Exhibit 10.1


 


HPT
IHG PR, Inc.

HPT State Street TRS LLC

HPT TRS IHG-2, Inc.

Two Newton Place


255 Washington Street,
Suite 300

Newton, Massachusetts 02458


 


July 23, 2020


 


Via FEDERAL EXPRESS
AND EMAIL


 


NOTICE OF EVENT OF DEFAULT AND TERMINATION


 


InterContinental Hotels, Inc.


InterContinental Hotels Group Resources, Inc.


IHG Management (Maryland) LLC


InterContinental Hotels Group (Canada), Inc.


c/o Six Continents Hotels, Inc.


Three Ravinia Drive, Suite 100


Atlanta, Georgia 30346


Attn: Vice President of Operations


 


KHRG Allegro, LLC


KHRG State Street, LLC


Kimpton Hotel & Restaurant
Group, LLC


222 Kearny Street - Suite 200


San Francisco, California 94108


 


Intercontinental Hotels (Puerto Rico) Inc.


c/o InterContinental Hotels Group


Three Ravinia Drive, Suite 100


Atlanta, Georgia  30346


Attn:  Robert Chitty


 


	Re:	The SVC/IHG Portfolio Agreements set forth on Schedule 1

(collectively, the “SVC/IHG Portfolio Agreements”)



 


Ladies and Gentlemen:


 


Reference is made to the SVC/IHG Portfolio
Agreements. Capitalized terms used and not otherwise defined in this letter shall have the meanings given such terms on Schedule
1 or in the SVC/IHG Portfolio Agreements.


 


The IHG Parties did
not pay the SVC Parties the full amounts of Owner’s Priority (including, without limitation, Owner’s First Priority
and Owner’s Pool B Priority) and Minimum Rent that were due on July 1, 2020 under the SVC/IHG Portfolio Agreements. After
applying the entire remaining Deposit against the shortfall, the balance due to the SVC Parties as of July 1 was $8,395,250. Failure
to pay all such amounts in full regardless of any inadequacy of Gross Revenues or Operating Profits constitutes a Manager Event
of Default under Section 17.1 of the Management Agreements and an Event of Default under Section 12.1 of the PR Lease.
Delinquent amounts accrue interest at the applicable Interest Rate under each SVC/IHG Portfolio Agreement.


 


Pursuant to Section
10.3 of the Management Agreements and Section 12.1 of the PR Lease, the SVC Parties elect to terminate the Management
Agreements and the PR Lease effective November 30, 2020.


 






     


     


    

 


InterContinental Hotels Group Resources, Inc., et. al.


July 23, 2020


Page 2


 


Failure to pay the
full installments of Owner’s Priority and Minimum Rent due on August 1, 2020 will constitute an additional Manager Event
of Default under the Management Agreements and an additional Event of Default under the PR Lease.


 


Pursuant to the SVC/IHG
Portfolio Agreements, the IHG Parties may avoid the termination of the SVC/IHG Portfolio Agreements by paying all amounts then
due on or before August 24, 2020.


 


This notice shall not
be deemed as a waiver of any other Manager Events of Default or Events of Default that may exist under the SVC/IHG Portfolio Agreements,
or any other defaults that may exist under any other agreements related thereto, or any other rights or remedies that the SVC Parties
might be entitled to exercise under the SVC/IHG Portfolio Agreements or any related agreement, at law and/or in equity. The SVC
Parties may elect, prior to the effective date of termination of the Management Agreements and the PR Lease, to exercise their
right to cause the IHG Parties to continue to manage one or more of the hotels in accordance with Section 17.5 of the Management
Agreements and Section 5.3.1(k) of the PR Lease.


 


	 	Sincerely yours,
	 	 
	 	HPT IHG PR, Inc.
	 	HPT State Street TRS LLC
	 	HPT TRS IHG-2, Inc.
	 	 
	 	 
	 	By:   	/s/ John G. Murray
	 	 	John G. Murray
	 	 	President



 



	cc:	InterContinental Hotels Group Resources, Inc.
	 	IHG Management (Maryland) LLC
	 	InterContinental Hotels Group
    (Canada), Inc.
	 	Intercontinental Hotels, Inc.
	 	c/o Six Continents Hotels,
    Inc.
	 	Three Ravinia Drive, Suite
    100
	 	Atlanta, Georgia 30346
	 	Attn: General Counsel –
    Operations
	 	 
	 	KHRG Allegro, LLC
	 	KHRG State Street LLC
	 	Kimpton Hotel & Restaurant
    Group
	 	222 Kearney Street –
    Suite 200
	 	San Francisco, California 94108
	 	Attn: General Counsel
	 	 
	 	Alston & Bird LLP
	 	One Atlantic Center
	 	1201 West Peachtree Street
	 	Atlanta, Georgia 30309
	 	Attn: Timothy Pakenham, Esq.




 






     


     


    

 


SCHEDULE 1



SVC/IHG PORTFOLIO AGREEMENTS


 


		1.	Lease Agreement, dated as of February 16, 2005, between HPT IHG PR, Inc., as landlord (“PR Landlord”), and
Intercontinental Hotels (Puerto Rico) Inc., as tenant (“PR Tenant”), as amended (as so amended, the “PR
Lease”).







		2.	Management Agreement, dated as of July 1, 2011, among HPT TRS IHG-2, Inc. (for itself and as successor by merger with HPT TRS
IHG-1, Inc. and HPT TRS IHG-3, Inc.), as owner (“Owner”), and Intercontinental Hotels Group Resources, Inc.,
IHG Management (Maryland) LLC, and Intercontinental Hotels Group Canada, Inc., as manager (collectively, “Manager”),
as amended (as amended, the “Master Management Agreement”).



 


		3.	Amended and Restated Management Agreement, dated as of February 1, 2017, between Owner, as owner, and KHRG Allegro, LLC, as
manager (“Chicago Allegro Manager”) (the “Chicago Allegro Management Agreement”).



 


		4.	Amended and Restated Management Agreement, dated as of October 9, 2019, between HPT State Street TRS LLC, as owner (“Chicago
Owner”), and Kimpton Hotel & Restaurant Group, LLC, and KHRG State Street, LLC, as manager (the “Chicago
Palomar Manager”) (the “Chicago Palomar Management Agreement”).



 


Definitions:


 


“IHG Parties” shall mean, collectively, PR
Tenant, Manager, Chicago Allegro Manager and Chicago Palomar Manager.


 


“Management Agreements” shall mean, collectively,
the Master Management Agreement, the Chicago Allegro Management Agreement and the Chicago Palomar Management Agreement.


 


“SVC Parties” shall mean, collectively, PR
Landlord, Owner and Chicago Palomar Owner.