**Exhibit 10.16**

 

**AMENDED AND RESTATED DEPOSIT AGREEMENT**

 

**THIS AMENDED AND RESTATED DEPOSIT AGREEMENT**(this “Agreement”) is made and entered into as of the 6th day ofJanuary, 2006 by and among HPT TRS IHG-1, Inc., a Maryland corporation (“StaybridgeOwner”), HPT TRS IHG-2, Inc., a Maryland corporation (“IC Owner”),HPT IHG PR, Inc., a Puerto Rico corporation (“PR Landlord”), and HPT TRSIHG-3, Inc., a Maryland corporation (“FC Owner” and together withStaybridge Owner, IC Owner and PR Landlord, collectively, the “HPT Parties”),InterContinental Hotels Group Resources, Inc., a Delaware corporation (“StaybridgeManager”), IHG Management (Maryland) LLC, a Maryland limited liabilitycompany (“IHG Maryland”), InterContinental Hotels Group (Canada), Inc.,a corporation under the laws of Ontario, Canada (“IHG Canada” andtogether with IHG Maryland, collectively, “IC Manager” and together withStaybridge Manager, collectively, the “IHG Parties”).

 

BACKGROUND STATEMENT

 

Staybridge Owner and Staybridge Manager entered into that certainManagement Agreement dated as of July 1, 2003, and amended said ManagementAgreement by (i) that certain First Amendment to Management Agreementdated as of September 18, 2003, (ii) that certain Second Amendment toManagement Agreement dated as of March, 2004, (iii) that certain ThirdAmendment to Management Agreement dated as of February 16, 2005, and (iv) thatcertain Fourth Amendment to Management Agreement dated as of January 6, 2006(as so amended and as the same may hereafter be amended, modified orsupplemented from time to time in accordance with the terms thereof, the “StaybridgeManagement Agreement”). Pursuant to Section 17.5 of the StaybridgeManagement Agreement, the Staybridge Owner is holding the “Deposit” to securethe performance by Staybridge Manager of the “Secured Obligations” (as suchterms are defined in the Staybridge Management Agreement). As used in thisAgreement, the term “Deposit” shall have the meaning ascribed to such term inthe Staybridge Management Agreement for all purposes hereof and the term “StaybridgeSecured Obligations” shall have the meaning ascribed to the term “SecuredObligations” in the Staybridge Management Agreement for all purposes hereof.

 

IC Owner and IHG Maryland entered into that certain ManagementAgreement, dated as of February 16, 2005, and (together with IHG Canada)amended said Management Agreement by that certain First Amendment to ManagementAgreement, dated as of May 31, 2005 (as so amended, the “Original ICManagement Agreement”).

 

PR Landlord and InterContinental Hotels (Puerto Rico), Inc. (“PRTenant”) entered into that certain Lease Agreement, dated as of February16, 2005 (as the same has been, and may hereafter be, amended, modified orsupplemented from time to time in accordance with the terms thereof, the “PRLease”).

 

InterContinental Hotels Group PLC (“Guarantor”), a corporationorganized and existing under the laws of England and Wales and the ultimateparent entity of each of the IHG Parties and PR Tenant, executed and deliveredthat certain Amended and Restated Consolidated Guaranty Agreement dated as ofFebruary 16, 2005 (the “Original PLC Guaranty”) in favor of StaybridgeOwner, IC Owner, PR Landlord and Hospitality Properties Trust, a Maryland realestate investment trust.

 

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IC Owner and IC Manager entered into that certain Amended and RestatedManagement Agreement, dated as of January 6, 2006 (as the same may hereafter beamended, modified or supplemented from time to time in accordance with theterms thereof, the “IC Management Agreement”), which amended andrestated the Original IC Management Agreement, as further described in the ICManagement Agreement.

 

Staybridge Owner, IC Owner, PR Landlord, Staybridge Manager and ICManager entered into that certain Deposit Agreement, dated as of January 6,2006 (the “Original Deposit Agreement”), pursuant to which the partiesthereto agreed that the Deposit shall stand as security for IC Manager’s and PRTenant’s observance and performance of certain covenants and agreements set forthin the IC Management Agreement and the PR Lease as well as the StaybridgeSecured Obligations.

 

On or about the date hereof, FC Owner and IHG Maryland are enteringinto that certain Management Agreement in conjunction with FC Owner’s or itsaffiliate’s acquisition of certain hotels (as the same may hereafter beamended, modified or supplemented from time to time in accordance with theterms thereof, the “FC Management Agreement”).

 

On or about the date hereof, Guarantor is executing and delivering thatcertain Second Amended and Restated Consolidated Guaranty Agreement (as thesame may hereinafter be amended, modified or supplemented from time to time inaccordance with the terms thereof, the “PLC Guaranty”). The PLC Guarantyamends and restates the Original PLC Guaranty, as further described in the PLCGuaranty.

 

In consideration of (i) FC Owner’s or its affiliate’s acquisition ofsaid hotels and FC Owner’s and IHG Maryland’s entering into the FC ManagementAgreement, (ii) IC Owner and IC Manager agreeing to replenish the Depositpursuant to the terms of the IC Management Agreement, and (iii) FC Owner andIHG Maryland agreeing to replenish the Deposit pursuant to the terms of the FCManagement Agreement, all of the parties hereto have agreed that the Depositshall stand as security for IC Manager’s, PR Tenant’s and IHG Maryland’sobservance and performance of certain covenants and agreements set forth in theIC Management Agreement, the PR Lease and the FC Management Agreement, as wellas the Staybridge Secured Obligations. The IHG Parties and PR Tenant are allwholly-owned subsidiaries of Guarantor and acknowledge and agree that each hasreceived good and valuable consideration for the respective rights andobligations set forth in this Agreement. The HPT Parties are all wholly-ownedsubsidiaries of Hospitality Properties Trust and acknowledge and agree thateach has received good and valuable consideration for the respective rights andobligations set forth in this Agreement.

 

As hereinbelow provided, the parties hereto hereby intend that theDeposit shall be made available to satisfy the Staybridge Secured Obligations,the IC Secured Obligations (as hereinafter defined) and the FC SecuredObligations (as hereinafter defined) on the condition and to the extent thatsuch obligations are not timely paid pursuant to the PLC Guaranty. Inconnection therewith, each of the Staybridge Management Agreement and the ICManagement Agreement has been amended, and the FC Management Agreement has beenexecuted,  to provide for thereplenishment of the Deposit to the extent any portion of the Deposit shall beapplied to the Staybridge Secured Obligations under the Staybridge ManagementAgreement or to the IC Secured Obligations or the FC Secured Obligations underthis Agreement.

 

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NOW, THEREFORE, in consideration of the Staybridge ManagementAgreement, the IC Management Agreement and the FC Management Agreement and themutual promises and covenants contained therein and herein, and for other goodand valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto, intending to be legally bound, hereby agreethat the Original Deposit Agreement is hereby amended and restated as follows:

 

1.             Representations.Each party to this Agreement makes the following representations on behalf ofsuch party (but not with respect to any other party to this Agreement): suchparty has duly and validly executed and delivered this Agreement; this Agreementconstitutes the legal, valid and binding obligation of such party, enforceableagainst such party in accordance with its terms, except as such enforceabilitymay be limited by bankruptcy, insolvency, reorganization, moratorium or similarlaws of general application affecting the rights and remedies of creditors; andthe execution, delivery and performance of this Agreement have been dulyauthorized by all requisite action of such party and such execution, deliveryand performance by such party will not result in any breach of the terms,conditions or provisions of, or conflict with or constitute a default under, orresult in the creation of any lien, charge or encumbrance upon any of theproperty or assets of such party pursuant to the terms of, any indenture,mortgage, deed of trust, note, other evidence of indebtedness, agreement orother instrument to which such party is a party or by which such party or anyproperty or assets of such party is bound, or violate any provision of lawapplicable to such party, or any order, writ, injunction, judgment or decree ofany court applicable to such party or any order or other public regulation ofany governmental commission, bureau or administrative agency applicable to suchparty.

 

2.             DepositAvailability. The Deposit is hereby agreed to stand as security for (i) theStaybridge Secured Obligations, (ii) the payment to IC Owner of all of the “Owner’sFirst Priority” as and when due under the IC Management Agreement determinedwithout respect to Gross Revenue thereunder or Operating Profits thereunder,the timely performance of all of the covenants to be performed by IC Managerunder the IC Management Agreement and the payment to PR Landlord of all of the “MinimumRent” as and when due under the PR Lease and the timely performance of all ofthe covenants to be performed by the PR Tenant under the PR Lease(collectively, the “IC Secured Obligations”), and (iii) the payment toFC Owner of all of the “Owner’s First Priority” as and when due under the FCManagement Agreement determined without respect to Gross Revenue thereunder orOperating Profits thereunder and the timely performance of all of the covenantsto be performed by IHG Maryland under the FC Agreement (the “FC SecuredObligations”, and together with the Staybridge Secured Obligations and ICSecured Obligations, collectively, the “Secured Obligations”). Accordingly,the establishment and existence of the Deposit pursuant to the StaybridgeManagement Agreement notwithstanding, each of IC Owner, PR Landlord and FCOwner shall have the option to elect, in its sole discretion, whether and whento apply funds from the Deposit with respect to any of the IC SecuredObligations or FC Secured Obligations without regard to when and whetherStaybridge Owner shall have made or shall be simultaneously electing whetherand when to apply funds from the Deposit with respect to any of the StaybridgeSecured Obligations; provided, however, none of Staybridge Owner,IC Owner, PR Landlord, FC Owner shall apply the Deposit to any of the SecuredObligations for which the Guarantor is responsible under the PLC Guarantyunless (a) the Guarantor shall have failed to pay any amount due 

 

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under the Guaranty for a periodof five (5) days after notice, or (b) an event described in Sections 17.1(a),17.1(b) or 17.1(c) of the Staybridge Management Agreement shall have occurredwith respect to the Guarantor.

 

3.             DepositReplenishment. Any other provision of the Staybridge Management Agreement,the IC Management Agreement or the FC Management Agreement to the contrarynotwithstanding, in the event of any application of the Deposit pursuant to theterms of the Staybridge Management Agreement or this Agreement, the Depositshall be replenished as required under the Staybridge Management Agreement byany or all of Staybridge Manager, IC Manager or IHG Maryland to the extentfunds are available for such application in accordance with the terms of theStaybridge Management Agreement, the IC Management Agreement or the FCManagement Agreement, as applicable, irrespective of whether the Deposit wasapplied pursuant to the Staybridge Management Agreement or this Agreement. Thatis, just as the Deposit is available to satisfy the Staybridge SecuredObligations, the IC Secured Obligations and the FC Secured Obligations, fundsavailable under all of the Staybridge Management Agreement, the IC ManagementAgreement and the FC Management Agreement may be used to replenish the Deposit.Nothing contained in this Agreement is intended nor shall be construed to alterthe provisions concerning the required amount of the Deposit at any given time.Notwithstanding any provisions in the Staybridge Management Agreement to thecontrary, the balance of the Deposit shall not be returned to the StaybridgeManager until the satisfaction in full of all of the Secured Obligations.

 

4.             Subrogation.Each of Staybridge Manager, IC Manager and IHG Maryland hereby covenants andagrees that it will not enforce or otherwise exercise any rights ofreimbursement, subrogation, contribution or other similar rights against theother until such time as the Deposit has been fully replenished. Until theSecured Obligations have been satisfied in full, neither Staybridge Manager, ICManager nor IHG Maryland shall have any right of subrogation, and each waivesany defense it may have based upon any election of remedies by the HPT Partieswhich destroys their subrogation rights or their rights to proceed against oneanother for reimbursement, including, without limitation, any loss of rightsany of them may suffer by reason of any rights, powers or remedies of the HPTParties in connection with any anti-deficiency laws or any other laws limiting,qualifying or discharging the indebtedness. Until all obligations of the IHGParties and PR Tenant pursuant to the Secured Obligations shall have beenirrevocably paid and satisfied in full, each of Staybridge Manager, IC Managerand IHG Maryland waives any right to enforce any remedy which any of the HPTParties now has or may in the future have against the other or the PR Tenantwith respect to the Deposit, draws therefrom or the replenishment thereof.

 

5.             Construction.It is the intention of the parties hereto that the Deposit be available tobenefit each of the HPT Parties as herein provided and that all of the IHGParties shall have the obligations with respect to the Deposit correspondinglyas set forth herein. Accordingly, in the event of any conflict between theterms and provisions of any of the Staybridge Management Agreement, the ICManagement Agreement or the FC Management Agreement on the one hand and thisAgreement on the other hand, the terms and provisions of this Agreement shallgovern and control, but only to the extent necessary to give effect to theintent of the parties hereto, and the Staybridge Management Agreement, the ICManagement Agreement and the FC Management Agreement shall remain unmodifiedand in full force and effect except to the extent necessary to give full effectto this Agreement.

 

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6.             GeneralProvisions. This Agreement may be executed in one or more counterparts, allof which counterparts shall constitute but one and the same instrument. ThisAgreement shall be binding upon and shall inure to the benefit of the permittedsuccessors in interest and the assigns of the parties hereto as provided in theStaybridge Management Agreement, the IC Management Agreement and the FCManagement Agreement, as applicable. This Agreement, together with theStaybridge Agreement, the IC Management Agreement and the FC ManagementAgreement, collectively constitute the entire agreement of the parties withrespect to the availability of the Deposit to the IC Secured Obligations andthe FC Secured Obligations and the replenishment of the Deposit by IC Managerpursuant to the IC Management Agreement and IHG Maryland pursuant to the FCManagement Agreement, and shall supersede and take the place of any otherdocuments, agreement or understandings of the parties purporting to be inagreement relating to the subject matter hereof.

 

7.             Governing Law. This Agreement shall be governed bythe laws of the State of Maryland.

 

8.             Restatement.This Agreement supercedes, amends and restates in its entirety the Original DepositAgreement.

 

**[Signatures on Following Pages]**

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and deliveredthis Agreement effective as of the day and year first above written.

 
| ** ** | **“STAYBRIDGE OWNER”** |
|------------|----------------------------------|
|       |                             |
|       | HPT TRS IHG-1, Inc.              |
|       |                             |
|       |                             |
|       | By:                              | /s/  John G. Murray |   |
|       |                             | John G. Murray, Vice President |
|       |                             |
|       |                             |
| ** ** | **“IC OWNER”**         |
|       |                             |
|       | HPT TRS IHG-2, Inc.              |
|       |                             |
|       |                             |
|       | By:                              | /s/  John G. Murray |   |
|       |                             | John G. Murray, Vice President |
|       |                             |
|       |                             |
| ** ** | **“PR LANDLORD”**      |
|       |                             |
|       | HPT IHG PR, Inc.                 |
|       |                             |
|       |                             |
|       | By:                              | /s/  John G. Murray |   |
|       |                             | John G. Murray, President |
|       |                             |
|       |                             |
| ** ** | **“FC OWNER”**         |
|       |                             |
|       | HPT TRS IHG-3, Inc.              |
|       |                             |
|       |                             |
|       | By:                              | /s/  John G. Murray |   |
|       |                             | John G. Murray, Vice President |
|            |                                  |  |  |  |  |  |

 

**[Signatures Continue on Next Page]**

 

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| ** ** | **“STAYBRIDGE MANAGER”**              |
|------------|-------------------------------------------------|
|       |                                            |
|       | InterContinental Hotels Group Resources, Inc.   |
|       |                                            |
|       |                                            |
|       | By:                                             | /s/  Robert J. Chitty |
|       |                                            | Robert J. Chitty, Vice President |
|       |                                            |
|       |                                            |
|       | **“IHG MARYLAND”**                    |
|       |                                            |
|       | IHG Management (Maryland) LLC                   |
|       |                                            |
|       |                                            |
|       | By:                                             | /s/  Robert J. Chitty |
|       |                                            | Robert J. Chitty, Vice President |
|       |                                            |
|       |                                            |
|       | **“IHG CANADA”**                      |
|       |                                            |
|       | **INTERCONTINENTAL HOTELS GROUP (CANADA) INC.** |
|       |                                            |
|       |                                            |
|       | By:                                             | /s/  Robert J. Chitty |
|       |                                            | Robert J. Chitty, Vice President |
|            |                                                 |  |  |  |  |  |  |

 

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