toxic or hazardous
sewage or waste other than that which permitted by applicable law or which is
normal domestic waste water for the type of business contemplated by this Lease
to be conducted by Tenant on, in or from the Premises. Any toxic or hazardous
sewage or waste which is produced or generated in connection with the use or
operation of the Premises shall be handled and disposed of as required by and in
compliance with all applicable local, state and federal laws, ordinances and
rules or regulations or shall be pre- treated to the level of domestic
wastewater prior to discharge into any septic facility or sanitary sewer system
serving the Premises.
3.5 Conflicting Businesses Prohibited. Landlord and Tenant hereby
recognize and acknowledge (a) that the Base Rent and the Percentage Rent payable
by Tenant to Landlord under this Lease have been established at the levels
specified in this Lease upon the premise and with the expectation that
Percentage Rent will constitute a material part of the total rents payable by
Tenant to Landlord under this Lease, (b) that the expectation of receiving
Percentage Rent constitutes a material consideration for Landlord's willingness
to execute this Lease and thereby lease and demise the Premises to Tenant, and
(c) that the operation, management, franchising or ownership by Tenant or an
Affiliate of Tenant of another business of the type specified in Section 3.1
above or any substantially similar or competing business (other than a full
service hotel as hereinafter defined (such other business or substantially
similar or competing business being referred to herein as a "Conflicting
Business") within the trade area depicted on Exhibit D attached hereto (the
"Proscribed Area") will tend to result in a decrease in the amount of Gross
Receipts which would otherwise reasonably be expected to be made upon, within
and from the Premises and thereby result in a reduction of the Percentage Rent
which would otherwise be payable by Tenant to Landlord pursuant to this Lease in
the absence of the operation of a Conflicting Business by Tenant or any
Affiliate of Tenant (as hereinafter defined) within the Proscribed Area.
Accordingly, Tenant on behalf of itself and its Affiliates, and Tenant's manager
(who has joined in the execution of this Lease solely to acknowledge the
restriction herein) agree that during the Term of this Lease neither Tenant, nor
any Affiliate of Tenant nor Tenant's manager, shall operate, manage, franchise,
own or have any other interest in a Conflicting Business within the Proscribed
Area. In the event of a breach of this covenant, in addition to any other remedy
otherwise available to Landlord, including injunctive relief, Landlord may, at
its election, require that forty percent (40%) of all Gross Receipts made from
any such Conflicting Business opened, operated, managed, leased, developed or
owned by Tenant or any affiliate or subsidiary of Tenant within the Proscribed
Area be included in the amount of Gross Receipts made from the Premises for
purposes of the determination and calculation of the Percentage Rent due from
Tenant to Landlord under this Lease (i.e., as though such Gross Receipts of the
Conflicting Business had actually been made upon, within and from the Premises).
If Landlord so elects, all provisions of Article IV of this Lease relating to
Tenant's
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maintenance and submission to Landlord of books, records and statements shall be
applicable to all books, records and statements pertaining to any such
Conflicting Businesses. However, any such Conflicting Business existing within
the Proscribed Area on the date of this Lease may continue to be operated,
managed, conducted and owned by Tenant or any Affiliate or subsidiary of Tenant
in the same manner as on the date of this Lease. Further, Tenant agrees that
Tenant's sole business shall be to lease, and Tenant shall not incur any
expenses or liability related to any business or activity other than leasing and
operating, the Premises, the premises contemplated by the Other Lease (as
hereinafter defined), and other premises owned or hereinafter owned by Landlord
or its Affiliates pursuant to terms acceptable to Landlord and Tenant. For
purposes hereof, "Full service hotel" shall mean, generally, a hotel with a
restaurant, lounge facilities and meeting space as well as minimum service
levels often including xxxx service and room service.
3.6 Continuous Operations. Tenant shall continuously operate its
business and maintain sufficient skilled staff and employees, and maintain
adequate levels and quality of Tenant's Personal Property to operate the
Premises as herein or otherwise required at its sole cost and expense throughout
the entire Term of this Lease.
3.7 Compliance With Restrictions, Etc. Tenant, at its expense, shall
comply with all restrictive covenants and other title exceptions affecting the
Premises and comply with and perform all of the obligations set forth in the
same to the extent that the same are applicable to the Premises or to the extent
that the same would, if not complied with or perform, impair or prevent the
continued use, occupancy and operation of the Premises for the purposes set
forth in this Lease. Further, in addition to Tenant's payment obligations under
this Lease, Tenant shall pay all sums charged, levied or assessed under any
restrictive covenants, declaration, reciprocal easement agreement or other title
exceptions, equipment leases, leases and all other agreements affecting the
Premises promptly as the same become due and shall furnish Landlord evidence of
payment thereof.
3.8 Affiliate. As used in this Lease the term "Affiliate" of any Person
shall mean (a) any other Person directly or indirectly controlling, controlled
by, or under common control with, such Person, or any general partner in such
Person or any officer or director, stockholder, or member of such Person or any
employee, agent, representative, successor or assign of any of the foregoing;
(b) any trustee of such Person; or (c) if such Person is an individual, any
member of the Family of such Person and any trusts for the benefit of such
individual or Family members. For purposes of this Section 3.8, the term
"control" (including the correlative meanings of the terms "controlling,"
"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 to cause the direction of the management policies of such Person
whether through the ownership of voting securities or by contract or otherwise.
Further, for purposes of this Section 3.8 "Family" shall mean, as to any Person,
such Person's grandparents, all lineal descendants of such Person's
grandparents, Persons adopted by, or stepchildren of, any such grandparent or
descendant and Persons currently married to, or who are widows or widowers of,
any such grandparent, descendant, adoptee or stepchild. In addition, for
purposes of this definition, "Person" shall mean
6
any individual, corporation, partnership, limited liability company, joint
venture, estate, trust, unincorporated association, and any federal, state,
county or municipal government and any political subdivision thereof.
3.9 Additional Covenants of Tenant. In addition to the other covenants
and representations of Tenant herein, Tenant hereby covenants, acknowledges and
agrees that Tenant shall:
(a) Not guaranty any obligation of any Person;
(b) Pay or cause to be paid when due all lawful claims
for labor and rents with respect to the Premises;
(c) Pay or cause to be paid when due all trade payables;
(d) Not declare, order, pay or make, directly or indirectly,
any distributions or any payments to any members or Affiliates of
Tenant, including payments in the ordinary course of business and
payments pursuant to management agreements with any such Affiliate) or
set apart any sum of property therefore, or agree to do so, if, at the
time of such proposed action or immediately after giving effect
thereto, any monetary Event of Default shall exist;
(e) Except as otherwise permitted by this Lease, not sell,
lease (as lessor or sublessor), transfer or otherwise dispose of or
abandon, all or any material portion of its assets or business to any
Person, or sell, lease, transfer or otherwise dispose of or abandon any
of Tenant's Personal Property, provided, however, Tenant may dispose of
portions of Tenant's Personal Property which have become inadequate,
obsolete, worn-out, unsuitable, undesirable or unnecessary, provided
substitute equipment or fixtures having equal or greater value and
utility have been provided.
(f) Except for liabilities incurred in the ordinary course of
business, not create, incur, assume or guarantee, or permit to exist or
become or remain liable directly or indirectly upon, any obligation,
contingent or otherwise, which in accordance with GAAP should be
reflected on the obligor's balance sheet as a liability
("Indebtedness") except the following:
(i) Indebtedness of Tenant to Landlord;
(ii) Unsecured borrowing of Tenant from its
Affiliates which are by their terms expressly subordinate
pursuant to a subordination agreement to the payments of
Tenant's obligations under this Agreement; or
(iii) Deferred fees to the Manager as provided in the
Management Agreement, provided that such fees shall be, from
and after the occurrence of a default or Event of Default,
subordinate to all amounts owing to Landlord.
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ARTICLE IV
RENT
4.1 Base Rent. Subject to proration as set forth below, and subject to
increase as set forth in Article 4.4, 9.2 and Article 11.2 hereof, Tenant shall
pay as annual base rent for the Premises ("Base Rent") as follows: (a) for the
first Lease Year (as hereinafter defined) the sum of ONE MILLION TWO HUNDRED
EIGHT THOUSAND NINE HUNDRED AND SEVENTY AND NO/100 DOLLARS ($1,208,970.00),
together with all applicable sales and use and other taxes thereon, which shall
be due and payable on the Commencement Date; and (b) for the second Lease Year
and for each successive Lease Year thereafter during the Term, the sum of ONE
MILLION TWO HUNDRED THIRTY SEVEN THOUSAND SEVEN HUNDRED FIFTY FIVE AND NO/100
DOLLARS ($1,237,755.00) together with all applicable sales and use and other
taxes thereon (other than Landlord's income taxes) which , shall be due and
payable in full on the first day of each such Lease Year. However, at Tenant's
option, and so long as Tenant shall not be in default of its obligations under
this Lease, Base Rent may be paid by Tenant to Landlord in equal monthly
installments, in advance, on the first (1st) day of each calendar month
commencing on the first (1st) day of the calendar month immediately following
the Commencement Date, it being agreed that Base Rent payable with respect to
the period between the Commencement Date and the first day of the following
calendar month shall be due at the time that the first payment of Base Rent is
due. In the event of a default by Tenant of its obligations under this Lease,
the full amount of Base Rent for such period, less the aggregate amount of all
monthly installments of Base Rent previously paid for such period, shall be
immediately due and payable by Tenant to Landlord.
For the purposes of this Lease, the term "Lease Year" shall mean and be
defined as each twelve month period commencing on the first day of the calendar
month immediately following the Commencement Date; provided, however, that the
first Lease Year shall include the period from the Commencement Date to the
first day of the next following calendar month. Base Rent shall be
proportionately prorated for any extended or partial Lease Year (i.e., the first
Lease Year and/or the final Lease Year).
4.2 Percentage Rent. In addition to, and not in lieu of, Base Rent,
Tenant shall pay to Landlord during the Term of this Lease a sum ("Percentage
Rent") which, when combined with the Percentage Rent under the Other Lease, will
equal fifteen percent (15%) of the consolidated Gross Receipts for the Premises
and the premises under and contemplated by the Other Lease (as hereinafter
defined) in excess of $8,080,000.00 for each calendar year during the Term of
this Lease. For the convenience of Tenant, and for so long as Tenant is not in
default hereunder or under the Other Lease, a portion of such Percentage Rent as
determined above shall be payable hereunder and the balance shall be payable
under the Other Lease. If there is a default hereunder or under the Other Lease,
the entire fifteen percent (15%) of Percentage Rent shall be paid under the
Lease which is not in default. Provided, further, if the Other Lease is
terminated the threshold for calculating Percentage Rent at the rate of fifteen
percent (15%) shall be THREE MILLION FOUR HUNDRED TEN THOUSAND AND NO/100
DOLLARS ($3,410,000.00)
8
For the purposes of this Lease and in the calculation of Percentage
Rent, the term "Gross Receipts" shall mean and be defined as all revenues
derived by Tenant or any operator or manager of the Premises on behalf of
Tenant, or any part thereof, (or when the term is used with respect to any
entity other than Tenant, all revenue derived by such other entity) in respect
to the Premises from whatever source including without limitation all hotel
departments, parking, services and operations, off-premises catering, if any,
and all sales and services in, about and originating from the Premises
(including any common area) excluding only: interest income earned by Tenant;
the sale of used equipment, trade fixtures or any other capital assets; loan
proceeds; capital contributions; condemnation proceeds (other than those
received in respect of a temporary taking); insurance proceeds, other than so
called "business interruption or rent insurance" proceeds; such credits
allowances (but not allowances for bad debts) and refunds as are customary in
the hotel industry; returns of merchandise from or on behalf of a customer;
service charges paid by guests to the extent paid to employees of the hotel as
tips and gratuities; the amount of any sales, use or excise taxes, taxes on
rents and other similar taxes. Gross Receipts shall not be deemed cumulative
from one calendar year to any succeeding calendar year. Rather they shall be
computed separately for each calendar year on an accrual basis in accordance
with the Uniform System of Accounts for Hotels (Ninth Revised Edition, 1996 as
adopted by the American Hotel and Motel Association (the "Uniform System of
Accounts"). Each sale on credit shall be treated as a sale for the full price in
cash during the month in which such sale is initially made, irrespective of the
time when Tenant or its manager actually receives payment (whether full or
partial) from its customer or any applicable credit or credit card agency, and
no deduction shall be allowed for uncollected or uncollectible credit accounts
or sales. Revenue earned by Tenant or its manager from sales by any permitted
sublessee, concessionaire or licensee on, in or from the Premises shall be
included in Gross Receipts.
4.3 Payment of Percentage Rent. Tenant shall within thirty (30) days
after the end of each calendar quarter during the Term of this Lease submit to
Landlord an unaudited (but certified by a duly authorized officer of Tenant)
statement showing a detailed breakdown of the calculation of Percentage Rent on
a quarterly and calendar year-to-date basis. For purposes of such quarterly
calculations, Percentage Rent shall be due and payable on Gross Receipts in
excess of $2,020,000.00 (being one fourth of the annual threshold referenced in
Section 4.2 hereof.)] On or before February 1, May 1, August 1 and November 1 of
each calendar year during the Term of this Lease, Tenant shall pay to Landlord,
together with the installment of Base Rent then due, any Percentage Rent
applicable to the immediately preceding calendar quarter (i.e., the May 1
Percentage Rent payment will constitute Percentage Rent due for the first
calendar quarter of the year, and so on). Percentage Rent for any partial
calendar quarter (i.e., in the first Lease year and the final Lease year) shall
be prorated proportionately. Tenant's obligation to pay Percentage Rent for the
calendar quarter which includes the date of termination of this Lease shall
survive the termination hereof.
Tenant shall, no later than 90 days following the end of each calendar
year during the Term hereof furnish to Landlord for such calendar year a
complete statement (the "Annual Operations Statement") certified by an
independent certified public accountant who is actively engaged in the practice
of his professions and who is acceptable to Landlord (which Statement
9
shall also be certified either by an officer or a partner in Tenant), setting
forth, with respect to such calendar year in reasonable detail the Gross
Receipts derived by or for the benefit of the Tenant in respect of such calendar
year together with copies of statements from the manager of the Hotel as to its
respective operations in the Hotel or on the Premises including without
limitation, all expenses incurred and income derived by them, respectively, in
respect of the Premises. If the Annual Operations Statement for any calendar
year indicated that the aggregate of the installment payments theretofore made
with respect to such calendar year pursuant to this paragraph exceeds the
Percentage Rent due for such calendar year, Landlord shall credit such
overpayment together with interest thereon determined as set forth below in this
paragraph against the next installment or installments of Base Rent falling due
(or will pay the amount of such overpayment, together with such interest to
Tenant if the Lease shall have terminated other than by reason of Tenant's
default or if Landlord so elects to do so). If, on the other hand, the Annual
Operations Statement indicates that the aggregate of the installment payments
theretofore made with respect to such calendar year is less than the Percentage
Rent due for such calendar year then Tenant shall pay the balance or excess, as
the case may be, together with interest thereon determined as set forth below in
this paragraph, to Landlord concurrently with the submission of the Annual
Operations Statement. Interest shall accrue at the Prime Rate from the last day
of the month to which it is so attributed until the date when the adjusted
amount is fully credited or paid (as the case may be), in the manner as set
forth above. For purposes of this Lease, Prime Rate shall mean and refer to the
fluctuating annual rate equal at all times to the annual rate of interest
publicly announced from time to time by Citibank, N.A. or, if such rate is no
longer publicly announced by Citibank, N.A., the Prime Rate announced in the
"Money Rates" Section of the Wall Street Journal. Each change in the Prime Rate
shall take effect on the first day of the month immediately succeeding the month
in which the corresponding change occurs in the then applicable rate referred to
above, and in the event of multiple changes in such applicable rate during such
month, the change in the Prime Rate shall be based on the last such applicable
rate in effect during the subject month.
4.4 Additional Rentals/Earn Out. In the event that Tenant and or
Stormont Trice Management Corporation should, pursuant to the terms of paragraph
21 of that certain Hotel Purchase and Sale Contract between CNL Real Estate
Advisors, Inc., and Gwinnett Residence Associates, LLC, dated April 24, 1998, as
amended by First Amendment to Hotel Purchase and Sale Contract dated July 31,
1998 (the "Purchase Contract") as assigned by CNL Real Estate Advisors, Inc., to
Landlord, (which paragraph 21 survived the closing of such Purchase Contract),
earn additional sales proceeds (purchase price), at such time as additional
sales proceeds (purchase price) are, in fact, paid to Tenant or Tenant's
designee pursuant to such paragraph 21, the Base Rent due hereunder shall
concurrently therewith be increased by that sum derived by multiplying the
amount of additional purchase price paid by the sum of ten and three-quarters
percent (10.75%).
4.5 Financial Statements. Throughout the Term of this Lease, Tenant
shall prepare and deliver to Landlord at or prior to the end of each month
during the Term hereof, a profit and loss statement and operating balance sheet
showing the results of the operation of the Premises for the immediately
preceding month and for the calendar year to date. Tenant shall provide
10
Landlord with a complete financial statement which shall be delivered prior to
the end of the next following month, in the form customarily provided in the
industry and approved in advance by the Landlord, and which shall: (a) be taken
from the books and records maintained by Tenant and its manager in the form
specified herein; (b) follow the general form set forth in the Uniform System of
Accounts; and (c) indicate variances from budgeted results for each line item
against the approved budget for the Premises for such calendar year. The
aforesaid profit and loss statement, operating balance sheet and financial
statements shall be accompanied by an Officer's Certificate which, for purposes
hereof shall mean a Certificate of any Officer of Tenant (or such Officer's
designee), duly authorized, which such Officer shall certify (a) that such
statements have been properly prepared in accordance with GAAP and the Uniform
System of Accounts and are true, correct and complete in all material respects
and fairly present the consolidated financial condition of the Tenant at and as
of the dates thereof and the results of its operations for the period covered
thereby, and (b) that no Event of Default has occurred and is continuing
hereunder. Tenant shall deliver to Landlord within ninety (90) days after the
end of each calendar year, a profit and loss statement, balance sheet and
statement of cash flow certified by an independent certified public account who
is actively engaged in the practice of his professional and who is acceptable to
Landlord (which statement shall also be certified by an officer or partner in
Tenant) together with copies of all reports and communications furnished to
Tenant's manager, showing results from the operation of the Premises during such
calendar year, and reasons for material variations from the approved budget for
such year. Tenant shall also deliver to Landlord at any time and from time to
time, upon not less than twenty (20) days notice from Landlord, any financial
statements or other financial reporting information required to be filed by
Landlord with the Securities and Exchange Commission or any other governmental
authority or required pursuant to any order issued by any court, governmental
authority or arbitrator in any litigation to which Landlord is a party for
purposes of compliance therewith. Any disputes concerning the contents of such
statements or any accounting matter thereunder shall be determined by the
approved independent certified public account providing such statement. The
financial statements required herein are in addition to the statement required
under Section 4.3 hereof.
4.6 Records. Tenant shall keep and maintain at all times in accordance
with generally accepted accounting principles, consistently applied, and the
Uniform System of Accounts (separate and apart from its other books, records and
accounts) complete and accurate up-to-date books and records adequate to reflect
clearly and correctly the results of operations of the Premises, on an accrual
basis, including but not limited to, each calculation of Percentage Rent. Such
books and records shall be kept and maintained at the Premises or Tenant's
principal office in Atlanta, Georgia or, upon notice to Landlord, at the
principal office of the manager of the Premises in Atlanta, Georgia. Landlord or
its representatives shall have, at all reasonable times during normal business
hours, reasonable access, on reasonable advance notice, to examine and copy the
books and records pertaining to the Premises. Such books and records shall be
kept by the Tenant at the corporate offices of Stormont Trice Corporation in
Atlanta and shall be available for at least four (4) years after the applicable
quarterly calculation of Percentage Rent for Landlord's inspection, copying,
review and audit at Landlord's expense during reasonable business hours and upon
reasonable notice for the purpose of verifying the accuracy of Tenant's
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calculation of Percentage Rent. At Landlord's request, an authorized employee or
agent of Tenant and its manager shall be available on a quarterly basis to meet
with Landlord or its representatives and review the Tenant's operations and
records.
4.7 Audit. Landlord shall have the right to audit the books and records
of Tenant at any time during the Term of this Lease. If any such audit of
Tenant's books and records by Landlord or its agent shall reveal a deficiency in
the calculation and/or payment of Percentage Rent, Tenant shall forthwith pay
Landlord the amount of any such deficiency plus interest thereon at the rate
specified in this Lease. If any such audit shall reveal a deficiency greater
than three percent (3%) of the Percentage Rent actually paid by Tenant to
Landlord, Tenant shall in addition to the amount of such deficiency and interest
thereon, as aforesaid, also pay to Landlord the reasonable costs of such audit.
Additionally, if Gross Receipts shall be found to be willfully or intentionally
understated or if Percentage Rent shall be understated by three percent (3%) or
more and Landlord has previously notified Tenant at least once during the Term
of this Lease of a three percent (3%) or more understatement of Percentage Rent,
or if proper books and records are not maintained by Tenant as required
hereunder, Landlord shall have the right to declare an Event of Default under
this Lease.
4.8 Landlord Advances. If Landlord shall make any expenditure for which
Tenant is responsible or liable under this Lease, or if Tenant shall become
obligated to Landlord under this Lease for any sum other than Base Rent or
Percentage Rent as hereinabove provided, the amount thereof shall be deemed to
constitute additional rent ("Additional Rent") and shall be due and payable by
Tenant to Landlord, together with all applicable sales taxes thereon, if any,
simultaneously with the next succeeding monthly installment of Base Rent or at
such other time as may be expressly provided in this Lease for the payment of
the same.
For the purpose of this Lease, the term "Rent" shall mean and be
defined as all Base Rent, Percentage Rent and Additional Rent due from Tenant to
Landlord hereunder.
4.9 Sales Tax. In addition to the Rent and any other sums or amounts
required to be paid by Tenant to Landlord pursuant to the provisions of this
Lease, Tenant shall also pay to Landlord, simultaneously with such payment of
such Rent or other sums or amounts, the amount of any applicable sales, use,
excise or similar or other tax on any such Rent or other sums or amounts so paid
by Tenant to Landlord, whether the same be levied, imposed or assessed by the
State in which the Premises is located or any other federal, state, county or
municipal governmental entity or agency. Any such sales, use, excise or similar
or other taxes shall be paid by Tenant to Landlord at the same time that each of
the amounts with respect to which such taxes are payable are paid by Tenant to
Landlord. Landlord shall upon written request by Tenant provide to Tenant on an
annual basis such reasonable information as shall be necessary to enable Tenant
to pay such tax.
4.10 Payment of Rent. Each of the foregoing amounts of Rent and other
sums shall be paid to Landlord without demand and without deduction, set-off,
claim or counterclaim of any nature whatsoever which Tenant may have or allege
to have against Landlord, and all such
12
payments shall, upon receipt by Landlord, be and remain the sole and absolute
property of Landlord. All such Rent and other sums shall be paid to Landlord in
legal tender of the United States at the address to which notices to Landlord
are to be given or to such other party or to such other address as Landlord may
designate from time to time by written notice to Tenant. If Landlord shall at
any time accept any such Rent or other sums after the same shall become due and
payable, such acceptance shall not excuse a delay upon subsequent occasions, or
constitute or be construed as a waiver of any of Landlord's rights hereunder.
4.11 Past Due Rent. If Tenant fails to make any payment of Rent or any
other sums or amounts to be paid by Tenant hereunder on or before the fifth day
after the date such payment is due and payable, Tenant shall pay to Landlord an
administrative late charge of five percent (5%) of the amount of such payment.
In addition, such past due payment shall bear interest at the Prime Rate plus
eight percent (8%) from the date such payment became due to the date of payment
thereof by Tenant. Thus, for example, if the Prime Rate is seven percent (7%)
the said default rate would be fifteen percent (15%). Such late charge and
interest shall constitute Additional Rent and shall be due and payable with the
next installment of Rent due hereunder.
4.12 No Abatement of Rent. No abatement, diminution or reduction (a) of
Rent, charges or other compensation, or (b) of Tenant's other obligations
hereunder shall be allowed to Tenant or any person claiming under Tenant, under
any circumstances or for any reason whatsoever and to the maximum extent
permitted by law, Tenant hereby waives the application of any local or state
statutes, land rules, regulations or ordinance providing to the contrary.
4.13 Security for Tenant's Performance. Tenant acknowledges that the
Retained Funds (as defined in the Purchase Contract) constitute security for the
faithful observance and performance by Tenant of all of the terms, covenants and
conditions of this Lease to be observed and performed, including, without
limitation, the surrender of possession of the Premises to Landlord as provided
herein. If any Event of Default shall occur and be continuing, Landlord may, at
its option, and without prejudice to any other remedy which Landlord may have on
account thereof, appropriate and apply so much of the Retained Funds as may be
necessary to compensate Landlord toward the payment of Rent or other sums or
loss or damage sustained by Landlord due to such breach by Tenant. It is
understood and agreed that the amount of the Retained Funds is not to be
considered as prepaid Rent nor shall damages be limited to the amount of
Retained Funds. Further, Landlord is not obligated to, but may, at its option,
apply the Retained Funds to Rent or other charges not paid when due or for
payment of damages incurred from Tenant's failure to perform under this Lease.
Landlord's right to possession of the Premises for non-payment of Rent for any
reason shall not in any way be affected by Landlord's possession of the Retained
Funds. In addition, Tenant understands, acknowledges and agrees that in the
event that this Lease is terminated pursuant to Article XIX hereof, the Retained
Funds shall be applied against and used for payment of all sums and amounts due
Landlord or which Landlord may recover on account of a default as contemplated
in this Lease including, but not limited to, (a) all Rents and other sums,
charges, payments, costs and expenses agreed and/or required to be paid by
Tenant to Landlord, (b) all costs and expenses of Landlord in connection with
the recovery of possession of the Premises, including reasonable attorneys fees
(based upon
13
services rendered at hourly rates) and court costs, and (c) the costs of the
reletting or attempted reletting of the Premises. Any Retained Funds remaining
after payment of the aforesaid sums shall be returned to Tenant. Provided this
Lease is not terminated as a result of an Event of Default, the Retained Funds
shall be paid as provided in the Purchase Contract.
ARTICLE V
TAXES AND ASSESSMENTS
5.1 Obligation to Pay Taxes. Throughout the entire Term of this Lease,
Tenant shall bear, pay and discharge as Additional Rent and not later than the
last day on which payment may be made without penalty or interest, any and all
taxes, assessments and other governmental impositions and charges of every kind
and nature whatsoever, extraordinary as well as ordinary, and each and every
installment thereof which shall or may during the Term hereof be charged, laid,
levied, assessed, or imposed upon, or arise in connection with, the use,
occupancy or possession of the Premises or any part thereof, including, without
limitation, ad valorem real and personal property taxes, and all taxes charged,
laid, levied, assessed or imposed in lieu of or in addition to any of the
foregoing by virtue of all present or future laws, ordinances, requirements,
orders, directions, rules or regulations of federal, state, county and municipal
governments and of all other governmental authorities whatsoever. Upon payment,
Tenant shall promptly furnish to Landlord satisfactory evidence of the payment
of all taxes, assessments, impositions or charges required to be paid by Tenant
pursuant to the foregoing. Further, with respect to the calendar year in which
the Term of this Lease commences, and any tax period or year prior to the
Commencement Date (if different than a calendar year), Tenant shall be obligated
to pay or cause to be paid, and shall pay or cause to be paid, all ad valorem
taxes and personal property taxes and other charges and assessments due for such
entire calendar year (or tax year) notwithstanding the date this Lease
commences.
Notwithstanding the foregoing, Tenant shall have the right, after prior
written notice to Landlord, to contest at its own expense the amount and
validity of any taxes affecting the Premises by appropriate proceedings under
applicable law conducted in good faith and with due diligence and to postpone or
defer payment thereof, provided and so long as:
(a) Such proceedings shall operate to suspend the collection
of such taxes from Tenant or the Premises;
(b) Neither the Premises nor any part thereof would be in
immediate danger of being forfeited or lost by reason of such
proceedings, postponement or deferment; and
(c) In the case of the tax affecting the Premises which might
be or become a lien, encumbrance or charge upon or result in any
forfeiture or loss of the Premises or any part thereof, or which might
result in loss or damage to Tenant or Landlord, Tenant, prior to the
date such tax would become delinquent, shall have furnished Landlord
with security satisfactory to Landlord, and, in the event that such
security is furnished, Landlord shall not have the right during the
period of the contest to pay, remove or discharge the tax.
14
5.2 Tax and Insurance Escrow Account. In the event Tenant fails to
timely pay any tax, assessment, imposition or charge required to be paid by
Tenant pursuant to Section 5.1 hereof, Landlord shall have the right, by written
notice to Tenant effective as of the date of such notice, to require Tenant to
pay or cause to be paid into a separate account (the "Tax and Insurance
Account") to be established by Tenant with a lending institution where the
accounts for the Premises are maintained, (which lending institution shall be
approved in advance by Landlord and which Tax and Insurance Account shall not be
removed from such lending institution without the express prior approval of
Landlord), and which Landlord may draw upon, a reserve amount sufficient to
discharge the obligations of Tenant under Section 5.1 and Article 8 hereof
(other than worker's compensation insurance premiums) with respect to real
estate taxes and insurance as and when they become due (such amounts, the "Tax
and Insurance Escrow Amount"). During each month commencing with the first full
calendar month following the receipt of said notice from Landlord, Tenant shall
deposit into the Tax and Insurance Account one twelfth of the Tax and Insurance
Escrow Amount so that as each installment of insurance premiums and real estate
taxes becomes due and payable, there are sufficient funds in the Tax and
Insurance Account to pay the same. If the amount of such insurance premiums and
real estate taxes has not been definitively ascertained by Tenant at the time
when any such monthly deposit is to be paid, Landlord shall require payment of
the Tax and Insurance Escrow Amount based upon the amount of premiums and real
estate taxes paid for the preceding year, subject to adjustment as and when the
amount of such premiums and real estate taxes are ascertained by Tenant. The Tax
and Insurance Escrow Amount in the Tax and Insurance Account shall be and
constitute additional security for the performance of Tenant's obligations
hereunder and shall be subject to Landlord's security interest therein and
shall, if there are sufficient funds in escrow, be used to pay taxes and
insurance premium when due. Landlord and Tenant shall execute such documentation
as may be necessary to create and maintain Landlord's security interest in the
Tax and Insurance Account. The provisions of Section 23.9 shall not be
applicable to this Article 5.
ARTICLE VI
UTILITIES
Tenant shall be liable for and shall promptly pay directly all charges
and fees (together with any applicable taxes or assessments thereon) when due
for water, gas, electricity, air conditioning, heat, septic, sewer, refuse
collection, telephone and any other utility charges, impact fees, or similar
items in connection with the use or occupancy of the Premises. Landlord shall
not be responsible or liable in any way whatsoever for the quality, quantity,
impairment, interruption, stoppage, or other interference with any utility
service, including, without limitation, water, air conditioning, heat, gas,
electric current for light and power, telephone, or any other utility service
provided to or serving the Premises. No such interruption, termination or
cessation of utility services shall relieve Tenant of its duties and obligations
pursuant to this Lease, including, without limitation, its obligation to pay all
Rent as and when the same shall be due hereunder.
15
ARTICLE VII
AGREEMENTS, FEES, ETC.
Tenant shall keep and maintain in full force and free from defaults on
the part of Tenant during the entire Term of this Lease all Franchise
Agreements, license agreements and management agreements involving or relating
to the operation of the Premises for its Permitted Use. In addition, Tenant
shall either (a) keep and maintain in full force and free from defaults all
service and maintenance contracts and other contracts and agreements involving
or relating to the operation of the Premises for its Permitted Use (other than
those set forth in the preceding sentence), or (b) itself provide the services
contemplated by the agreements referenced in subparagraph (a) hereof. Tenant
hereby represents that there are no equipment leases or maintenance or service
contracts which are binding on Landlord or Tenant. Any new, and any change in
any Franchise Agreement, license agreement, management agreement or equipment
lease shall require Landlord's prior written consent, and with respect to any
new, or amendment to any, Franchise Agreement, license agreement, management
agreement, or equipment lease, the terms of Section 23.9 shall not be
applicable. Tenant shall, at its sole cost and expense, pay all franchise fees,
license fees, management fees or other expenses of any kind or nature whatsoever
in connection with its operation of the Premises for its Permitted Use. Tenant
shall also obtain and maintain all liquor licenses, certificates of occupancy
and permits and licenses required to operate the Premises.
ARTICLE VIII
INSURANCE
8.1 Insurance by Tenant. Throughout the Term of this Lease, Tenant
shall, at its sole cost and expense, maintain in full force and effect the
following types and amounts of insurance coverage on the Premises described in
this Section 8.1. The policies for insurance coverage on the Premises, including
the Improvements, FF&E and Tenant's Personal Property, shall satisfy the
requirements of the Franchise Agreement and of any mortgage, security agreement
or other financing lien affecting the Premises and all easement agreements
affecting the Premises, if any.
(a) Property Insurance. "All Risk" (special) form insurance on
the Improvements and all items of personal property used or useful in
the operation and use of the Premises, including but not limited to all
signs, awnings, canopies, gazebos, fences and retaining walls, and all
FF&E and all other operating supplies and equipment for all lobbies,
dining rooms, kitchens, laundries, halls, pantries, toilets, foyers,
corridors and other public rooms and places, and for the parlors,
suites, dressing rooms, bedrooms, baths and other private rooms, and
for all workshops, store rooms and offices in the Premises necessary
and proper for the complete and comfortable use, enjoyment, occupancy
and operation of the Premises as required herein including all
permitted alterations, changes, additions and replacements thereof and
thereto, including without limitation, insurance against loss or damage
from the perils covered under "All Risk" (Special) form, including, but
not limited to the following: fire, windstorm, sprinkler leakage,
vandalism and malicious mischief, water damage and other hazards and
perils generally included
16
under extended coverage, all in an amount sufficient to cover the full
(100%) replacement value of the Improvements and FF&E, without a
co-insurance provision, and shall include an Agreed Value endorsement
and an Inflation Guard endorsement.
(b) Ordinance or Law Coverage with limits of not less than the
Improvements for Coverage A (Loss to the undamaged portion of the
building), limits not less than $500,000.00 for Coverage B (Demolition
Cost Coverage), and limits not less than $500,000.00 for Coverage C
(Increased Cost of Construction Coverage).
(c) Boiler and Machinery or System breakdown Insurance. Boiler
and Machinery insurance against loss or damage from boilers, pressure
vessels, or similar apparatus, air conditioning equipment, piping and
machinery, pumps, engines, transformers, compressors, sprinklers, if
any, now or hereafter installed in the Premises in the minimum amount
of $5,000,000.00 or in such greater amounts as are then customary or as
may be reasonably requested by Lessor from time to time.
(d) Builder's Risk Insurance. Builder's risk insurance in
accordance with the requirements of this Article (in policy form and
limits acceptable to the Landlord) but only prior ro commencement of
and during the construction of any permitted rehabilitation,
replacement, reconstruction, restoration, renovation or alteration to
the Premises.
(e) Flood Hazard Insurance. Flood hazard insurance if any
portion of the Improvements is currently or at any time in the future
located in a federally designated "Special Flood Hazard Area" and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968 (and any successor thereto) in an amount that
reasonably assures that there will be sufficient proceeds to replace
the Improvements and the FF&E in the event of a loss against which such
insurance is issued, with limits and deductibles acceptable to
Landlord.
(f) Earthquake Insurance. Earthquake insurance, if the
Premises is currently, or at any time in the future, located within a
Major Earthquake Disaster Area, in amounts, form and substance and with
limits and deductibles satisfactory to the Landlord.
(g) Business Income Insurance. Business Income Insurance to be
written on Special Form (and on Earthquake and Flood forms is such
insurance for those risks is required) including Extra Expense, without
a provision for co-insurance including an amount sufficient to pay at
least eighteen (18) months of Rent for the benefit of Landlord, and at
least eighteen months of Net Operating Income less Rent for the benefit
of the Tenant.
(h) Commercial General Liability Insurance. Occurrence form
commercial general liability and property damage insurance covering the
Premises and the business conducted thereon and therein and providing
coverage against liability for personal and
17
bodily injury, death and property damage, including Liquor Liability,
having limits of not less than ONE MILLION AND NO/100 DOLLARS
($1,000,000.00) per occurrence and TWO MILLION AND NO/100 DOLLARS
($2,000,000.00) aggregate (per location) and the limit on fire legal
liability should be increased to a minimum of $1,000,000.00. Such
insurance shall cover at least the following hazards: (i) premises and
operations; (ii) products and completed operations; (iii) independent
contractors; (iv) blanket contractual liability for all written and
oral contracts; (v) advertising and personal injury and broad form
property damage; and (vi) contractual liability covering the
indemnities contained in Article XVIII hereof to the extent the same is
available. Such insurance, and any and all other liability insurance
maintained by Tenant in excess of or in addition to that required
hereunder, shall name Landlord as an additional insured.
(i) Business Auto Liability Insurance. Business auto liability
insurance including owned, non-owned and hired vehicles for combined
single limit of bodily injury and property damage of not less than
$1,000,000.00 per occurrence.
(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
$1,000,000.00 per occurrence.
(k) Workers Compensation Insurance. Workers' compensation
insurance, or comparable coverage if not required by state law, and
Employers' Liability insurance in an amount of at least $1,000,000.00
per accident/disease covering all persons employed in connection with
the performance of work of any nature in or about the Premises, in a
form prescribed by the laws of the State in which the Premises is
located.
(l) Umbrella Liability Policy. An Umbrella Policy shall be
following form Primary General Liability, Automobile Liability and
Employers Liability and include Liquor Liability with limits of not
less than $50,000,000.00 per occurrence/aggregate per location.
(m) Other Insurance. Such additional insurance as may be
reasonably required from time to time, by Landlord or any Mortgagee
which is customarily carried by comparable lodging properties in the
area, including, but not limited to Plate Glass Insurance, Fidelity
Bonds/Employee Dishonesty Insurance, Innkeeper's Legal Liability
Insurance, Safe Deposit Box Legal Liability Insurance, and Employment
Practices Liability Insurance.
All deductibles on the insurance requirements of subparagraphs
(a), (b), (c), (d), (e), (f) and (g) above (except as otherwise
stipulated), shall not exceed $100,000.00 unless approved by Landlord.
All insurance required hereunder, and all other insurance maintained by
tenant on the Improvements and FF&E in excess of or in addition to that
required hereunder, shall be carried in favor of Landlord and Tenant,
as their respective interests may appear.
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8.2 Carriers and Features. All insurance policies required to be
carried by Tenant as provided in this Article shall be issued by insurance
companies approved by Landlord authorized and licensed to do business in the
State in which the Premises is located. The insurance companies must have (as
determined by Landlord at its discretion): (a) an investment grade rating for
claims paying ability assigned by a credit rating agency approved by Landlord
and (b) a general policy rating of A- or better and a financial class of VIII or
better by A.M. Best & Company, Inc. All such policies shall be for periods of
not less than one year and Tenant shall renew the same at least thirty (30) days
prior to the expiration thereof. All such policies shall name as additional
insureds, Landlord, CNL Hospitality Properties, Inc., CNL Real Estate Advisors,
Inc. and any wholly or principally owned subsidiaries of either of them that may
now or hereafter exist, as well as any Mortgagee or collateral assignee of
Landlord, and shall require not less than thirty (30) days written notice to
Landlord prior to any cancellation thereof or any change reducing coverage
thereunder or any other material change, provided, however, for any cancellation
due to non-payment, ten (10) days notice shall be required. In addition to the
foregoing, all policies of insurance required in Section 8.1 above shall contain
clauses or endorsements to the effect that (a) no act or negligence of Tenant,
or anyone acting for Tenant, or failure to comply with the provisions of any
policy which might otherwise result in a forfeiture of the insurance or any part
thereof, shall in any way affect the validity or enforceability of the insurance
insofar as Landlord is concerned, (b) Landlord shall not be liable for any
insurance premiums thereon or subject to any assessments thereunder and (c) the
coverages provided thereby will be primary and any insurance carried by any
additional insured shall be excess and non-contributory.
Tenant shall pay the premiums for all insurance policies which Tenant
is obligated to carry under this Article and, at least thirty (30) days prior to
the date any such policy of insurance must be in effect, deliver to Landlord a
copy of the policy or policies, or a certificate or certificates thereof (on
ACCORD 27 forms or equivalent) evidencing the coverage required herein and
setting forth deductibles and the amount thereof, if any, along with evidence
that the premiums therefor have been paid for at least the next ensuing
quarter-annual period. Renewal certificates shall be delivered to the Landlord
not later than the effective date of such insurance. A true and certified copy
of each required policy shall be delivered to the Landlord not later than sixty
(60) days after the effective date of such insurance.
8.3 Failure to Procure Insurance. In the event Tenant shall fail to
procure insurance required under this Article and fail to maintain the same in
full force and effect continuously during the Term of this Lease, Landlord shall
be entitled to procure (but not be obligated to procure) the same and Tenant
shall immediately reimburse Landlord for such premium expense as Additional
Rent. Further, Tenant's obligation to maintain the insurance hereunder shall not
relieve Tenant of liability under the indemnity provisions of this Lease.
8.4 Waiver of Subrogation. Tenant agrees that, with respect to any
losses incurred by Tenant and covered or contemplated by any of the policies
referenced herein, Landlord shall not have any liability to Tenant, nor to any
insurer of Tenant, for or in respect of such losses and
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Tenant shall require all policies of risk insurance carried by it on its
property in the Premises to contain or be endorsed with a provision in and by
which the Tenant and the insurer designated therein shall waive their rights of
recovery and subrogation against Landlord.
8.5 No Separate Insurance. Tenant shall not take out separate
insurance, concurrent in form or contributing in the event of loss with that
required by Sections 8.1 or 8.2 hereof, or increase the amount of any existing
insurance by securing an additional policy or additional policies, unless all
parties having an insurable interest in the subject matter of such insurance,
including Landlord and all Mortgagees, are included therein as additional
insureds and the loss is payable under such insurance in the same manner as
losses are payable under this Lease. In the event that Tenant shall take out any
such separate insurance or increase the amounts of any then existing insurance,
Tenant shall give Landlord prompt notice thereof.
ARTICLE IX
DAMAGE OR DESTRUCTION
9.1 Restoration and Repair. If, during the Term the Premises shall be
totally or partially destroyed and the Improvements located thereon and/or the
FF&E are thereby rendered Unsuitable for Its Permitted Use, (as hereinafter
defined), either Landlord or Tenant may, by the giving of notice thereof to the
other party, terminate this Lease, whereupon, this Lease shall terminate and
Landlord shall be entitled to retain the insurance proceeds payable on account
of such damage and Tenant shall pay or pay to Landlord the amount of any
deductible. If, during the Term of this Lease, the Premises and/or Improvements
and/or FF&E shall be destroyed or damaged in whole or in part by fire, windstorm
or any other cause whatsoever, but the Premises are not rendered Unsuitable for
Its Permitted Use, Tenant shall give Landlord immediate notice thereof and shall
subject to the provisions of Section 9.2 below, repair, reconstruct or replace
the Improvements and/or FF&E, or the portion thereof so destroyed or damaged, at
least to the extent of the value and character thereof existing immediately
prior to such occurrence including any Improvements or alterations required to
be made by any governmental body, county or city agency, which may increase the
replacement value of the Improvements which existed prior to the damage, due to
any changes in code or building regulations. All such restoration work shall be
started as practicable and diligently contemplated at Tenant's sole cost and
expense. Tenant shall, however, immediately take such action as necessary to
assure that the Premises (or any portion thereof, do not constitute a nuisance
or otherwise present or constitute a health or safety hazard.
9.2 Insufficient Insurance Proceeds. If this Lease is not otherwise
terminated pursuant to this Section 9 and the cost of the repair or restoration
of the Premises exceeds the amount of insurance proceeds received by Landlord
and Tenant pursuant to this Section 9, Tenant shall give Landlord notice
thereof, which notice shall set forth in reasonable detail the nature of such
deficiency and whether Tenant shall pay and assume the amount of such deficiency
(Tenant having no obligation to do so except that, if Tenant shall elect to make
such funds available, the same shall become an irrevocable obligation of Tenant
pursuant to this Lease). In the event Tenant shall elect not to pay and assume
the amount of such deficiency, Landlord shall have the
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right (but not the obligation), exercisable at Landlord's sole election by
notice to Tenant, given within sixty (60) days after Tenant's notice of the
deficiency, to elect to make available for application to the cost of repair or
restoration the amount of such deficiency; provided, however, in such event upon
any disbursement by Landlord thereof, the Base Rent shall be adjusted in the
manner contemplated for Major Repairs as provided in Section 11.2 hereof. In the
event that neither Landlord nor Tenant shall elect to make such deficiency
available for restoration, either Landlord or Tenant may terminate this Lease by
notice to the other, whereupon this Lease shall terminate as provided in Section
9.1.
For purposes hereof, the term "Unsuitable for Its Permitted Use" shall
mean a state or condition of the Premises such that following any damage or
destruction involving the Premises, the Premises cannot be operated in the good
faith judgement of Tenant (after conferring with Franchisor, if required) on a
commercially practicable basis for its Permitted Use and it cannot reasonably be
expected to be restored to substantially the same condition as existed before
such damage or destruction and as is otherwise required by this Section within
twelve (12) months following such damage or destruction or such other shorter
period of time as to which business interruption insurance is available to cover
Rent and other costs related to the Premises following such damage or
destruction.
9.3 Escrow of Insurance Proceeds. In the event of a casualty resulting
in a loss to the Improvements and/or FF&E in an amount greater than ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($100,000.00), the proceeds of all insurance
policies maintained by Tenant shall be deposited in Landlord's name in an escrow
account at a bank or other financial institution designated by Landlord, and
shall be used by Tenant for the repair, reconstruction or restoration of the
Improvements and/or FF&E to their original condition. Such proceeds shall be
disbursed periodically by Landlord upon certification of the architect or
engineer having supervision of the work that such amounts are the amounts paid
or payable for the repair, reconstruction or restoration. Tenant shall, at the
time of establishment of such escrow account and from time to time thereafter
until said work shall have been completed and paid for, furnish Landlord with
adequate evidence acceptable to Landlord that at all times the undisbursed
portion of the escrowed funds, together with any funds made available by Tenant,
is sufficient to pay for the repair, reconstruction or restoration in its
entirety. Tenant shall obtain, and make available to Landlord, receipted bills
and, upon completion of said work, full and final waivers of lien. In the event
of a casualty resulting in a loss payment for the Improvements in an amount
equal to or less than the amount stated above, the proceeds shall be paid to
Tenant, and shall be applied towards repair, reconstruction and restoration. Any
and all loss adjustments with respect to losses payable hereunder shall require
the prior written consent of Landlord. All salvage resulting from any risk
covered by insurance shall belong to Tenant, provided any rights to the same
have been waived by the insurer. In addition, notwithstanding anything in this
Lease to the contrary, Tenant shall be strictly liable and solely responsible
for the amount of any deductible and shall, upon any insurable loss in excess of
$100,000.00, pay over the amount of such deductible to Landlord (for deposit in
escrow with the insurance proceeds, as aforesaid) at the time and in the manner
herein provided for payment of the applicable proceeds to Landlord.
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9.4 Abatement of Rent. This Lease shall remain in full force and effect
and Tenant's obligation to make all payments of Rent and to pay all the charges
as and when required under this Lease shall remain unabated during the Term
notwithstanding any damage involving the Premises (provided that Landlord shall
credit against such payments any amounts paid to Landlord as a consequence of
such damage under any business interruption insurance obtained by Tenant
hereunder). The provisions of this Section 9.4 shall be considered an express
agreement governing any cause of damage or destruction to the Premises and, to
the maximum extent permitted by law, Tenant hereby waives the application of any
local or state statute, law, rule, regulation or ordinance in effect during the
Term which provides for such a contingency.
9.5 Tenant's Property and Business Interruption Insurance. All
insurance proceeds payable by reason of any loss of or damage to any of Tenant's
Personal Property and the business interruption insurance maintained for the
benefit of Tenant shall be paid to Tenant; provided, however, no such payments
shall diminish or reduce the insurance payments otherwise payable to or for the
benefit of Landlord hereunder.
ARTICLE X
ADDITIONS, ALTERATIONS AND REMOVALS
10.1 Prohibition. Except as hereinafter expressly provided in Section
10.2, no portion of the Premises shall be demolished, removed or altered by
Tenant in any manner whatsoever without the prior written consent and approval
of Landlord, which is not subject to Section 23.9 and may be withheld by
Landlord in its sole and absolute discretion. Notwithstanding the foregoing,
however, Tenant shall be entitled and obligated to undertake all alterations to
the Premises required by the Franchise Agreement or any applicable law or
ordinance including, without limitation, any alterations required by any
Accessibility Laws, and, in such event, Tenant shall comply with the provisions
of Section 10.2 below.
10.2 Permitted Renovations. Landlord acknowledges that various minor,
non-structural alterations may be undertaken by Tenant from time to time and
that Tenant may be obligated under the Franchise Agreement to perform
renovations and alterations. Landlord hereby agrees that Tenant shall be
entitled to perform all such work on or about the Improvements; provided,
however, that the same shall not weaken or impair the structural strength of the
Improvements, or unless required by Franchise Agreement, alter their exterior
design or appearance or the interior design or appearance of the lobby,
materially impair use of any of the service facilities or fundamentally affect
the character or suitability of the Improvements for hotel purposes or
materially lessen or impair their value, and provided further, that in
connection with any such permitted renovation, the following conditions shall be
met, to wit:
(a) Before the commencement of any such work, plans and
specifications therefor or a detailed itemization thereof prepared by a
licensed architect approved by Landlord shall be furnished to Landlord
for its review approval. The terms of Section 23.9 shall not be
applicable to such approval. Such approval shall not constitute
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Landlord's agreement that the plans and specification are incompliance
with applicable law or an assumption by Landlord of any liability in
connection with the renovation work contemplated thereby.)
(b) Before the commencement of any such work, Tenant shall
obtain the approval thereof by all governmental departments or
authorities having or claiming jurisdiction of or over the Premises, if
required by such departments or authorities, and with any public
utility companies having an interest therein, if required by such
utility companies. In any such work, Tenant shall comply with all
applicable laws, ordinances, requirements, orders, directions, rules
and regulations of the federal, state, county and municipal governments
and of all other governmental authorities having or claiming
jurisdiction of or over the Premises and of all their respective
departments, bureaus and offices, and with the requirements and
regulations, if any, of such public utilities, of the insurance
underwriting board or insurance inspection bureau having or claiming
jurisdiction, or any other body exercising similar functions, and of
all insurance companies then writing policies covering the Premises or
any part thereof.
(c) Tenant represents and warrants to Landlord that all such
construction work will be performed in a good and workmanlike manner
and in accordance with the plans and specifications therefore, the
terms, provisions and conditions of this Lease and all governmental
requirements.
(d) Landlord shall have the right to inspect any such
construction work at all times during normal working hours and to
maintain at the Premises for that purpose (at its own expense) such
inspector(s) as it may deem necessary so long as such inspections do
not interfere with Tenant's work (but Landlord shall not thereby assume
any responsibility for the proper performance of the work in accordance
with the terms of this Lease, nor any liability arising from the
improper performance thereof).
(e) All such work shall be performed at Tenant's cost and
expense and free of any expense to Landlord and free of any liens on
Landlord's fee simple interest on or Tenant's leasehold interest in the
Premises.
(f) Upon substantial completion of any such work Tenant shall
procure a certificate of occupancy, if applicable, from the appropriate
governmental authorities verifying the substantial completion thereof.
(g) Tenant shall, and hereby agrees to, indemnify and save and
hold Landlord harmless from and against and reimburse Landlord for any
and all loss, damage, cost, liability, fee and expense (including,
without limitation, reasonable attorney's fees based upon service
rendered at hourly rates) incurred by or asserted against Landlord
which is occasioned by or results, directly or indirectly, from any
construction or renovation
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activities conducted upon the Premises; whether or not the same is
caused by or the fault of Tenant or any contractor, subcontractor,
laborer, supplier, materialman or any other third party.
10.3 Additions, Expansions and Structural Alterations. Except as
expressly permitted in Section 10.2 above, nothing in this Article or elsewhere
in this Lease shall be deemed to authorize Tenant to construct and erect any
additions to or expansions of the Improvements, or perform any alterations of a
structural nature whatsoever; it being understood that Tenant may do so only
with the prior written consent and approval of Landlord, which consent and
approval may be withheld by Landlord in its sole and absolute discretion and may
be conditioned upon the payment by Tenant to Landlord of a fee.
ARTICLE XI
MAINTENANCE AND REPAIRS
11.1 Repairs by Tenant. Except as provided in Section 11.2 hereof,
Tenant shall, at all times during the Term of this Lease and at its sole cost
and expense, put, keep, replace and maintain the Premises (including, without
limitation, all portions of the Improvements, including without limitation, the
roof, plumbing systems, electric systems and HVAC systems, Tenant's Personal
Property and the FF&E) in good repair and in good, safe and substantial order
and condition, shall make all repairs thereto, both inside and outside,
structural and non-structural, ordinary and extraordinary, howsoever the
necessity or desirability for repairs may occur, and whether or not necessitated
by wear, tear, obsolescence or defects, latent or otherwise, and shall use all
reasonable precautions to prevent waste, damage or injury. Tenant shall also, at
its own cost and expense, put, keep, replace and maintain all landscaping,
signs, sidewalks, roadways, driveways and parking areas within the Premises in
good repair and in good, safe and substantial order and condition and free from
dirt, standing water, rubbish and other obstructions or obstacles. In addition,
Tenant shall also, at its sole cost and expense, put, keep, replace and maintain
the FF&E and Tenant's Personal Property in good repair and in good, safe and
substantial order, howsoever the necessity or desirability for repairs may
occur, and whether or not necessitated by wear, tear, obsolescence or defects.
Tenant may at any time and from time to time remove and dispose of any of the
FF&E which has become obsolete or unfit for use or which is no longer useful in
the operation of the Hotel's business conducted by Tenant on the Premises;
provided, however, that the FF&E so disposed of shall be promptly replaced by
with other FF&E not necessarily of the same character, but of at least equal
usefulness and quality as, and having a value at least equal to the value of,
those disposed of, and in any event in accordance with and in compliance with
the standards required by and the provisions of this Lease. Tenant shall further
at all times maintain the Premises, including the grounds and landscaping, in an
aesthetic pleasing manner.
11.2 Landlord's Obligation. Except as hereinafter provided in this
Section 11.2 Landlord shall not be required to make any alterations,
reconstructions, replacements, changes, additions, improvements or repairs of
any kind or nature whatsoever to the Premises or any portion thereof (including,
without limitation, any portion of the Improvements or any FF&E)
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at any time during the Term of this Lease. Landlord agrees that it shall be
Landlord's responsibility to make and pay for major repairs, alterations,
improvements, renewals, replacements or additions to the Premises, structure,
roof or exterior facade, and to its mechanical, electrical, heating, ventilating
air conditioning, plumbing and vertical transportation systems (all of the
foregoing the "Major Repairs"). In this regard, Tenant shall prepare and deliver
to Landlord for its review and approval, an annual estimate (the "Building
Estimate") of the expenses necessary for Major Repairs which Tenant believes
should be made to the Premises for the following Lease Year, which Building
Estimate shall be submitted to Landlord for its review and approval not later
than sixty (60) days prior to the commencement of each calendar year during the
Term hereof. Tenant acknowledges and agrees that the terms of Section 23.9 shall
not be applicable to this Section 11.2 and any Major Repairs not approved by
Landlord shall not be made; provided, however, that Landlord agrees that it will
not withhold its consent with respect to Major Repairs which are required by
reason of any law, ordinance, regulation or order of governmental authority
having jurisdiction (as determined by Landlord in its reasonable judgement) for
the continued safe and orderly operation of the Premises or which are required
by the Franchise Agreement or which are required in the case of an emergency. If
the Landlord does not approve the Building Estimate or any Major Repair
contemplated therein, the parties shall attempt in good faith during the
subsequent thirty (30) day period to resolve any disputes, which attempts shall
include, if requested by either party, at least one meeting of executive-level
officers of Landlord and Tenant. In the event that the parties are still not
able to reach agreement on the Building Estimate for any particular Lease Year
after complying with the foregoing requirements of this Section 11.2, the
parties shall adopt such portions of the Building Estimate as they may have
agreed upon and any matters not agreed upon shall be referred to arbitration.
Pending the results of such arbitration or the earlier agreement of the parties,
no Major Repairs shall be made unless the same are set forth in a previously
approved Building Estimate or are specifically required by Landlord or otherwise
required in case of emergency as aforesaid. With respect to any such matter to
be submitted to arbitration, Landlord shall be entitled to designate any
nationally recognized accounting firm with a hospitality division of which
Landlord or an Affiliate of Landlord is not a significant client to serve as
arbitrator of such dispute within fifteen (15) days after written demand for
arbitration is received or sent by Landlord. In the event Landlord fails to make
such designation within such fifteen (15) day period, Tenant shall be entitled
to designate any nationally recognized accounting firm with a hospitality
division of which Tenant or an Affiliate of Tenant is not a significant client
to serve as arbitrator of such dispute within fifteen (15) days after Landlord
fails to timely make such designation. In the event no nationally recognized
accounting firm satisfying such qualifications is available and willing to serve
as arbitrator, the arbitrator shall be appointed by the American Arbitration
Association from among the members of its panel who are qualified and who have
experience in resolving matters of a nature similar to the matter to be resolved
by arbitration. In any event a single arbitrator shall be designated and shall
resolve the dispute. The arbitrator's decision shall be binding on all parties
and shall not be subject to further review or appeal except as otherwise allowed
by applicable law. Upon failure of either party to comply with the arbitrator's
decision, the arbitrator shall be empowered at the request of the other party to
order such compliance by the non-complying party and to supervise or arrange for
the supervision of the non-complying party to comply with the arbitrator's
decision, all at the expense of the non-complying party. To
25
the maximum extent possible, the arbitrator and the parties, and the American
Arbitration Association, if applicable, shall take any action necessary to
ensure that the arbitration shall be concluded within ninety (90) days following
such dispute. The fees and expenses of the arbitrator shall be shared equally by
the Landlord and the Tenant. Unless otherwise agreed to in writing by the
parties or required by the arbitrator or the American Arbitration Association,
if applicable, arbitration proceedings hereunder shall be conducted in the state
where the Premises are located. Notwithstanding formal rules of evidence, each
party may submit such evidence as each party deems appropriate to support its
position and the arbitrator shall have access to and the right to examine all
books and records of Landlord and Tenant regarding the Premises during such
arbitration. In the event of the receipt by Tenant of a governmental order or
other circumstances ascribed in the preceding sentence, Tenant shall promptly
deliver the same to Landlord.
The cost of Major Repairs shall be borne by Landlord and upon funding
of the same by Landlord, Base Rent shall be adjusted as hereinafter provided in
this paragraph. Landlord and Tenant acknowledge and agree that in the event that
funding is necessary for Major Repairs, Landlord shall provide the funds
required for such expenditures ("Additional Capital Investment") and Base Rent
shall be increased by the amount necessary to provide a per annum yield on the
Additional Capital Investment equal to the greater of (a) ten percent 10.00% or
(b) the yield on the ten-year U.S. Treasury Securities (at the time the
Additional Capital Investment is requested by Tenant), plus 375 basis points.
11.3 The FF&E Reserve. Tenant shall establish a separate interest
bearing reserve account (the "FF&E Reserve") in a bank designated by Landlord
and reasonably approved by Tenant. All interest earned on the FF&E Reserve shall
be added to and remain part of the FF&E Reserve. The FF&E Reserve shall be used
for the replacement and renewal of FF&E in an amount which shall not be less
than the amount determined in accordance with the following provisions of this
Section 11.3 and Tenant shall use the FF&E Reserve only for the purposes of
making replacements and substitutions to the FF&E and other capital expenditures
as hereinafter referenced. All funds in the FF&E Reserve, all interest earned
thereon and all property purchased with funds from the FF&E Reserve shall be and
remain the property of Landlord. Both Tenant and Landlord shall be signatories
on the FF&E Reserve Account 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 FF&E 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 FF&E 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 FF&E 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 FF&E Reserve. Deposits
to the FF&E Reserve with respect to any such month shall be made in arrears
within fifteen (15) 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
FF&E Reserve and of the account in which the FF&E Reserve is
26
maintained. Tenant may only withdraw funds from the FF&E Reserve contained in
the Approved FF&E Budget and, if not, only with the prior approval of Landlord,
which funds shall be withdrawn to cover the costs of the replacement, renewal
and additions related to the FF&E at the Premises and for routine or non-major
repairs and maintenance to the Premises which are normally capitalized under
generally accepted accounting principles, such as exterior and interior painting
and resurfacing building walls, floors, roofs and parking areas and replacing
folding walls and the like contemplated in the FF&E Budget (but which are not
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 "FF&E Budget"). Such FF&E 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
budget items for all projected expenditures for replacements, substitutions and
additions to FF&E. Tenant shall provide to Landlord reasonable additional
detail, information and assumptions used in the preparation of the FF&E Budget
as requested by Landlord. Tenant shall review the FF&E Budget with Landlord, and
subject to Landlord's approval, Tenant shall implement such FF&E Budget for the
successive calendar year (during which it shall, if approved by Landlord, be
referred to as the "Approved FF&E Budget"). Landlord shall have the right to
disapprove any FF&E 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 FF&E 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
FF&E Reserve, nor shall Tenant deviate from the Approved FF&E 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. Upon the
expiration or earlier termination of this Lease, funds in the FF&E Reserve and
all property purchased with funds from the FF&E Reserve shall be paid, granted
and assigned to Landlord as Additional Rent.
ARTICLE XII
LANDLORD'S RIGHT TO INSPECT
Landlord, Mortgagee and their agents shall have the right to enter upon
the Premises or any portion thereof at any reasonable time to inspect the same,
including but not limited to, the operation, sanitation, safety, maintenance and
use of the same, or any portions of the same and to assure itself that Tenant is
in full compliance with its obligations under this Lease (but Landlord and
Mortgagee shall not thereby assume any responsibility for the performance of any
of Tenant's obligations hereunder, nor any liability arising from the improper
performance thereof). In making any such inspections, neither Landlord nor
Mortgagee shall unduly interrupt or interfere with the conduct of Tenant's
business.
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ARTICLE XIII
ASSIGNMENT, TRANSFER AND SUBLETTING BY TENANT
13.1 Transfers Prohibited Without Consent. Except as provided in
Section 13.4 hereof, Tenant shall not, without the prior written consent of
Landlord, in each instance, sell, assign or otherwise transfer this Lease, or
Tenant's interest in the Premises, in whole or in part, or any rights or
interest which Tenant may have under this Lease, or sublet the Premises, or any
part thereof, or grant or permit any lien or encumbrance on or security interest
in Tenant's interest in this Lease. If given, the consent of Landlord to an
assignment, transfer, subletting or encumbrance shall in no event be construed
to relieve Tenant or such assignee or subtenant from the obligation of obtaining
the express consent in writing of Landlord to any further assignment, transfer,
subletting or encumbrance. In addition, any such approved assignee shall
expressly assume this Lease by an agreement in recordable form, an original
executed counterpart of which shall be delivered to Landlord prior to any
assignment of the Lease. Any assignment, transfer, sublease or encumbrance in
violation of this Article shall be voidable at Landlord's option. The terms of
Section 23.9 shall not be applicable to Landlord's approval hereunder.
13.2 Indirect Transfer Prohibited Without Consent. A sale, assignment,
pledge, transfer, exchange or other disposition of (a) the stock of Tenant or
any general partner interest in Tenant or (b) any interest of a member or
members of Tenant which results in a change or transfer of management or control
of Tenant, or a merger, consolidation or other combination of Tenant with
another entity which results in a change or transfer of management or control of
Tenant, shall be deemed an assignment hereunder and shall be subject to Section
13.1 hereof. For purposes hereof, exchange or transfer of management or control
or effective control, shall mean a transfer of 50% or more of the economic
benefit of, or control of, any such entity.
13.3 Adequate Assurances. Without limiting any of the foregoing
provisions of this Article, if, pursuant to the U.S. Bankruptcy Code, as the
same may be amended from time to time, Tenant is permitted to assign or
otherwise transfer its rights and obligations under this Lease in disregard of
the restrictions contained in this Article, the assignee agrees to provide
adequate assurance to Landlord (a) that any Percentage Rent shall not decline
substantially after the date of such assignment, (b) of the continued use of the
Premises solely in accordance with the Permitted Use thereof, (c) of the
continuous operation of the business in the Premises in strict accordance with
the requirements of Article III hereof, and (d) of such other matters as
Landlord may reasonably require at the time of such assumption or assignment.
Such assignee shall agree that adequate assurance of future Percentage Rent
under this Lease by the assignee shall mean the deposit of cash security with
Landlord in an amount equal to the sum of the Percentage Rent paid for the
preceding calendar year or, if a calendar year has not yet elapsed, a sum equal
to five percent (5%) of the Base Rent then in effect, which deposit shall be
held by Landlord, without interest, for the balance of the Term as security for
the full and faithful performance of all the obligations under this Lease on the
part of the assignee yet to be performed. In addition, adequate assurance shall
mean that any such assignee shall have a net worth (exclusive of good
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will) of not less than twice the aggregate of the Rent due and payable for the
previous Lease Year. Such assignee shall expressly assume this Lease by an
agreement in recordable form, an original counterpart of which shall be
delivered to Landlord prior to an assignment of the Lease.
13.4 Permitted Transfer. Landlord hereby acknowledges and agrees that
commencing with the first day of the fourth Lease Year of the Term hereof, it
will consent to any requested transfer of this Lease by Tenant if Tenant is not
in default hereunder and Tenant demonstrates to the Landlord's reasonable
satisfaction that the proposed purchaser, transferee or assignee is a Single
Purpose Entity (a) who has a verifiable net worth (determined in accordance with
generally accepted accounting principles) of not less than two times the Rent
due and payable for the Lease Year immediately preceding such proposed sale or
transfer; (b) who is approved by the Franchisor under the Franchise Agreement
and, if required, is approved by the manager of the Premises; (c) who has not
been convicted of a felony and is known to have not engaged in criminal activity
or other activity involving moral turpitude (including any affiliate of such
person); (d) who does not, as its primary business, own, lease or operate any
casino or gambling facility (including any affiliate of such person or entity);
(e) who does not own or operate a distillery, winery or brewery or
distributorship of alcoholic beverages if such leasing, ownership or operation
might reasonably impair the ability of Tenant or the manager of the Premises, or
their Affiliates to obtain or retain any alcoholic beverage license for the
premises; or who does not own or operate a hotel or other facility proscribed in
Section 3.5 hereof. Any approval of such successor Tenant shall not affect or
alter Landlord's approval rights of each manager of the Premises and the
conditions in the Section 13.4 shall only apply to a transfer of Tenant's
interest in this Lease.
ARTICLE XIV
LANDLORD'S INTEREST NOT SUBJECT TO LIENS
14.1 Liens, Generally. Tenant shall not, directly or indirectly, create
or cause to be imposed, claimed or filed upon the Premises, or Tenant's assets,
properties or income or any portion thereof, or upon the interest of Landlord
therein, any lien, charge, attachment, claim or encumbrance of any nature
whatsoever. If, because of any act or omission of Tenant, any such lien, charge
or encumbrance shall be imposed, claimed or filed by any party whosoever or
whatsoever, Tenant shall, at its sole cost and expense, cause the same to be
promptly (and in no event later than fifteen (15) days following receipt of
notice of such lien, charge or encumbrance) fully paid and satisfied or
otherwise promptly discharged of record (by bonding or otherwise) and Tenant
shall indemnify and save and hold Landlord harmless from and against any and all
costs, liabilities, suits, penalties, claims and demands whatsoever, and from
and against any and all reasonable attorney's fees, at both trial and all
appellate levels, resulting or on account thereof and therefrom. In the event
that Tenant shall fail to comply with the foregoing provisions of this Section,
Landlord shall have the option, but not the obligation, of paying, satisfying or
otherwise discharging (by bonding or otherwise) such lien, charge or encumbrance
and Tenant agrees to reimburse Landlord, upon demand and as Additional Rent, for
all sums so paid and for all costs and expenses incurred by Landlord in
connection therewith, together with interest thereon, until paid.
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14.2 Mechanics Liens. Landlord's interest in the Premises shall not be
subjected to liens of any nature by reason of Tenant's construction, alteration,
renovation, repair, restoration, replacement or reconstruction of any
improvements on or in the Premises, or by reason of any other act or omission of
Tenant (or of any person claiming by, through or under Tenant) including, but
not limited to, mechanics' and materialmen's liens. All persons dealing with
Tenant are hereby placed on notice that such persons shall not look to Landlord
or to Landlord's credit or assets (including Landlord's interest in the
Premises) for payment or satisfaction of any obligations incurred in connection
with the construction, alteration, renovation, repair, restoration, replacement
or reconstruction thereof by or on behalf of Tenant. Tenant has no power, right
or authority to subject Landlord's interest in the Premises to any mechanic's or
materialmen's lien or claim of lien. If a lien, a claim of lien or an order for
the payment of money shall be imposed against the Premises on account of work
performed, or alleged to have been performed, for or on behalf of Tenant, Tenant
shall, within fifteen (15) days after written notice of the imposition of such
lien, claim or order, cause the Premises to be released therefrom by the payment
of the obligation secured thereby or by furnishing a bond or by any other method
prescribed or permitted by law. If a lien is released, Tenant shall thereupon
furnish Landlord with a written instrument of release in form for recording or
filing in the appropriate office of land records of the County in which the
Premises is located, and otherwise sufficient to establish the release as a
matter of record.
14.3 Contest of Liens. Tenant may, at its option, contest the validity
of any lien or claim of lien if Tenant shall have first posted an appropriate
and sufficient bond in favor of the claimant or paid the appropriate sum into
court, if permitted by and in strict compliance with applicable law, and thereby
obtained the release of the Premises from such lien. If judgment is obtained by
the claimant under any lien, Tenant shall pay the same immediately after such
judgment shall have become final and the time for appeal therefrom has expired
without appeal having been taken. Tenant shall, at its own expense, defend the
interests of Tenant and Landlord in any and all such suits; provided, however,
that Landlord may, at its election, engage its own counsel and assert its own
defenses, in which event Tenant shall cooperate with Landlord and make available
to Landlord all information and data which Landlord deems necessary or desirable
for such defense.
14.4 Notices of Commencement of Construction. If required by the laws
of the State in which the Premises is located, prior to commencement by Tenant
of any work on the Premises which shall have been previously permitted by
Landlord as provided in this Lease, Tenant shall record or file a notice of the
commencement of such work or similar notice required by applicable law (the
"Notice of Commencement") in the land records of the County in which the
Premises are located, identifying Tenant as the party for whom such work is
being performed, stating such other matters as may be required by law and
requiring the service of copies of all notices, liens or claims of lien upon
Landlord. Any such Notice of Commencement shall clearly reflect that the
interest of Tenant in the Premises is that of a leasehold estate and shall also
clearly reflect that the interest of Landlord as the fee simple owner of the
Premises shall not be
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subject to mechanics or materialmen's liens on account of the work which is the
subject of such Notice of Commencement. A copy of any such Notice of
Commencement shall be furnished to and approved by Landlord and its attorneys
prior to the recording or filing thereof, as aforesaid.
ARTICLE XV
CONDEMNATION
15.1 Complete Taking. If the whole of the Premises shall be taken or
condemned for any public or quasi-public use or purpose, by right of eminent
domain or by purchase in lieu thereof, or if a substantial portion of the
Premises shall be so taken or condemned that the portion or portions remaining
is or are not sufficient and suitable, in the mutual reasonable judgment of
Landlord and Tenant, for the continued operation thereof as required herein, so
as to effectively render the Premises untenantable, then this Lease and the Term
hereby granted shall cease and terminate as of the date on which the condemning
authority takes possession and all Rent shall be paid by Tenant to Landlord up
to that date or refunded by Landlord to Tenant if Rent has previously been paid
by Tenant beyond that date.
15.2 Partial Taking. If a portion of the Premises is taken, and the
portion or portions remaining can, in the mutual reasonable judgment of Landlord
and Tenant, be adapted and used for the conduct of Tenant's business operation
in accordance with the terms of this Lease, such that the Premises are not
effectively rendered untenantable, then the Tenant shall, utilizing condemnation
proceeds paid to Landlord from the condemning authority, promptly restore the
remaining portion or portions thereof to a condition comparable to their
condition at the time of such taking or condemnation, less the portion or
portions lost by the taking, and this Lease shall continue in full force and
effect except that the Rent payable hereunder shall, if necessary, be equitably
adjusted to take into account the portion or portions of the Premises lost by
the taking.
15.3 Award. The entire award for the Premises or the portion or
portions thereof so taken shall be apportioned between Landlord and Tenant as
follows: (a) if this Lease terminates due to a taking or condemnation, Landlord
shall be entitled to the entire award; (b) if this Lease does not terminate due
to such taking or condemnation, Tenant shall be entitled to the award to the
extent required for restoration of the Premises, and Landlord shall be entitled
to the balance of the award not applied to restoration. If this Lease does not
terminate due to a taking or condemnation, Tenant shall, with due diligence,
restore the remaining portion or portions of the Premises in the manner
hereinabove provided. In such event, the proceeds of the award to be applied to
restoration shall be deposited with a bank or financial institution designated
by Landlord as if such award were insurance proceeds, and the amount so
deposited will thereafter be treated in the same manner as insurance proceeds
are to be treated under Section 9.2 of this Lease until the restoration has been
completed and Tenant has been reimbursed for all the costs and expenses thereof.
If the award is insufficient to pay for the restoration, Tenant shall be
responsible for the remaining cost and expense of such restoration.
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15.4 Disputes. If Landlord and Tenant cannot agree in respect of any
matters to be determined under this Article, a determination shall be requested
of the court having jurisdiction over the taking or condemnation; provided,
however, that if said court will not accept such matters for determination,
either party may have the matters determined by a court otherwise having
jurisdiction over the parties.
ARTICLE XVI
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
16.1 Subordination. This Lease, Tenant's interest hereunder and
Tenant's leasehold interest in and to the Premises are hereby agreed by Tenant
to be and are hereby made junior, inferior, subordinate and subject in right,
title, interest, lien, encumbrance, priority and all other respects to any
mortgage or mortgages now or hereafter in force and effect upon or encumbering
Landlord's interest in the Premises, or any portion thereof, and to all
collateral assignments by Landlord to any third party or parties of any of
Landlord's rights under this Lease or the rents, issues and profits thereof or
therefrom as security for any liability or indebtedness, direct, indirect or
contingent, of Landlord to such third party or parties, and to all future
modifications, extensions, renewals, consolidations and replacements of, and all
amendments and supplements to any such mortgage, mortgages or assignments, and
upon recording of any such mortgage, mortgages or assignments, the same shall be
deemed to be prior in dignity, lien and encumbrance to this Lease, Tenant's
interest hereunder and Tenant's leasehold interest in and to the Premises
irrespective of the dates of execution, delivery or recordation of any such
mortgage, mortgages or assignments. The foregoing subordination provisions of
this Section shall be automatic and self-operative without the necessity of the
execution of any further instrument or agreement of subordination on the part of
Tenant. Provided, however, if the aggregate sum of all obligations secured by
any mortgage or mortgages encumbering the Premises exceeds sixty percent (60%)
of the fair market value of the Premises as determined at the time of such
loan(s), Tenant's aforesaid subordination shall not be applicable to the portion
of the loan(s) in excess of the said sixty percent (60%) and Tenant's written
subordination (which shall not be unreasonably withheld) shall be required with
respect to such excess. Tenant acknowledges and agrees that notwithstanding the
foregoing automatic subordination, if Landlord or the holder or proposed holder
of any such mortgage, mortgages, security interest in or assignment of the Lease
(a "Mortgagee") shall request that Tenant execute and deliver any further
instrument or agreement of subordination of this Lease or Tenant's interest
hereunder or Tenant's leasehold interest in the Premises to any such mortgage,
mortgages or assignments in confirmation or furtherance of or in addition to the
foregoing subordination provisions of this Section, Tenant shall promptly
execute and deliver the same to the requesting party. Further, Tenant agrees
that it will, from time to time, execute such reasonable documentation as may be
requested by Landlord and any Mortgagee (a) to assist Landlord and such
Mortgagee in establishing or perfecting any security interest in Landlord's
interest in the FF&E Reserve and the funds therein; and (b) to facilitate or
allow Landlord to encumber the Premises as herein contemplated. Further, should
any rating agency require the same, Tenant agrees that it will execute such
documentation as may be requested by such agency, including documentation and
amendments to Tenant's organizational documents required to qualify Tenant as a
single purpose entity, provided Landlord shall pay the
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reasonable costs incurred by Tenant in so qualifying and the Tenant will
negotiate in good faith the requirements of such single person entity. Provided
further, the parties hereto acknowledge that the requirements for a Single
Purpose Entity on Exhibit H are not binding on Tenant in such circumstance. If,
within thirty (30) days following Tenant's receipt of a written request by
Landlord or the holder or proposed holder of any such mortgage, mortgages or
assignments, Tenant shall fail or refuse or shall have not executed any such
further instrument or agreement of subordination, for whatever reason, Tenant
shall be in breach and default of its obligation to do so and of this Lease and
Landlord shall be entitled thereupon to exercise any and all remedies available
to Landlord pursuant to this Lease or otherwise provided by law. In connection
with any granting by Tenant of a mortgage to a Mortgagee (as hereinafter
defined) Landlord agrees in good faith to request on behalf of Tenant, a
non-disturbance agreement from the Mortgagee in form reasonably acceptable to
Tenant and Mortgagee.
16.2 Attornment. Tenant shall and hereby agrees to attorn, and be bound
under all of the terms, provisions, covenants and conditions of this Lease, to
any successor of the interest of Landlord under this Lease for the balance of
the Term of this Lease remaining at the time of the succession of such interest
to such successor. In particular, in the event that any proceedings are brought
for the foreclosure of any mortgage or security interest encumbering or
collateral assignment of Landlord's interest in the Premises, or any portion
thereof, Tenant shall attorn to the purchaser at any such foreclosure sale and
recognize such purchaser as Landlord under this Lease, subject, however, to all
of the terms and conditions of this Lease. Tenant agrees that neither the
purchaser at any such foreclosure sale nor the foreclosing mortgagee or holder
of such security interest or collateral assignment shall have any liability for
any act or omission of Landlord, be subject to any offsets or defenses which
Tenant may have as claim against Landlord, or be bound by any advance rents
which may have been paid by Tenant to Landlord for more than the current period
in which such rents come due.
16.3 Rights of Mortgagees and Assignees. At the time of giving any
notice of default to Landlord, Tenant shall mail or deliver to any Mortgagee a
copy of any such notice. No notice of default or termination of this Lease by
Tenant shall be effective until any Mortgagee shall have been furnished a copy
of such notice by Tenant. In the event Landlord fails to cure any default by it
under this Lease, the Mortgagee shall have, at its option, a period of thirty
(30) days after expiration of any cure period of Landlord within which to remedy
such default of Landlord or to cause such default to be remedied. In the event
that the Mortgagee elects to cure any such default by Landlord, then Tenant
shall accept such performance on the part of such Mortgagee as though the same
had been performed by Landlord, and for such purpose Tenant hereby authorizes
any Mortgagee to enter upon the Premises to the extent necessary to exercise any
of Landlord's rights, powers and duties under this Lease. If, in the event of
any default by Landlord which is reasonably capable of being cured by a
Mortgagee, the Mortgagee promptly commences and diligently pursues to cure the
default, then Tenant will not terminate this Lease or cease to perform any of
its obligations under this Lease so long as the Mortgagee is, with due
diligence, engaged in the curing of such default.
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ARTICLE XVII
END OF TERM
17.1 Surrender of Premises. Tenant shall, on or before the last day of
the Term of this Lease or upon the sooner termination thereof, peaceably and
quietly surrender and deliver to Landlord the Premises, including, without
limitation, all Improvements and FF&E and all additions thereto and replacements
thereof made from time to time over the Term of this Lease, in good order,
condition and repair, reasonable wear and tear excepted, and free and clear of
all liens and encumbrances.
17.2 Holding Over. If Tenant or any other person or party shall remain
in possession of the Premises or any part thereof following the expiration of
the Term or earlier termination of this Lease without an agreement in writing
between Landlord and Tenant with respect thereto, the person or party remaining
in possession shall be deemed to be a tenant at sufferance, and during any such
holdover, the Rent payable under this Lease by such tenant at sufferance shall
be double the rate or rates in effect immediately prior to the expiration of the
Term or earlier termination of this Lease. In no event, however, shall such
holding over be deemed or construed to be or constitute a renewal or extension
of this Lease.
ARTICLE XVIII
LIABILITY OF LANDLORD; INDEMNIFICATION
18.1 Liability of Landlord. Landlord shall not be liable to Tenant, its
employees, agents, business invitee, licensees, customers, clients, family
members or guests for any damage, injury, loss, compensation or claim,
including, but not limited to, claims for the interruption of or loss to
Tenant's business, based on, arising out of or resulting from any cause
whatsoever (other than Landlord's negligence or wilful misconduct), including,
but not limited to: (a) repairs to any portion of the Premises; (b) interruption
in Tenant's use of the Premises; (c) any accident or damage resulting from the
use or operation (by Landlord, Tenant or any other person or persons) of any
equipment within the Premises, including without limitation, heating, cooling,
electrical or plumbing equipment or apparatus; (d) the termination of this Lease
by reason of the condemnation or destruction of the Premises in accordance with
the provisions of this Lease; (e) any fire, robbery, theft, mysterious
disappearance or other casualty; (f) the actions of any other person or persons;
and (g) any leakage or seepage in or from any part or portion of the Premises,
whether from water, rain or other precipitation that may leak into, or flow
from, any part of the Premises, or from drains, pipes or plumbing fixtures in
the Improvements. Any goods, property or personal effects stored or placed by
the Tenant or its employees in or about the Premises shall be at the sole risk
of the Tenant.
18.2 Indemnification of Landlord. Tenant shall defend, indemnify and
save and hold Landlord harmless from and against any and all liabilities,
obligations, losses, damages, injunctions, suits, actions, fines, penalties,
claims, demands, costs and expenses of every kind or nature, including
reasonable attorneys' fees and court costs, incurred by Landlord, arising
directly or indirectly from or out of: (a) any failure by Tenant to perform any
of the terms, provisions,
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covenants or conditions of this Lease or the Franchise Agreement or management
agreement on Tenant's part to be performed including but not limited to the
payment of any fee, cost or expense which Tenant is obligated to pay and
discharge hereunder or under any Franchise Agreement or management agreement;
(b) any accident, injury or damage which shall happen at, in or upon the
Premises, however occurring; (c) any matter or thing growing out of the
condition, occupation, maintenance, alteration, repair, use or operation by any
person of the Premises, or any part thereof, or the operation of the business
contemplated by this Lease to be conducted thereon, thereat, therein, or
therefrom; (d) any failure of Tenant to comply with any laws, ordinances,
requirements, orders, directions, rules or regulations of any governmental
authority, including, without limitation, the Accessibility Laws; (e) any
contamination of the Premises, or the groundwaters thereof, arising on or after
the date Tenant takes possession of the Premises and occasioned by the use,
transportation, storage, spillage or discharge thereon, therein or therefrom of
any toxic or hazardous chemicals, compounds, materials or substances, whether by
Tenant or by any agent or invitee of Tenant; (f) any discharge of toxic or
hazardous sewage or waste materials from the Premises into any septic facility
or sanitary sewer system serving the Premises arising on or after the date
Tenant takes possession of the Premises, whether by Tenant or by any agent of
Tenant; or (g) any other act or omission of Tenant, its employees, agents,
invitees, customers, licensees or contractors, provided, however, Tenant shall
not be liable for or be obligated to indemnify Landlord from and against any
damages resulting from Landlord's negligence or willful misconduct.
Tenant's indemnity obligations under this Article and elsewhere in this
Lease arising prior to the termination or permitted assignment of this Lease
shall survive any such termination or assignment.
18.3 Notice of Claim or Suit. Tenant shall promptly notify Landlord of
any claim, action, proceeding or suit instituted or threatened against Tenant or
Landlord of which Tenant receives notice or of which Tenant acquires knowledge.
In the event Landlord is made a party to any action for damages or other relief
against which Tenant has indemnified Landlord, as aforesaid, Tenant shall defend
Landlord, pay all costs and shall provide effective counsel to Landlord in such
litigation or, at Landlord's option, shall pay all attorneys' fees and costs
incurred by Landlord in connection with its own defense or settlement of said
litigation.
18.4 Limitation on Liability of Landlord. In the event Tenant is
awarded a money judgment against Landlord, Tenant's sole recourse for
satisfaction of such judgment shall be limited to: (a) execution against the
Landlord's interest in the Premises or, (b) at Tenant's option (which shall be
irrevocable once elected), a credit against future Rent obligations due
hereunder up to the amount of such judgment(s). In no event shall any partner,
member, officer, director, stockholder or shareholder of Landlord or any partner
thereof or Affiliate or subsidiary thereof, be personally liable for the
obligations of Landlord hereunder.
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ARTICLE XIX
DEFAULT
19.1 Events of Default. Each of the following events shall be an Event
of Default hereunder by Tenant and shall constitute a breach of this Lease:
(a) If Tenant shall fail to pay, when due, any Rent, or
portion thereof, or any other sum due to Landlord from Tenant
hereunder, and such failure shall continue for a period of five (5)
days after the due date thereof.
(b) If Tenant shall violate or fail to comply with or perform
any other term, provision, covenant, agreement or condition to be
performed or observed by Tenant under this Lease, and such violation or
failure shall continue for a period of thirty (30) days after written
notice thereof from Landlord; provided, however, if such violation or
failure is incapable of cure by Tenant within such thirty (30) days
after Tenant's diligent and continuous efforts to cure the same, Tenant
shall have an additional period of ninety (90) days to cure the same.
(c) If any assignment, transfer, sublease or encumbrance shall
be made or deemed to be made that is in violation of the provisions of
this Lease.
(d) If Tenant shall cease the actual and continuous operation
of the business contemplated by this Lease to be conducted by Tenant
upon the Premises (and such cessation is not the result of casualty,
condemnation or renovation and accompanying restoration or is not
otherwise permitted by Landlord or is not the result of a legal
requirement or during an emergency); or if Tenant shall vacate, desert
or abandon the Premises; or if the Premises shall become empty and
unoccupied; or if the Premises or Improvements are used or are
permitted to be used for any purpose, or for the conduct of any
activity, not permitted by this Lease.
(e) If, at any time during the Term of this Lease, Tenant
shall file in any court, pursuant to any statute of either the United
States or of any State, a petition in bankruptcy or insolvency, or for
reorganization or arrangement, or for the appointment of a receiver or
trustee of all or any portion of Tenant's property, including, without
limitation, its leasehold interest in the Premises, or if Tenant shall
make an assignment for the benefit of its creditors or petitions for or
enters into an arrangement with its creditors.
(f) If, at any time during the Term of this Lease, there shall
be filed against Tenant in any courts pursuant to any statute of the
United States or of any State, a petition in bankruptcy or insolvency,
or for reorganization, or for the appointment of a receiver or trustee
of all or a portion of Tenant's property, including, without
limitation, its leasehold interest in the Premises, and any such
proceeding against Tenant shall not be dismissed within sixty (60) days
following the commencement thereof.
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(g) If Tenant's leasehold interest in the Premises or property
therein shall be seized under any levy, execution, attachment or other
process of court where the same shall not be vacated or stayed on
appeal or otherwise within thirty (30) days thereafter, or if Tenant's
leasehold interest in the Premises is sold by judicial sale and such
sale is not vacated, set aside or stayed on appeal or otherwise within
thirty (30) days thereafter.
(h) If an Event of Default shall occur under and as defined in
that certain Lease Agreement of even date herewith between Landlord and
Tenant with respect to the Residence Inn - Buckhead (Lenox Park) (the
"Other Lease").
(i) If Tenant shall default under any Franchise Agreement or
management agreement for or concerning the Premises.
(j) If a final unappealable determination is made by
applicable state authorities of the revocation or limitation of any
material license, permit, certification or approval required for the
lawful operation of the Premises in accordance with its Permitted Use
or there occurs the loss or material limitation of any material
license, permit, certification or approval under any other
circumstances under which Tenant is required to cease its operation of
the Premises in accordance with its Permitted Use at the time of such
loss or limitation.
(k) If any material representation or warranty made by Tenant
under or in connection with this Lease, the Other Lease, or in any
documents, certificate or agreement delivered in connection therewith
proves to have been false or misleading in any material respect on the
date when made or deemed made, and the same shall continue for five (5)
business days after notice thereof from Landlord.
19.2 Remedies on Default. If any of the Events of Default hereinabove
specified shall occur, Landlord, at any time thereafter, shall have and may
exercise any of the following rights and remedies:
(a) Landlord may, pursuant to written notice thereof to
Tenant, terminate this Lease and, peaceably or pursuant to appropriate
legal proceedings, re-enter, retake and resume possession of the
Premises for Landlord's own account and, for Tenant's breach of and
default under this Lease, recover immediately from Tenant any and all
rents and other sums and damages due or in existence at the time of
such termination, including, without limitation, (i) all Rent and other
sums, charges, payments, costs and expenses agreed and/or required to
be paid by Tenant to Landlord hereunder, (ii) all costs and expenses of
Landlord in connection with the recovery of possession of the Premises,
including reasonable attorney's fees based upon services rendered at
hourly rates and court costs, and (iii) all costs and expenses of
Landlord in connection with any reletting or attempted reletting of the
Premises or any part or parts thereof, including, without limitation,
brokerage fees, advertising costs, reasonable attorney's fees based
upon services
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rendered at hourly rates based upon service rendered at hourly rates
and the cost of any alterations or repairs or tenant improvements which
may be reasonably required to so relet the Premises, or any part or
parts thereof.
(b) Landlord may, pursuant to any prior notice required by
law, and without terminating this Lease, peaceably or pursuant to
appropriate legal proceedings, re-enter, retake and resume possession
of the Premises for the account of Tenant, make such alterations of and
repairs and tenant improvements to the Premises as may be reasonably
necessary in order to relet the same or any part or parts thereof and
relet or attempt to relet the Premises or any part or parts thereof for
such term or terms (which may be for a term or terms extending beyond
the Term of this Lease), at such rents and upon such other terms and
provisions as Landlord, in its sole, but reasonable, discretion, may
deem advisable. If Landlord takes possession and control of the
Premises and operates the same, Tenant shall, for so long as Landlord
is actively operating the Premises, have no obligation to operate the
Premises. If Landlord relets or attempts to relet the Premises,
Landlord shall at its sole discretion determine the terms and
provisions of any new lease or sublease and whether or not a particular
proposed new tenant or sublessee is acceptable to Landlord. Upon any
such reletting, all rents received by the Landlord from such reletting
shall be applied, (a) first, to the payment of all costs and expenses
of recovering possession of the Premises, (b) second, to the payment of
any costs and expenses of such reletting, including brokerage fees,
advertising costs, reasonable attorney's fees based upon service
rendered at hourly rates and the cost of any alterations and repairs
reasonably required for such reletting; (c) third, to the payment of
any indebtedness, other than Rent, due hereunder from Tenant to the
Landlord, (d) fourth, to the payment of all Rent and other sums due and
unpaid hereunder, and (e) fifth, the residue, if any, shall be held by
the Landlord and applied in payment of future Rents as the same may
become due and payable hereunder. If the rents received from such
reletting during any period shall be less than that required to be paid
during that period by the Tenant hereunder, Tenant shall promptly pay
any such deficiency to the Landlord and failing the prompt payment
thereof by Tenant to Landlord, Landlord shall immediately be entitled
to institute legal proceedings for the recovery and collection of the
same. Such deficiency shall be calculated and paid at the time each
payment of rent shall otherwise become due under this Lease, or, at the
option of Landlord, at the end of the Term of this Lease. Landlord
shall, in addition, be immediately entitled to xxx for and otherwise
recover from Tenant any other damages occasioned by or resulting from
any abandonment of the Premises or other breach of or default under
this Lease other than a default in the payment of rent. No such
re-entry, retaking or resumption of possession of the Premises by the
Landlord for the account of Tenant shall be construed as an election on
the part of Landlord to terminate this Lease unless a written notice of
such intention shall be given to the Tenant or unless the termination
of this Lease be decreed by a court of competent jurisdiction.
Notwithstanding any such re-entry and reletting or attempted reletting
of the Premises or any part or parts thereof for the account of Tenant
without termination, Landlord may at
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any time thereafter, upon written notice to Tenant, elect to terminate
this Lease or pursue any other remedy available to Landlord for
Tenant's previous breach of or default under this Lease.
(c) Landlord may, without re-entering, retaking or resuming
possession of the Premises, xxx for all Rent and all other sums,
charges, payments, costs and expenses due from Tenant to Landlord
hereunder either: (i) as they become due under this Lease, taking into
account that Tenant's right and option to pay the Rent hereunder on a
monthly basis in any particular Lease Year is conditioned upon the
absence of a default on Tenant's part in the performance of its
obligations under this Lease, or (ii) at Landlord's option, accelerate
the maturity and due date of the whole or any part of the Rent for the
entire then-remaining unexpired balance of the Term of this Lease, as
well as all other sums, charges, payments, costs and expenses required
to be paid by Tenant to Landlord hereunder, including, without
limitation, damages for breach or default of Tenant's obligations
hereunder in existence at the time of such acceleration, such that all
sums due and payable under this Lease shall, following such
acceleration, be treated as being and, in fact, be due and payable in
advance as of the date of such acceleration. Landlord may then proceed
to recover and collect all such unpaid Rent and other sums so sued for
from Tenant by distress, levy, execution or otherwise. Regardless of
which of the foregoing alternative remedies is chosen by Landlord under
this subparagraph (c), Landlord shall not be required to relet the
Premises nor exercise any other right granted to Landlord pursuant to
this Lease, nor shall Landlord be under any obligation to minimize or
mitigate Landlord's damages or Tenant's loss as a result of Tenant's
breach of or default under this Lease. Provided, however, that in the
event that Landlord exercises its option contained in (ii) above and
collects from Tenant all sums contemplated thereby and Landlord
thereafter relets the Premises (the parties acknowledging that Landlord
shall be under no obligation to relet the Premises), then after
deducting the amount of any indebtedness other than Rent due hereunder
from Tenant to Landlord and the payment of all costs and expenses of
reletting, including brokerage fees, attorneys fees, refurbishment,
etc., Landlord agrees, after the expiration of each lease year under
its lease with such new tenant, (and provided that Landlord has
received and collected from the new tenant rental for such period equal
to or greater than the Rent due hereunder and which was paid by Tenant
to Landlord pursuant to (ii) above), to return to Tenant a sum equal to
the portion of the accelerated rental paid by Tenant to Landlord
pursuant to (ii) above allocable to each such recently expired lease
year (after deducting a pro rata share of the aforesaid expenses
allocable to each year). Landlord shall determine amount of such return
in its sole discretion and such determination shall be final and
binding on Tenant.
(d) Landlord may, in addition to any other remedies provided
herein, enter upon the Premises or any portion thereof and take
possession of (i) any and all of Tenant's Personal Property, if any,
and; (ii) Tenant's books and records necessary to operate the Premises,
without liability for trespasses or conversion (Tenant hereby waiving
any right to notice or hearing prior to such taking of possession by
Landlord) and sell the same by public or private sale, after giving
Tenant reasonable notice of the time and place
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of any public or private sale, at which sale Landlord or its assigns
may purchase all or any portion of Tenant's Personal Property, if any,
unless otherwise prevented by law. Unless otherwise provided by law and
without intending to exclude any other manner of giving Tenant
reasonable notice, the requirement of reasonable notice shall be met if
such notice if given at least ten (10) days before the date of sale.
The proceeds from any such disposition, less all expenses incurred in
connection with the taking of possession, holding and selling of such
Property (including reasonable attorneys' fees based upon services
rendered at hourly rates) shall be credited against Rent which is due
hereunder.
(e) In addition to the remedies hereinabove specified and
enumerated, Landlord shall have and may exercise the right to invoke
any other remedies allowed at law or in equity as if the remedies of
re-entry, unlawful detainer proceedings and other remedies were not
herein provided. Accordingly, the mention in this Lease of any
particular remedy shall not preclude Landlord from having or exercising
any other remedy at law or in equity. Nothing herein contained shall be
construed as precluding the Landlord from having or exercising such
lawful remedies as may be and become necessary in order to preserve the
Landlord's right or the interest of the Landlord in the Premises and in
this Lease, even before the expiration of any notice periods provided
for in this Lease, if under the particular circumstances then existing
the allowance of such notice periods will prejudice or will endanger
the rights and estate of the Landlord in this Lease and in the
Premises. In addition, any provision of this Lease to the contrary
notwithstanding, no provision of this Lease shall delay or otherwise
limit Landlord's right to seek injunctive relief or Tenant's obligation
to comply with any such injunctive relief.
Provided, however, in the event that the Tenant's default
hereunder is the default contemplated in paragraph 19.1(j) above, and
such default in not caused by Tenant or any person claiming by, through
or under Tenant (including manager), or does not result form any action
or inaction on the part of Tenant or any person claiming by, through or
under Tenant (including the manager) but results solely from causes
beyond Tenant's control or actions (or person claiming by, through or
under Tenant) then with respect to such a default, Landlord's sole
remedy shall be to terminate this Lease and Landlord shall not be
entitled to recover from Tenant any damages.
19.3 Landlord May Cure Tenant Defaults. If Tenant shall default in the
performance of any term, provisions, covenant or condition on its part to be
performed hereunder, Landlord may, after notice to Tenant and a reasonable time
to perform after such notice (or without notice if, in Landlord's reasonable
opinion, an emergency exists) perform the same for the account and at the
expense of Tenant. If, at any time and by reason of such default, Landlord is
compelled to pay, or elects to pay, any sum of money or do any act which will
require the payment of any sum of money, or is compelled to incur any expense in
the enforcement of its rights hereunder or otherwise, such sum or sums, together
with interest thereon at the Prime Rate plus eight percent (8%) shall be deemed
Additional Rent hereunder and shall be repaid to Landlord by Tenant promptly
when billed therefor, and Landlord shall have all the same rights and remedies
in respect thereof as Landlord has in respect of the rents herein reserved.
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19.4 Landlord's Lien. Landlord shall have at all times during the Term
of this Lease, a valid lien for all rents and other sums of money becoming due
hereunder from Tenant, upon all goods, accounts, wares, merchandise, inventory,
furniture, fixtures, equipment, vehicles and other personal property and effects
of Tenant situated in or upon the Premises, and such property shall not be
removed therefrom except in accordance with the terms of this Lease without the
approval and consent of Landlord until all arrearages in rent as well as any and
all other sums of money then due to Landlord hereunder shall first have been
paid and discharged in full. Upon the occurrence of any Event of Default by
Tenant, Landlord may, in addition to any other remedies provided herein or by
law, enter upon the Premises and take possession of any and all goods, wares,
merchandise, books and records, inventory, furniture, fixtures, equipment,
vehicles and other personal property and effects of Tenant situated in or upon
or with respect to the Premises without liability for trespass or conversion,
and sell the same at public or private sale, with or without having such
property appraised, at which Landlord or its assigns may purchase any of the
same and apply the proceeds thereof, less any and all expenses connected with
the taking of possession and sale, as a credit against any sums due by Tenant,
and Tenant agrees to pay any deficiency forthwith. If Landlord takes possession
and control of the Premises and operates the same, Tenant shall for so long as
Landlord is actively operating the Premises, have no obligation to operate the
Premises. Alternatively, the lien hereby granted may be foreclosed in the manner
and form provided by law for foreclosure of security interests or in any other
manner and form provided by law. The statutory lien for rent, if any, is not
hereby waived and the express contractual lien herein granted is in addition
thereto and supplementary thereto. Tenant agrees to execute and deliver to
Landlord from time to time during the Term of this Lease such Financing
Statements as may be required by Landlord in order to perfect the Landlord's
lien provided herein or by state law. Tenant further agrees that during an Event
of Default or the pendency of any event or circumstance which, with the passage
of time may become an Event of Default, Tenant shall not make any distributions
to its shareholders, partners, members or other owners and any such
distributions shall be considered and deemed to be fraudulent and preferential
and subordinate to Landlord's claim for Rent and other sums hereunder.
19.5 The Other Lease. As referenced in this Lease, Landlord and Tenant
are, concurrently with the execution of this Lease, entering into the Other
Lease. It is the express agreement and understanding of Landlord and Tenant that
this Lease and the Other Lease are and shall be cross defaulted such that a
default under and/or termination of this Lease or the Other Lease shall be in
and constitute a default and or termination of the Other Lease or this Lease,
respectively. Provided, however, if this Lease is terminated by either Landlord
or Tenant as a result of a casualty pursuant to Sections 9.1 or 9.2, such
termination shall not constitute or require a termination of the Other Lease and
such Other Lease shall survive the termination of this Lease under Sections 9.1
and 9.2. Further, it is the express agreement, intent and understanding of
Landlord and Tenant that this Lease and the Other Lease are not severable.
Further, in the event that Tenant shall file for, or there shall be filed
against Tenant, bankruptcy, insolvency or a similar arrangement or proceeding,
that this Lease and the Other Lease shall be and remain cross defaulted and
considered one Lease and may not be severed or assumed separately in any such
41
proceedings, it being the express agreement and intent of Landlord and Tenant
that both this Lease and the Other Lease shall be rejected by any receiver or
trustee in any such proceedings or both said Leases shall be assumed by any such
receiver or trustee.
19.6 Rights Cumulative. The rights and remedies provided and available
to Landlord in this Lease are distinct, separate and cumulative remedies, and no
one of them, whether or not exercised by Landlord, shall be deemed to be in
exclusion of any other.
ARTICLE XX
REIT REQUIREMENTS
Tenant understands that, in order for Landlord to qualify as a real
estate investment trust (a "REIT") under the Internal Revenue Code (the "Code"),
the following requirements (the "REIT Requirements") must be satisfied:
20.1 The average of the adjusted tax bases of the personal property
that is leased to Tenant with respect to the Premises at the beginning and end
of a calendar year cannot exceed fifteen percent (15%) of the average of the
aggregate adjusted tax bases of the real and personal property comprising such
Premises that is leased to Tenant under such lease at the beginning and end of
such calendar year (the "Personal Property Limitation"). If Landlord reasonably
anticipates that the Personal Property Limitation will be exceeded with respect
to the Premises for any Lease Year, Landlord shall notify Tenant, and Landlord
and Tenant shall negotiate in good faith the purchase by Tenant of items of
personal property anticipated by Landlord to be in excess of the Personal
Property Limitation. Provided, however, that Tenant's responsibility to purchase
such personal property will be offset by Landlord in some mutually agreeable
manner.
20.2 Tenant cannot sublet the property that is leased to it by
Landlord, or enter into any similar arrangement, on any basis such that the
rental or other amounts paid by the sublessee thereunder would be based, in
whole or in part, on either (a) the net income or profits derived by the
business activities of the sublessee or (b) any other formula such that any
portion of the rent paid by Tenant to Landlord would fail to qualify as "rent
from real property" within the meaning of Section 856(d) of the Code.
20.3 Anything to the contrary in this Agreement notwithstanding, Tenant
shall not sublease the property leased to it by Landlord to, or enter into any
similar arrangement with, any person in which Landlord owns, directly or
indirectly, a ten percent (10%) or more interest, with the meaning of Section
856(d)(2)(B) of the Code, and any such action shall be deemed void ab initio.
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20.4 Anything to the contrary in this Agreement notwithstanding,
neither party shall take, or permit to take, any action that would cause
Landlord to own, directly or indirectly, a ten percent (10%) or greater interest
in the Tenant within the meaning of Section 856(d)(2)(B) of the Code, and any
similar or successor provision thereto, and any such action shall be deemed void
ab initio.
ARTICLE XXI
NOTICES
Any notice required or permitted to be given under this Lease shall be
deemed given if delivered personally to an officer or general partner of the
party to be notified or sent by (a) United States registered or certified mail,
postage prepaid, return receipt requested, (b) telecopy or (c) overnight courier
service, and addressed as follows:
If to Landlord: CNL Hospitality Properties, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
ATTN: Mr. C. Xxxxx Xxxxxxxxxx
With a copy to: Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 X. Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
ATTN: Xxxxxxx X. Xxxxxx, Esquire
If to Tenant: STC Leasing Associates, LLC
x/x Xxxxxxxx Xxxxx Xxxxxxxxxxx
Xxx Xxxxxxxxx
Xxxxx 000
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
ATTN: Xx. Xxxxx X. Xxxxxxxx, Xx.
With a copy to: King and Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
ATTN: Xxxxxx X. Xxxxxxxxxx, Esquire
or such other address or party as may be designated by either party by written
notice to the other. Except as otherwise provided in this Lease, every notice,
demand, request or other communication hereunder shall be deemed to have been
given or served upon actual receipt thereof. Accordingly, a notice shall not be
effective until actually received. Notwithstanding the foregoing, any notice
mailed to the last designated address of any person or party to which a notice
may be or is required to be delivered pursuant to this Lease shall not be deemed
43
ineffective if actual delivery cannot be made due to a change of address of the
person or party to which the notice is directed or the failure or refusal of
such person or party to accept delivery of the notice.
ARTICLE XXIII
MISCELLANEOUS
23.1 "Net" Lease. Landlord and Tenant acknowledge and agree that both
parties intend that this Lease shall be and constitute what is generally
referred to in the real estate industry as a "triple net" or "absolute net"
lease, such that Tenant shall be obligated hereunder to pay all costs and
expenses incurred with respect to, and associated with, the Premises and all
personal property thereon and therein and the business operated thereon and
therein, including, without limitation, all taxes and assessments, utility
charges, insurance costs, maintenance costs and repair, replacement and
restoration expenses (all as more particularly herein provided) and all costs
and expenses for, under and with respect to the Franchise Agreement and any
management agreement for the Premises, together with any and all other
assessments, charges, costs and expenses of any kind or nature whatsoever
related to, or associated with, the Premises and the business operated thereon
and therein; provided, however, that Landlord shall nonetheless be obligated to
pay any debt service on any mortgage encumbering Landlord's fee simple interest
in the Premises, and Landlord's personal income taxes with respect to the rents
received by Landlord under this Lease. Except as expressly hereinabove provided,
Landlord shall bear no cost or expense of any type or nature with respect to, or
associated with, the Premises.
23.2 Estoppel Certificates. Tenant shall from time to time, within
fifteen (15) days after request by Landlord and without charge, give a Tenant
Estoppel Certificate in the form attached hereto as Exhibit E and containing
such other matters as may be reasonably requested by Landlord to any person,
firm or corporation specified by Landlord.
23.3 Brokerage. Landlord and Tenant hereby represent and warrant to
each other that they have not engaged, employed or utilized the services of any
business or real estate brokers, salesmen, agents or finders in the initiation,
negotiation or consummation of the business and real estate transaction
reflected in this Lease. On the basis of such representation and warranty, each
party shall and hereby agrees to indemnify and save and hold the other party
harmless from and against the payment of any commissions or fees to or claims
for commissions or fees by any real estate or business broker, salesman, agent
or finder resulting from or arising out of any actions taken or agreements made
by them with respect to the business and real estate transaction reflected in
this Lease.
23.4 No Partnership or Joint Venture. Landlord shall not, by virtue of
this Lease, in any way or for any purpose, be deemed to be a partner of Tenant
in the conduct of Tenant's business upon, within or from the Premises or
otherwise, or a joint venturer or a member of a joint enterprise with Tenant.
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23.5 Entire Agreement. This Lease contains the entire agreement between
the parties and, except as otherwise provided herein, can only be changed,
modified, amended or terminated by an instrument in writing executed by the
parties. It is mutually acknowledged and agreed by Landlord and Tenant that
there are no verbal agreements, representations, warranties or other
understandings affecting the same; and that Tenant hereby waives, as a material
part of the consideration hereof, all claims against Landlord for rescission,
damages or any other form of relief by reason of any alleged covenant, warranty,
representation, agreement or understanding not contained in this Lease. This
Lease shall not be changed, amended or modified except by a written instrument
executed by Landlord and Tenant.
23.6 Waiver. No release, discharge or waiver of any provision hereof
shall be enforceable against or binding upon Landlord or Tenant unless in
writing and executed by Landlord or Tenant, as the case may be. Neither the
failure of Landlord or Tenant to insist upon a strict performance of any of the
terms, provisions, covenants, agreements and conditions hereof, nor the
acceptance of any Rent by Landlord with knowledge of a breach of this Lease by
Tenant in the performance of its obligations hereunder, or the following of any
practice or custom at variance with the terms hereof, shall not be deemed or
constitute a waiver of any rights or remedies that Landlord or Tenant may have
or a waiver of any subsequent breach or default in any of such terms,
provisions, covenants, agreements and conditions or the waiver of the right to
demand exact compliance with the terms hereof.
23.7 Time. Time is of the essence in every particular of this Lease,
including, without limitation, obligations for the payment of money.
23.8 Costs and Attorneys' Fees. In addition to Landlord's rights under
Sections 18.2 and 19.2, if either party shall bring an action to recover any sum
due hereunder, or for any breach hereunder, and shall obtain a judgment or
decree in its favor, the court may award to such prevailing party its reasonable
costs and reasonable attorney's fees based upon service rendered at hourly
rates, specifically including reasonable attorney's fees based upon service
rendered at hourly rates incurred in connection with any appeals (whether or not
taxable as such by law). Landlord shall also be entitled to recover its
reasonable attorney's fees based upon service rendered at hourly rates and costs
incurred in any bankruptcy action filed by or against Tenant, including, without
limitation, those incurred in seeking relief from the automatic stay, in dealing
with the assumption or rejection of this Lease, in any adversary proceeding, and
in the preparation and filing of any proof of claim.
23.9 Approval of Landlord. Whenever the consent to or of Landlord is
referred to or is a condition precedent to the taking of any action by Tenant,
unless otherwise provided herein, such consent or approval shall not be
unreasonably withheld or delayed, and the failure of Landlord to notify Tenant
that it does not give its consent or approval within thirty (30) days after
receipt of any request shall be deemed to constitute such consent or approval.
Whenever Tenant is required under this Lease to do anything to meet the
satisfaction or judgement of Landlord, the reasonable satisfaction or judgement
of Landlord shall be deemed sufficient. The foregoing provision of this Section
shall not apply in any instance where the provisions of this
45
Lease expressly state that the provisions of this Section do not apply or where
the provisions of this Lease expressly state that such consent, approval or
satisfaction are subject to the sole and absolute discretion or judgement of
Landlord, and in each such instance Landlord's approval or consent may be
unreasonably withheld or unreasonable satisfaction or judgement may be exercised
by Landlord.
23.10 Captions and Headings. The captions and headings in this Lease
have been inserted herein only as a matter of convenience and for reference and
in no way define, limit or describe the scope or intent of, or otherwise affect,
the provisions of this Lease.
23.11 Severability. If any provision of this Lease shall be deemed to
be invalid, it shall be considered deleted therefrom and shall not invalidate
the remaining provisions of this Lease.
23.12 Successors and Assigns. The agreements, terms, provisions,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of Landlord and Tenant and, to the extent permitted herein, their
respective successors and assigns.
23.13 Applicable Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State in which the Premises is located.
23.14 Recordation of Memorandum of Lease. At either party's option, a
short form memorandum of this Lease, in the form attached hereto as Exhibit F
shall be recorded or filed among the appropriate land records of the County in
which the Premises is located, and Tenant shall pay the transfer and all
recording costs associated therewith. In the event of a discrepancy between the
provisions of this Lease and such short form memorandum thereof, the provisions
of this Lease shall prevail.
23.15 Waiver of Jury Trial. TENANT AND LANDLORD HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER OF THEM OR THEIR HEIRS,
PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE
OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO LANDLORD'S
ACCEPTING THIS LEASE.
23.16 Guaranty. In order to further secure Tenant's obligations
hereunder, Stormont Trice Corporation, Stormont Trice Development Corporation
and Stormont Trice Management Corporation (each a "Guarantor" and collectively
"Guarantors") have agreed to provide, and shall provide, a joint and several
Guaranty of this Lease, the form of which Guaranty is attached hereto as Exhibit
G and by this reference made a part hereof. The original of such Guaranty shall
be executed by the Guarantors in connection with the execution of this Lease.
The Guarantors have further joined in executing this Lease for the sole purpose
of acknowledging their agreement to
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provide such Guaranty and the Guaranty referenced in Section 23.22. The Tenant
is an Affiliate of the Guarantors and some if not all of the officers, directors
and shareholders of the Guarantors are also officers and directors of the Tenant
and the Guarantors therefore will benefit from Tenant's entering into this
Lease.
23.17 Landlord's Option to Terminate Lease.
(a) In the event Landlord enters into a bona fide contract to
sell the Premises to a non-Affiliated Person, Landlord may terminate the Lease
by giving not less than ninety (90) days' prior Notice to Tenant of Landlord's
election to terminate the Lease effective upon the closing under such contract.
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 Section 23.17(a), Landlord shall
within 180 days of such closing, pay to Tenant the fair market value of Tenant's
leasehold estate hereunder, plus twenty percent (20%). In addition, in the event
if such early termination as provided herein in this Section 23.17 (a) Landlord
shall deliver the Retained Funds to Tenant. In the event Landlord and Tenant are
unable to agree upon the fair market value of an original or replacement
leasehold estate, it shall be determined by appraisal using the appraisal
procedure set forth in Section 23.17(b).
For the purposes of this Section, fair market value of the
leasehold estate (i) 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 Tenant's leasehold estate under this Lease or an offered replacement
leasehold estate, and (ii) shall not contemplate the existence of a third party
management agreement with respect to which management fees are paid.
(b) If it becomes necessary to determine fair market value for
any purpose of this Lease, the party required or permitted to give Notice of
such required determination shall include in the Notice the name of a person
selected to act as appraiser on its behalf. Within ten (10) days after Notice,
Landlord (or Tenant, as the case may be) shall by Notice to Tenant (or Landlord,
as the case may be) appoint a second person as appraiser on its behalf. The
appraisers thus appointed, each of whom must be a member of the American
Institute of Real Estate Appraisers (or any successor organization thereto) with
at lease five years experience in the State where the Premises are located
appraising property similar to the Premises, shall, within 45 days after the
date of the Notice appointing the first appraiser, proceed to appraise said the
Premises to determine the fair market value as of the relevant date (giving
effect to the impact, if any, of inflation from the date of their decision to
the relevant date); provided, however, that if only one appraiser shall have
been so appointed, then the determination of such appraiser shall be final and
binding upon the parties. If two appraisers are appointed and if the difference
between the amounts so determined does not exceed five percent (5%) of the
lesser of such amounts, then fair market value shall be an amount equal to fifty
(50%) percent of the sum of the amounts so determined. If the difference between
the amounts so determined exceeds five percent of the lesser of such amounts,
then such two appraisers shall have twenty days to appoint a third appraiser. If
no such appraiser shall have been appointed with such twenty days, or within
ninety
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(90) days of the original request for a determination of fair market value,
whichever is earlier, either Landlord or Tenant may apply to any court having
jurisdiction to have such appointment made by such court. Any appraiser
appointed by the original appraisers or by such court shall be instructed to
determine fair market value within 45 days after appointment of such appraiser.
The determination of the appraiser which differs most in the terms of dollar
amount from the determinations of the other two appraisers shall be excluded,
and fifty percent of the sum of the remaining two determinations shall be final
and binding upon Landlord and Tenant as the fair market value. This provision
for determining by appraisal shall be specifically enforceable to the extent
such remedy is available under applicable law, and any determination hereunder
shall be final and binding upon the parties except as otherwise provided by
applicable law. Landlord shall pay the fees and expenses of the appraisers.
(c) In the event this Lease Agreement terminates pursuant to
Section 4(A) or 4(B) of that certain Owner Agreement between Landlord, Tenant
and Franchisor of even date herewith (the "Owner Agreement"), as compensation
for such termination, Landlord shall, within 180 days of such termination, pay
Tenant the fair market value of Tenant's leasehold estate plus 20% as
contemplated in subparagraph (a) hereof. Further, in the event Franchisor
terminates the Owner Agreement and the Franchise Agreement pursuant to Section
4(C) of the Owner Agreement, (i) Landlord shall pay for all costs of
"de-identifying" and "re-identifying" the Improvements, and (ii) Landlord and
Tenant shall in good faith negotiate and agree upon a new "flag" for the
Premises and any changes to the terms of this Lease. If Landlord and Tenant
cannot agree upon a new "flag" or any changes to this Lease as referenced in
(ii) of the preceding sentence, either Landlord or Tenant shall have the right
to terminate this Lease by notice to the other party, whereupon (x) this Lease
shall terminate on the first business day following the expiration of the second
calendar month after the receipt of such notice and Landlord shall within 60
days following such termination pay to Tenant the fair market value of Tenant's
leasehold estate as determined pursuant to subparagraph (a) above; provided,
however, Landlord shall not be obligated to pay the additional 20% of such fair
market value as referenced in subparagraph (a) hereof.
23.18 Treatment of Lease. Landlord and Tenant each agree to treat this
Lease as a true lease for tax purposes and as an operating lease for generally
accepted accounting principles.
23.19 Landlord's Option to Acquire the Tenant's Personal Property;
Transfer of Licenses. Upon the expiration or early termination of this Lease,
the Landlord shall have the right and option to acquire all of Tenant's Personal
Property then in place or utilized at or within the Premises for the then market
value thereof (current replacement cost as determined by appraisal subject to,
and with appropriate price adjustments for, all equipment leases, conditional
sales contracts, UCC-1 Financing statements and other encumbrances to which such
personal property is subject, at the time of such expiration or termination of
this Lease. Provided, Landlord's right to acquire the Tenant's Personal Property
as herein provided shall be in addition to and not in lieu of Landlord's rights
with respect to Tenant's Personal Property as a result of a default hereunder by
Tenant. Further, upon the expiration or sooner termination of this Lease, Tenant
shall use its best efforts to transfer and assign to Landlord or its designee or
assist Landlord or
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its designee in obtaining, any contracts, licenses, permits, development rights,
trade names, telephone exchange numbers identified with the Premises, approvals
and certificates and all other transferable intangible property, miscellaneous
rights, benefits and privileges of any kind or character with respect to the
Premises useful or required for the then operation of the Premises.
23.20 Tenant's Representations.
In addition to the any other representation or warranty set
forth herein and as an inducement to Landlord to enter into this Lease,
Tenant hereby represents and warrants to Landlord as follows:
(a) Tenant is a limited liability company duly organized and
validly existing and in good standing under the laws of the State of
Georgia. Tenant has all requisite power and authority under the laws of
the State of Georgia and its charter documents to enter into and
perform its obligations under this Lease and to consummate the
transactions contemplated hereby. Tenant is duly authorized to transact
business in any jurisdiction in which the nature of the business
conducted by it requires such qualification.
(b) Tenant has taken all necessary action to authorize the
execution, delivery and performance of this Lease, and upon the
execution and delivery of any document to be delivered by Tenant, prior
to the date hereof, such document shall constitute the valid and
binding obligation and agreement of Tenant, enforceable against Tenant
in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the rights and remedies
of creditors and except to the extent that the availability of
equitable relief may be subject to the discretion of the court before
which any proceeding may be brought.
(c) Neither the execution and delivery of this Lease or the
compliance with the terms and provisions hereof, will result in any
breach of the terms, conditions or provisions of, or conflict with or
constitute a default under, or result in the creation of any lien,
charges or encumbrance upon any property or assets of Tenant pursuant
to the terms of any other indenture, mortgage, deed of trust, note,
evidence of indebtedness, agreement or other instrument to which Tenant
may be a party or by which it or any of its properties may be bound, or
violate any provisions of law, or any applicable order, writ,
injunction, judgement or decree of any court, or any order or other
public regulation of any governmental commission, bureau or
administrative agency.
(d) There are no judgements presently outstanding and
unsatisfied against Tenant or any of its properties, and neither Tenant
nor any of its properties are involved in any material litigation at
law or in equity or any proceeding before any court, or by or before
any governmental or administrative agency, which litigation or
proceeding could materially adversely affect Tenant, and no such
material litigation or proceeding is, to the knowledge of Tenant,
threatened against Tenant and no investigation looking toward such a
proceeding has begun or is contemplated.
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(e) To the knowledge of Tenant, neither this Lease nor any
other document, certificate or statement furnished to Landlord by or on
behalf of Tenant in connection with the transaction contemplated herein
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained
herein or therein not misleading. To the knowledge of Tenant there is
no fact or condition which materially and adversely affects the
business, operations, affairs, properties or condition of Tenant which
has not been set forth in this Lease or in other documents,
certificates or statements furnished to Landlord in connection with the
transaction contemplated hereby.
(f) Tenant hereby represents to Landlord that, in the
reasonable opinion of Tenant, the Premises and the Improvements therein
are adequately furnished and contain adequate FF&E and inventory
consistent with the amount of FF&E and inventory which is customarily
maintained in a hotel of the type and character of the Premises as
otherwise required to operate the Premises in a manner contemplated by
this Lease and in compliance with the Franchise Agreement and all legal
requirements. In addition to the foregoing, Tenant shall provide and
maintain throughout the Term, all Tenant's Personal Property as shall
be necessary in order to operate the Premises in compliance with
applicable legal requirements and insurance requirements and otherwise
in accordance with customarily practice in the industry for the
Permitted Use. If, from and after the Commencement Date, Tenant
acquires an interest in any items of tangible personal property (other
than motor vehicles) on, or in connection with the Premises which
belong to anyone other than Tenant, Tenant shall require the agreement
permitting such use to provide that Landlord or its designee may assume
Tenant's rights and obligations under such agreement upon the
termination of this Lease and any assumption of management or operation
of the Premises by Landlord or its designee.
(g) Tenant shall deliver to Landlord within thirty (30) days
after receipt of or after modification thereof, copies of all licenses
authorizing Tenant and/or manager to operate the Premises for its
Permitted Use.
(h) Tenant shall give prompt notice to Landlord of any
litigation or any administrative proceeding to which it may hereafter
become a party of which tenant has notice or actual knowledge and which
involves a potential uninsured liability equal to or greater than
$100,000.00 or which, in Tenant's reasonable opinion, may otherwise
result in any material adverse change in the business, operations,
property, prospects, results of operation or conditions, financial or
otherwise, of Tenant.
(i) During the Term of this Lease, except as approved in
writing by Landlord, and except for those nights when all rooms in the
Premises are sold, Tenant shall not, either directly or indirectly, for
itself, or through, or on behalf of, or in connection with any Person,
divert or attempt to divert any business or customer of the Premises to
any
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competitor, by direct or indirect inducement or otherwise, or do or
perform, directly or indirectly, any other act injurious or prejudicial
to the good will associate with the Landlord or the Premises.
(j) Tenant acknowledges that Tenant's failure or repeated
delays in making prompt payment in accordance with the terms of any
agreement, leases, invoices or statements for purchase or lease of
furniture, fixtures, equipment, inventories, supplies, travel agent
services or other goods or services will be detrimental to the
reputation of Landlord and Tenant. Accordingly, Tenant agrees that
Tenant shall pay when due all undisputed amounts owed by Tenant in
connection with the operation of the Premises.
(k) All employees of Tenant are solely employees of Tenant and
not Landlord. Tenant is not Landlord's agent for any purpose in regard
to Tenant's employees or otherwise. Further, Tenant expressly
acknowledges and agrees that Landlord does exercise any direction or
control over the employment policies or employment decisions of Tenant.
(l) Tenant shall submit to Landlord within ninety (90) days
after the end of each calendar year during the Term of this Lease, a
list of all members of the Tenant (being a limited liability company),
and the respective interests in Tenant held by each of such members as
of the end of each calendar year. If Tenant is a corporation, or if any
member of Tenant is a corporation, Tenant shall submit to Landlord
within ninety (90) days after the end of each calendar year during the
Term of this Lease, a list of all shareholders and the respective
interests of Tenant (or such corporate member) held by each of such
shareholders as of the end of each calendar year. In addition, if
Tenant is a partnership, Tenant shall submit to Landlord within ninety
(90) days after the end of each calendar year during the Term of this
Lease a list of all partners and the respect interests in Tenant held
by each partner as of the end of each calendar year.
23.21 No Merger of Title. It is expressly acknowledged and agreed that
it is the intent of the parties that there shall be no merger of this Lease or
of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, this Lease or the
leasehold estate created hereby and the fee estate or ground landlord's interest
in the Premises.
23.22 Additional Obligations relating to the Franchise Agreement. In
addition to the obligations contained herein, Tenant agrees to deliver to
Landlord (a) copies of all notices provided by the Franchisor to Tenant under
the terms of the Franchise Agreement concerning notices of default, notices of
changes or modifications to the Premises and the like; and (b) evidence of
acceptable to Landlord that Tenant has paid to Franchisor all sums due from
Tenant to Franchisor under the Franchise Agreement.
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In addition to the foregoing, Tenant expressly understands,
acknowledges and agrees that in connection with the execution of this Lease,
Landlord has entered into that certain Owner's Agreement between Landlord,
Tenant and Franchisor and that in the event of a default under the Franchise
Agreement by Tenant, Landlord may be or become liable to Franchisor under the
terms of the Owner's Agreement and the Franchise Agreement. Tenant further
acknowledges and agrees that Tenant shall indemnify and hold Landlord harmless
from and against any and all loss, damage, injunctions, obligations, suits,
actions, fines, penalties, claims, demands, costs and expenses of any kind and
nature resulting or arising directly or indirectly from Tenant's default under
the Franchise Agreement. Accordingly, to further secure Tenant's indemnity
obligations to Landlord hereunder with respect to defaults under the Franchise
Agreement, the Guarantors, in addition to the Guaranty of even date herewith,
referenced in Section 23.16 hereof, shall execute that certain separate Guaranty
in favor of Landlord, a copy of which is attached hereto as Exhibit I. The
original of such Guaranty shall be executed by the Guarantors in connection with
the execution of this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease 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
Title: 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)
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"TENANT"
STORMONT TRICE CORPORATION,
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
Name: Xxxxx X. Xxxxxxxx, Xx.
Its: Treasurer
(CORPORATE SEAL)
STORMONT TRICE DEVELOPMENT
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
Name: Xxxxx X. Xxxxxxxx, Xx.
Its: Vice President
(CORPORATE SEAL)
STORMONT TRICE MANAGEMENT
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
Name: Xxxxx X. Xxxxxxxx, Xx.
Its: Treasurer
(CORPORATE SEAL)
"GUARANTORS"
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JOINDER OF STORMONT TRICE MANAGEMENT CORPORATION
Stormont Trice Management Corporation, as the manager of the Premises,
hereby joins in the execution of this Lease as Manager for the purpose of
acknowledging and agreeing to the restriction and limitation set forth in
Article 3.2 hereof (regarding the subordinate position of manager, the
management agreement and management fees to this Lease) and Article 3.5 hereof
regarding the operation of a Conflicting Business within the Prescribed Area by
manager.
STORMONT TRICE MANAGEMENT
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
Its: Treasurer
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