Exhibit 10.7 

 

AMENDED AND RESTATED POOLING AGREEMENT

 

THIS AMENDED AND RESTATED POOLING AGREEMENT (this “Agreement”) is executed as of
December 31, 2019 (the “Execution Date”), but is to become effective as of
January 1, 2020 (the “Effective Date”), by and among (i) Marriott International,
Inc., a Delaware corporation (“Marriott”), (ii) Marriott Hotel Services, Inc., a
Delaware corporation, Residence Inn By Marriott, LLC, a Delaware limited
liability company, Courtyard Management Corporation, a Delaware corporation,
SpringHill SMC, LLC, a Delaware limited liability company, TownePlace
Management, LLC, a Delaware limited liability company and Essex House
Condominium Corporation, a Delaware corporation (each individually, a “Manager”
and collectively, the “Managers”), and (iii) HPT TRS MRP, Inc., a Maryland
corporation (“MRP Tenant”), and HPT CY TRS, Inc., a Maryland corporation (“CY
Tenant,” and together with MRP Tenant, each individually, a “Tenant” and
collectively, the “Tenants”).

 

RECITALS:

 

A.      HPTMI Properties Trust, a Maryland real estate investment trust (“HPTMI
Landlord”) and MRP Tenant are parties to that certain Amended, Restated and
Consolidated Master Lease Agreement, dated as of January 1, 2011, as amended (as
the same may be amended, modified or supplemented from time to time, the “T-234
Lease”), relating to the properties referenced therein.

 

B.       HPTCY Properties Trust, a Maryland real estate investment trust (“HPTCY
Landlord”), SVC and CY Tenant are parties to that certain Master Lease
Agreement, dated as of December 31, 2012, as amended (as the same may be
amended, modified or supplemented from time to time, the “CY53 Lease”), relating
to the properties referenced therein.

 

C.       HPTMI Hawaii, Inc., a Delaware corporation (“Kauai Landlord”), and MRP
Tenant are parties to that certain Lease Agreement, executed as of the Execution
Date but to become effective as of the Effective Date (as the same may be
amended, modified or supplemented from time to time, the “Kauai Lease”),
relating to the property referenced therein.

 

D.       As of the Execution Date and the Effective Date, the T-234 Lease, the
CY53 Lease and the Kauai Lease (each individually, a “Lease” and collectively,
the “Leases”) relate to the hotel properties listed on Exhibit A attached hereto
and made a part hereof (each individually, a “Property” and collectively, the
“Properties”).

 

E.       As of the Execution Date, each Tenant has entered into a Second Amended
and Restated Management Agreement, or Management Agreement (as applicable), with
each applicable Manager with respect to each Property (as any of them may be
amended, modified or supplemented from time to time, each, a “Management
Agreement” and collectively, the “Management Agreements”).

 

 

 

 

F.       Each Property that is subject to a Lease and a Management Agreement
shall constitute a “Portfolio Property” and all of such Properties shall
collectively constitute the “Portfolio Properties.” Any Property with respect to
which a Manager Deconsolidation Event has occurred shall thereafter no longer be
considered a Portfolio Property.

 

G.       Simultaneously with the execution and delivery of this Agreement,
Marriott and the Tenants entered into that certain Marriott Guaranty Agreement
(as the same may be amended, modified or supplemented from time to time, the
“Marriott Guaranty”) pursuant to which, inter alia, Marriott has agreed to
guarantee to the Tenants (subject to the terms, conditions and limitations set
forth therein) that the Tenants will receive timely payment of a certain portion
of Aggregate Tenants’ Priority with respect to the Portfolio Properties in
certain events, upon terms and conditions set forth in this Agreement and the
Marriott Guaranty.

 

H.       Certain parties hereto previously have entered into a Pooling
Agreement, dated as of January 1, 2011, for certain Portfolio Properties
pursuant to which, as of the Execution Date, (i) the revenues generated by the
operations of such Portfolio Properties are pooled for purposes of paying
operating expenses of such Portfolio Properties, fees and other amounts due to
Marriott, the Managers and MRP Tenant, and distributions to various other
persons, and (ii) working capital and reserves of such Portfolio Properties are
managed on a pooled basis (the “Prior Pooling Agreement”). From and after the
Effective Date, by this Agreement, Marriott, each Manager, and each Tenant
desire to amend and restate the terms and provisions of the Prior Pooling
Agreement in their entirety and replace them with the terms and provisions of
this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Marriott, each Manager, and each Tenant hereby covenant and agree as follows:

 

ARTICLE I

 

DEFINED TERMS

 

1.01          Definitions. The following capitalized terms as used in this
Agreement shall have the meanings set forth below:

 

“Accounting Period” shall have the meaning, with respect to any Portfolio
Property, given such term in the Management Agreement for such Portfolio
Property.

 

“Additional Manager Advances” shall mean advances made by the Managers as so
defined in each Management Agreement.

 

“Additional Marriott Advances” shall mean all advances made by Marriott pursuant
to Sections 2.02.B (excluding any Security Deposit Advances or Marriott Guaranty
Advances), 3.03, 4.02.A, 4.03 and 5.01.B hereof.

 

“Additional Pooled Working Capital” shall have the meaning set forth in Section
5.01.B hereof.

 

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“Affiliate” shall have the meaning set forth in the Management Agreements.

 

“Aggregate Accounting Period Statement” shall have the meaning set forth in
Section 3.01 hereof.

 

“Aggregate Amount Funded” shall have the meaning set forth in the Marriott
Guaranty.

 

“Aggregate Annual Operating Statement” shall have the meaning set forth in
Section 3.02.A hereof.

 

“Aggregate Base Management Fee” shall mean, for any given period, an amount
equal to two percent (2%) of Aggregate Gross Revenues for such period, payable
in accordance with Sections 3.01 and 3.02 hereof.

 

“Aggregate Deductions” shall mean, for any given period, the sum of Deductions
for the Portfolio Properties for such period.

 

“Aggregate First Incentive Management Fee” shall mean, for any given period, an
amount equal to forty percent (40%) of Aggregate Operating Profit remaining
after deducting amounts paid or payable in respect of Sections 2.02.A(1) through
(5) hereof, payable in accordance with Sections 3.01 and 3.02 hereof.

 

“Aggregate Gross Revenues” shall mean, for any given period, the sum of Gross
Revenues for the Portfolio Properties for such period.

 

“Aggregate Ground Lease Rent” shall have the meaning set forth in Section
2.02.A(2) hereof.

 

“Aggregate Management Fees” shall mean, collectively, the Aggregate Base
Management Fee, the Aggregate First Incentive Management Fee and the Aggregate
Second Incentive Management Fee.

 

“Aggregate Operating Loss” shall mean, for any given period, a negative
Aggregate Operating Profit for such period.

 

“Aggregate Operating Profit” shall mean, for any given period, an amount equal
to Aggregate Gross Revenues less Aggregate Deductions for such period.

 

“Aggregate Second Incentive Management Fee” shall mean, for any given period, an
amount equal to forty percent (40%) of Aggregate Operating Profit remaining
after deducting amounts paid or payable in respect of Sections 2.02.A(1) through
(7) hereof, payable in accordance with Sections 3.01 and 3.02 hereof.

 

“Aggregate System Fee” shall mean, during any given Portfolio Fiscal Year (or
portion thereof), the sum of the System Fees for the Portfolio Properties for
such period.

 

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“Aggregate Tenants’ Priority” shall mean, for any given period, the sum of the
Tenant’s Priority for the Portfolio Properties for such period, payable in
accordance with Sections 3.01 and 3.02 hereof; provided, however, effective on
the date a Management Agreement is terminated with respect to a Portfolio
Property as a result of a Manager Deconsolidation Event, an Exit Hotel Removal
or otherwise, or pursuant to the terms of the Renovation-Related Agreements,
Aggregate Tenants’ Priority payable with respect to each Portfolio Accounting
Period for the Portfolio Properties shall be decreased by the amount of the
Tenant’s Priority of such Portfolio Property calculated as of the date the
Portfolio Property is no longer subject to a Management Agreement. If the
termination of a Management Agreement with respect to the foregoing occurs on a
day other than the first day of a Portfolio Accounting Period, then the
Aggregate Tenants’ Priority payable for the Portfolio Properties for the
immediately following Portfolio Accounting Period (after having been so
decreased) shall be further decreased (but only for such instant Portfolio
Accounting Period) by the amount by which Aggregate Tenants’ Priority for the
preceding Portfolio Accounting Period, as adjusted for reduction on a per diem
basis, is less than the amount of Aggregate Tenants’ Priority actually paid to
the Tenants for such preceding Portfolio Accounting Period.

 

“Aggregate Tenants’ Priority Shortfall” shall have the meaning set forth in
Section 2.02.B hereof.

 

“Agreement” shall have the meaning set forth in the Preamble, as the same may be
amended, modified or supplemented from time to time.

 

“Allocation Formula” shall have the meaning set forth in Section 6.02.B hereof.

 

“Arbitration” shall have the meaning set forth in the Management Agreements.

 

“Available Funds” shall have the meaning set forth in Section 2.02.A(4) hereof.

 

“Base Management Fee” shall have the meaning, for each Property, given such term
in the Management Agreement for such Property.

 

“Business Day” shall have the meaning given such term in the Management
Agreements.

 

“Controlling Interest” shall mean (i) if the Person is a corporation, the right
to exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of such Person (through ownership of such
shares or by contract), or (ii) if the Person is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the business, management or policies of such Person.

 

“CY Tenant” shall have the meaning set forth in the Preamble.

 

“CY53 Lease” shall have the meaning set forth in the Recitals.

 

“Deal Terms” shall have the meaning set forth in Section 7.19.A hereof.

 

“Deconsolidation Event” shall have the meaning set forth in Section 6.02 hereof.

 

“Deductions” shall have the meaning, for each Property, given such term in the
Management Agreement for such Property.

 

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“Dispute” shall have the meaning set forth in the Management Agreements.

 

“Effective Date” shall have the meaning set forth in the Preamble.

 

“Emergency Funding” shall have the meaning set forth in the Management
Agreements.

 

“Execution Date” shall have the meaning set forth in the Preamble.

 

“Exit Hotel” shall mean a Portfolio Property designated as a property to be
sold, removed and/or franchised during the term of this Agreement in accordance
with the terms and conditions of the Exit Hotel Agreement.

 

“Exit Hotel Agreement” shall mean that certain Amended and Restated Exit Hotel
Agreement, dated as of the Execution Date but to be effective as of the
Effective Date, by and among the Landlords, the Tenants, Marriott and the
Managers, as the same may be amended, modified or supplemented from time to
time.

 

“Exit Hotel Removal” shall mean a sale, removal and/or franchise conversion (or
deemed sale, if applicable) of an Exit Hotel pursuant to the Exit Hotel
Agreement.

 

“Expert” shall have the meaning set forth in the Management Agreements.

 

“First Incentive Management Fee” shall have the meaning, for each Property,
given such term in the Management Agreement for such Property.

 

“Fiscal Year” shall have the meaning, for each Portfolio Property, given such
term in the Management Agreement for such Portfolio Property.

 

“GAAP” shall mean generally accepted accounting principles consistently applied.

 

“Gross Revenues” shall have the meaning, for each Property, given such term in
the Management Agreement for such Property.

 

“Ground Lease Rent” shall have the meaning, for each Portfolio Property, given
such term in the Management Agreement for such Portfolio Property.

 

“HPTCY Landlord” shall have the meaning set forth in the Recitals.

 

“HPTMI Landlord” shall have the meaning set forth in the Recitals.

 

“Kauai Landlord” shall have the meaning set forth in the Recitals.

 

“Kauai Lease” shall have the meaning set forth in the Recitals.

 

“Landlord” or “Landlords” shall mean the HPTMI Landlord, HPTCY Landlord, SVC
and/or Kauai Landlord, as applicable.

 

“Landlord Deconsolidation Event” shall have the meaning set forth in Section
6.02 hereof.

 

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“Lease” or “Leases” shall have the meaning set forth in the Recitals.

 

“Legal Requirements” shall have the meaning set forth in the Management
Agreements.

 

“Management Agreement” and “Management Agreements” shall have the meanings set
forth in the Recitals, but shall include only the Management Agreements for the
Portfolio Properties.

 

“Manager” and “Managers” shall have the meaning set forth in the Preamble.

 

“Manager Deconsolidation Event” shall have the meaning set forth in Section 6.02
hereof.

 

“Manager Default” shall have the meaning set forth in the Management Agreements.

 

“Manager Event of Default” shall have the meaning set forth in the Management
Agreements.

 

“Manager Funding Termination Event” shall have the meaning set forth in the
Management Agreements.

 

“Marriott” shall have the meaning set forth in the Preamble.

 

“Marriott Guaranty” shall have the meaning set forth in the Recitals.

 

“Marriott Guaranty Advance” shall mean an advance under the Marriott Guaranty
allocated to pay a portion of Aggregate Tenants’ Priority (as more particularly
set forth in the Marriott Guaranty and subject to any applicable cap stated
therein).

 

“Marriott Guaranty Term” shall have the meaning given the defined term “Guaranty
Term” in the Marriott Guaranty.

 

“Marriott Guaranty Termination Event” means the expiration of the Marriott
Guaranty Term or the termination of Marriott’s obligation to advance funds under
the Marriott Guaranty for any reason pursuant to the terms of the Marriott
Guaranty.

 

“MRP Tenant” shall have the meaning set forth in the Preamble.

 

“Officer’s Certificate” shall mean a certificate executed by a vice president of
each Manager which certifies that with respect to the Aggregate Annual Operating
Statement delivered under Section 3.02.A hereof and the annual accounting
delivered under Section 3.02.B hereof, that the accompanying statement or
accounting has been properly prepared in accordance with GAAP and fairly
presents the financial operations of the Portfolio Properties.

 

“Operating Profit” shall have the meaning, for each Property, given such term in
the Management Agreement for such Property.

 

“Owner Agreement” shall have the meaning set forth in the Management Agreements.

 

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“Person” shall mean any individual or entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such individual
or entity where the context so admits.

 

“Pooled Reserve” shall have the meaning set forth in Section 5.02 hereof.

 

“Pooled Working Capital” shall have the meaning set forth in Section 5.01.A
hereof.

 

“Portfolio Accounting Period” shall have the same meaning as the definition of
“Accounting Period” as set forth in the Management Agreements applicable to the
Portfolio Properties. Marriott shall have the right to make changes to the
Portfolio Accounting Periods in the future, and appropriate corresponding
adjustments to this Agreement’s reporting and accounting procedures shall be
made; provided, however, that no such change or adjustment shall in any way
reduce or in any material respect delay the distribution of Aggregate Operating
Profit or other payments due hereunder.

 

“Portfolio Agreements” shall mean all of the agreements, effective as of the
Effective Date, by and among Marriott, the Landlords, the Managers and the
Tenants, as applicable, pertaining to the operation of the Portfolio Properties,
including without limitation, this Agreement, the Owner Agreements, the Exit
Hotel Agreement and the Management Agreements.

 

“Portfolio Fiscal Year” shall have the same meaning as the definition of “Fiscal
Year” as set forth in the Management Agreements applicable to the Portfolio
Properties; provided, however, if the “Fiscal Year” as set forth in the
Management Agreements applicable to the Portfolio Properties changes, no such
change or adjustment, as such change is implemented in this Agreement, shall in
any way reduce or in any material respect delay the distribution of Aggregate
Operating Profit or other payments due hereunder.

 

“Portfolio Property” and “Portfolio Properties” shall have the meanings set
forth in the Recitals.

 

“Post-Guaranty Termination Threshold” shall mean, for any given period after the
occurrence of a Marriott Guaranty Termination Event, an amount equal to eighty
percent (80%) of Aggregate Tenants’ Priority.

 

“Prior Pooling Agreement” shall have the meaning set forth in the Recitals.

 

“Property” and “Properties” shall have the meanings set forth in the Recitals.

 

“Prorated Portions” shall have the meaning set forth in Section 3.01 hereof.

 

“Reimbursable Advances” shall mean the amounts paid or payable in respect of
Section 2.02.A(4) hereof.

 

“Renovation-Related Agreements” shall have the meaning set forth in the
Management Agreements.

 

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“Renovations” shall mean the renovation and improvement work relating to certain
Portfolio Properties pursuant to the Renovation-Related Agreements.

 

“Reserve(s)” shall have the meaning, for each Property, given such term in the
Management Agreement for such Property.

 

“Rules” shall have the meaning set forth in the Management Agreements.

 

“Second Incentive Management Fee” shall have the meaning, for each Property,
given such term in the Management Agreement for such Property.

 

“Security Deposit” shall mean the security deposit in the aggregate original
amount of Sixty-Four Million Seven Hundred Thousand Dollars ($64,700,000), held
by the Tenants pursuant to the terms of the Security Deposit Agreement.

 

“Security Deposit Advances” shall mean advances made pursuant to the terms of
the Security Deposit Agreement.

 

“Security Deposit Agreement” shall mean that certain Amended and Restated
Security Deposit Agreement, dated as of the Execution Date but to be effective
as of the Effective Date, among Marriott, the Managers and the Tenants, as the
same may be amended, modified or supplemented from time to time.

 

“Security Deposit Replenishment” shall mean the amounts paid or payable in
respect of Section 2.02.A(7) hereof to the replenishment of the Security Deposit
to the original amount of Sixty-Four Million Seven Hundred Thousand Dollars
($64,700,000), as such amount may be adjusted from time to time pursuant to the
Security Deposit Agreement.

 

“Sum Due Marriott” shall have the meaning set forth in Section 2.02.A(4) hereof.

 

“Sum Due Tenants” shall have the meaning set forth in Section 2.02.A(4) hereof.

 

“SVC” shall mean Service Properties Trust (formerly Hospitality Properties
Trust), a Maryland real estate investment trust.

 

“SVC Guaranty” shall mean that certain Amended and Restated Guaranty Agreement,
dated as of the Execution Date but to become effective as of the Effective Date,
as the same may be amended, modified or supplemented from time to time, pursuant
to which SVC has agreed to guarantee to Marriott and the Managers (subject to
the terms, conditions and limitations set forth therein) the obligations of the
Landlords and the Tenants under the Portfolio Agreements as set forth therein.

 

“System Fee” shall have the meaning, for each Property, given such term in the
Management Agreement for such Property.

 

“T-234 Lease” shall have the meaning set forth in the Recitals.

 

“Tenant” and “Tenants” shall have the meanings given such terms in the Preamble.

 

8

 

 

“Tenant Advances” shall mean all Tenant Working Capital Advances and Tenant
Aggregate Operating Loss Advances made by the Tenants from time to time.

 

“Tenant Aggregate Operating Loss Advance” shall have the meaning set forth in
Section 3.03 hereof.

 

“Tenant Deconsolidation Event” shall have the meaning set forth in Section 6.02
hereof.

 

“Tenant Default” shall have the meaning set forth in the Management Agreements.

 

“Tenant Working Capital Advances” shall have the meaning set forth in Section
5.01.B hereof.

 

“Tenant’s Priority” shall have the meaning, for each Property, given such term
in the Management Agreement for such Property.

 

“Tenants’ Termination Threshold” shall mean, for any given period prior to the
occurrence of a Marriott Guaranty Termination Event, an amount equal to
eighty-five percent (85%) of Aggregate Tenants’ Priority.

 

“Working Capital” shall have the meaning, with respect to each Property, given
such term in the Management Agreement for such Property.

 

ARTICLE II

 

COMPENSATION OF MANAGERS; PRIORITIES FOR

 

DISTRIBUTION OF AGGREGATE OPERATING PROFIT

 

2.01          System, Base and Incentive Management Fees. In lieu of the System
Fee, the Base Management Fee, the First Incentive Management Fee, and the Second
Incentive Management Fee to be paid pursuant to Section 3.01 of each Management
Agreement, the Managers of the Portfolio Properties and the Tenants agree that
such Managers shall be paid, collectively, the following management fees:

 

A.                The Aggregate System Fee; plus

 

B.                 The Aggregate Base Management Fee; plus

 

C.                 The Aggregate First Incentive Management Fee; plus

 

D.                The Aggregate Second Incentive Management Fee.

 

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The Aggregate Management Fees shall be allocated among the Managers as the
Managers shall determine in their sole discretion, and the Tenants shall have no
responsibility or liability in connection with any such allocation as determined
by the Managers or the distribution thereof among the Managers. If in any
Portfolio Fiscal Year the amount of Aggregate Operating Profit is insufficient,
after distributions higher in the priority of payments set forth in Section
2.02.A hereof, to pay the full amount of the Aggregate Base Management Fee,
Aggregate First Incentive Management Fee or the Aggregate Second Incentive
Management Fee due for such Portfolio Fiscal Year, the amount paid shall be
allocated among the Managers as the Managers shall determine in their sole
discretion, and (i) any portion of the Aggregate Base Management Fee left unpaid
shall accrue and be payable in subsequent Portfolio Fiscal Years and (ii) any
portion of the Aggregate First Incentive Management Fee or the Aggregate Second
Incentive Management Fee for such Portfolio Fiscal Year left unpaid shall be
deemed waived and shall not accrue or be payable in any subsequent Portfolio
Fiscal Year and in no event shall the Tenants be liable for the payment of any
unpaid portion of the Aggregate First Incentive Management Fee or the Aggregate
Second Incentive Management Fee to Managers. Upon the termination of this
Agreement and following the completion of the final accounting provided for in
Section 11.11.A of the Management Agreements and distributions provided
thereunder, all accrued but unpaid Aggregate Management Fees (including, without
limitation, any accrued Base Management Fees) shall be deemed waived, and in no
event shall the Tenants be liable for the payment of any unpaid portion of such
Aggregate Management Fees to the Managers.

 

2.02          Priorities for Distribution of Aggregate Operating Profit.

 

A.             Aggregate Operating Profit shall be distributed, to the extent
available, in the following order of priority (which distributions Marriott and
the Managers are irrevocably authorized to pay):

 

1.                  First, to the Tenants, in an amount equal to Aggregate
Tenants’ Priority.

 

2.                  Second, to the Tenants, in an amount equal to the aggregate
amount of the Ground Lease Rent due pursuant to the ground leases (if any) to
which the Portfolio Properties are subject (the “Aggregate Ground Lease Rent”).

 

3.                  Third, to the Managers, in an amount equal to the Aggregate
Base Management Fee.

  

4.                  Fourth, pari passu, to (a) the Tenants, in an amount
necessary to reimburse the Tenants for all Tenant Advances made by the Tenants
which have not yet been repaid by distributions pursuant to this Section
2.02.A(4), and (b) to Marriott, in an amount necessary to reimburse Marriott,
Managers and/or any Affiliate for all Additional Marriott Advances and all
Additional Manager Advances made by Marriott, Managers or any Affiliate from
time to time which have not yet been repaid by distributions pursuant to this
Section 2.02.A(4). If at any time the amounts available for distribution to the
Tenants and Marriott and/or any Affiliate pursuant to this Section 2.02.A(4)
(“Available Funds”) are insufficient (i) to repay to the Tenants all outstanding
Tenant Advances (the “Sum Due Tenants”), and (ii) to repay to Marriott, Managers
and/or any Affiliate all outstanding Additional Marriott Advances and Additional
Manager Advances (the “Sum Due Marriott”), then (X) the Tenants shall be paid
from the Available Funds the amount obtained by multiplying a number equal to
the amount of the Available Funds by a fraction, the numerator of which is the
Sum Due Tenants and the denominator of which is a number equal to the sum of the
Sum Due Tenants plus the Sum Due Marriott, and (Y) Marriott shall be paid from
the Available Funds the amount obtained by multiplying a number equal to the
amount of the Available Funds by a fraction, the numerator of which is the Sum
Due Marriott and the denominator of which is a number equal to the sum of the
Sum Due Tenants plus the Sum Due Marriott.

 

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5.                  Fifth, to the Managers, in an amount equal to any accrued
but unpaid Aggregate Base Management Fees.

 

6.                  Sixth, to the Managers, in an amount equal to the Aggregate
First Incentive Management Fee.

 

7.                  Seventh, to the Tenants, in an amount up to sixty percent
(60%) of Aggregate Operating Profit remaining after deducting amounts paid or
payable in respect of Sections 2.02.A(1) through (6) hereof necessary for the
Security Deposit Replenishment.

 

8.                  Eighth, to the Managers, in an amount equal to the Aggregate
Second Incentive Management Fee.

 

9.                  Finally, to the Tenants, the balance, if any.

 

B.                 For any Portfolio Accounting Period, and subject to the terms
hereof, the Tenants shall receive Aggregate Tenants’ Priority in accordance with
the terms hereof, subject, however, to the following provisions of this Section
2.02.B. If the Aggregate Operating Profit for the applicable Portfolio
Accounting Period, as determined by Marriott and the Managers, is less than
Aggregate Tenants’ Priority with respect to such Portfolio Accounting Period (an
“Aggregate Tenants’ Priority Shortfall”), then such Aggregate Tenants’ Priority
Shortfall shall first be funded by Security Deposit Advances, and if the
Security Deposit is depleted or otherwise insufficient to fund such Aggregate
Tenants’ Priority Shortfall, then the amount of the Aggregate Tenants’ Priority
Shortfall required to satisfy the Tenants’ Termination Threshold shall be funded
by Marriott Guaranty Advances, subject to and in accordance with the terms of
the Marriott Guaranty, for so long as the Marriott Guaranty is in effect, and
any such amounts funded in excess of the Tenants’ Termination Threshold shall be
deemed to have been funded by Marriott as an Additional Marriott Advance and/or
Manager as an Additional Manager Advance (as applicable) and not as a Marriott
Guaranty Advance. Any amount of the Aggregate Tenants’ Priority Shortfall not
funded from the Security Deposit or by Marriott or its Affiliates shall accrue
and be paid as provided in Section 3.01 hereof. If a Marriott Guaranty
Termination Event has occurred, then Marriott and/or its Affiliates may, without
any obligation and in its or their sole and absolute discretion, fund up to the
Post-Guaranty Termination Threshold, and any such amounts funded by Marriott
and/or its Affiliates following such Marriott Guaranty Termination Event shall
be deemed Additional Marriott Advances and/or Additional Manager Advances (as
applicable). If (a) no Marriott Guaranty Termination Event has occurred, and
Marriott has not funded up to the Tenants’ Termination Threshold under the
Marriott Guaranty as provided herein for the applicable Portfolio Fiscal Year on
a cumulative basis within ten (10) days of receiving written request from the
Tenants or (b) a Manager Funding Termination Event has occurred, then the
Tenants shall have the right to effect a termination of this Agreement and all
(but not less than all) of the Management Agreements by written notice to
Marriott, which termination shall be effective as of the effective date which is
set forth in said notice; provided that said effective date shall be at least
sixty (60) days (or such longer period required by applicable Legal Requirements
concerning the termination of Portfolio Property employees) after the date of
such notice. If the termination is pursuant to clause (a) of this Section
2.02.B, then such termination (i) shall be in accordance with the provisions of
Section 11.11 of each Management Agreement, (ii) shall constitute a Manager
Default under each Management Agreement, and (iii) shall entitle the Tenants to
all rights and remedies available to them with respect to Manager Defaults as
provided for in Article IX of each Management Agreement. If the termination is
due to a Manager Funding Termination Event, then such termination shall not
constitute a Manager Default or Manager Event of Default under any of the
Management Agreements and shall be in accordance with the provisions of Section
11.11 of each Management Agreement.

 

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C.                 The parties acknowledge that, as of the Effective Date, the
balance of the Security Deposit is estimated to be $33,638,180 (subject to
reconciliation). During the term of this Agreement, the Tenants shall not make
any payment from the Security Deposit, or otherwise reduce the balance of the
Security Deposit, except in connection with a Security Deposit Advance made
pursuant to Section 2.02.B hereof or otherwise as permitted by the Security
Deposit Agreement.

 

D.                Notwithstanding the provisions of Section 2.02.A(2) hereof,
the parties hereby acknowledge and agree that none of Manager, Marriott or any
of their respective Affiliates are obligated to pay and in no event shall be
liable in any way whatsoever (i) for any payment of, or failure to pay, the
Aggregate Ground Lease Rent to the lessor(s) under any such ground leases;
and/or (ii) if there is insufficient Aggregate Operating Profit to cover the
full amount of such Aggregate Ground Lease Rent.

 

E.                 Notwithstanding any provision to the contrary contained in
this Agreement, (i) all distributions and other amounts payable to the Tenants
hereunder shall be distributed or paid by Marriott and/or Managers to MRP Tenant
for the benefit of both Tenants and such amounts shall be allocated between the
Tenants as the Tenants determine in their sole discretion, and Marriott,
Managers and their Affiliates shall have no responsibility or liability in
connection with any such allocation or the distribution thereof between the
Tenants and (ii) all Aggregate Accounting Period Statements and other reports,
statements and officer’s certificates shall be delivered to MRP Tenant for the
benefit of both Tenants.

 

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ARTICLE III

 

ACCOUNTING; INTERIM DISTRIBUTIONS; ANNUAL ADJUSTMENTS

 

3.01          Portfolio Accounting Periods; Statements; Distributions. Within
twenty (20) days after the close of each Portfolio Accounting Period, Marriott
shall deliver an interim accounting (the “Aggregate Accounting Period
Statement”) to the Tenants showing Aggregate Gross Revenues, Aggregate
Deductions, Aggregate Operating Profit, and applications and distributions
thereof for such Portfolio Accounting Period. Notwithstanding the order of
distribution of Aggregate Operating Profit set forth in Section 2.02.A hereof,
for each Portfolio Accounting Period, Marriott shall, with each such accounting,
transfer to the Tenants any interim amounts due the Tenants hereunder, transfer
to the Managers any interim amounts due the Managers, and retain any interim
amounts due to Marriott under Section 2.02.A hereof. In addition, each
applicable Manager shall provide each applicable Tenant with interim accountings
pursuant to the applicable Management Agreement on an Accounting Period basis
for each Portfolio Property that it manages for such Tenant as if the applicable
Portfolio Property were not a participant in this Agreement. If the portion of
Aggregate Operating Profit to be distributed to the Tenants pursuant to Sections
2.02.A(1), (2), (4) or (7) hereof is insufficient to pay each of such interim
amounts then due in full following the end of any Portfolio Accounting Period,
then any such interim amounts left unpaid shall be paid from and to the extent
of Aggregate Operating Profit available therefor at the time distributions are
made for following successive Portfolio Accounting Periods until such interim
amounts are paid in full, and such payments shall be made from such Aggregate
Operating Profit in the same order of priority as other payments made on account
of such items following such Portfolio Accounting Periods. If the portion of
Aggregate Operating Profit to be distributed to Marriott or the Managers
pursuant to Section 2.02.A(3), (4), (5), (6) or (8) hereof is insufficient to
pay each of such interim amounts then due in full following the end of any
Portfolio Accounting Period, then, any such interim amounts left unpaid shall be
paid from and to the extent of Aggregate Operating Profit available therefor at
the time distributions are made following successive Portfolio Accounting
Periods until such interim amounts are paid in full, and such payments shall be
made from such Aggregate Operating Profit in the same order of priority as other
payments made on account of such items following such Portfolio Accounting
Periods. The portion of Aggregate Operating Profit to be distributed as interim
distributions to the Tenants as Aggregate Tenants’ Priority, as Aggregate Ground
Lease Rent and as Security Deposit Replenishment pursuant to Section 2.02.A
hereof for the then-current Portfolio Fiscal Year, as well as the portion of
Aggregate Operating Profit to be distributed to the Managers as their Aggregate
Base Management Fee, Aggregate First Incentive Management Fee and Aggregate
Second Incentive Management Fee pursuant to Section 2.02.A hereof shall be
determined by applying in each instance a cumulative prorated amount to such
Aggregate Tenants’ Priority, Aggregate Ground Lease Rent, Aggregate Base
Management Fee, Aggregate First Incentive Management Fee, Security Deposit
Replenishment and Aggregate Second Incentive Management Fee (calculated on a
year-to-date basis, with the prorated amount being one-twelfth (1/12) of the
total amount for each of such items for each Portfolio Accounting Period of each
Portfolio Fiscal Year) to the year-to-date cumulative Aggregate Operating Profit
(all such portions being hereinafter collectively referred to as the “Prorated
Portions”). In each Portfolio Accounting Period after the first Portfolio
Accounting Period of a Portfolio Fiscal Year, inclusive, the Prorated Portions
shall be adjusted to reflect distributions, in each instance, to the Tenants and
the Managers and retention by Marriott of Aggregate Operating Profit with
respect to such Prorated Portions for prior Portfolio Accounting Periods during
the then-current Portfolio Fiscal Year. All distributions shall be made in the
order of priority as set forth in Section 2.02.A hereof.

 

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3.02          Annual Accounting Statements and Cash Adjustments.

 

A.                Calculations and payments of the Aggregate First Incentive
Management Fee, the Aggregate Second Incentive Management Fee, Aggregate
Tenants’ Priority, Aggregate Ground Lease Rent and distributions of Aggregate
Operating Profit made with respect to each Portfolio Accounting Period within a
Portfolio Fiscal Year shall be accounted for cumulatively within a Portfolio
Fiscal Year, but shall not be cumulative from one Portfolio Fiscal Year to the
next. Calculations and payments of Aggregate Base Management Fees, Reimbursable
Advances and the Security Deposit Replenishment shall be accounted for
cumulatively within a Portfolio Fiscal Year, and shall be cumulative from one
Portfolio Fiscal Year to the next. Calculations of Security Deposit Advances and
Marriott Guaranty Advances shall be accounted for cumulatively within a
Portfolio Fiscal Year. Within sixty (60) days after the end of each Portfolio
Fiscal Year, Marriott and the Managers shall deliver to the Tenants a statement
(an “Aggregate Annual Operating Statement”) in reasonable detail summarizing the
operations of the Portfolio Properties for the immediately preceding Portfolio
Fiscal Year, and an Officer’s Certificate certifying that such Aggregate Annual
Operating Statement is true and correct. Marriott, the Managers and the Tenants
shall, within ten (10) Business Days after the Tenants’ receipt of such
Aggregate Annual Operating Statement, make any adjustments, by cash payment, in
the amounts paid or retained for such Portfolio Fiscal Year as are needed
because of the final figures set forth in such Aggregate Annual Operating
Statement. Such final accounting shall be controlling over the interim
accountings and shall be final subject to adjustments required as a result of an
audit requested by the Landlords or the Tenants pursuant to each Management
Agreement. No adjustment shall be made for any Aggregate Operating Loss or
Aggregate Operating Profit in a preceding or subsequent Portfolio Fiscal Year.
Each Manager shall provide the applicable Tenant with interim and annual
statements pursuant to the applicable Management Agreement for each Portfolio
Property that it manages as if the applicable Portfolio Property were not a
participant in this Agreement.

 

B.                 In addition, on or before April 30 of each Portfolio Fiscal
Year, commencing on April 30, 2021, Marriott and the Managers shall deliver to
the Tenants and the Landlords an Officer’s Certificate setting forth the totals
of Aggregate Gross Revenue, Aggregate Deductions, the calculation of Aggregate
Tenants’ Priority, and Security Deposit Replenishments for the Properties which
were Portfolio Properties with respect to which this Agreement was in effect for
the preceding Portfolio Fiscal Year, subject to the audit rights of the Tenants
as set forth in each Management Agreement. Notwithstanding anything contained in
this Agreement to the contrary, Marriott and the Managers shall remain obligated
to deliver an Officer’s Certificate as required by Section 3.02.B of the Prior
Pooling Agreement on or before April 30, 2020. MRP Tenant shall have the right
to audit such Officer’s Certificate in accordance with the Prior Pooling
Agreement, and the applicable parties shall make such adjustments with respect
thereto as would be required under the Prior Pooling Agreement.

 

3.03          Aggregate Operating Loss. To the extent there is an Aggregate
Operating Loss for any Portfolio Fiscal Year, the Tenants shall have the right,
without any obligation and in their sole and absolute discretion, to advance
funds required to fund such Aggregate Operating Loss within twenty (20) days
after Marriott has delivered written notice thereof to the Tenants. Any
Aggregate Operating Loss so funded by the Tenants shall constitute a “Tenant
Aggregate Operating Loss Advance.” If the Tenants do not fund such Aggregate
Operating Loss in accordance with the terms of this Section 3.03, then Marriott
or its Affiliates shall also have the right, within twenty (20) days after such
initial twenty (20)-day period, without any obligation and in its or their sole
and absolute discretion, to advance funds required to fund such Aggregate
Operating Loss, and any such advance shall constitute an Additional Marriott
Advance or Additional Manager Advance (as applicable). Any Tenant Aggregate
Operating Loss Advances and/or Additional Marriott Advances and/or Additional
Manager Advances shall be repaid in accordance with Section 2.02.A(4) hereof.

 

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ARTICLE IV

 

ACCOUNTS; EXPENDITURES

 

4.01          Accounts. All funds derived from operation of the Portfolio
Properties shall be deposited in one or more bank accounts designated by
Marriott, which accounts may be commingled accounts containing other funds owned
by or managed by Marriott. The Pooled Reserve shall be held in an interest
bearing escrow reserve account in a bank or similar institution designated by
Manager and reasonably acceptable to the Tenants and the Landlords, and the
Pooled Reserve shall not be commingled with any other funds. Withdrawals from
said accounts shall be made solely by representatives of Marriott whose
signatures have been authorized. Reasonable petty cash funds shall be maintained
at the Portfolio Properties.

 

4.02          Expenditures and Payments.

 

A.                Marriott, on behalf of and in coordination with the Managers
pursuant to their obligations under the Management Agreements, and in each
instance subject to the provisions of this Agreement, shall make expenditures,
to the extent of the sufficiency of funds available therefor pursuant to this
Agreement, for all Aggregate Deductions. The Tenants agree and authorize
Marriott to reimburse Marriott or any Affiliate for Emergency Funding from
future Reserves of the applicable Portfolio Properties, unless Marriott or any
Affiliate, as applicable, elects to treat such Emergency Funding as an
Additional Manager Advance or Additional Marriott Advance with respect to the
Portfolio Property.

 

B.                 Each Tenant irrevocably authorizes and directs Marriott to
pay and Marriott agrees to pay (or repay, as applicable), from Aggregate
Operating Profit, without notice, demand or request therefor, but in each
instance subject to the provisions of this Agreement: (i) distributions to the
Tenants with respect to Aggregate Tenants’ Priority, (ii) distributions to the
Tenants with respect to the Aggregate Ground Lease Rent (if any),
(iii) distributions to the Managers with respect to the Aggregate Base
Management Fee, (iv) distributions to the Tenants, Marriott and/or the Managers
with respect to the Tenant Advances, Additional Marriott Advances and Additional
Manager Advances, (v) distributions to the Managers with respect to any accrued,
but unpaid Aggregate Base Management Fees, (vi) distributions to the Managers
with respect to the Aggregate First Incentive Management Fee,
(vii) distributions to the Tenants for Security Deposit Replenishment,
(viii) distributions to the Managers with respect to the Aggregate Second
Incentive Management Fee, and (ix) distributions to the Tenants of the remaining
balance, if any, in each of the foregoing instances set forth in this Section
4.02.B(i) through (ix), at the time interim distributions are made pursuant to
Section 3.01 hereof, and to the extent of the sufficiency of, and in the order
of distribution of, Aggregate Operating Profit pursuant to Section 2.02.A
hereof.

 

4.03          Classification of Advances Made by Marriott.

 

A.                Notwithstanding anything herein to the contrary, within sixty
(60) days after the end of each Portfolio Fiscal Year, Marriott shall determine
whether any Additional Manager Advance, any Additional Marriott Advance or any
Marriott Guaranty Advance (pursuant to the terms of the Marriott Guaranty) was
made with respect to such Portfolio Fiscal Year, and if Marriott or the Managers
has made such an advance with respect to such Portfolio Fiscal Year, then
Marriott shall advise the Tenants in writing of the type and amount of such
advance, and the balance of the Aggregate Amount Funded shall be deemed
increased by the amount of any Marriott Guaranty Advance.

 

15

 

 

B.                 Notwithstanding anything herein to the contrary, if the
Landlords or the Tenants fail timely to fund the cost of the Renovations to the
Portfolio Properties in accordance with the terms of the Renovation-Related
Agreements, and such failure continues for a period of ten (10) days following
receipt of Marriott’s written request for the same to the Landlords and the
Tenants, then (i) such failure shall constitute a Marriott Guaranty Termination
Event, and (ii) any and all outstanding Marriott Guaranty Advances made prior to
the date thereof shall be immediately due and payable by the Landlords and the
Tenants (and/or by SVC pursuant to the SVC Guaranty) to Marriott.

 

ARTICLE V

 

POOLING OF WORKING CAPITAL AND RESERVES

 

5.01          Pooling of Working Capital.

 

A.                The Working Capital applicable to all Portfolio Properties
pursuant to the Management Agreements shall be pooled and used by Marriott and
the Managers for the purposes set forth in Section 4.02.A hereof pursuant to the
Managers’ cash-management policies (the “Pooled Working Capital”). Upon any
Manager Deconsolidation Event as to one or more but less than all of the
Portfolio Properties, Pooled Working Capital shall be allocated as described in
Section 6.02.A hereof; provided, however, that any allocation of Pooled Working
Capital following an Exit Hotel Removal shall be made in accordance with the
terms of the Exit Hotel Agreement. Upon the expiration or termination of all
Management Agreements for all Portfolio Properties, the Tenants shall, except as
otherwise provided in the Management Agreements or this Agreement, receive any
unused Pooled Working Capital.

 

B.                 Upon written notice from Marriott, the Tenants shall, within
ten (10) Business Days of Marriott’s request, advance funds necessary to
maintain Pooled Working Capital at a level determined by Marriott to be
reasonably necessary to satisfy the needs of the Portfolio Properties as their
operation may from time to time require (such additional funds, the “Additional
Pooled Working Capital”). Any such request by Marriott shall be accompanied by a
reasonably detailed explanation of the reasons for this request. All funds so
advanced shall be added to Pooled Working Capital. All advances made by the
Tenants pursuant to this Section 5.01.B shall constitute “Tenant Working Capital
Advances.” Tenant Working Capital Advances shall be repaid in accordance with
Section 2.02.A(4) hereof. If the Tenants fail to timely fund such Additional
Pooled Working Capital within ten (10) Business Days after Marriott’s request
for the same, then, without affecting the Managers’ rights and remedies under
the Management Agreements, Marriott or its Affiliates shall have the right,
without any obligation and in its or their sole and absolute discretion, to
advance such Additional Pooled Working Capital within ten (10) Business Days
after such initial ten (10)-Business Day period, and any such advances shall
constitute Additional Marriott Advances or Additional Manager Advances, which
shall be repaid as provided in Section 2.02.A(4) hereof. If the Tenants do not
elect to advance funds as contemplated in this Section 5.01.B, then the Managers
shall have the rights set forth in Section 9.07.A of each Management Agreement.

 

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5.02          Pooling of Reserves.

 

A.                All deposits required to be made to the Reserves pursuant to
the Management Agreements with respect to the Portfolio Properties shall instead
be pooled into one account to be used for the purposes set forth in the
Management Agreements and the Renovation-Related Agreements for the Portfolio
Properties on a pooled basis (the “Pooled Reserve”). Subject to the terms of the
Renovation-Related Agreements, the funds in the Pooled Reserve shall be
available for all Portfolio Properties regardless of the amount of funds that
would otherwise be held in a Reserve for a particular Portfolio Property if the
Reserves were separately maintained. Upon any Manager Deconsolidation Event as
to one or more but less than all of the Portfolio Properties, the Pooled Reserve
shall be allocated as described in Section 6.02.A hereof; provided, however,
that any allocation of the Pooled Reserves following an Exit Hotel Removal shall
be made in accordance with the terms of the Exit Hotel Agreement. Upon the
expiration or termination of all Management Agreements for all Portfolio
Properties, Marriott and the Managers shall, except as otherwise provided in the
Management Agreements or this Agreement, release and transfer to the applicable
Landlords or (if directed by a Landlord) to the applicable Tenants the remaining
Pooled Reserve funds after payment of all expenses that are to be paid out of
the Reserves pursuant to the Management Agreements relating to periods prior to
such expiration or termination.

 

B.                 For the avoidance of doubt, the parties acknowledge and agree
that the Landlords and the Tenants have an obligation to provide the additional
funds for Reserves required in accordance with Section 5.07 of the Management
Agreements and that each Manager shall have the remedies afforded to it under
the terms of the Management Agreements for the failure or refusal by the
Landlords or the Tenants to provide such additional funds.

 

ARTICLE VI

 

REMOVAL OF PROPERTIES AS PORTFOLIO PROPERTIES

 

6.01          Intentionally Deleted.

 

6.02          Removal of Properties as Portfolio Properties. Each of the
following shall be, with respect to any Portfolio Property, and subject to the
immediately succeeding paragraph, a “Deconsolidation Event”: (i) if any
Portfolio Property (other than with respect to an Exit Hotel Removal) ceases to
be owned by the applicable Landlord as of the date hereof, or any Affiliate
thereof or of SVC, which for the purposes hereof, shall include a transfer of a
Controlling Interest in such Landlord if following such transfer, such Landlord
is not owned or controlled by SVC or an Affiliate of SVC (a “Landlord
Deconsolidation Event”); (ii) if any Portfolio Property (other than with respect
to an Exit Hotel Removal) ceases to be leased by the applicable Tenant, or any
Affiliate thereof or of SVC, which for the purposes hereof, shall include a
transfer of a Controlling Interest in such Tenant other than to SVC or an
Affiliate of SVC (a “Tenant Deconsolidation Event”); or (iii) if the applicable
Management Agreement is terminated with respect to such Portfolio Property
(other than with respect to an Exit Hotel Removal), and such termination does
not otherwise result in the execution of a new management agreement having the
same terms as the terms of the applicable Management Agreement with SVC or an
Affiliate of SVC (a “Manager Deconsolidation Event”). Except as expressly set
forth herein, no provision of this Agreement shall be construed as modifying the
terms of any Lease, Management Agreement or Owner Agreement with respect to
transfer of any interest of any part therein.

 

17

 

 

Notwithstanding the foregoing, or anything to the contrary contained herein or
in any other Portfolio Agreement, except with respect to a total condemnation of
any Portfolio Property, (1) no Landlord Deconsolidation Event shall or can occur
prior to the expiration or earlier termination of this Agreement; (2) no Tenant
Deconsolidation Event shall or can occur prior to the completion of the
Renovations pursuant to the Renovation-Related Agreements; and (3) following the
completion of the Renovations pursuant to the Renovation-Related Agreements, the
Tenants may consummate a Tenant Deconsolidation Event with respect to all (but
not less than all) of the Portfolio Properties subject to this Agreement at the
time of such Tenant Deconsolidation Event, at no cost to Marriott or the
Managers, provided that (a) the applicable Landlord or an Affiliate thereof or
SVC shall continue to own the Portfolio Properties, (b) the permitted purchaser
must meet and comply with the requirements of Section 10.02 of the Management
Agreements and those set forth in the applicable Lease, and (c) such Landlord,
the applicable Tenant and the permitted purchaser shall execute and deliver such
documents as Marriott and the Managers may reasonably require, including any
documents required under the applicable Owner Agreement, to reflect such
assignment or transfer and the continued applicability of the Portfolio
Agreements with respect to the Portfolio Properties.

 

A.                From and after the date of a Manager Deconsolidation Event
with respect to any particular Portfolio Property, such Property shall no longer
be treated as a Portfolio Property pursuant to this Agreement. If the Manager
Deconsolidation Event occurs on a day other than the last day of a Portfolio
Accounting Period, the parties shall exclude such prorated amounts of the Gross
Revenues and Deductions (and other amounts as may be necessary) applicable to
such Property for the period following the Manager Deconsolidation Event, as are
appropriate in their reasonable judgment, in the calculation of Aggregate Gross
Revenues and Aggregate Deductions (and other amounts as may be necessary) for
the Portfolio Accounting Period in which the Manager Deconsolidation Event
occurred. Additionally, the parties shall make such prorations, adjustments,
allocations, and changes pursuant to the Allocation Formula set forth in Section
6.02.B hereof to reflect the removal of such Property from being subject to this
Agreement and the applicable Management Agreement. Additionally, in the case of
a Manager Deconsolidation Event, the applicable Tenant and the applicable
Manager, both acting reasonably, shall determine the portion of (1) the Pooled
Working Capital allocable to the Property being removed from this Agreement and
the amount of the Pooled Working Capital so allocated shall be remitted to the
parties entitled to the same pursuant to the applicable Management Agreement,
the applicable Owner Agreement and this Agreement, and (2) the Pooled Reserve
allocable to the Property being removed from this Agreement and the amount of
the Pooled Reserve so allocated shall, after payment of all amounts properly
payable therefrom pursuant to the applicable Management Agreement and this
Agreement: (i) be made available to the applicable Tenant to allow such Tenant
to fulfill its obligations under the applicable Lease, if the Property which is
the subject of such Manager Deconsolidation Event shall remain subject to the
such Lease, and (ii) otherwise, be delivered to the applicable Landlord. In
determining the portion of the Pooled Reserve allocable to such Property, the
parties shall take into account whether and when such Property and the Portfolio
Properties have each undergone a substantial soft-goods or case-goods
replacement.

 

18

 

 

B.                 The “Allocation Formula” shall be to multiply the amount in
question by a fraction, the numerator of which is the Operating Profit for the
Property with respect to which a Manager Deconsolidation Event has occurred for
the preceding twelve (12) full Portfolio Accounting Periods, and the denominator
of which is the Aggregate Operating Profit for all Portfolio Properties for the
same period.

 

C.                 From and after the date of a Tenant Deconsolidation Event as
permitted hereinabove (that is not also a Manager Deconsolidation Event) with
respect to the Portfolio Properties, such Portfolio Properties shall continue to
be subject to the terms, conditions and provisions of this Agreement and of the
other Portfolio Agreements. In connection with any permitted Tenant
Deconsolidation Event, the applicable Landlord, the applicable Tenant and the
permitted successor to such Tenant shall execute and deliver such documents as
Marriott and the Managers may reasonably require to confirm and reflect such
Tenant Deconsolidation Event and the continued applicability of this Agreement
and the other Portfolio Agreements with respect to the Portfolio Properties.

 

D.                Notwithstanding the provisions of this Section 6.02 to the
contrary, in the event of a Manager Deconsolidation Event with respect to any
particular Portfolio Property, the amounts of any outstanding Additional
Marriott Advances, any outstanding Additional Manager Advances and any
outstanding Tenant Advances shall not be adjusted upon the removal of such
Property and shall remain subject to reimbursement to Marriott, Managers and/or
Tenants pursuant to this Agreement; provided, however, that if the Manager
Deconsolidation Event with respect to such Portfolio Property was caused by a
Tenant Default, then, notwithstanding the foregoing, there shall be a reduction
to the amount of any outstanding Tenant Advances to reflect an allocation of a
portion of such Tenant Advances to such Property upon the removal of such
Property from this Agreement (which allocation shall be determined based on the
Allocation Formula) and (i) the amount of such allocation shall reduce the
amount of the outstanding Tenant Advances for the remaining Portfolio Properties
as of the date of the Manager Deconsolidation Event and (ii) following the
Manager Deconsolidation Event, Tenants shall not have any right to reimbursement
for the amount of any Tenant Advances so allocated to the Property being removed
from this Agreement.

 

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ARTICLE VII

 

MISCELLANEOUS PROVISIONS

 

7.01          Notices. Subject to the provisions of this Section 7.01, notices
and other communications under this Agreement must be (i) in writing;
(ii) delivered by hand against receipt, by certified or registered mail, postage
prepaid, return receipt requested or by a nationally recognized overnight
delivery service; and (iii) addressed as provided below or at any other address
designated in writing by the party receiving the notice. Any notice will be
deemed received when delivery is received or refused at the address provided
below or at the other address designated in writing.

 

  To the Tenants: HPT TRS MRP, Inc.
HPT CY TRS, Inc.
c/o Service Properties Trust
Two Newton Place
255 Washington Street
Newton, Massachusetts 02458
Attn: President
Phone: (617) 964-8389         To Marriott:
(and/or to a Manager,
addressed to such
Manager in care of
Marriott) Marriott International, Inc.
10400 Fernwood Road
Bethesda, Maryland 20817
Attn: Law Department 52/923 – Hotel Operations
Phone: (301) 380-9555         with a copy to: Marriott International, Inc.
10400 Fernwood Road
Bethesda, Maryland 20817
Attn: Department 51/911 – Lodging Financial Analysis
Phone: (301) 380-7301

 

Notwithstanding the foregoing, Marriott may provide the Tenants and the
Landlords with electronic delivery of the reports required under this Agreement.
Marriott, the Tenants and the Landlords will reasonably cooperate with one
another to adapt to new technologies that may be available for the transmission
of such reports.

 

7.02          Applicable Law. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of the State of Maryland,
without regard to its “choice of law” rules.

 

7.03          Dispute Resolution; Arbitration and Expert Resolution. Disputes
under this Agreement shall be resolved by Arbitration in accordance with the
procedures set forth in Section 11.23.A of the Management Agreements, unless the
underlying dispute is one which, if arising under the Management Agreements
would be resolved by referral to an Expert, in which event, the Dispute shall be
resolved in accordance with the procedures set forth in Section 11.23.B of the
applicable Management Agreement(s).

 

7.04          Waiver of Jury Trial. In the event there occurs a Dispute, or an
aspect of a Dispute, which under the Rules cannot be resolved by Arbitration,
but must be referred to a court for determination, each Tenant, Marriott and
Manager hereby absolutely, irrevocably and unconditionally waives trial by jury
in connection with any litigation, action, suit or proceeding relating to the
resolution of such Dispute.

 

7.05          Binding Effect. The rights, powers, privileges, and discretions
(hereinafter referred to as the “rights”) to which the parties may be entitled
hereunder shall inure to the benefit of each of their respective successors and
permitted assigns. All the rights of the parties herein are cumulative and not
alternative and may be enforced successively or concurrently. Failure of any
party to exercise any of its rights shall not be deemed a waiver thereof, and no
waiver of any of a party’s rights shall be deemed to apply to any other rights.
The terms, covenants, and conditions of or imposed upon each party herein shall
be binding upon the successors and assigns of such party.

 

20

 

 

7.06          Severability. In case any provision (or any part of any provision)
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalid, illegal or unenforceable
provision shall not affect any other provision (or remaining part of the
affected provision) of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had not been included
herein.

 

7.07          Grammar. When used herein, the singular shall include the plural,
the plural shall include the singular, and the use of any gender shall be
applicable to all genders.

 

7.08          Time of the Essence. Time is of the essence in the performance of
the obligations and undertakings of the parties hereto.

 

7.09          Captions. The captions appearing in this Agreement are inserted
only as a matter of convenience and do not define, limit, construe or describe
the scope or intent of the sections of this Agreement nor in any way affect this
Agreement.

 

7.10          Remedies. No remedy herein conferred upon a party hereto is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.

 

7.11          Due Authorization. Each party hereto represents and warrants to
the other that this Agreement has been duly authorized, executed and delivered
by the representing party, and constitutes the binding and enforceable
obligation of such party subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the rights of creditors
generally; and (ii) the exercise of judicial discretion in accordance with
general principles of equity.

 

7.12          Counterparts. This Agreement may be executed in one or more
counterparts (including by means of facsimile or via email in electronic or
portable document format (.pdf) signature pages), each of which shall be deemed
an original but all of which together will constitute one and the same
instrument.

 

7.13          Entire Agreement. Subject to Section 7.19, this Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of all prior
agreements and understandings, both written and oral, among the parties hereto
relating to the subject matter hereof including, without limitation, the Prior
Pooling Agreement.

 

7.14          GAAP. All calculations made pursuant to this Agreement shall,
except to the extent expressly provided to the contrary herein, be made in
accordance with GAAP, consistently applied.

 

21

 

 

7.15          Tenants’ Obligations Under the Leases. Nothing contained herein
shall limit the Tenants’ obligations under the Leases. It is acknowledged by the
parties hereto that this Agreement is not intended to, and shall not, interfere
with or restrict a Landlord’s rights under any Lease.

 

7.16          Termination of Tenants’ Liability. Upon expiration of the entire
term of each Management Agreement, and following the completion of the final
accounting provided for in Section 11.11.A of each Management Agreement and the
distributions provided for therein, and provided that such expiration did not
result from a default by any Tenant under any Management Agreement, Tenants
shall have no further liability for repayment of Additional Marriott Advances
made pursuant to this Agreement.

 

7.17          Default. It shall be a default by any party hereto if such party
fails to perform any obligation hereunder within eight (8) Business Days after
receipt of written notice from a non-defaulting party demanding such cure, or,
if such default is susceptible of cure, but such cure cannot be accomplished
within said eight (8) Business Day period of time, if the defaulting party fails
to commence the cure of such default within such eight (8) Business Day period
of such notice or thereafter fails to diligently pursue such cure to completion.

 

7.18          NONLIABILITY OF OFFICERS, ETC. NO TRUSTEE, OFFICER, SHAREHOLDER OR
AGENT OF MARRIOTT, ANY MANAGER OR ANY TENANT SHALL BE HELD TO ANY PERSONAL
LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST,
MARRIOTT, ANY MANAGER OR ANY TENANT. ALL PERSONS DEALING WITH MARRIOTT, ANY
MANAGER OR ANY TENANT, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF MARRIOTT,
THE APPLICABLE MANAGER OR THE APPLICABLE TENANT, AS THE CASE MAY BE, FOR THE
PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION HEREUNDER.

 

7.19          Single Agreement; Integration.

 

A.                It is expressly acknowledged and agreed by each of Marriott,
the Managers, the Landlords and the Tenants that the underlying terms and
conditions of this Agreement, the Marriott Guaranty, the Management Agreements
and each and every other document and agreement entered into in connection
herewith or therewith and/or contemplated hereby or thereby (collectively, the
“Deal Terms”) have been negotiated by the parties as a single integrated
transaction. The fact that there exists separate Management Agreements for the
different hotel brands is merely a matter of convenience to Marriott and the
Managers to reflect their existing internal corporate organization. The purpose
of this Agreement and the intent of the parties hereto is that the Portfolio
Properties at all times constitute a single pool and portfolio and the Deal
Terms have been established with that purpose. The aggregation and integration
of the Portfolio Properties into a single pool and portfolio is a material
inducement to the Landlords and the Tenants to agree to the Deal Terms and an
underlying principle of the Deal Terms.

 

22

 

 

B.                 The Managers acknowledge and agree that a fundamental and
material purpose of this Agreement is to integrate the Portfolio Properties and
Deal Terms as one and to invalidate the right of any Manager to reject any
Management Agreement or this Agreement as to a particular Portfolio Property
(and not to all Portfolio Properties) in the event of a bankruptcy of such
Manager. Accordingly, each Manager hereby waives, to the maximum extent
permitted by law, any right to terminate this Agreement or reject any of the
Deal Terms, whether pursuant to the Title 11 of the U.S. Code or any other
similar insolvency or state bankruptcy laws.

 

7.20          No Rights of Third Parties. This Agreement does not give any
rights or benefits to any Person that is not a party to this Agreement, except
as provided in this Agreement. To the extent that any Affiliate of a Manager or
a Tenant is expressly identified as having particular rights or benefits under
this Agreement, such Person is entitled to enforce those rights and enjoy those
benefits in accordance with this Agreement.

 

7.21          Prior Pooling Agreement. For the avoidance of doubt, the Prior
Pooling Agreement shall continue to govern the rights and obligations of the
parties with respect to periods prior to the Effective Date, and this Agreement
shall govern the rights and obligations of the parties with respect to periods
from and after the Effective Date.

 

23

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with the intention of creating an instrument under seal.

 

  MARRIOTT:       MARRIOTT INTERNATIONAL, INC.       By: /s/ Julie Bowen  (SEAL)
  Name: Julie Bowen   Title: Authorized Signatory         MANAGERS:      
MARRIOTT HOTEL SERVICES, INC.       By: /s/ Julie Bowen (SEAL)   Name: Julie
Bowen   Title: Authorized Signatory

 

  RESIDENCE INN BY MARRIOTT, LLC       By: /s/ Julie Bowen (SEAL)   Name: Julie
Bowen   Title: Authorized Signatory         COURTYARD MANAGEMENT CORPORATION    
  By: /s/ Julie Bowen (SEAL)   Name: Julie Bowen   Title: Authorized Signatory  
      SPRINGHILL SMC, LLC       By: /s/ Julie Bowen (SEAL)   Name: Julie Bowen  
Title: Authorized Signatory         TOWNEPLACE MANAGEMENT, LLC       By: /s/
Julie Bowen (SEAL)   Name: Julie Bowen   Title: Authorized Signatory

 

[Signature Page to Amended and Restated Pooling Agreement]

 

 

 

 

  ESSEX HOUSE CONDOMINIUM CORPORATION       By: /s/ Julie Bowen (SEAL)   Name:
Julie Bowen   Title: Authorized Signatory

 

[Signature Page to Amended and Restated Pooling Agreement]

 

 

 

 

  TENANTS:       HPT TRS MRP, INC.       By: /s/ John G. Murray (SEAL)   Name:
John G. Murray   Title: President         HPT CY TRS, INC.         By: /s/ John
G. Murray (SEAL)   Name: John G. Murray   Title: President

 

[Signature Page to Amended and Restated Pooling Agreement]

 

 

 

 

EXHIBIT A

 

PROPERTIES

 

  Unit Number Property Name 1 39-7R8 Kauai Marriott Hotel and Resort 2 19-2KC
SpringHill Suites Seattle Renton 3 19-2KD SpringHill Suites Nashville Airport 4
31-1JP Courtyard Oakland Emeryville 5 31-1MD Courtyard Houston Hobby 6 31-1NF
Courtyard Dallas Richardson 7 31-1Q1 Courtyard Phoenix Tempe 8 31-1Q2 Courtyard
Ft. Worth Fossil Creek 9 31-1Q3 Courtyard Pleasant Hill 10 31-1Q7 Courtyard
Birmingham Colonnade 11 31-1Q8 Courtyard Allentown Bethlehem 12 31-1QB Courtyard
San Ramon 13 31-1QC Courtyard Richmond NW 14 31-1QD Courtyard Oklahoma City NW
15 31-1QE Courtyard Chicago W. Dundee 16 31-1QH Courtyard Charleston North 17
31-1QJ Courtyard Durham 18 31-1QM Courtyard Detroit Novi 19 31-1QN Courtyard Las
Vegas 20 31-1QW Courtyard Phoenix Chandler 21 31-1QX Courtyard San Francisco
Oyster Point 22 33-752 Marriott Nashville Airport 23 57-126 Residence Inn
Westborough 24 57-128 Residence Inn Detroit Warren 25 57-129 Residence Inn
Annapolis 26 57-130 Residence Inn Syracuse 27 57-133 Residence Inn Philadelphia
Willow Grove 28 57-135 Residence Inn Chicago Downtown 29 57-142 Residence Inn
Allentown Bethlehem 30 57-143 Residence Inn Parsippany 31 57-144 Residence Inn
Fairfax Fair Lakes 32 57-145 Residence Inn Charlottesville 33 57-147 Residence
Inn BWI Airport 34 57-152 Residence Inn Chicago Waukegan 35 57-155 Residence Inn
Charleston, WV 36 57-233 Residence Inn Atlanta Alpharetta 37 57-235 Residence
Inn Nashville 38 57-236 Residence Inn Durham 39 57-239 Residence Inn Atlanta
Town Center 40 57-242 Residence Inn Birmingham Homewood 41 57-243 Residence Inn
New Orleans Convention Center

 

A-1

 

 

  Unit Number Property Name 42 57-248 Residence Inn Raleigh/Cary 43 57-250
Residence Inn Raleigh-Durham Airport/Morrisville 44 57-251 Residence Inn Atlanta
Alpharetta Northpoint 45 57-312 Residence Inn Dallas Market Center 46 57-315
Residence Inn Dallas Central Expressway 47 57-316 Residence Inn Albuquerque 48
57-319 Residence Inn Ft. Worth Fossil Creek 49 57-320 Residence Inn San Antonio
Riverwalk 50 57-322 Residence Inn Dallas Richardson 51 57-421 Residence Inn
Fountain Valley 52 57-424 Residence Inn Rancho Bernardo 53 57-427 Residence Inn
Phoenix Scottsdale 54 57-428 Residence Inn Phoenix Tempe 55 57-430 Residence Inn
Fresno 56 57-433 Residence Inn Reno South Meadows 57 57-441 Residence Inn San
Francisco Oyster Point 58 64-5A1 TownePlace Suites Newport News 59 64-5A2
TownePlace Suites Chantilly 60 64-5A4 TownePlace Suites Richmond Northwest 61
64-5A8 TownePlace Suites Atlanta Norcross 62 64-5A9 TownePlace Suites Atlanta
Northlake 63 64-5AE TownePlace Suites Chicago West Dundee 64 64-5AG TownePlace
Suites Virginia Beach 65 64-5AK TownePlace Suites Detroit Novi 66 64-5AL
TownePlace Suites Falls Church 67 64-5AW TownePlace Suites Phoenix Scottsdale 68
64-5AX TownePlace Suites Boston Danvers 69 64-5BF TownePlace Suites Seattle
Renton 70 31-1AD Courtyard Atlanta Airport North 71 31-1R7 Courtyard Atlanta
Cumberland 72 31-1P9 Courtyard Atlanta/Jimmy Carter Blvd. 73 31-1AH Courtyard
Atlanta/Midtown 74 31-1DG Courtyard Boston/Danvers 75 31-1F7 Courtyard
Boston/Foxborough 76 31-1DH Courtyard Boston/Lowell 77 31-1W8 Courtyard
Boston/Milford 78 31-1W6 Courtyard Boston/Stoughton 79 31-1V2 Courtyard
Detroit/Auburn Hills 80 31-1W2 Courtyard Dulles/Fairfax 81 31-1V1 Courtyard
Indianapolis/Carmel 82 31-1GB Courtyard Kansas City South 83 31-1DF Courtyard
Mahwah NJ 84 31-1T9 Courtyard Minneapolis 85 31-1DN Courtyard Philadelphia
Airport 86 31-1JF Courtyard Phoenix Camelback 87 31-1R5 Courtyard Raleigh-Durham
Airport/Morrisville 88 31-1L2 Courtyard Scottsdale/Mayo

 

A-2

 

 

  Unit Number Property Name 89 31-1JG Courtyard Seattle/Bellevue 90 31-1R9
Courtyard Spartanburg 91 31-1AJ Courtyard Chattanooga 92 31-1AF Courtyard Macon
93 31-1JE Courtyard Camarillo 94 31-1JD Courtyard San Jose Airport 95 31-1DK
Courtyard Columbia, MD 96 31-1V9 Courtyard Kansas City Airport 97 31-1DB
Courtyard Wilmington 98 31-1AG Courtyard Fayetteville 99 31-1N9 Courtyard Dallas
Northpark 100 31-1JH Courtyard Fountain Valley 101 31-1DA Courtyard
Boston/Norwood 102 31-1J6 Courtyard Los Angeles Airport 103 31-1AC Courtyard
Charlotte Research Park 104 31-1GH Courtyard Milwaukee/Brookfield 105 31-1DE
Courtyard Boston/Woburn 106 31-1AK Courtyard Boca Raton 107 31-1W3 Courtyard
Williamsburg 108 31-1W5 Courtyard Hanover 109 31-1AE Courtyard Miami Lakes 110
31-1GD Courtyard Quad Cities 111 31-1DL Courtyard Greenbelt 112 31-1JC Courtyard
Torrance/Business Center 113 31-1B3 Courtyard Jacksonville/Mayo 114 31-1F9
Courtyard Willow Grove 115 31-1F3 Courtyard Syracuse 116 31-1JB Courtyard Laguna
Hills 117 31-1V8 Courtyard Chicago/ Arlington 118 31-1DM Courtyard Fishkill 119
31-1W9 Courtyard Newport/Middletown 120 31-1W4 Courtyard Pittsburgh Airport 121
31-1DJ Courtyard Tinton Falls 122 31-1DC Courtyard Arlington/ Rosslyn

 

A-3