Exhibit 10.11

 

HOTEL LEASE

 

between

 

GANO HOLDINGS, LLC, a Rhode Island limited liability company, as Landlord

 

and

 

PHR GANO OPCO SUB, LLC, a Delaware limited liability company, as Tenant

 

Dated as of February 27, 2020

 

 

Hilton Garden Inn, Providence, RI

220 India Street, Providence RI

 

 

 

 

 

TABLE OF CONTENTS

 

          Page         ARTICLE I DEFINITIONS   1       ARTICLE 2 DEMISE AND TERM
  5 2.1 Demise   5 2.2 Term   5 2.3 Termination Upon Sale by Landlord   6 2.4
Effect of Termination   6         ARTICLE 3 RENT   6 3.1 Rent   6 3.2
Apportionments   7 3.3 Additional Rent   7 3.4 Late Charge   8 3.5 Intentionally
Omitted   8 3.6 Personal Property Limitation   8 3.7 Sublease Rent Limitation  
8 3.8 No Commingling of Funds   8 3.9 Manager; Management   8 3.10 Books and
Records   9 3.11 Rent without Setoff   10 3.12 Rent Acceptance   10 3.13 Place
Where Rent Paid   10 3.14 Key Money   10         ARTICLE 4 USE   11 4.1 General
Operating Covenants   11 4.2 Prohibited Uses   11 4.3 Records.   11 4.4 Guests  
12 4.5 Advertising and Promotion   12 4.6 Services and Purchases.   12 4.7
Permits   12 4.8 Compliance with Law, Franchise Agreement and Mortgages.   12
4.9 Payment of Taxes.   13 4.10 Removal of Liens   14 4.11 Utilities   14 4.12
Notice to Landlord   14 4.13 Franchise Agreement.   15 4.14 Representations,
Warranties and Covenants of Landlord   16 4.15 Representations and Warranties of
Tenant   16 4.16 Mutual Representations, Warranties and Covenants of Landlord
and Tenant.   18 4.17 “As Is” Leased Property   18

 

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4.18 Third Party Manager   18         ARTICLE 5 FINANCIAL STATEMENTS;
TRANSACTIONS WITH AFFILIATES   19 5.1 Financial Statements to be Provided by
Tenant   19 5.2 Transactions with Affiliates   19         ARTICLE 6 MAINTENANCE,
REPAIRS AND ALTERATIONS   19 6.1 Maintenance and Repairs   19 6.2 Alterations  
19 6.3 Capital Expenditures   20         ARTICLE 7 LIABILITY CLAIMS AND
INSURANCE   20 7.1 Waiver of Claims   20 7.2 Liability Insurance   20 7.3
Property Insurance   21 7.4 Business Interruption Coverage.   21 7.5 Waiver of
Subrogation   21 7.6 Other   21 7.7 Single Policy   22         ARTICLE 8 DEFAULT
AND TERMINATION   22 8.1 Tenant Default   22 8.2 Collateral Assignment   23 8.3
Landlord’s Remedies   23 8.4 Surrender of the Leased Property   23 8.5
Landlord’s Right to Cure   24 8.6 Tenant’s Bankruptcy or Insolvency   24 8.7
Attorneys’ Fees   25 8.8 Remedies Cumulative   25 8.9 Liability for Tenant’s
Obligations   25 8.10 Default by Landlord   25 8.11 Holding Over   25        
ARTICLE 9 CASUALTY OR CONDEMNATION   26 9.1 Restoration   26 9.2 Condemnation  
26         ARTICLE 10 ASSIGNMENT AND SUBLETTING   27 10.1 Assignment or
Subletting   27 10.2 Notice   27 10.3 Continued Primary Liability   27 10.4
Miscellaneous   27         ARTICLE 11 SUBORDINATION   27 11.1 Subordination.  
27         ARTICLE 12 MISCELLANEOUS   29 12.1 Quiet Enjoyment   29

 

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12.2 Landlord’s Right of Entry   29 12.3 Estoppel Certificates   29 12.4
Delivery of Notices   29 12.5 Notices   29 12.6 No Broker   30 12.7 Quarterly
Meetings   30 12.8 No Joint Venture   31 12.9 Partial Invalidity   31 12.10
Third Parties   31 12.11 Waivers and Enforcement   31 12.12 Modification   31
12.13 Non-Recourse Liability   31 12.14 Captions   32 12.15 Time of Essence   32
12.16 Successors and Assigns   32 12.17 No Recordation   32 12.18 Name   32
12.19 Survival   32 12.20 Confidentiality   32 12.21 Conveyance by Landlord   32
12.22 Governing Law   33 12.23 Counterparts   33

 

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HOTEL LEASE

 

THIS HOTEL LEASE (this “Lease”) is made and entered into as of the 27th day of
February 2020, by and between GANO HOLDINGS, LLC, a Rhode Island limited
liability company, having its principal office at c/o Procaccianti Companies,
1140 Reservoir Avenue, Cranston, Rhode Island 02920-6320 (“Landlord”), and PHR
GANO OPCO SUB, LLC, a Delaware limited liability company, having its principal
office at c/o Procaccianti Companies, 1140 Reservoir Avenue, Cranston, Rhode
Island 02920-6320 (“Tenant”).

 

RECITALS

 

A.            Landlord is the owner of the real property located at 220 India
Street, Providence, RI and legally described on Exhibit A attached hereto (the
“Land”) and all improvements thereon, including the building that is being
operated as a hotel consisting of 137 guest rooms, and other facilities. The
Property (as hereinafter defined) and that portion of the FF&E (as hereinafter
defined) that is owned by Landlord (and not paid for herein by Tenant) are
hereinafter collectively referred to as the “Leased Property”.

 

B.            Landlord desires to lease the Leased Property to Tenant and Tenant
desires to lease the Leased Property from Landlord, all on the terms and
conditions set forth herein.

 

AGREEMENT

 

In consideration of the mutual covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:

 

ARTICLE I
DEFINITIONS

 

In addition to other terms that are defined elsewhere in this Lease, the
following terms shall have the meanings set forth below when used herein:

 

“Additional Rent” has the meaning set forth in Section 3.3.

 

“Affiliate” means, with respect to any Person, any other Person (a) directly or
indirectly controlled by, controlling or under direct or indirect common control
with the Person in question, (b) who owns, directly or indirectly, 5% or more of
the equity interest of the Person in question, or (c) who is an immediate family
member (e.g., a parent, spouse, sibling, child or grandchild) of the Person in
question. For the purposes of this definition, “control” when used with respect
to any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interest, by contract or otherwise; and the terms
“controlling” and “controlled” have the meanings correlative to the foregoing.

 

“Assigned Items” has the meaning set forth in Section 2.1.

 

“Base Rent” has the meaning set forth in Section 3.1.

 

 

 

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any corresponding provision or provisions of prior or succeeding law.

 

“Commencement Date” means February 27, 2020.

 

“Consumer Price Index” means the Consumer Price Index for All Urban Consumers
(CPI-U) for the U.S. City Average for All Items, 1982-84=100 as published by the
United States Department of Labor, Bureau of Labor Statistics. If the Consumer
Price Index shall cease to use 1982-84 as the base period, the Consumer Price
Index shall be converted in accordance with the conversion factor, if any,
published by the United States Department of Labor, Bureau of Labor Statistics.
If the Consumer Price Index is discontinued or revised during the Term hereof
such other governmental index or computation, if any, with which it is replaced
shall be used. If no conversion factor is supplied by the United States
Department of Labor, Bureau of Labor Statistics, either for a new base year or a
new index, the parties hereto shall agree upon a replacement for the Consumer
Price Index to be used.

 

“Cut-Off Time” means 12:01 a.m. on the Commencement Date.

 

“Debtor’s Law” has the meaning set forth in Section 8.6.

 

“Default Interest Rate” means an annual rate equal to the Prime Rate, plus five
percent (5%).

 

“Event of Default” has the meaning set forth in Section 8.1.

 

“Executive Order 13224” has the meaning set forth in Section 4.15(e)(i).

 

“Expiration Date” has the meaning set forth in Section 2.2.

 

“FF&E” means the furniture, furnishings, equipment, fixtures, apparatus and
other personal property used in, or held in storage for use in, the operation of
the Hotel, or any replacement or substitution of such furniture, furnishings,
equipment, fixtures or apparatus.

 

“Fixed Rent” has the meaning set forth in Section 3.1(a).

 

“Foreclosure Purchaser” means the holder of a Mortgage or the designee or
assignee of the holder of a Mortgage in the case of a deed-in-lieu of
foreclosure, or the purchaser in a foreclosure proceeding.

 

“Franchise” means the franchise rights of Tenant under the Franchise Agreement.

 

“Franchise Agreement” means that certain Franchise Agreement dated on or about
the date hereof, between Franchisor and Tenant, for the use of the franchise
rights, the “Hilton Garden Inn” trademark, services and related rights, subject
to the obligations and limitations set forth therein, as amended from time to
time, and any substitute therefor mutually agreed to by Franchisor and Tenant.

 

“Franchisor” means Hilton Franchise Holding LLC.

 

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“GAAP” has the meaning set forth in Section 3.1(d).

 

“Governmental Authority” means any federal, state, county or municipal
government and any appropriate department, commission, board or other authority
having jurisdiction over the Hotel now or hereafter in force, including, without
limitation, any alcoholic beverage control board, health inspector, the Board of
Fire Underwriters, and any insurance company providing the insurance required to
be carried under this Lease.

 

“Gross Revenue” has the meaning set forth in Section 3.1(d).

 

“Hazardous Materials” means any flammables, explosives, radioactive materials,
hazardous wastes, hazardous and toxic substances or related materials, asbestos
or any material containing asbestos, or any other substance or material included
in the definition of “hazardous substances”, “hazardous wastes”, “hazard
materials”, “toxic substances”, “contaminants” or any other pollutant, or
otherwise regulated by any federal, state or local environmental law, ordinance,
rule or regulation, including the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, and the Resource Conservation and Recovery Act,
as amended, and in the regulations adopted and publications promulgated pursuant
to each of the foregoing Acts.

 

“Hotel” means the hotel operated on the Land by Tenant, currently commonly known
as the Hilton Garden Inn, Providence, and all improvements constructed thereon,
all related FF&E, and all rights appurtenances and interests in connection
therewith.

 

“Hotel Personalty” has the meaning set forth in Section 3.6(a).

 

“Land” has the meaning set forth in Recital A.

 

“Landlord” has the meaning set forth in the preamble.

 

“Law” has the meaning set forth in Section 4.8(a).

 

“Lease” has the meaning set forth in the preamble.

 

“Lease Year” means a consecutive twelve-month period, commencing on the first
day of the first full month after the Commencement Date, except that the final
Lease Year shall end on the Expiration Date (unless this Lease shall be sooner
terminated in accordance with its terms).

 

“Leased Property” has the meaning set forth in Recital A.

 

“Licenses” has the meaning set forth in Section 4.7.

 

“Lien” has the meaning set forth in Section 4.10.

 

“Management Agreement” means that certain Management Agreement, dated as of the
date hereof, between Tenant and Manager for the management and operation of the
Hotel, as amended from time to time, and any substitute therefor mutually agreed
to by Manager and Tenant.

 

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“Manager” means GANO Hotel Manager, LLC.

 

“Mortgage” means any first mortgage, deed of trust, deed to secure debt or other
security instrument recorded against all or any portion of the Property for
current indebtedness of Landlord and all renewals, modifications, refinancings,
rearrangements, consolidations, replacements and extensions thereof, as
evidenced or deemed to be evidenced by any mortgage, deed of trust, deed to
secure debt, assignment of leases or profits, security agreement or fixture
filing from Landlord to a lender.

 

“Notices” has the meaning set forth in Section 12.5.

 

“OFAC” has the meaning set forth in Section 4.15(e)(i).

 

“OFAC Lists” has the meaning set forth in Section 4.15(e)(i).

 

“Officer’s Certificate” has the meaning set forth in Section 3.1(c).

 

“Operating Supplies” means all supplies, except for FF&E and kitchen, restaurant
and bar equipment, used or held in storage for future use in connection with
operation of the Hotel in accordance with the Operational Standards, including,
without limitation, all engineering, maintenance and housekeeping supplies,
guest room cleaning supplies, soap and other toiletries, toilet paper,
stationery, writing pens, office supplies, and food and beverages of all kinds.

 

“Operational Standards” means the operating standards required for the Hotel to
be operated as a first-class, hotel staffed and equipped and having inventories
comparable to other similar first-class hotels in comparable metropolitan areas
in the United States, and at all times in accordance with the requirements
established and set forth by the Franchisor.

 

“Parking Contracts” means any agreements providing for vehicle parking (valet or
otherwise) rights associated with the guests, invitees or employees of the
Hotel.

 

“Percentage Rent” has the meaning set forth in Section 3.1(b).

 

“Person” means any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization.

 

“Personal Property Limitation” has the meaning set forth in Section 3.6(a).

 

“Persons Within Tenant’s Control” means all of Tenant’s subtenants and
assignees, and all of their respective principals, officers, agents,
contractors, servants, employees, licensees, guests and invitees.

 

“Prime Rate” means the prime rate of interest published from time to time (and
as the same may be changed from time to time) in the Money Rates section of The
Wall Street Journal, or its successor publication, from time to time.

 

“Property” means the Land and the Hotel, in whole or in part, and all
improvements, FF&E, appurtenances, rights and interests relating thereto.

 

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“Proposed Party” has the meaning set forth in Section 10.2.

 

“Renewal Term” has the meaning set forth in Section 2.2.

 

“Rent” means Base Rent, Additional Rent, Percentage Rent and any other sum
payable from Tenant to Landlord pursuant to this Lease.

 

“Required Improvements” has the meaning set forth in Section 4.13(b).

 

“Service Contracts” has the meaning set forth in Section 4.6(a).

 

“Tenant” has the meaning set forth in the preamble.

 

“Tenant’s Representative” has the meaning set forth in Section 8.6.

 

“Term” has the meaning set forth in Section 2.2.

 

The terms “herein,” “hereof,” “hereunder” and like terms, unless otherwise
specified, shall be deemed to refer to this Lease in its entirety and shall not
be limited to any particular section or provision hereof. The terms “include”
and “including” as used herein shall be deemed to mean “including, but not
limited to.” References herein to “Sections,” and “Exhibits” shall be deemed to
respectively mean sections of and exhibits to this Lease unless otherwise
specified.

 

ARTICLE 2
DEMISE AND TERM

 

2.1            Demise. Upon the terms and conditions hereinafter set forth and
in consideration of the payment from time to time by Tenant of the Rent and the
prompt performance by Tenant and Landlord of each and every one of the
respective covenants and agreements hereinafter contained to be kept and
performed by Tenant and Landlord, the performance of each and every one of which
is declared to be an integral part of the consideration to be furnished
respectively by Tenant and Landlord, (i) Landlord does hereby lease, let and
demise unto Tenant, and Tenant does hereby lease of and from Landlord, for the
Term, at the Rent and upon all of the other provisions of this Lease, the Leased
Property together with any and all improvements now or hereafter erected or
installed thereon relating to the Leased Property and all present or future
appurtenances, rights, service contracts, equipment leases, privileges, licenses
and easements benefiting, belonging or pertaining thereto; and (ii) effective as
of the Commencement Date, Landlord does hereby assign to Tenant and Tenant does
hereby assume from Landlord, for the Term, all of Landlord’s right, title and
interest in and to, and all of Landlord’s obligations under, the Parking
Contracts, the Service Contracts, the Licenses, the hotel reservations and any
proprietary rights, records, documents and intangible property required in the
ordinary course of business in operating the Hotel (collectively, the “Assigned
Items”).

 

2.2            Term. The term of this Lease (the “Term”) shall commence on the
Commencement Date and shall continue until the tenth (10th) anniversary of the
first full month of this Lease, or such earlier date upon which this Lease is
sooner terminated in accordance with its terms (the “Expiration Date”). Provided
that no Event of Default shall have occurred and be continuing, this Lease shall
automatically extend for two (2) renewal terms of five (5) years each

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(each a “Renewal Term”) unless Tenant elects, by providing notice to Landlord no
later than 12 months prior to then next scheduled expiration of the Term or
Renewal Term of this Agreement to terminate this Agreement upon the expiration
of the then current Term or Renewal Term. Base Rent and Percentage Rent shall be
renegotiated by Landlord and Tenant prior to the commencement of each Renewal
Term at rental rates with shall be “market rent” (meaning such rent which a
willing tenant would pay a willing landlord to lease the Leased Property taking
into account the terms and conditions of this Lease and permitting compliance
with Sections 3.6 and 3.7 hereof) which shall be evidenced by a transfer pricing
report prepared by an independent national accounting firm. All of the terms,
covenants and provisions of this Agreement shall apply to each Renewal Term.
Tenant shall have no right to extend the Term beyond the expiration of third
Renewal Term. If Tenant does not give notice that it elects to terminate this
Agreement in accordance with this Section 2.2, this Lease shall automatically
renew at the end of the Term or Renewal Term then in effect as provided in the
this Section 2.2.

 

2.3            Termination Upon Sale by Landlord. Notwithstanding anything to
the contrary contained herein, the Term shall automatically expire and this
Lease shall automatically terminate immediately upon completion of a sale by
Landlord of Landlord’s interest in all or substantially all of the Leased
Property.

 

2.4            Effect of Termination. Upon any termination of this Lease, Tenant
shall pay to Landlord any Rent due and payable as of the date of such
termination.

 

ARTICLE 3
RENT

 

3.1            Rent. Tenant agrees to pay for use of the Leased Property during
each Lease Year (or partial Lease Year, if applicable with respect to the first
and last Lease Year), the rent (the “Base Rent”) equal to the sum of Fixed Rent
and Percentage Rent, as each are calculated in accordance Schedule 3.1 attached
hereto and made a part hereof.

 

(a)           “Fixed Rent” shall have the meaning contained in Schedule 3.1.

 

(b)            “Percentage Rent” shall have the meaning contained in Schedule
3.1.

 

(c)           Tenant shall pay an amount equal to the Fixed Rent on the first
(1st) day of each calendar month during the Term (including the calendar month
next succeeding the last month of the term hereof). Percentage Rent for each
Lease Year shall be payable monthly in arrears on the 15th day following the end
of each calendar month based upon a written statement, signed and certified by
an officer of Tenant (an “Officer’s Certificate”) to be true and correct,
setting forth the total amount of Tenant’s Gross Revenue made during the
immediately preceding calendar month. For the last month of the Term, which
shall be a partial month, the dollar thresholds set forth in Sections 3.1(b)(i)
through (v) above shall be multiplied by a fraction equal to (i) the number of
days in such month divided by (ii) 30.

 

(d)           With respect to any applicable time period, “Gross Revenue” means
all revenues and income of any kind derived from the use of rooms at the Hotel,
including, without limitation, revenue derived from rooms and suites rented or
leased for part of a day, a week, a

 

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month or longer, and all revenues and income of any kind derived from the sale
of all food, liquor, soft drinks or other beverages at the Hotel, including
mini-bars, and the sale, rental or use of kitchen facilities and services,
conference facilities and services, meeting rooms, miscellaneous banquet income
and service charges or audio/video equipment, and all revenues and income of any
kind derived from minor operating departments income from the operations of the
Hotel. Notwithstanding anything to the contrary contained herein, revenue from
guests who guaranteed their arrival but did not “show”, shall be included in
Gross Revenue when collection is reasonably assured. The calculation of all
types of revenue shall be determined on the accrual method of accounting in
accordance with generally accepted accounting principles consistently applied
(“GAAP”) and shall include sales made on a cash basis or on credit, but shall
exclude the following items:

 

(i)        Federal, state and municipal excise taxes and sales taxes paid by
customers in connection with goods, merchandise or services purchased by them to
the extent that such taxes are separately levied, whether or not itemized on the
customer’s bill or checks; and

 

(ii)        Service charges or tips paid directly to employees if not separately
itemized or if not included in package prices on the customer’s bill or checks;
and

 

(iii)        All applicable room, excise, sales and use taxes or similar
government charges collected directly from guests of the Hotel; and

 

(iv)        Revenues from the sale or financing of all or any part of the Leased
Property, the operating inventory, or surplus items; and

 

(v) Except for proceeds under any business interruption policies, any insurance
or condemnation proceeds related to the Leased Property.

 

(e)           Landlord and Tenant hereby agree to allocate fairly (based on
relative value) the Base Rent payments between the lease of the Hotel, on the
one hand, and the lease of the Hotel Personalty, on the other hand.

 

3.2           Apportionments. In the event that Tenant receives any income or
incurs any expenses attributable to the period prior to the Cut-Off Time, Tenant
shall assign such items of income and expense to the designee of Landlord, and
Landlord’s designee shall retain all such income and pay all such expenses
attributable to this period. In the event that Landlord receives any income (or
a credit therefor in connection with Landlord’s purchase of the Leased Property)
or incurs any expense attributable to the period following the Cut-Off Time, and
Tenant would have been entitled to such income or responsible for such expense
had such income or expense been received or incurred directly by Tenant,
Landlord shall assign such items of income and expense to Tenant, and Tenant
shall retain such income and pay all such expense attributable to this period.

 

3.3           Additional Rent. All payments (whether or not specifically denoted
as such) to be made by Tenant pursuant to the provisions of this Lease in
addition to Base Rent shall constitute “Additional Rent”.

 

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3.4           Late Charge. Any amount payable hereunder that shall not have been
paid within ten (10) days after the date on which the same shall become due and
payable shall bear interest at a rate equal to eighteen percent (18%) per annum,
compounded monthly, but in no event in excess of the maximum rate permitted by
applicable law.

 

3.5              Intentionally Omitted.

 

3.6              Personal Property Limitation.

 

(a)           Anything contained in this Lease to the contrary notwithstanding,
the amount of Hotel Personalty subject to this Lease shall be limited so that
the rents attributed to Hotel Personalty shall not exceed fifteen percent (15%)
of the total rents from all property demised under this Lease determined at the
time that the Hotel Personalty is placed in service (the “Personal Property
Limitation”). “Hotel Personalty” is defined to include, without limitation, all
property related to the Hotel that is not “real property” within the meaning of
Treas. Reg. Section 1.856-10. Landlord and Tenant shall at all times cooperate
in good faith and use their best efforts to permit Landlord to comply with the
Personal Property Limitation, which compliance may include, without limitation,
the purchase by Tenant at fair market value of personal property used in the
operation of the Hotel sufficient to permit compliance with the Personal
Property Limitation set forth in this Section 3.6. All such compliance shall be
effected in a manner that has no material net economic detriment to Tenant. This
Section 3.6 is intended to ensure that the rents from personal property fall
below the fifteen percent (15%) limitation of Section 856(d)(1) of the Code and
shall be interpreted in a manner consistent with such intent.

 

(b)           If and to the extent the ownership of any portion of the Hotel
Personalty would cause the Base Rent not to qualify as “rents from real
property” for purposes of Section 856(d)(1) of the Code, or if deemed
appropriate or desirable by Landlord, Tenant agrees that, upon request of
Landlord, Tenant will acquire such of the Hotel Personalty at its fair market
value as Landlord shall reasonably specify, and Landlord and Tenant agree to
adjust the Base Rent (including any revenue breakpoints set forth in the
Percentage Rent) to appropriately reflect such acquisition, and Landlord and
Tenant agree to amend this Lease accordingly.

 

3.7            Sublease Rent Limitation. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not sublet the Hotel or enter into any
similar arrangement on any basis such that the rental or other amounts to be
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 would fail
to qualify as “rents from real property” within the meaning of Section 856(d)(1)
of the Code, or any similar or successor provision thereto.

 

3.8            No Commingling of Funds. Tenant shall not commingle monies
received and held by Tenant from the possession and operation of the Leased
Property with any other funds of Tenant or of any other Person.

 

3.9            Manager; Management.

 

(a)           Pursuant to the Management Agreement, Manager has agreed to manage
the Leased Property on the terms and conditions contained therein. Tenant shall
(i) at all

 

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times comply with the terms and conditions contained in the Management
Agreement, (ii) do all things necessary to preserve and keep unimpaired its
material rights under the Management Agreement and (iii) notify Landlord in
writing of any default, alleged default, or event which with notice or the
passage of time would constitute a default under the Management Agreement, which
default or event shall be and constitute a default hereunder.

 

(b)           Tenant hereby covenants and agrees to promptly enforce the
performance and observance of all of the material covenants and agreements
required to be performed and/or observed by Manager under the Management
Agreement and all of its rights and remedies under the Management Agreement
against Manager.

 

(c)           Tenant hereby covenants and agrees not to do any of the following
without the prior written consent of Landlord: (i) surrender, terminate or
cancel the Management Agreement, (ii) reduce or consent to the reduction of the
term of the Management Agreement, (iii) increase or consent to the increase of
the amount of any charges under the Management Agreement, or (iv) otherwise
modify, change, supplement, alter or amend in any material adverse respect any
of the provisions of the Management Agreement or any of Tenant’s rights and
remedies under the Management Agreement.

 

(d)           If Tenant receives any notice of or becomes aware of a violation
or circumstances likely to result in a violation of the Management Agreement,
Tenant shall promptly deliver to Landlord written notice of such violation or
circumstances and, to the extent the same is the responsibility of Tenant under
this Lease, take all remedial action necessary for compliance with the
Management Agreement; provided that Tenant may contest any such violation if
Landlord consents to such contest by Tenant, which consent shall not be
unreasonably withheld. If Tenant contests such violation, Tenant shall hold
Landlord harmless from any loss, cost, damage or expense, including reasonable
attorneys’ fees, resulting from such contest, unless the contested violation
resulted from an intentional act or omission in contravention of this Lease by
Landlord, its agents or employees.

 

(e)           Tenant shall deliver to Landlord, within three (3) days after
receipt of same by Tenant, copies of all written notices sent to Tenant by
Manager relating to the Management Agreement.

 

(f)            Landlord and Tenant agree to cooperate fully with each other in
the event it becomes necessary to obtain an extension or modification of the
Management Agreement or a new management agreement for the Leased Property.

 

(g)           Tenant shall ensure that the Management Agreement (or any
successor management agreement) obligates the Manager to provide information
Landlord deems reasonably necessary to ensure that the Manager is an “eligible
independent contractor” as such term is defined in Section 856(d)(9)(A) of the
Code.

 

3.10          Books and Records. In addition to any other requirements set forth
herein (including, without limitation, Sections 4.3(a) and 5.1), Tenant
covenants that, for the purposes of ascertaining the amount payable to Landlord
as Percentage Rent, Tenant shall keep books of account and other records in
which full, true and correct entries will be made of all financial

 

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dealings and actions in relation to the business and affairs of the Hotel in
accordance with generally accepted accounting principles, consistently applied,
and will preserve such records and books of account throughout the Term. All
such books and records shall be maintained at the Leased Property or the
principal business office of Tenant or Manager during the Term and, upon the
Expiration Date, shall be delivered to Landlord, subject to Tenant’s continuing
right to review such books and records and to make copies or extracts of the
same. Landlord shall keep such books and records for five (5) years after the
expiration or earlier termination of this Lease. Landlord shall have access to
such books and records during regular business hours during the Term and shall
have the right, at its expense, to make copies or extracts thereof.

 

3.11          Rent without Setoff. Except as otherwise expressly provided
herein, there shall be no deduction or setoff of any nature whatsoever from Rent
payable under this Lease, by reason of (a) any damage to or destruction of the
Leased Property or any portion thereof from whatever cause or any condemnation;
(b) the lawful or unlawful prohibition of, or restriction upon, Tenant’s use of
the Leased Property, or any portion thereof, unless caused by Landlord or unless
the same is a breach of warranty or covenant by Landlord; (c) any claim that
Tenant may have against Landlord by reason of any default or breach of any
warranty by Landlord under this Lease or any other agreement between Landlord
and Tenant, or to which Landlord and Tenant are parties; (d) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceedings affecting Landlord or any assignee or transferee
of Landlord; or (e) for any other cause whether similar or dissimilar to any of
the foregoing. Except as otherwise specifically provided in this Lease, Tenant
hereby waives all rights arising from any occurrence whatsoever, which may now
or hereafter be conferred upon it by law, to entitle Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable or other
obligations to be performed by Tenant hereunder. The obligations of each party
hereunder shall be separate and independent covenants and agreements, and the
Rent and all other sums payable by Tenant hereunder shall continue to be payable
in all events unless the obligations to pay the same shall be terminated
pursuant to the express provisions of this Lease.

 

3.12          Rent Acceptance. If Landlord, at any time or times, accepts any
Rent or any other sum due to it hereunder after the same becomes due and
payable, such acceptance shall not excuse delay upon any subsequent occasion, or
constitute, or be construed as, a waiver of any of Landlord’s rights hereunder
as to payment of any Rent or any other sums due to it thereafter. Furthermore,
Landlord’s acceptance at any time of less than the full amount of any item of
Rent due shall not be deemed a waiver of any unpaid amount, whether or not there
is any dispute thereon between Landlord and Tenant, and whether or not Tenant
expressly asserts, and/or Landlord expressly disclaims or denies, such
acceptance as being in full settlement, full payment or the like of any such
dispute.

 

3.13          Place Where Rent Paid. All Rent shall be payable to Landlord at
the place provided in this Lease for the sending of notices to Landlord, or at
such other place as Landlord may specify by notice to Tenant from time to time.
A place once specified as the place for the payment of Rent shall continue until
changed by notice by Landlord to Tenant.

 

3.14          Key Money. To the extent any key money is provided by Franchisor
to Tenant pursuant to the terms of any Franchise Agreement, Tenant agrees to
transfer such key money to Landlord as an advance payment of Rent.

 

10

 

 

ARTICLE 4
USE

 

4.1           General Operating Covenants. During the Term, Tenant shall
continuously use and occupy the Hotel as a hotel which meets or exceeds the
Operational Standards. Tenant shall operate the Hotel under the name “Hilton
Garden Inn Providence,” or such other name as Landlord may approve from time to
time, and shall maintain the Hotel in compliance with all applicable Laws, the
Operational Standards, all Mortgages and the Franchise Agreement. Tenant shall
proceed with diligence and exercise reasonable good faith efforts to obtain and
maintain all approvals necessary to operate and use the Hotel for its intended
purpose under all applicable Laws. Tenant shall use reasonable good faith
efforts to promote the maximum possible amount of trade, commerce and business
for the Hotel. Tenant shall not hold itself out as the agent of Landlord. Upon
written request from Tenant, which request shall not be delivered more
frequently than quarterly, Landlord shall perform an inspection of the Leased
Property, and, promptly following such inspection, confirm that Tenant is in
compliance with this Section 4.1, or, if Tenant is not in compliance with this
Section 4.1, specify any violations of this Section 4.1.

 

4.2           Prohibited Uses. Tenant will not knowingly make or permit to be
made any use of the Hotel or any part thereof that would violate any of the
covenants, terms, provisions and conditions of this Lease, the Franchise
Agreement or any Mortgage, or that directly or indirectly is forbidden by
applicable Laws or that may be dangerous to life, limb or property or that may
invalidate or materially increase the premium cost of any policy of insurance
carried on the Leased Property or covering the operation of the Leased Property
or the Hotel. Tenant shall not, and shall not knowingly permit anyone else to,
bring into, use, store or dispose of on the Leased Property any materials or
substances in violation of any applicable Laws. Tenant will not, and will not
knowingly suffer or permit the Leased Property or any part thereof to be used in
any manner or permit anything to be brought into or kept therein that would in
any way materially impair or tend to materially impair the character, reputation
or appearance of the Hotel or that would materially impair or interfere with or
tend to materially impair or interfere with any of the services performed by
Landlord for the Hotel or that could threaten the safety of the Hotel or any of
its occupants. Tenant will not, and will not knowingly suffer or permit the
Leased Property or any part thereof to be used in any manner to conduct wagering
activities by any person who is engaged in the business of accepting wagers and
who is otherwise legally authorized to engage in such business.

 

4.3             Records.

 

(a)           In addition to any other requirements set forth herein (including,
without limitation, Sections 3.10 and 5.1), Tenant shall maintain complete books
and records for the Hotel, including the books of account, guest records, front
office records and general records of the Hotel.

 

(b)           Tenant shall prepare and file all forms, reports and returns for
the Hotel required by all federal, state or local laws in connection with
unemployment insurance, worker’s compensation insurance, disability benefits,
income tax withholding, and social security. Tenant shall prepare for review,
approval and, where appropriate, auditing by Landlord’s independent accounting
firm, all financial statements with respect to the operation of the Hotel.

 

11

 

 

4.4           Guests. Tenant shall maintain business-like relations with guests
of the Hotel. Tenant shall collect with diligence the rents and other income due
from guests and concessionaires and use reasonable good faith efforts to enforce
compliance with all terms of overnight occupancy rights.

 

4.5           Advertising and Promotion. Tenant shall arrange, contract and pay
for all advertising and promotion that Tenant deems necessary for the successful
operation of the Hotel in order to meet or exceed the Operational Standards.

 

4.6           Services and Purchases.

 

(a)           Tenant shall enter into, perform its obligations under,
administer, pay and use reasonable good faith efforts to enforce service
contracts required in the ordinary course of business in operating the Hotel,
including contracts for water, electricity, gas, telephone, refuse removal,
vermin extermination, snow removal, cable, Internet, cleaning, laundry, pool
service, vending services, fire systems inspection and testing, elevator and
boiler maintenance, and all other services (collectively, “Service Contracts”)
that are provided in comparable hotels.

 

(b)          Tenant shall take reasonable measures, as directed by Landlord and
as are consistent with the provisions of this Lease, to provide for security in
the Hotel.

 

(c)          Tenant shall make all payments on or before the applicable due
dates required to maintain the insurance regarding the Hotel that Tenant is
required to carry under Article 7.

 

4.7           Permits. To the extent not required to be provided by Landlord,
Tenant shall apply for, obtain and maintain (or shall require Manager to apply
for, obtain and maintain) for the benefit of the Hotel all licenses and permits
required in connection with the management and operation of the Hotel
(collectively, “Licenses”). Landlord shall execute and deliver any and all
applications and other documents and otherwise cooperate to the fullest extent
with Tenant in applying for, obtaining and maintaining such Licenses. Tenant
shall assign (or cause Manager to assign) all such Licenses for the Hotel to
Landlord or its designee upon termination of this Lease (to the extent
assignable).

 

4.8           Compliance with Law, Franchise Agreement and Mortgages.

 

(a)           Subject to Section 4.8(c) below, Tenant shall comply with and
abide by all applicable statutes, laws, rules, regulations, requirements,
orders, notices, determinations and ordinances of any Governmental Authority
(all of the foregoing hereinafter referred to collectively as “Laws”), and with
the terms and provisions of the Franchise Agreement and any Mortgage, to the
extent performance of such terms and provisions are within the control of Tenant
under this Lease.

 

(b)           Subject to Section 4.8(c) below, if Tenant receives notice of or
becomes aware of a violation or circumstances likely to result in a violation of
any Law, the Franchise Agreement, or any Mortgage, Tenant shall promptly deliver
to Landlord, Franchisor, and the holder of such Mortgage written notice of such
violation or circumstances and, to the extent the same is the responsibility of
Tenant under this Lease, take all remedial action necessary for

12

 

 

compliance with the Law, the Franchise Agreement and any Mortgage; provided that
Tenant may contest any such violation if Landlord consents to such contest by
Tenant, which consent shall not be unreasonably withheld. If Tenant contests
such violation, Tenant shall hold Landlord harmless from any loss, cost, damage
or expense, including, reasonable attorneys’ fees, resulting from such contest,
unless the contested violation resulted from an intentional act or omission in
contravention of this Lease by Landlord, its agents or employees. Upon written
request from Tenant, which request shall not be delivered more frequently than
quarterly, Landlord shall perform an inspection of the Leased Property, and,
promptly following such inspection, confirm that there is no violation or
circumstances likely to result in a violation of any Law, the Franchise
Agreement or any Mortgage, or, if such a violation or circumstance shall exist,
specify any such violation or circumstance. In addition, Tenant shall, at
Tenant’s expense, comply with all requirements set forth in the Franchise
Agreement.

 

(c)           Notwithstanding the foregoing provisions of this Section 4.8,
Landlord shall be solely responsible for all cost and expense arising from the
presence, suspected presence, release or suspected release of any Hazardous
Materials in or into the air, soil, surface water or ground water, or any
portion thereof, at, on, about, under or within the Leased Property, including
any costs of investigation or remediation, whether prior to or subsequent to the
Commencement Date; provided, however, that Tenant shall be solely responsible
for all cost and expense arising from the presence, suspected presence, release
or suspected release of any Hazardous Materials in or into the air, soil,
surface water or ground water, or any portion thereof, at, on, about, under or
within the Leased Property, including any costs of investigation or remediation,
if and to the extent caused by the intentional act or willful misconduct of
Tenant.

 

4.9           Payment of Taxes.

 

(a)           Tenant shall pay all taxes (including, without limitation, all ad
valorem, sales and use, single business, gross receipts, transaction, privilege,
imposition, rent or similar taxes as the same relate to or are imposed upon
Tenant or the business conducted upon the Leased Property) not included in
Section 4.9(b) below, water, sewer or other rents and charges, excises, tax
levies, fees (including, without limitation, license, permit, inspection,
authorization and similar fees) and all other governmental charges not included
in Section 4.9(b) below, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character in respect of the
Leased Property or the business conducted thereon by Tenant (including all
interest and penalties thereon due to any failure in payment by Tenant), which
at any time during or in respect of the Term hereof may be assessed or imposed
on or in respect of or be a lien upon (i) Landlord’s interest in the Leased
Property; (ii) the Leased Property, any part thereof, any rent therefrom, or any
estate, right, title, or interest therein; or (iii) any occupancy, operation,
use or possession of, or sales from, or activity conducted on or in connection
with the Leased Property or the leasing or use of the Leased Property or any
part thereof by Tenant, including, without limitation, (A) all social security
taxes, unemployment insurance taxes, withholding taxes and similar taxes and
assessments of any nature imposed on Tenant in connection with any employees or
personnel of Tenant; (B) all hotel taxes, gross receipts taxes, amusement taxes,
excise taxes, sales or use taxes, rent taxes or similar taxes as the same relate
to or are imposed upon Tenant or the business conducted upon the Leased Property
(excluding the income of any sublessees, licensees or concessionaires of Tenant,
but including the rent or other amounts received by Tenant under any such
subleases, licenses or concession agreements); and (C) all personal property
taxes

 

13

 

 

or similar taxes or assessments with respect to any period during the Term, it
being agreed that any personal property taxes payable in part with respect to
the Term and in part with respect to periods before or after the Term shall be
prorated between Landlord and Tenant based on the number of days of the period
for which such personal property tax is payable that fall within the Term and
that fall outside of the Term.

 

(b)          Landlord shall pay all real property or similar taxes or
assessments, whether special or general, of any nature whatsoever assessed
against the Leased Property, with respect to any period before, during or after
the Term, but the foregoing shall not include any sales, use, gross receipts,
occupancy, single business, transaction, privilege, imposition, rent, ad valorem
or other tax not specifically enumerated herein.

 

4.10          Removal of Liens. Except as contemplated under any mortgage loan
associated with the Leased Property, Tenant shall at all times keep the Leased
Property free of any claim, lien, encumbrance or security interest other than
liens for real and personal property taxes and assessments not then delinquent
(hereinafter collectively called a “Lien”), except for taxes that are then due
and payable and that, if not then paid, would be delinquent. In the event a Lien
is asserted against the Leased Property or any part thereof, Tenant shall
immediately give Landlord written notice thereof and shall, to the extent that
the Lien would be the responsibility of Tenant hereunder, within twenty (20)
days after such notice is given, take all reasonable steps necessary for removal
thereof or bonding over unless Landlord notifies Tenant in writing within such
20-day period that Landlord wishes to contest such Lien or permit Tenant to
contest such Lien. Landlord shall retain all right to contest and control all
matters involving real property tax assessments and valuations regarding the
Property. Tenant shall promptly notify Landlord of any notice received by it
regarding such matters.

 

4.11          Utilities. Tenant shall be solely responsible for, and shall
promptly pay directly to the utility or service provider the cost (including
connection and other charges), of all heat, air conditioning, water, gas,
electrical, light, power, sewer charges, telephone service, and other services
and utilities supplied to the Leased Property, together with any taxes thereof.
Landlord shall reasonably cooperate with Tenant in connection with any energy
conservation program, provided that the same shall be accomplished without
Landlord being required to incur any out-of-pocket cost or expense thereby. If
such cooperation by Landlord shall result in any out-of-pocket cost or expense
to Landlord (including reasonable attorneys’ fees and disbursements), Tenant
shall nonetheless have the right to require Landlord’s cooperation in connection
therewith, provided that Tenant shall reimburse Landlord for such out-of-pocket
costs or expenses, as Additional Rent, within thirty (30) days after demand
therefor.

 

4.12          Notice to Landlord. Tenant shall promptly notify Landlord in
writing:

 

(a)           if, to the actual knowledge of Tenant, the condition of the Hotel
or any part thereof fails to meet any Law or the standards imposed hereunder;

 

(b)           upon receipt by Tenant of any notice, demand or similar
communication with respect to the violation of (i) any Law, (ii) the Franchise
Agreement, or (iii) the obligation of Landlord under any Mortgage;

 

14

 

 

(c)           upon receipt by Tenant of any summons, notice, demand or similar
communication regarding any action at law or in equity or before any regulatory
body in connection with or involving the Hotel, or any portion thereof;

 

(d)           upon receipt by Tenant of any notice or communication from an
insurance carrier regarding a material change to insurance coverages or the
insurability of the Leased Property; and

 

(e)           upon receipt by Tenant of any notice or communication of any
nature, written or oral, that, in the reasonable opinion of Tenant, may have a
material adverse effect on the Hotel.

 

4.13          Franchise Agreement.

 

(a)           On or before the Commencement Date, Tenant shall deliver to
Landlord a copy of the Franchise Agreement and Tenant shall be the holder and
owner of the Franchise to permit the Hotel to be operated as a “Hilton Garden
Inn”.

 

(b)           Landlord acknowledges and agrees that Franchisor, as a condition
to its execution of the Franchise Agreement, has required that the Hotel undergo
certain modifications or renovations (the “Required Improvements”). Landlord
shall cause such Required Improvements to be completed at Landlord’s expense and
in accordance with the terms set forth by the Franchisor. Landlord acknowledges
that Tenant would be unwilling to enter into this Lease without Landlord’s
commitment to complete the Required Improvements and, as such, Landlord will
receive material benefit from completing the Required Improvements.

 

(c)           Landlord shall indemnify, defend (with legal counsel reasonably
approved by Tenant), and hold Tenant harmless from all causes of action, claims,
debts, liabilities, controversies, damages, costs, losses, and expenses
(including reasonable attorneys’ fees) suffered or incurred by Tenant, including
lost profits, by reason of Landlord’s failure to complete the Required
Improvements as required by Franchisor, except to the extent that such damage or
loss is attributable to the gross negligence, willful misconduct or fraud of
Tenant.

 

(d)           Except as set forth in Section 4.13(b), Tenant shall be
responsible for the performance of all obligations imposed on the franchisee
under the Franchise Agreement. Neither Landlord nor Tenant shall take any
actions that violate the terms of the Franchise Agreement. To the extent any of
the provisions of the Franchise Agreement impose a greater obligation on Tenant
than the corresponding provisions of this Lease, then Tenant shall be obligated
to comply with, and to take all reasonable actions necessary to prevent breaches
or defaults under, the provisions of the Franchise Agreement. It is the intent
of the parties hereto that Tenant shall comply in every material respect with
the provisions of the Franchise Agreement to avoid any default under the
Franchise Agreement during the term of this Lease. In the event that it becomes
necessary to obtain an extension to the Franchise Agreement or a new franchise
for the Leased Property, Landlord shall cooperate with Tenant to the extent
necessary in connection therewith.

 

(e)           Tenant shall indemnify, defend (with legal counsel reasonably
approved by Landlord), and hold Landlord harmless from all causes of action,
claims, debts,

 

15

 

 

liabilities, controversies, damages, costs, losses, and expenses (including
reasonable attorneys’ fees) suffered or incurred by Landlord, including lost
profits, by reason of Tenant’s failure (or the failure of any Person occupying
all or any portion of the Leased Property under or through Tenant) to comply
with the terms of the Franchise Agreement, except to the extent that such damage
or loss is attributable to the gross negligence, willful misconduct or fraud of
Landlord.

 

(f)            Tenant hereby covenants and agrees to promptly enforce the
performance and observance of all of the material covenants and agreements
required to be performed and/or observed by Franchisor under the Franchise
Agreement and all of its rights and remedies under the Franchise Agreement
against the Franchisor.

 

(g)           Tenant hereby covenants and agrees not to do any of the following
without the prior written consent of Landlord and the holder of any Mortgage:
(i) surrender, terminate or cancel the Franchise Agreement, (ii) reduce or
consent to the reduction of the term of the Franchise Agreement, (iii) increase
or consent to the increase of the amount of any charges under the Franchise
Agreement, or (iv) otherwise modify, change, supplement, alter or amend in any
material adverse respect any of the provisions of the Franchise Agreement or any
of Tenant’s rights and remedies under the Franchise Agreement.

 

(h)           Tenant shall deliver to Landlord, within three (3) days after
receipt of same by Tenant, copies of all written notices sent to Tenant by
Franchisor relating to the Franchise Agreement.

 

(i)            If the terms of this Lease conflict with the terms of the
Franchise Agreement, the terms of the Franchise Agreement shall control.

 

4.14          Representations, Warranties and Covenants of Landlord. Landlord
hereby represents, warrants and covenants to Tenant that as of the Commencement
Date:

 

(a)           Organization; Binding and Enforceable. Landlord is a duly
organized limited liability company validly existing under the laws of the State
of Delaware. Landlord has full power and authority to perform its obligations
under this Lease, and this Lease is the legal, valid and binding obligation of
Landlord and is enforceable against Landlord in accordance with its terms.

 

(b)           No Conflicts; Consents Obtained. The execution and delivery of
this Lease does not violate or conflict with the formation document or the
operating document of Landlord or any agreement, judgment, license, permit,
order or other document applicable to or binding upon Landlord. Landlord has
obtained all consents and approvals required by any third party with respect to
Landlord in connection with the execution and delivery of this Lease.

 

4.15          Representations and Warranties of Tenant. Tenant hereby represents
and warrants to Landlord that as of the Commencement Date:

 

(a)          Organization; Binding and Enforceable. Tenant is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware. Tenant has full power and authority to
perform its obligations under this Lease, and

 

16

 

 

this Lease is the legal, valid and binding obligation of Tenant, and enforceable
against Tenant in accordance with its terms.

 

(b)          No Conflicts; Consents Obtained. The execution and delivery of this
Lease does not violate or conflict with the formation document or the operating
document of Tenant or any agreement, judgment, license, permit, order or other
document applicable to or binding upon Tenant. Tenant has obtained all consents
and approvals required by any third party with respect to Tenant in connection
with the execution and delivery of this Lease.

 

(c)          Management Agreement. (i) The Management Agreement is in full force
and effect, (ii) there is no material uncured default, breach or violation
existing thereunder by either party thereto, and (iii) to Tenant’s knowledge, no
event has occurred (other than payments due but not yet delinquent) that, with
the passage of time or the giving of notice, or both, would constitute a
material default, breach or violation by either party thereunder.

 

(d)          Franchise Agreements. (i) The Franchise Agreement is in full force
and effect, (ii) there is no material uncured default, breach or violation
existing thereunder by either party thereto, and (iii) to Tenant’s knowledge, no
event has occurred (other than payments due but not yet delinquent) that, with
the passage of time or the giving of notice, or both, would constitute a
material default, breach or violation by either party thereunder.

 

(e)          OFAC Lists.

 

(i)        Neither Tenant, nor any member of Tenant, nor, to Tenant’s knowledge,
any Person with actual authority to direct the actions of any member of Tenant,
nor, to Tenant’s present, actual knowledge, any other Persons holding any legal
or beneficial interest whatsoever in Tenant, (A) are named on any list of
persons, entities, and governments issued by the Office of Foreign Assets
Control of the United States Department of the Treasury (“OFAC”) pursuant to
Executive Order 13224 – Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism (“Executive Order
13224”), as in effect on the date hereof, or any similar list known to Tenant or
publicly issued by OFAC or any other department or agency of the United States
of America (collectively, the “OFAC Lists”), (b) are included in, owned by,
controlled by, knowingly acting for or on behalf of, knowingly providing
assistance, support, sponsorship, or services of any kind to, or otherwise
knowingly associated with any of the Persons referred to or described in the
OFAC Lists; or (c) has knowingly conducted business with or knowingly engaged in
any transaction with any Person named on any of the OFAC Lists or any Person
included in, owned by, controlled by, acting for or on behalf of, providing
assistance, support, sponsorship, or services of any kind to, or, to Tenant’s
present, actual knowledge otherwise associated with any of the Persons referred
to or described in the OFAC Lists.

 

(ii)        Neither Tenant, nor any Persons holding any legal or beneficial
interest whatsoever in Tenant (whether directly or indirectly), will conduct
business with or engage in any transaction with any Person named on any of the
OFAC Lists or any Person included in, owned by, controlled by, acting for or on
behalf of, providing assistance, support, sponsorship, or services of any kind
to, or otherwise associated with any of the Persons referred to or described in
the OFAC Lists.

 

17

 

 

(iii)        Tenant shall comply at all times with the requirements of Executive
Order 13224; the International Emergency Economic Powers Act, 50 U.S.C. Sections
1701-06; the United and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56; the
Iraqi Sanctions Act, Pub. L. 101-513, 104 Stat. 2047-55; the United Nations
Participation Act, 22 U.S.C. Section 287c; the Antiterrorism and Effective Death
Penalty Act, (enacting 8 U.S.C. Section 219, 18 U.S.C. Section 2332d, and 18
U.S.C. Section 2339b); the International Security and Development Cooperation
Act, 22 U.S.C. Section 2349 aa-9; the Terrorism Sanctions Regulations, 31 C.F.R.
Part 595; the Terrorism List Governments Sanctions Regulations, 31 C.F.R. Part
596; and the Foreign Terrorist Organizations Sanctions Regulations, 31 C.F.R.
Part 597 and any similar laws are regulation currently in force or hereafter
enacted.

 

4.16          Mutual Representations, Warranties and Covenants of Landlord and
Tenant.

 

(a)          Single Purpose Entities. Except as otherwise permitted by this
Lease, each of Landlord and Tenant hereby represents and warrants that it has
been organized as a single purpose entity, solely for the purpose of entering
into this Lease and the other agreements contemplated hereby and performing the
obligations required hereunder and under the other agreements contemplated
hereby. Each of Landlord and Tenant covenants that as of the date hereof and
through the Term it will comply with the special purpose entity covenants
contained in the loan documents related to any Mortgage by the Landlord.

 

(b)          No Discrimination. Each of Landlord and Tenant covenants by and for
itself, its successors and assigns, and all persons claiming under or through
them, and this Lease is made and accepted upon and subject to the condition that
there shall be no discrimination against or segregation of any person or group
of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the leasing, subleasing, transferring, use or
enjoyment of the Property herein leased, nor shall the Lease itself, or any
person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants or vendees of
the Property herein leased.

 

4.17          “As Is” Leased Property. Tenant agrees to accept the Leased
Property on the Commencement Date “AS IS” in the condition existing on the date
hereof, subject to the provisions of Section 6.3 below. Landlord shall have no
obligation to do any work in order to make the Leased Property suitable and
ready for occupancy and use by Tenant. Landlord shall deliver actual possession
of the Leased Property to Tenant in such condition on the Commencement Date.
Tenant agrees that, except as expressly provided herein, (a) Tenant enters into
this Lease without any representations, warranties or promises, express or
implied, by Landlord, its agents, representatives, employees, servants or any
other person in respect of the Leased Property, and (b) no rights, easements or
licenses are acquired by Tenant by implication or otherwise.

 

4.18          Third Party Manager. Tenant shall have the right to cause Manager
to perform all obligations of Tenant to be performed under this Lease, provided
that Tenant shall

 

18

 

 

remain liable to Landlord for the performance of all such obligations,
notwithstanding any liability of Manager to Tenant.

 

ARTICLE 5
FINANCIAL STATEMENTS; TRANSACTIONS WITH AFFILIATES

 

5.1           Financial Statements to be Provided by Tenant. In addition to any
other requirements set forth herein (including, without limitation, Sections
3.10 and 4.3(a)), Tenant shall maintain accurate and complete books of account
and records showing the assets and liabilities, operations, transactions and
financial condition of Tenant and the Property on an accrual basis in accordance
with GAAP. The books of account and records of Tenant and the Property shall at
all times be maintained at the principal business office of Tenant or Manager.
All such books of account and records may be inspected, copied and audited by
Landlord or any of its members or their designees or representatives from time
to time and upon reasonable prior notice at the office of Tenant or Manager.
Tenant shall, as and when received (or required to be received), furnish to
Landlord copies of the financial statements and reports furnished (or required
to be furnished) by Manager to Tenant pursuant to the terms of the Management
Agreement. In addition, if not furnished pursuant to the immediately preceding
sentence, Tenant shall furnish to Landlord, as and when required pursuant to the
terms of any Mortgage, any and all operating statements, financial statements,
balance sheets, budgets and reports regarding the Leased Property, including the
Hotel, that shall be required under such Mortgage.

 

5.2            Transactions with Affiliates. In Tenant’s management and
operation of the Hotel, Tenant may not purchase goods, supplies or services from
or through any of its Affiliates, except with the prior written consent of
Landlord, which consent shall not be unreasonably withheld.

 

ARTICLE 6
MAINTENANCE, REPAIRS AND ALTERATIONS

 

6.1            Maintenance and Repairs. Subject to Landlord’s performance of its
obligations under this Lease with respect to the condition of the Leased
Property (including, without limitation, with respect to the Required
Improvements), Tenant shall keep and maintain the Leased Property, the heating,
air conditioning, ventilating, plumbing, mechanical, electrical, telephone,
elevator, escalator, life and safety and security systems, floor and wall
coverings in good order, repair and condition, including making and paying for
necessary replacements, additions and substitutions in order to maintain the
Hotel in compliance with any Mortgage, the Operational Standards, the Franchise
Agreement, and all applicable Laws; provided, however, that Landlord shall have
the right to (i) participate in meetings with Tenant’s contractors performing
any such repairs, replacements, additions and substitutions and (ii) require
that any such repairs, replacements, additions and substitutions be supervised
by Landlord.

 

6.2            Alterations. Except for Tenant’s obligations hereunder to renew
and replace (which may, without Landlord’s consent, be made with the same,
similar, or better materials and workmanship), Tenant shall not have any right
to make any alterations, changes, additions or improvements to the Hotel or the
FF&E, if and to the extent such FF&E is owned by Landlord, without the prior
written consent of Landlord, which consent Landlord may withhold in

 

19

 

 

its sole discretion. Any work that Tenant may perform in the Hotel that is done
with Landlord’s consent, if given, may be conditioned on (i) Landlord’s approval
of Tenant’s plans therefor, (ii) Landlord’s participation in meetings with
Tenant’s contractors performing any such alterations, changes, additions or
improvements, (iii) Landlord’s supervision of the performance of any such
alterations, changes, additions or improvements, and (iv) compliance by Tenant
with such terms and conditions as Landlord may reasonably impose or as are
required to maintain the quality of the improvements on the Land in accordance
with the Operational Standards, any Mortgage or the Franchise Agreement. All
alterations, additions, and improvements in, on, or to the Hotel made or
installed by Tenant, including carpeting and wall covering, shall be and become
a part of the realty and owned by Landlord without compensation to Tenant.

 

6.3            Capital Expenditures. Landlord shall be responsible for any
capital expenditure (determined in accordance with GAAP) necessary to operate
and maintain the Leased Property in accordance with the Operational Standards.

 

ARTICLE 7
LIABILITY CLAIMS AND INSURANCE

 

7.1            Waiver of Claims. To the extent permitted pursuant to applicable
Laws, Tenant agrees that Landlord, its Affiliates, and each of their respective
shareholders, directors, partners, members, officers, employees and agents,
shall not be liable to Tenant, and Tenant hereby releases said parties from any
liability, for any personal injury to Tenant’s employees, invitees, guests or
licensees, for loss of income or damage to or loss of persons or personal
property in or about the Hotel from any cause whatsoever except to the extent
that such damage or loss of income is attributable to the gross negligence,
willful misconduct or fraud of Landlord. To the extent permitted pursuant to
applicable Laws, Landlord agrees that Tenant, its Affiliates and each of their
respective shareholders, directors, partners, members, officers, employees and
agents shall not be liable to Landlord, and Landlord hereby releases said
parties from any liability for any personal injury to Landlord’s employees,
invitees, guests or licensees, for loss of income or damage or loss of income of
persons or property in or about the Hotel from any cause whatsoever except to
the extent that such damage or loss is attributable to the gross negligence,
willful misconduct or fraud of Tenant.

 

7.2            Liability Insurance. Tenant will secure and maintain broad form
commercial general liability insurance (including innkeeper’s legal liability
insurance and dram shop insurance, if applicable) designating Landlord, Manager,
and Tenant as named insureds and Franchisor and the holder of each Mortgage as
additional insureds, from financially responsible insurance companies, covering
the Hotel in forms and with limits that are in compliance with the Franchise
Agreement, the Management Agreement and each Mortgage and which are reasonable
and appropriate based on the Operational Standards. The companies issuing such
policies and the form and coverage of such policies shall be subject to the
prior written approval of Landlord, which approval shall not be unreasonably
withheld. Tenant shall cause Manager to maintain workers’ compensation insurance
and employer’s liability insurance in forms and amounts required by law. Tenant
shall supply Landlord with certificates of insurance for all the above-described
policies of insurance. Such certificates shall provide that Tenant’s insurance
may not be terminated, canceled or amended except upon thirty (30) days’ prior
written notice to Landlord.

 

20

 

 

7.3            Property Insurance. Subject to the terms of Section 7.7 below,
Landlord shall obtain and keep in full force and effect “all risk” property
insurance on the Hotel, including all FF&E owned by Landlord, in compliance with
each Mortgage and the Franchise Agreement, for the full replacement cost
thereof, excluding deductibles. Tenant shall insure all FF&E owned by Tenant, in
compliance with each Mortgage and the Franchise Agreement, for the full
replacement cost thereof, excluding deductibles. Landlord shall supply Tenant,
and Tenant shall supply Landlord, with certificates of insurance for all the
above-described policies of insurance and each shall name Landlord, Manager, and
Tenant as named insured parties. In addition, each policy maintained by Landlord
under this Section 7.3 shall name the holder of each Mortgage as loss payee.
Such certificates shall provide that such insurance may not be terminated,
canceled or amended except upon thirty (30) days’ prior written notice to
Landlord and Tenant. Tenant hereby waives any claims against Landlord for any
loss or damage to the Leased Property as a result of fire or other casualty
covered by insurance (unless such loss or damage is a direct result of
Landlord’s negligence, willful misconduct or fraud).

 

7.4            Business Interruption Coverage.

 

(a)           Subject to the terms of Section 7.7 below, Landlord shall obtain
coverage for the actual loss sustained (including rental value) resulting from
the necessary interruption of business caused by direct physical damage to or
destruction of real or personal property resulting from an occurrence covered by
the insurance described in Section 7.3 above, including one hundred eighty (180)
days subsequent to completion of any required repairs or replacements necessary
to return the Leased Property to a condition at least as good as the condition
prior to the interruption event and sufficient to satisfy the requirements of
the Franchise Agreement, any Mortgage and the Operational Standards. The
insurance described in this Section 7.4(a) shall name Landlord as named insured
party and each mortgagee under any Mortgage as loss payee.

 

(b)           Subject to the terms of Section 7.7 below, Tenant shall obtain
coverage for the actual loss of profits sustained resulting from the necessary
interruption of business caused by direct physical damage to or destruction of
real or personal property resulting from an occurrence covered by the insurance
described in Section 7.3 above, including one hundred eighty (180) days
subsequent to completion of any required repairs or replacements necessary to
return the Leased Property to a condition at least as good as the condition
prior to the interruption event and sufficient to satisfy the requirements of
the Franchise Agreement and the Operational Standards.

 

7.5           Waiver of Subrogation. All insurance policies described in
Sections 7.1, 7.2, 7.3 and 7.4(a) shall provide for waiver of rights of
subrogation against Landlord, Tenant, Manager and the holder of each Mortgage.

 

7.6           Other. Any insurance provided by Tenant under this Article 7 may
be provided under the blanket insurance policies of Manager, which policies
cover other hotel properties managed by Manager, subject, however, to the prior
written approval of Landlord (which approval shall not be unreasonably withheld)
if Landlord shall have an approval right pursuant to this Article 7 over the
insurance coverage being provided by any such blanket insurance policy. All
premiums, costs and expenses shall be allocated among the properties

 

21

 

 

participating in such program. Coverage extended to any additional insured or
additional named insured under these policies will expire on the Expiration
Date.

 

7.7            Single Policy. Notwithstanding anything to the contrary contained
in this Article 7, any insurance coverage required to be provided by Landlord
under this Article 7 may be provided by Tenant on behalf of Landlord under a
single policy, and any insurance required to be provided by Tenant under this
Article 7 may be provided by Landlord on behalf of Tenant under a single policy,
provided that (i) any such coverage shall otherwise comply with the foregoing
provisions of this Article 7, including with respect to the naming of loss
payees, named insureds and additional insureds, (ii) in the result of an insured
claim, any such coverage shall result in the same allocation of proceeds as
would have been made had the policies been maintained separately, and (iii)
notwithstanding the fact that one party may maintain insurance coverage for the
benefit of the other party, the cost of insurance under this Article 7 shall be
allocated such that each party shall pay for its respective share of such
insurance.

 

ARTICLE 8
DEFAULT AND TERMINATION

 

8.1            Tenant Default. The following events shall constitute a default
by Tenant (subsequent to the associated notice and cure periods set forth in
this Section 8.1, each an “Event of Default”) under this Lease:

 

(a)           Tenant shall fail to pay when due and payable any of the Rent
herein provided for or any other sum agreed or required by this Lease to be paid
by Tenant upon the respective dates that the same becomes due and payable and
such failure shall continue for a period of five (5) business days after written
notice of non-payment from Landlord; or

 

(b)           Tenant shall fail to perform any other covenant of this Lease to
be kept and performed by Tenant, and such failure shall thereafter continue for
a period of thirty (30) days after written notice from Landlord to Tenant
specifying the nature of said failure; provided that, if the default is one that
cannot, by its nature, reasonably be cured within thirty (30) days, no Event of
Default will have occurred hereunder if Tenant commences reasonable and diligent
efforts to cure such default within such 30-day period after receipt of
Landlord’s notice and thereafter diligently prosecutes such efforts to
completion; or

 

(c)            Tenant shall file an application for, or consent to, the
appointment of a receiver, trustee or liquidator of itself or of all of its
assets, or file a voluntary petition in bankruptcy or for reorganization, or
have filed against it an involuntary petition in bankruptcy which is not
dismissed within sixty (60) days, or file a pleading in any court of record
admitting in writing its inability to pay its debts as they come due, or make a
general assignment for the benefit of creditors or file an answer admitting the
material allegations of, or its consenting to, or defaulting in answering, a
petition filed against it in any bankruptcy or reorganization proceeding; or

 

(d)           any order, judgment or decree by any court of competent
jurisdiction, is entered adjudicating Tenant as bankrupt, or appointing a
receiver, trustee or

 

22

 

 

liquidator of it or of all of its assets, and such order, judgment or decree
continues unstayed and in effect for any period of ninety (90) consecutive days;
or

 

(e)           the Management Agreement is terminated for any reason during the
Term, unless terminated by Tenant on account of the default or failure to
perform by Manager; or

 

(f)            Tenant is in default (after notice and the expiration of
applicable cure periods) under the Franchise Agreement, unless such default is
solely as a result of Landlord’s failure to comply with its obligations set
forth in Section 4.13(b) hereof; or

 

(g)           an act or omission of Tenant causes a default under the Mortgage;
or

 

(h)           Tenant violates Section 12.20.

 

8.2           Collateral Assignment. To secure payment and performance of
Tenant’s obligations to Landlord under this Lease, Tenant hereby irrevocably,
absolutely and unconditionally assigns, transfers and conveys to Landlord, its
successors and assigns, all of Tenant’s right, title and interest, if any, and
grants to Landlord a security interest, in and to all of Tenant’s right, title
and interest in and to the property and items set forth on Exhibit B hereto. The
foregoing is intended to grant in favor of Landlord a first priority continuing
lien and security interest in all of Tenant’s personal property. Tenant
authorizes Landlord (or holder of a Mortgage, on Landlord’s behalf) and its
counsel to file UCC statements in form and substance satisfactory to Landlord,
describing the collateral as all assets and personal property of Tenant, whether
now owned or existing or hereafter acquired or arising and wheresoever located,
including all accessions thereto and products and proceeds thereof, or using
words with similar effect. Tenant acknowledges, agrees and consents to the
pledge by Landlord to any holder of a Mortgage of Landlord’s rights, title, and
interests herein as collateral security for the Landlord’s obligations to any
holder of a Mortgage.

 

8.3           Landlord’s Remedies. Upon a continuing and uncured Event of
Default, Landlord shall have, in addition to all rights and remedies provided by
law, the right to terminate this Lease by delivery of written notice thereof to
Tenant at any time prior to the cure of the Event of Default.

 

8.4           Surrender of the Leased Property. Tenant shall, on the Expiration
Date, or on the earlier termination hereof, peaceably and quietly leave (subject
to any continuing rights of Tenant to enter onto the Leased Property for the
purposes specifically contemplated in this Lease), surrender and yield up unto
Landlord the Leased Property in good order and repair, excepting reasonable wear
and tear. Upon the termination of this Lease for any reason, (i) Landlord, or a
purchaser of Landlord’s interest in the Leased Property, shall purchase all of
the Hotel Personalty (including FF&E) owned by Tenant and all of the Operating
Supplies owned by Tenant and used in connection with the Leased Property (if
any) for an amount equal to the fair market value of such Hotel Personalty and
Operating Supplies as of the date of termination, (ii) Tenant shall leave at the
Hotel the Hotel Personalty and Operating Supplies not owned by Tenant (which
shall be in a condition consistent with the Operational Standards), and (iii)
Tenant shall assign the Assigned Items to Landlord. Tenant shall also reasonably
cooperate for thirty (30) days with any successor

 

23

 

 

tenant or owner of the Hotel upon the expiration or termination of this Lease to
effect a smooth and efficient transition in the operation of the Hotel. Upon
termination of this Lease and surrender of the Hotel by Tenant, Landlord shall
either assume or cause to be assumed all of the Assigned Items and perform or
otherwise cause to be performed all of Tenant’s obligations thereunder relating
to any period after the Expiration Date.

 

8.5            Landlord’s Right to Cure. Tenant agrees that, if an Event of
Default occurs, Landlord may, but shall not be obligated to, after the
occurrence of the Event of Default, until the same has been cured, and after
notice or demand to Tenant, without waiving or releasing Tenant from any of
Tenant’s obligations under this Lease, make any payment or perform such other
act in whole or in part to the extent Landlord may deem desirable and, in
connection therewith, to pay expenses and employ legal counsel. All sums paid by
Landlord pursuant to this Section 8.5 and all reasonable expenses, including
reasonable attorneys’ fees, paid in connection therewith, together with interest
thereon at the Default Interest Rate calculated from the date of payment by
Landlord, shall be deemed to be Rent hereunder and shall be payable upon demand
by Landlord, and Landlord shall have the same rights and remedies for the
nonpayment thereof as in the case of default in the payment of Rent.

 

8.6            Tenant’s Bankruptcy or Insolvency. If Tenant shall be subjected
to the provisions of the United States Bankruptcy Code or other law of the
United States or any state thereof for the protection of debtors as in effect at
such time (each a “Debtor’s Law”), the debtor-in-possession and any trustee or
receiver of Tenant’s assets (each a “Tenant’s Representative”) shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Leased Property then accorded to Tenant by the specific
provisions of this Lease, except to the extent Landlord shall be required to
permit such assumption, assignment or sublease by the provisions of such
Debtor’s Law. Without limitation of the generality of the foregoing, any right
of any Tenant’s Representative to assume or assign this Lease or to sublease any
of the Leased Property shall be subject to the conditions that:

 

(a)           Such Debtor’s Law shall provide to Tenant’s Representative a right
of assumption of this Lease which Tenant’s Representative shall have timely
exercised and Tenant’s Representative shall have fully cured any default of
Tenant under this Lease.

 

(b)           Tenant’s Representative or the proposed assignee, as the case
shall be, shall have deposited with Landlord as security for the timely payment
of rent an amount equal to three (3) months’ Rent and other monetary charges
accruing under this Lease, and shall have provided Landlord with adequate other
assurance of the future performance of the obligations of Tenant under this
Lease. Without limitation, such assurances shall include, at least, in the case
of assumption of this Lease, demonstration to the satisfaction of Landlord that
Tenant’s Representative has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that Tenant’s Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease.

 

(c)           In the case of assignment, submission of current financial
statements of the proposed assignee, audited by an independent certified public
accountant reasonably acceptable to Landlord and showing a net worth and working
capital in amounts determined by

 

24

 

 

Landlord to be sufficient to assure the future performance by such assignee of
all of Tenant’s obligations under this Lease.

 

(d)           Any existing or proposed assumption or assignment of this Lease
and any subleasing of any part or all of the Leased Property will not breach any
provision of any other lease, mortgage, financing agreement or other agreement
by which Landlord is bound.

 

8.7           Attorneys’ Fees. If at any time litigation is instituted between
Landlord and Tenant with respect to this Lease, the prevailing party in such
litigation may recover from the losing party all court costs, reasonable costs
of litigation and reasonable attorneys’ fees incurred or expended by the
prevailing party in such action.

 

8.8           Remedies Cumulative. To the maximum extent permitted by law, each
legal, equitable or contractual right, power and remedy of Landlord or Tenant,
now or hereafter provided either in this Lease or by statute or otherwise, shall
be cumulative and concurrent and shall be in addition to every other right,
power and remedy and the exercise or beginning of the exercise by Landlord or
Tenant (as applicable) of any one or more of such rights, powers and remedies
shall not preclude the simultaneous or subsequent exercise by Landlord of any or
all of such other rights, powers and remedies.

 

8.9           Liability for Tenant’s Obligations. Landlord covenants and agrees
to look solely to Tenant (and not its Affiliates) for all obligations of Tenant
under this Lease.

 

8.10          Default by Landlord. Landlord shall not be in default of any
obligation of Landlord hereunder unless and until Landlord has failed to perform
such obligation within thirty (30) days after receipt of written notice of such
failure from Tenant; provided, however, that in the event the nature of
Landlord’s obligation is such that more than thirty (30) days are required for
complete performance, Landlord shall not be in default pursuant to this Section
8.10 if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes such performance to completion.

 

8.11          Holding Over. Tenant acknowledges that (a) Tenant’s complete
vacancy and surrender of the Leased Property in strict compliance with Section
8.4 (and all other provisions of this Lease) on or before the Expiration Date or
earlier termination may be critical to the sale by Landlord of the Leased
Property, and (b) if Tenant or any Person occupying the Leased Property (or any
part thereof) by or through Tenant holds over past the Expiration Date for any
period of time, however brief, such holding over will compromise and
deleteriously affect Landlord’s ability to timely conclude any sale of the
Leased Property. In light of the foregoing, (i) Tenant and any Person occupying
the Leased Property (or any part thereof) by or through Tenant shall not be
permitted to hold over for any period of time beyond the Expiration Date for any
reason or length of time, (ii) if Tenant (or any Person holding through Tenant)
shall hold over for any period whatsoever, Tenant shall be a tenant at
sufferance, subject to eviction without notice, and (iii) Tenant shall
indemnify, defend (with legal counsel reasonably approved by Landlord), and hold
Landlord harmless from all causes of action, claims, debts, liabilities,
controversies, damages, costs, losses, and expenses (including reasonable
attorneys’ fees) suffered or incurred by Landlord, including lost profits, by
reason of Tenant’s failure (or the failure of any Person occupying all or any
portion of the Leased Property under or through Tenant) to completely vacate and
surrender

 

25

 

 

the Leased Property on or before the Expiration Date in strict compliance with
Section 8.4 and all other applicable provisions of this Lease.

 

ARTICLE 9
CASUALTY OR CONDEMNATION

 

9.1           Restoration. If, during the Term, the Hotel is damaged or
destroyed by fire, casualty or other cause, Landlord shall, at its cost and
expense and with all reasonable diligence, comply with the requirements of each
Mortgage, as such document pertains to casualty and repair, and with Tenant’s
directions so as to enable Tenant to comply with the requirements of the
Franchise Agreement, as such document pertains to casualty and repair. If the
Leased Property, or any material part thereof, shall be rendered untenantable by
reason of such damage and such damage shall not be due to the fault of Tenant or
of Persons Within Tenant’s Control, then the Base Rent hereunder, or an amount
thereof apportioned according to the area of the Leased Property so rendered
untenantable (if less than the entire Leased Property shall be so rendered
untenantable), shall be abated for the period from the date of such damage to
the date when the damage shall have been repaired as aforesaid. If all or any
part of the Leased Property shall be damaged or destroyed by fire or other
casualty such that the Hotel is closed and Landlord determines in its reasonable
judgment that the damage cannot be fully restored within 365 days, then either
Landlord or Tenant may terminate this Lease by notice given to the other party
not later than thirty (30) days after the determination by Landlord that the
Leased Property cannot be restored within such time period. If this Lease is
terminated pursuant to this Section 9.1, all insurance proceeds shall be paid to
Landlord free of any claim or interest therein whatsoever of Tenant. If this
Lease is not terminated as the result of any fire or other casualty, then,
subject to the rights of the holder of each Mortgage, the proceeds of any
casualty insurance or the equivalent thereof shall be used by Landlord to pay
for the cost of restoration.

 

9.2           Condemnation. If, during the Term, all or any part of or interest
in the Hotel is taken by any public authority under the power of eminent domain
or by purchase in lieu thereof, Landlord shall, at its cost and expense and with
all reasonable diligence, comply with the requirements of each Mortgage, as such
document pertains to condemnation and restoration, and with Tenant’s directions
so as to enable Tenant to comply with the requirements of the Franchise
Agreement, as such document pertains to condemnation and restoration. If only a
part of the Leased Property shall be so condemned or taken, then effective as of
the date of vesting of title, the Base Rent and shall be abated in an amount
apportioned according to the area of the Leased Property so condemned or taken.
If all or any part of or interest in the Hotel is taken by any public authority
under the power of eminent domain or by purchase in lieu thereof, such that the
Hotel is closed and Landlord determines in its reasonable judgment that the
Hotel cannot be reopened within 365 days, then either Landlord or Tenant may
terminate this Lease by notice given to the other party within thirty (30) days
after possession of the Leased Property has been taken. If this Lease is
terminated pursuant to this Section 9.2, then, subject to the rights of the
holder of any applicable Mortgage, all awards and proceeds of condemnation shall
be paid to Landlord free and clear of any claim or interest therein whatsoever
of Tenant. Tenant shall have no claim against the condemning authority, whether
for the value of its leasehold estate or otherwise.

 

26

 

 

ARTICLE 10
ASSIGNMENT AND SUBLETTING

 

10.1          Assignment or Subletting. Tenant shall not assign, transfer,
mortgage, hypothecate, or encumber, by operation of law or otherwise, this
Lease, or any of Tenant’s interest herein or hereto, nor sublet the Leased
Property, or any portion thereof, nor grant any license or right of use or
occupancy with respect to the Leased Property, without the prior written consent
of Landlord, which consent may be withheld by Landlord in its sole and absolute
discretion. In addition, Tenant shall not do any of the foregoing without the
prior written consent of the holder of any Mortgage if and to the extent such
consent is required by such Mortgage or related loan documents. Any consent
shall be specifically conditioned upon Tenant’s compliance with all of the
provisions of this Article 10. Any attempt to do otherwise shall be absolutely
and unconditionally null and void and of no force or effect whatsoever.

 

10.2          Notice. If Tenant desires to undertake any such transaction, it
shall provide Landlord with written notice of such desire, specifying the
consideration for, and all other terms and conditions of such proposed
transaction, and identifying the proposed assignee or subtenant (the “Proposed
Party”). Tenant shall also provide Landlord with such corporate, financial, and
insurance information as Landlord may reasonably request concerning the Proposed
Party.

 

10.3          Continued Primary Liability. Notwithstanding any assignment,
conveyance or subletting, permitted or otherwise, Tenant shall at all times
remain directly, primarily and fully responsible and liable for the payment of
the Rent and for compliance with all of its other obligations under the terms,
provisions and covenants of this Lease.

 

10.4          Miscellaneous. Notwithstanding any other provision of this Article
10 to the contrary, in connection with any proposed assignment or subletting,
(a) Tenant shall pay to Landlord all reasonable expenses, including reasonable
attorneys’ fees incurred by Landlord in connection with the transaction, (b)
Tenant and its proposed party shall, within ten (10) days after notice to do so,
execute and deliver to Landlord such documents, including insurance, and take
such further action, as Landlord may reasonably require to effect such
transaction or to protect Landlord’s rights, (c) the acceptance by Landlord of
Rent from any other person other than Tenant shall not be deemed a waiver by
Landlord of any provision of this Lease or a consent to any transaction subject
to this Article 10, (d) the consent to any particular transaction shall not be
deemed a consent to any other transaction subject to this Article 10, and (e)
the consent to any assignment, subletting or other such transfer (or the
consummation of any such transaction) shall not in any way relieve Tenant of any
of its obligations under this Lease, whether arising before or after such
consent.

 

ARTICLE 11
SUBORDINATION

 

11.1          Subordination.

 

(a)           This Lease shall be subject and subordinate to any existing or
future Mortgage. Tenant shall execute such instruments as shall from time to
time be reasonably requested by the holder of the Mortgage confirming such
subordinated status. Tenant agrees that

 

27

 

 

if a Foreclosure Purchaser shall succeed to the interest of Landlord in the
Leased Property, (i) this Lease will terminate by operation of law or upon
written notice to Tenant from the Foreclosure Purchaser, as applicable, (ii) the
holder of such Mortgage shall not have any obligation under this Lease to
Tenant, (iii) Tenant’s rights in and ownership of any FF&E or other property or
items set forth on Exhibit B hereto owned or leased by Tenant shall terminate by
operation of law or upon written notice to Tenant, as applicable (if by written
notice to Tenant from the Foreclosure Purchaser, Tenant shall deliver to the
Foreclosure Purchaser such assignments and bills of sale as the Foreclosure
Purchaser may require to evidence the transfer of such FF&E and other property
or items), and (iv) Tenant shall cooperate with the Foreclosure Purchaser with
respect to delivery of all licenses and permits, if any, held by Tenant.

 

(b)           In the event of any foreclosure of any Mortgage or conveyance in
lieu of foreclosure, neither the Foreclosure Purchaser nor its successors or
assigns shall in any way or to any extent (i) be bound by any modification or
amendment of this Lease executed after the date of this Lease or by any existing
prepayment of Rent for a period greater than one (1) month, unless such
modification, amendment or prepayment shall have been expressly approved in
writing by such Foreclosure Purchaser, (ii) be bound by any assignment of
Tenant’s interest in this Lease by Tenant or by operation of law or otherwise
(except for any assignment of Tenant’s interest in this Lease by Tenant made in
accordance with the terms of this Lease, which assignment shall be expressly
subject to the security interests of the holder of the Mortgage, including,
without limitation, any security interests granted to Landlord by Tenant and
pledged or assigned including, without limitation, any notices by Landlord to
the holder of any Mortgage as permitted under Section 8.2 above) without the
express prior written consent of such Foreclosure Purchaser, (iii) be obligated
or liable to Tenant with respect to any act or failure to act on the part of
Landlord occurring prior to the transfer of title to the Foreclosure Purchaser,
or (iv) be obligated or liable to Tenant for failure to complete any proposed
construction regarding the Leased Property. Except to the extent permitted in
accordance with the preceding sentence, Tenant shall have no right to assert or
claim any of the foregoing or any damages arising therefrom against the
Foreclosure Purchaser, whether as an offset or defense or otherwise.

 

(c)           After notice is given to Tenant by the Foreclosure Purchaser that
the rents under this Lease should be paid to the Foreclosure Purchaser, Tenant
shall pay to the Foreclosure Purchaser, or in accordance with the directions of
the Foreclosure Purchaser, all rents and other monies due and to become due to
Landlord under this Lease, and Landlord hereby expressly authorizes Tenant to
make such payments to the Foreclosure Purchaser and hereby releases and
discharges Tenant of and from any liability to Landlord on account of any such
payments.

 

(d)           Tenant agrees to provide to the Foreclosure Purchaser a copy of
any notice, demand or request provided to Landlord under this Lease at the
address of the Foreclosure Purchaser provided to Tenant by the Foreclosure
Purchaser.

 

(e)           If the terms of this Lease conflict with the terms of any Mortgage
regarding the matters set forth in this Section 11.1, the terms of the Mortgage
shall control.

 

28

 

 

ARTICLE 12
MISCELLANEOUS

 

12.1         Quiet Enjoyment. Landlord covenants and agrees that Tenant, upon
compliance with the obligations of Tenant hereunder, and subject to the
provisions hereof, shall lawfully and quietly enjoy the Leased Property and
Tenant’s rights hereunder during the Term without hindrance by Landlord or any
Persons by, through and under Landlord.

 

12.2         Landlord’s Right of Entry. Landlord, its employees and agents,
shall have the right to enter the Hotel at reasonable times and on reasonable
notice to Tenant to examine the condition and use thereof, exhibit the same, and
otherwise perform its obligations and exercise its rights hereunder. Landlord
will endeavor to examine the Hotel or otherwise perform its obligations and
exercise its rights with minimum disruption to the operation of the Hotel.

 

12.3          Estoppel Certificates. Tenant and Landlord, from time to time
within ten (10) business days following written request by the other party or by
the holder of any Mortgage of the Leased Property, shall execute, acknowledge
and deliver to the requesting party or its designee a written statement in form
and substance reasonably requested by such requesting party certifying to such
requesting party or to such other Person as such requesting party may designate
(i) the commencement and expiration dates of the Term, (ii) that this Lease is
unmodified and in full force and effect or, if there have been modifications,
that the same is in full force and effect as modified and setting forth the
modifications, (iii) the dates to which Rent and other payments due under this
Lease from Tenant have been paid in advance, if any, and (iv) whether or not, to
the best knowledge of the party signing such certificate, the requesting party
is in default in the performance of any term, covenant or condition contained in
this Lease or any Mortgage and, if so, specifying each such default of which the
signing party may have knowledge. Such certificate shall also set forth such
other information regarding this Lease as may reasonably be requested or, with
respect to a certificate delivered by Tenant, regarding the Management Agreement
as may be reasonably requested, including, without limitation, (A) that the
Management Agreement is in full force and effect, and (B) that there is no
material uncured default, breach or violation existing thereunder by either
party thereto and that, to Tenant’s knowledge, no event has occurred (other than
payments due but not yet delinquent) that, with the passage of time or the
giving of notice, or both, would constitute a material default, breach or
violation by either party thereunder.

 

12.4          Delivery of Notices.

 

(a)          If Tenant shall give Landlord any notice of a default or breach by
Landlord, Tenant shall simultaneously deliver a written notice of such breach or
default to the holder of all Mortgages.

 

(b)          If Landlord shall receive any written notice from a Governmental
Authority, a mortgagee under any Mortgage or any party commencing a litigation
against Landlord or the Leased Property, Landlord shall, upon receipt of such
notice, deliver a copy thereof to Tenant.

 

12.5          Notices. All notices, demands, consents, approvals, requests or
other communications that either Landlord or Tenant may desire or be required to
give hereunder

 

29

 

 

(collectively, “Notices”) shall be in writing and shall be given by personal
delivery or facsimile or United States registered or certified mail (postage
prepaid, return receipt requested) addressed as hereinafter provided, provided,
however, that any Notice given by facsimile shall also be given by personal
delivery or United States registered or certified mail. Except as otherwise
specified herein, the time period in which a response to any notice or other
communication must be made, if any, shall commence to run on the earliest to
occur of (a) if by personal delivery, the date of receipt, or attempted
delivery, if such communication is refused; (b) if given by facsimile, the date
on which such facsimile is transmitted and confirmation of delivery thereof is
received; and (c) if sent by mail (as aforesaid), the date of receipt or
attempted delivery, if such mailing is refused. Until further notice, notices
and other communications under this Agreement shall be addressed to the parties
listed below as follows:

 

(a)           Each notice to Tenant shall be delivered to Tenant at the
following addresses:

 

PHR GANO OPCO SUB, LLC

c/o Procaccianti Companies

1140 Reservoir Avenue

Cranston, Rhode Island 02920-6320

Attention: Ron M. Hadar, General Counsel

 

 

(b)           Each notice to Landlord shall be delivered to Landlord at the
following address:

 

GANO HOLDINGS, LLC

c/o Procaccianti Companies

1140 Reservoir Avenue

Cranston, Rhode Island 02920-6320

Attention: Ron M. Hadar, General Counsel

 

Either party shall have the right from time to time during the term of this
Lease to change the address thereof and to specify as the address thereof any
other address within the United States of America.

 

12.6          No Broker. Tenant and Landlord each represents and warrants to the
other that no broker or finder was engaged in connection with the execution of
this Lease and each agrees to indemnify and hold the other harmless of and from
and against all liabilities, costs and expenses (including reasonable attorneys’
fees) arising from any claim by any such broker or finder arising out of the
acts of the indemnifying party.

 

12.7         Quarterly Meetings. Landlord covenants to meet with Tenant not less
frequently than quarterly (and otherwise, as may be reasonably requested by
Tenant) so as to review and consult with Tenant with respect to any and all
matters concerning the Leased Property that Tenant may desire to discuss,
including, without limitation, the condition of the Leased Property.

 

30

 

 

12.8          No Joint Venture. Nothing contained in this Lease shall be
construed to make Landlord and Tenant partners or joint venturers or to render
any of said parties liable for the debts or obligations of the others or to
create any agency relationship between the parties.

 

12.9          Partial Invalidity. If any provisions of this Lease or the
application thereof to any Person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to Persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.

 

12.10      Third Parties. The Lease is made for the exclusive benefit of the
parties hereto and their successors and assigns herein permitted and not for any
third party other than (only to the extent specifically provided in Section
11.1, 12.3 and 12.4) the holder of any Mortgage and any Foreclosure Purchaser,
and, except to such extent, nothing in this Lease, expressed or implied, is
intended to confer upon any Person, other than the parties hereto and their
respective successors and permitted assigns, any rights or remedies under or by
this Lease.

 

12.11      Waivers and Enforcement. No delay or omission by either of the
parties hereto to exercise any right or power accruing upon any non-compliance
or failure of performance by the other party under the provisions of this Lease
shall impair any such right or power or be construed to be a waiver thereof. The
failure herein to specify a right, power or remedy accruing upon any
non-compliance or failure of performance by either of the parties hereto shall
not be construed to be a waiver thereof so as to impair the right of the party
thereby aggrieved to all remedies then available to it at law or in equity by
reason of such noncompliance or failure of performance. A waiver by either of
the parties hereto of performance of any of the covenants, conditions or
agreements hereof to be performed by the other party hereto shall not be
construed to be a waiver of any succeeding breach thereof or of any other
covenant condition or agreement herein contained.

 

12.12      Modification. This Lease contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
other agreements, oral or written, between the parties on or prior to the date
hereof with respect to such subject matter. None of the covenants, terms or
conditions of this Lease to be kept and performed by either party to this Lease
shall in any manner be waived, modified, changed or abandoned except by written
instrument duly signed, acknowledged and delivered by the parties to this Lease.
Any amendment to this Lease that is not ministerial in nature shall require the
prior written consent of Franchisor or the holder of any Mortgage to the extent
required in the Franchise Agreement or in such Mortgage, as applicable.

 

12.13      Non-Recourse Liability. Landlord and each of its officers, directors,
affiliates, shareholders, members and constituent partners, as applicable, shall
in no event or at any time be personally liable for the payment or performance
of any obligation required or permitted of Landlord under this Lease or under
any document executed in connection herewith. In the event of any actual or
alleged failure, breach or default by Landlord under this Lease or any such
document, the sole recourse of Tenant shall be against the interest of Landlord
in the Leased Property. No attachment, execution, writ, or other process shall
be sought or obtained, and no judicial proceeding shall be initiated by or on
behalf of Tenant, against Landlord (or any of

 

31

 

 

Landlord’s officers, directors, affiliates or constituent partners or
shareholders) personally or Landlord’s assets as a result of any such failure,
breach, or default. In no event shall Landlord have any liability for any loss
of profits, business interruptions and/or consequential damages of Tenant.

 

12.14      Captions. The Article and Section headings or captions are for
convenience and reference only and in no way define, limit or describe the scope
or intent of this Lease, nor in any way affect this Lease.

 

12.15      Time of Essence. Time is of the essence as to the covenants in this
Lease.

 

12.16      Successors and Assigns. All the covenants, agreements, conditions and
undertakings in this Lease shall extend and inure to and be binding upon the
successors and permitted assigns of each of the parties hereto, the same as if
they were in every case named and expressed.

 

12.17      No Recordation. Neither party shall record this Lease or any
memorandum thereof.

 

12.18      Name. Subject to the terms of the Franchise Agreement, Landlord shall
have the right to change the name of the Hotel at any time and from time to time
and the right to place any signs in or on the Hotel from time to time indicating
the name of the Hotel as designated by Landlord. Landlord and Tenant shall at
all times refer to the Hotel by such name as is designated by Landlord from time
to time. Tenant shall have no right to place any signs on the exterior of the
Hotel without the prior written consent of Landlord.

 

12.19      Survival. All of the provisions of this Lease shall survive the
termination of this Lease, and, except as otherwise specifically provided
herein, neither party shall be relieved from any liability hereunder accruing
prior to the Expiration Date.

 

12.20      Confidentiality. Tenant and Landlord each agree that it and its
Affiliates will keep all non-public information obtained by them with respect to
the business and business terms of the parties confidential and will not provide
such information to any third parties without the prior written consent of the
other party, unless required by court order or Law, except to their employees,
agents, contractors, lenders, professionals and consultants on a need-to-know
basis. Notwithstanding any terms or conditions in this Lease or any related
agreement to the contrary, but subject to restrictions reasonably necessary to
comply with federal or state securities laws, any Person may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax structure
of the transaction and all materials of any kind (including opinions or other
tax analyses) that are provided relating to such tax treatment and tax
structure. For the avoidance of doubt, this authorization is not intended to
permit disclosure of the names of, or other identifying information regarding,
the participants in the transaction, or of any information of the portion of any
materials not relevant to the tax treatment or tax structure of the transaction.

 

12.21      Conveyance by Landlord. If Landlord or any successor owner of all or
any portion of the Leased Property conveys all or any portion of the Leased
Property in accordance with the terms hereof, other than as security for debt,
if the grantee or transferee of such of the Leased Property expressly assumes
and agrees to perform, by written instrument in form approved

 

32

 

 

by Tenant, which approval shall not unreasonably be withheld, all obligations of
Landlord hereunder arising or accruing from and after the date of such
conveyance or transfer, Landlord or such successor owner, as the case may be,
shall thereupon be released from all liabilities and obligations hereunder
arising or accruing from and after the date of such conveyance or other
transfer, all such future liabilities and obligations shall thereupon be binding
upon the new owner, and this Lease shall continue in full force and effect.

 

12.22       Governing Law. This Lease shall be construed and enforced in
accordance with the Laws of the State of Rhode Island.

 

12.23      Counterparts. This Lease may be executed in several counterparts,
each of which shall be deemed an original, and all such counterparts shall
together constitute one and the same instrument. Executed counterparts of thus
Lease delivered by facsimile transmission to the other party shall be binding on
the party delivering such executed counterpart.

 

 

[the remainder of this page is intentionally blank]

 

33

 

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed on
the day, month and year first above dated.

 

 

  LANDLORD:       GANO HOLDINGS, LLC, a Delaware limited liability company      
    By: /s/ James A. Procaccianti   Name: James A. Procaccianti   Title:
Authorized Representative       TENANT:       PHR GANO OPCO SUB, LLC, a Delaware
limited liability company           By: /s/ James A. Procaccianti   Name: James
A. Procaccianti   Title: Authorized Representative

 

[Signature Page to Hotel Lease – Hilton Garden Inn, Providence, RI]

 

 

 

 

SCHEDULE 3.1

 

(a)       Fixed Rent” means the monthly Fixed Rent as shown in the chart
contained in subsection (c) below for such applicable month (or partial month).

 

(b)       “Percentage Rent” means an amount each month equal to the amount Gross
Revenues exceed the applicable Revenue Floor (as defined in the chart contained
in subsection (c) below) for such month (or partial month) multiplied by the
applicable Percentage Rent Multiplier for such month (or partial month) shown in
the chart contained in subsection (c) below.

 

(c)  

 

Month/Year   Fixed
Rent   Revenue
Floor   Percentage Rent
Multiplier   Feb-2020 (Partial month)   $6,306   $33,629    23.22%  Mar-20  
$55,204   $224,905    30.39%  Apr-20   $70,461   $240,543    36.27%  May-20  
$112,329   $299,683    46.41%  Jun-20   $111,599   $305,654    45.20%  Jul-20  
$94,011   $285,467    40.77%  Aug-20   $95,228   $286,604    41.14%  Sep-20  
$80,608   $264,711    37.70%  Oct-20   $106,510   $297,409    44.34%  Nov-20  
$34,866   $187,657    23.00%  Dec-20   $52,902   $114,869    15.35%  Jan-21  
$54,665   $143,508    12.70%  Feb-21   $37,030   $198,882    23.05%  Mar-21  
$56,094   $229,324    30.28%  Apr-21   $71,702   $245,269    36.19%  May-21  
$114,540   $305,572    46.41%  Jun-21   $113,797   $311,660    45.21%  Jul-21  
$95,803   $291,076    40.75%  Aug-21   $97,048   $292,235    41.12%  Sep-21  
$82,088   $269,912    37.65%  Oct-21   $108,590   $303,252    44.33%

 

 

 

 

 Nov-21   $35,280   $191,345    22.83%  Dec-21   $52,902   $117,126    15.06%
 Jan-22   $54,665   $146,193    12.46%  Feb-22   $37,527   $202,603    22.93%
 Mar-22   $56,890   $233,613    30.15%  Apr-22   $72,747   $249,857    36.05%
 May-22   $116,262   $311,287    46.24%  Jun-22   $115,504   $317,490    45.04%
 Jul-22   $97,224   $296,520    40.60%  Aug-22   $98,489   $297,702    40.96%
 Sep-22   $83,293   $274,961    37.51%  Oct-22   $110,215   $308,925    44.17%
 Nov-22   $35,751   $194,924    22.71%  Dec-22   $52,902   $119,317    14.78%
 Jan-23   $54,665   $149,855    12.16%  Feb-23   $38,249   $207,678    22.80%
 Mar-23   $58,034   $239,465    30.01%  Apr-23   $74,241   $256,116    35.89%
 May-23   $118,708   $319,085    46.06%  Jun-23   $117,931   $325,443    44.86%
 Jul-23   $99,249   $303,949    40.43%  Aug-23   $100,542   $305,160    40.79%
 Sep-23   $85,014   $281,849    37.34%  Oct-23   $112,526   $316,664    44.00%
 Nov-23   $36,436   $199,807    24.58%  Dec-23   $73,481   $122,306    20.03%
 Jan-24   $73,481   $152,718    16.04%  Feb-24   $38,121   $211,645    22.30%
 Mar-24   $58,036   $244,040    29.44%  Apr-24   $74,364   $261,009    35.27%
 May-24   $119,136   $325,181    45.36%  Jun-24   $118,341   $331,660    44.18%
 Jul-24   $99,522   $309,755    39.78%  Aug-24   $100,825   $310,989    40.14%
 Sep-24   $85,193   $287,233    36.72%  Oct-24   $112,901   $322,713    43.31%
 Nov-24   $36,305   $203,624    24.07%  Dec-24   $73,481   $124,643    19.65%
 Jan-25   $73,481   $155,772    15.72%  Feb-25   $41,360   $215,878    23.72%
 Mar-25   $62,089   $248,921    30.88%

 

2

 

  

 Apr-25   $78,962   $266,229    36.72%  May-25   $125,454   $331,685    46.83%
 Jun-25   $124,727   $338,293    45.65%  Jul-25   $105,250   $315,950    41.24%
 Aug-25   $106,595   $317,209    41.60%  Sep-25   $90,345   $292,978    38.18%
 Oct-25   $119,063   $329,167    44.78%  Nov-25   $39,404   $207,696    23.49%
 Dec-25   $0   $0    0.00%  Jan-26   $5,140   $158,888    4.01%  Feb-26  
$41,934   $220,196    23.58%  Mar-26   $63,077   $253,899    30.76%  Apr-26  
$80,288   $271,554    36.61%  May-26   $127,710   $338,319    46.74%  Jun-26  
$126,967   $345,059    45.56%  Jul-26   $107,101   $322,269    41.15%  Aug-26  
$108,473   $323,553    41.51%  Sep-26   $91,898   $298,837    38.07%  Oct-26  
$121,191   $335,751    44.69%  Nov-26   $39,939   $211,850    23.34%  Dec-26  
$0   $0    0.00%  Jan-27   $4,978   $162,066    3.80%  Feb-27   $42,508  
$224,600    23.43%  Mar-27   $64,074   $258,977    30.63%  Apr-27   $81,629  
$276,985    36.49%  May-27   $129,999   $345,085    46.64%  Jun-27   $129,242  
$351,960    45.46%  Jul-27   $108,979   $328,715    41.05%  Aug-27   $110,378  
$330,024    41.41%  Sep-27   $93,471   $304,814    37.97%  Oct-27   $123,350  
$342,466    44.59%  Nov-27   $40,473   $216,087    23.19%  Dec-27   $0   $0  
 0.00%  Jan-28   $4,802   $165,307    3.60%  Feb-28   $43,082   $229,092  
 23.28%  Mar-28   $65,080   $264,157    30.50%  Apr-28   $82,986   $282,524  
 36.37%  May-28   $132,324   $351,987    46.54%  Jun-28   $131,552   $359,000  
 45.37%  Jul-28   $110,883   $335,289    40.94%  Aug-28   $112,310   $336,625  
 41.31%

 

3

 

 

 Sep-28   $95,065   $310,910    37.86%  Oct-28   $125,541   $349,315    44.50%
 Nov-28   $41,007   $220,409    23.03%  Dec-28   $0   $0    0.00%  Jan-29  
$4,611   $168,613    3.39%  Feb-29   $43,657   $233,674    23.13%  Mar-29  
$66,095   $269,440    30.37%  Apr-29   $84,359   $288,175    36.24%  May-29  
$134,683   $359,026    46.45%  Jun-29   $133,896   $366,180    45.27%  Jul-29  
$112,814   $341,995    40.84%  Aug-29   $114,269   $343,357    41.20%  Sep-29  
$96,680   $317,129    37.74%  Oct-29   $127,765   $356,301    44.40%  Nov-29  
$41,540   $224,817    22.88%  Dec-29   $0   $0    0.00%  Jan-30   $4,694  
$171,985    3.38%  Feb 2030 - Partial month   $36,837   $197,253    23.12%

 

4

 

 

Exhibit A

 

Legal Description

 

A.P. 17, Lot 633

 

#220 India Street

 

Providence, Rhode Island

 

That certain tract or parcel of land situated southeasterly of Interstate Route
195, westerly of Tockwotton Street and westerly of India Street in the City of
Providence, Providence County, State of Rhode Island and Providence Plantations,
delineated on that plan entitled “ALTA / NSPS Land Title Survey Plan, A.P. 17,
Lot 633, Wyndham Garden Providence, 220 India Street, Providence, RI 02903, Gano
Holdings, L.L.C. c/o The Procaccianti Group, 1140 Reservoir Avenue, Cranston,
Rhode Island 02920 Project No. 04-313 Scale: 1”=20’ Date:01/22/20 by Waterman
Engineering Company Richard S. Lipsitz, P.L.S. No. 1837”, more particularly
bounded and described as follows;

 

 Beginning at a point in the northerly State Highway Line of India Point Park as
delineated on Rhode Island Highway Plat No. 2869, said point being at the
westerly terminus of India Street and the southeasterly corner of the parcel
herein-described;

 

thence proceeding N 79°51'31" W, by and with the said northerly State Highway
Line of India Point Park, a distance of one hundred forty six and 26/100
(146.26') feet to an angle point;

 

thence proceeding N 74°04'39" W, by and with the said northerly State Highway
Line of India Point Park, a distance of thirty nine and 55/100 (39.55') feet to
an angle point;

 

thence proceeding N 59°28'57" W, by and with the said northerly State Highway
Line of India Point Park, a distance of twenty eight and 27/100 (28.27') feet to
an angle point;

  

thence proceeding N 42°06'33" W, by and with the said northerly State Highway
Line of India Point Park, a distance of ten and 76/100 (10.76') feet to an angle
point;

 

thence proceeding N 16°05'44" W, by and with the said northerly State Highway
Line of India Point Park, a distance of ten and 76/100 (10.76') feet to an angle
point;

 

5

 

 

thence proceeding N 05°27'51" W, in part by and with the said northerly State
Highway Line of India Point Park and in part by and with the southeasterly State
Freeway Line of Interstate Route 195 as delineated on Rhode Island Highway Plat
No. 1374, a distance of one hundred twenty four and 00/100 (124.00') feet to the
northwesterly corner of the parcel herein-described;

 

thence proceeding N 53°40'20" E, by and with the said southeasterly State
Freeway Line of Interstate Route 195, a distance of thirty and 19/100 (30.19')
feet to an angle point;

 

thence proceeding N 47°53'52" E, by and with the said southeasterly State
Freeway Line of Interstate Route 195, a distance of thirty one and 22/100
(31.22') feet to an angle point;

 

thence proceeding N 78°04'49" E, by and with the said southeasterly State
Freeway Line of Interstate Route 195, a distance of one hundred thirteen and
72/100 (113.72') feet to an angle point;

 

thence proceeding S 79°08'48" E, by and with the said southeasterly State
Freeway Line of Interstate Route 195, a distance of one hundred seventeen and
70/100 (117.70') feet to the westerly terminus of Tockwotton Street and the
northeasterly corner of the parcel herein-described;

 

thence proceeding S 10°51'12" W, bounded easterly by the said westerly terminus
of Tockwotton Street, a distance of twenty five and 00/100 (25.00') feet to land
now or formerly of Brown University;

 

thence proceeding S 11°12'26" W, bounded easterly in part by the said Brown
University land and in part by the aforesaid westerly terminus of India Street,
a distance of two hundred twelve and 36/100 (212.36') feet to the point and
place of beginning.

 

The above-described parcel contains 53,715 +/- square feet (1.233 +/- acres) of
land, more or less

 

6

 

 

Exhibit B

 

The Collateral

 

1.       Fixtures and Personal Property. All goods, inventory, machinery,
equipment, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures),
furnishing, building supplies and materials, and all other personal property of
every kind and nature whatsoever owned by Tenant (or in which Tenant has or
hereafter acquires an interest) and now or hereafter located upon, or
appurtenant to, the Property or used or useable in the present or future
operation and occupancy of the Property, along with all accessions, replacements
or substitutions of all or any portion thereof including, but not limited to,
all items of personal property located within or adjacent to the Hotel and
included within the definition of “Property and Equipment” and “Inventories”
under the Uniform System of Accounts for the Lodging Industry as published by
the American Hotel Association of the United States and Canada, including but
not limited to, beds, bureaus, chiffoniers, chests, chairs, desks, lamps,
mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains,
shades, Venetian blinds, screens, paintings, hangings, pictures, divans,
couches, luggage carts, luggage racks, stools, sofas, chinaware, linens,
pillows, blankets, glassware, tableware, uniforms, guest ledgers, foodcarts,
cookware, dry cleaning facilities, dining room wagons, tools, keys or other
entry systems, bars, bar fixtures, and other drink dispensers, icemakers,
radios, televisions sets, intercom and paging equipment, electric and electronic
equipment, dictating equipment, private telephone systems, medical equipment,
potted plants, heating, lighting and plumbing equipment, fire prevention and
extinguishing apparatus, escalators, fittings, plants, apparatus, stoves,
ranges, refrigerators, laundry machines, tools, machinery, engines, dynamos,
motors, boilers, incinerators, switchboards, conduits, compressors, vacuum
cleaning systems, floor cleaning, waxing and polishing equipment, call systems,
brackets, electrical signs, bulbs, bells, ash and disposals, washers and dryers
and other customary hotel equipment, and computer software and hardware, but
excluding, in all events, alcoholic beverages inventory;

 

2.       Leases and Rents. All income, rents, room rates, issues, profits,
revenues, deposits, accounts and other benefits from the operation of the Hotel,
including, without limitation, all revenues, cash and credit card receipts
collected from guest rooms, restaurants, bars, mini-bars, meeting rooms, banquet
rooms and recreational facilities and otherwise, all receivables, customer
obligations, installment payment obligations and other obligations now existing
or hereafter arising or created out of sale, lease, sublease, license,
concession, or other grant of the right of the possession, use or occupancy of
all or any portion of the Land, the Hotel or personalty located therein, or
rendering of services by Tenant or any operator or manager of the Hotel or the
commercial space located therein or acquired from others including, without
limitation, from the rental of any office space, retail space, commercial space,
guest room or other space, halls, stores or offices, including any deposits
securing reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals, health club membership
fees, food and beverage wholesale and retail sales, service charges, vending

 

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machine sales, all deposits or other security now or hereafter made with or
given to any utility company by Tenant with respect to the Property, and all
proceeds, if any, from business interruption or other loss of income insurance
relating to the use, enjoyment or occupancy of the Land and/or the Hotel whether
paid or accruing before or after the filing by or against Tenant of any petition
for relief under any present or future state or federal law regarding bankruptcy
(each a “Bankruptcy Code”), reorganization or other relief to debtors and all
proceeds from the sale or other disposition of the Tenant Leases (hereinafter
defined). All leases, subleases, licenses and other agreements granting others
the right to use or occupy all or any part of the Property together with all
restatements, renewals, extensions, amendments and supplements thereto,
(collectively, the “Tenant Leases”), now existing or hereafter entered into, and
whether entered before or after the filing by or against Tenant of any petition
for relief under a Bankruptcy Code, and all of Tenant’s right, title and
interest in the Tenant Leases, including, without limitation (i) all guarantees,
letters of credit and any other credit support given by any tenant or guarantor
in connection therewith (collectively, the “Tenant Lease Guaranties”), (ii) all
cash, notes, or security deposited thereunder to secure the performance by the
tenants of their obligations thereunder (collectively, the “Tenant Security
Deposits”), (iii) all claims and rights to the payment of damages and other
claims arising from any rejection by a tenant of its Tenant Lease under a
Bankruptcy Code (“Bankruptcy Claims”), (iv) all of the landlord’s rights in
casualty or condemnation proceeds of a tenant in respect of the leased premises
(collectively, the “Tenant Claims”), (v) all rents, ground rents, additional
rents, revenues, termination and similar payments, issues and profits (including
all oil and gas or other mineral royalties and bonuses) from the Property
(collectively with the Tenant Lease Guaranties, Tenant Security Deposits,
Bankruptcy Claims and Tenant Claims, the “Rents”), whether paid or accruing
before or after the filing by or against Tenant of any petition for relief under
a Bankruptcy Code, (vi) all proceeds or streams of payment from the sale or
other disposition of the Tenant Leases or disposition of any Rents, and (vii)
the right to receive and apply the Rents to the payment of Tenant’s obligations
under this Lease and to do all other things which Tenant or a lessor is or may
become entitled to do under the Tenant Leases or with respect to the Rents;

 

3.       Condemnation Awards. All awards or payments, including interest
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;

 

4.       Insurance Proceeds. All proceeds of, and any unearned premiums on, any
insurance policies covering the Property, including, without limitation, the
exclusive right to receive and apply the proceeds of any claim awards,
judgments, or settlements made in lieu thereof, for damage to the Property;

 

5.       Tax Certiorari. All refunds, rebates or credits in connection with a
reduction in any taxes, including, without limitation, rebates as a result of
tax certiorari or any other applications or proceedings for reduction;

 

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6.       Agreements. All agreements (including, without limitation, interest
rate cap agreements, swaps or other interest hedging agreements), contracts
(including, without limitation, the Management Agreement and construction,
architectural, service, supply and maintenance contracts), registrations,
permits, licenses (including, without limitation, liquor licenses, if any, to
the fullest extent assignable by Tenant), franchise (including, without
limitation, the Franchise Agreement), plans, specifications and other documents,
now or hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Property, or respecting any business or activity conducted from the Property,
and all right, title and interest of Tenant therein and thereunder, including,
without limitation, the right, while an Event of Default remains uncured, to
receive and collect any sums payable to Tenant thereunder;

 

7.       Intangibles. All accounts, escrows, chattel paper, claims, deposits,
trade names, trademarks, service marks, logos, copyrights, goodwill, licenses,
permits, plans and specifications, environmental audits, engineering reports,
warranties, guaranties, books and records and all other general intangibles and
payment intangibles relating to or used in connection with the operation of the
Property;

 

8.       Accounts. All reserves, escrows and deposit accounts maintained by
Tenant with respect to the Property, together with all cash, checks, drafts,
certificates, accounts receivable, documents, letter of credit rights,
commercial tort claims, securities, investment property, financial assets,
instruments and other property from time to time held therein, and all proceeds,
products, distributions, dividends or substitutions thereon or thereof, and all
accounts (including, without limitation, any deposit accounts), impounds,
contract rights, book debts, letters of credit, letter of credit rights,
supporting obligations, drafts and notes arising from the operation of a hotel
at the Property or arising from the sale, lease or exchange of goods or other
property and/or the performance of services, and Tenant’s rights to payment from
any consumer credit/charge card organization or entities which sponsor and
administer such cards, including, without limitation, the American Express card,
the Visa card, the Discover card, and the MasterCard;

 

9.       Rights to Conduct Legal Actions. The right, in the name and on behalf
of Tenant, to commence any action or proceeding to protect the interest of
Landlord in the Property and to appear in and defend any action or proceeding
brought with respect to the Property; and

 

10.     Proceeds. All proceeds and profits arising from the conversion,
voluntary or involuntary, of any of the foregoing into cash (whether made in one
payment or a stream of payments) and any liquidation claims applicable thereto.

 

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