2003 OMNIBUS AGREEMENT
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THIS 2003 OMNIBUS AGREEMENT (this "Agreement"), is entered into as of this
______ day of October, 2003 by and among MARRIOTT INTERNATIONAL, INC., a
Delaware corporation with a mailing address at 10400 Fernwood Road, Bethesda, MD
20817 ("Franchisor"); BIG BOY PROPERTIES, INC., a Delaware corporation having
its principal address at 10400 Fernwood Road, Bethesda, Maryland 20817
("Landlord"); FAIRFIELD INN BY MARRIOTT LIMITED PARTNERSHIP, a Delaware limited
partnership with a mailing address at 100 Jericho Quadrangle - Ste. 214, Jericho
NY 11753 ("Owner"); LASALLE BANK, N.A., a national banking association, not in
its individual capacity but solely as Trustee with respect to the Asset
Securitization Corporation Commercial Mortgage Pass Through Certificates Series
1997-MDVII Securitization ("Lender"); SAGE MANAGEMENT RESOURCES III, LLC, a
Colorado limited liability company ("Sage"); and WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP, a Maryland limited partnership with a mailing address at
100 Jericho Quadrangle - Ste. 214, Jericho NY 11753 ("Guarantor").
RECITALS:
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1. Franchisor and Owner are parties to those certain Franchise Agreements
dated as of November 30, 2001 (as amended from time to time, the "Franchise
Agreements") regarding forty-six (46) Fairfield Inn by Marriott hotels owned by
Owner listed on Exhibit A hereto (each an "Inn" and collectively, the "Inns").
2. The Inns are operated and managed by Sage pursuant to a management
agreement between Owner and Sage (the "Sage Management Agreement").
3. Thirty (30) of the Inns are subject to an existing ground lease by and
between Landlord and Owner for each such Inn, as amended by that certain
Amendment of Ground Leases dated as of November 30, 2001 (collectively, the
"Ground Leases").
4. Lender is the successor in interest to Nomura Asset Capital Corporation
with respect to a $165,400,000 loan from Lender to Owner.
5. Among other parties, Owner, Franchisor, Landlord, Sage, and Lender were
parties to a November 30, 2001 restructuring involving the Inns (the "2001
Restructuring"); in connection therewith, various documents were executed by and
among various of the parties (all such documents, collectively the "2001
Restructuring Documents"), including, without limitation: the Franchise
Agreements; that certain comfort letter from Franchisor to Lender dated as of
November 30, 2001 regarding the Franchise Agreements (the "2001 Comfort
Letter"); that certain Amendment of Ground Leases dated as of November 30, 2001;
that certain Omnibus Agreement dated as of November 30, 2001; that certain
Waterfall Agreement dated as of November 30, 2001 (the "2001 Omnibus
Agreement"); and that certain Agreement Regarding Right to Terminate Certain
Franchise Agreement ("Franchise Termination Agreement").
6. To allow Owner to engage in an orderly liquidation of its assets, Owner
has requested from Franchisor and Landlord (collectively, "Marriott") the
following:
(a) waiver of the ground rent otherwise due and payable to Landlord
under the Ground Leases with respect to each Inn for one calendar year from
the date of this Agreement (the "Waiver Year") in an aggregate amount not
to exceed $1.2 million (the "Waiver Cap"), with payment of any ground rent
due and payable to Landlord with respect to the Waiver Year in
excess of the Waiver Cap deferred for each Inn until the earlier of (i) a
sale of the Inn; or (ii) April 1, 2005;
(b) deferral of the ground rent for each Inn otherwise due and payable
to Landlord under the Ground Leases with respect to the period of time
beginning upon termination of the Waiver Year and ending the earlier of (i)
a sale of the Inn; or (ii) April 1, 2005 (each, a "Deferral Termination
Event"), with such deferred rental to be paid in full by Tenant to Landlord
immediately upon the occurrence of any Deferral Termination Event; and
(c) liquidated damages otherwise due and payable to Franchisor pursuant
to the Franchise Agreements to be waived with respect to each Inn sold by
Owner on or before September 1, 2004 or de-flagged on or before September
1, 2004.
7. Marriott is willing to agree to the modifications requested by Owner as
set forth herein and the accompanying agreements among the parties of even date
herewith (collectively, the "2003 Restructuring Documents") in consideration for
the terms and conditions set forth herein and provided that Owner has satisfied
each of the 2003 Restructuring Preconditions (as such term is defined in Section
III below).
NOW, THEREFORE, for the mutual covenants and considerations herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
I. Recitals.
The parties hereby incorporate by reference each of the Recitals 1 through
7 above as a substantive component of this Agreement.
Future Participation of the Inns in the Fairfield Inn by Marriott System.
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(a) Inns that Must Remain in FIBM System. The parties agree that,
notwithstanding anything to the contrary in the Franchise Agreements, the 2001
Restructuring Documents, or any other agreements by or among the parties hereto,
each Inn set forth on Exhibit C hereto may not be sold by Owner, Lender, or any
other party unless, in connection with a sale, the purchaser of the Inn executes
a franchise agreement with Franchisor in the form attached to Franchisor's
then-current Uniform Franchise Offering Circular such that each such Inn remains
part of the Fairfield Inn by Marriott System ("FIBM System"). Any sale of an Inn
in violation of this subparagraph (a) shall constitute an Event of Default under
Section V(a)(vi) of this Agreement.
(b) Inns That Must Exit FIBM System. It is the intention of the parties to
cause, notwithstanding anything to the contrary in the Franchise Agreements, the
2001 Restructuring Documents, or any other agreements by or among the parties,
all Inns listed on Exhibit B hereto to leave the FIBM System on or before
September 1, 2004 without further action by any party, with at least two (2)
Inns listed on Exhibit B leaving the FIBM System on or before April 1, 2004, and
at least four (4) additional Inns (for a total of six (6) Inns) listed on
Exhibit B leaving the FIBM System no later than July 1, 2004. Franchisee shall
give Franchisor written notice no later than (i) March 1, 2004 identifying the
two (2) Franchise Agreements that are to terminate no later than April 1, 2004
and (ii) June 1, 2004 identifying the four (4) Franchise Agreements that are to
terminate no later than July 1, 2004. Accordingly, the parties agree that if
Franchisee has not provided such notice identifying the two (2) Franchise
Agreements governing the Inns listed on Exhibit B that are to terminate no later
than April 1, 2004 by March 1, 2004 and/or the four (4) additional Franchise
Agreements governing the Inns listed on
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Exhibit B that are to terminate on or before July 1, 2004 no later than June 1,
2004, then in such event Franchisor may designate the two (2) Franchise
Agreements governing the Inns listed on Exhibit B that will terminate on April
1, 2004 and/or the four (4) additional Franchise Agreements governing the Inns
listed on Exhibit B that will terminate on July 1, 2004 and such Franchise
Agreements will terminate without further action by any party and such Inns will
leave the System as of that date. The parties further agree that no liquidated
damages otherwise payable under the Franchise Agreements shall be payable with
respect to the Inns listed on Exhibit B hereto.
(c) Remaining Hotels. The parties agree that each Inn on Exhibit D hereto
may be sold by Owner regardless of whether the purchaser of each such Inn
executes a Franchise Agreement for such Inn with Franchisor ("Exhibit D Inns");
provided, however, that in order for each Exhibit D Inn to be eligible upon its
sale to remain in the FIBM System, the Inn must be sold by Owner (or Lender, as
the case may be) subject to a Property Improvement Plan approved by Franchisor
in its sole discretion and a Franchise Agreement in the form attached to
Franchisor's then-current Uniform Franchise Offering Circular for the Fairfield
Inn by Marriott brand.
(d) Priority Use of FF&E Reserve Funds. The parties agree that, as set
forth in Paragraph 2 of that certain Amendment to Certain Franchise Agreements
of even date hereof (the "Franchise Agreement Amendment"), funds placed into the
Master Reserve (as defined in the Franchise Agreement Amendment) will be used to
fund improvements to the Inns' furnishings, fixtures, and equipment in the order
of priority set forth in the Franchise Agreement Amendment.
(e) Termination of Franchise Agreement for Failure to Complete PIP. The
parties agree that, as set forth in Paragraphs 5 and 6 of the Franchise
Agreement Amendment, with respect to each Inn listed on Exhibits C and D hereto,
Franchisee shall be in material default under the Franchise Agreement if Owner
fails to complete the PIP for such Inn on or before April 1, 2005.
III. 2003 Restructuring Preconditions. Marriott shall execute the 2003
Restructuring Documents upon full and complete satisfaction of each of the
following (collectively, the "2003 Restructuring Preconditions"):
(a) To provide financial protection to Marriott against Owner filing
for bankruptcy protection after the date of this Agreement, Owner must
deliver to Marriott a guarantee in the form attached hereto as Exhibit E
fully executed by Guarantor;
(b) Owner executing a Release of All Claims in the form attached hereto
as Exhibit F;
(c) Lender executing a Release of All Claims in the form attached
hereto as Exhibit G;
(d) Lender consenting to an amendment of the 2001 Comfort Letter in the
form attached as Exhibit H hereto;
(e) Owner executing a Second Amendment of Ground Leases in the form
attached hereto as Exhibit I; and
(f) Owner executing an Amendment to Certain Franchise Agreements in the
form attached hereto as Exhibit J;
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IV. Liquidated Damages to Marriott.
(a) Liquidated Damages. Owner acknowledges that Marriott has agreed to the
2003 Restructuring (subject to the terms and conditions set forth herein) in
order to avoid a Bankruptcy Case (defined below) or a Common Law Civil Action
(defined below) by Owner. If a Bankruptcy Case or Common Law Civil Action occurs
on or after the date of this Agreement, Owner acknowledges that Marriott would
be damaged in several ways, including but not limited to: injury to the good
will in Marriott's proprietary marks and brands, injury to Marriott's good will
in the lodging industry, and injury to Marriott's good will among actual and
prospective lenders to Marriott and the owners of Marriott-flagged properties.
Owner acknowledges and agrees that the aforementioned damages to Marriott in the
event of a Bankruptcy Case or Common Law Civil Action on or after the date
hereof are inherently difficult to calculate although such damages are real and
meaningful to Marriott. Owner and Marriott agree that Marriott's damages in the
event of a Bankruptcy Case or Common Law Civil Action on or after the date
hereof would not be easily ascertained, would be difficult to estimate
accurately, and the proofs thereof would be burdensome and costly, and Owner and
Marriott agree that liquidated damages (as set forth herein) are not a penalty
and represent a reasonable estimate of just and fair compensation to Marriott of
the damages it would suffer. In the event of a Bankruptcy Case or Common Law
Civil Action on or after the date of this Agreement, Marriott shall be entitled
to recover from Guarantor, and Guarantor shall be obligated to pay in accordance
with the terms of the Guaranty, liquidated damages in the amount of Five Million
Dollars ($5,000,000.00). In addition to such liquidated damages, Marriott shall
have the right to recover reasonable attorneys' fees and court costs incurred in
collecting such sums plus reasonable interest thereon. The legal remedies
hereunder shall not preclude Marriott from any equitable remedies to which it
may be entitled under applicable law. Guarantor's obligation to pay Marriott
liquidated damages, if applicable, and other sums pursuant to this Section IV
shall survive termination of this Agreement.
(b) Definitions. As used in this Agreement, the term "Bankruptcy Case"
shall mean a reorganization, liquidation or other similar bankruptcy proceeding
under Title 11 of the United States Code or under any other federal or state
debtor relief laws or the re-opening of any bankruptcy proceeding instituted by
Owner or on behalf of Owner by Guarantor or its affiliates or instituted against
Owner at the instance, encouragement, or suggestion of Owner or Guarantor or
their affiliates, excluding, however, any proceeding instituted by the limited
partners of Owner not instituted at the instance, encouragement, or suggestion
of Guarantor or its affiliates. As used in this Agreement, the term "Common Law
Civil Action" means any suit or other proceeding (whether by making any motion,
bringing any counterclaim, claiming any defense, seeking any injunction or other
restraint, commencing any action, or otherwise) instituted or filed by Owner or
on behalf of Owner by Guarantor or their affiliates or instituted by any third
party at the instance, encouragement, or suggestion of Owner or Guarantor which
wrongly contests in bad faith or in any way wrongly interferes with, in bad
faith, directly or indirectly, the exercise by Lender against Owner or any of
them or the Premises of any rights or remedies available to Lender at law, in
equity, by agreement or otherwise, excluding, however, any proceeding instituted
by the limited partners of Owner not instituted at the instance, encouragement,
or suggestion of Guarantor or its affiliates.
V. Default.
(a) Events of Default. Each of the following shall, to the extent permitted
by applicable law, constitute a "Default" under this Agreement:
(i). The filing of a voluntary petition in bankruptcy or insolvency or
a petition for reorganization under any bankruptcy law by Owner. Upon the
occurrence of any Default as
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described under this Section V(a)(i) said Default shall be deemed an "Event
of Default" under this Agreement.
(ii). The consent to an involuntary petition in bankruptcy or the
failure to vacate, within ninety (90) days from the date of entry thereof,
any order for relief by Owner. Upon the occurrence of any Default as
described under this Section V(a)(ii), said Default shall be deemed an
"Event of Default" under this Agreement.
(iii). The entering of an order, judgment or decree by any court of
competent jurisdiction, on the application of a creditor, adjudicating
Owner as bankrupt or insolvent or approving a petition seeking
reorganization or appointing a receiver, trustee, or liquidator of all or a
substantial part of Owner's assets, and such order, judgment or decree's
continuing unstayed and in effect for an aggregate of one-hundred twenty
(120) days (whether or not consecutive). Upon the occurrence of any Default
as described under this Section V(a)(iii) said Default shall be deemed an
"Event of Default" under this Agreement.
(iv). The failure of Owner to make any payment required to be made in
accordance with the terms of this Agreement, as of the due date as
specified in this Agreement. Upon the occurrence of any Default as
described under this Section V(a)(iv), said Default shall be deemed an
"Event of Default" under this Agreement if the Owner fails to cure such
Default within ten (10) days after receipt of written notice from the
non-defaulting party demanding such cure.
(v). Owner or any of Owner's Affiliates is or becomes (A) a person or
entity designated by the U.S. Department of Treasury's Office of Foreign
Assets Control from time to time as a "specially designated national or
blocked person" or similar status, (B) a person or entity described in
Section 1 of U.S. Executive Order 13224, issued on September 23, 2001, or
(C) a person or entity otherwise identified by government or legal
authority as a person with whom Franchisor, or any of the other Marriott
Companies or any of their affiliates, are prohibited from transacting
business. As of the Effective Date, a list of such designations and the
text of the Executive Order are published under the internet website
address www.ustreas.gov/offices/enforcement/ofac.
(vi). The failure of Owner to perform, keep or fulfill any of the other
covenants, undertakings, obligations or conditions set forth in this
Agreement, and the continuance of such default for a period of thirty (30)
days after the Owner's receipt of written notice from the non-defaulting
party of said failure. Upon the occurrence of any Default as described
under this Section V(a)(vi), said Default shall be deemed an "Event of
Default" under this Agreement if the Owner fails to cure the Default within
thirty (30) days after receipt of written notice from the non-defaulting
party demanding such cure, or, if the Default is such that it cannot
reasonably be cured within said thirty (30) day period of time, if the
Owner fails to commence the cure of such Default within said thirty (30)
day period of time or thereafter fails to diligently pursue such efforts to
completion.
(vii). The breach of any one or more Franchise Agreements or any one or
more Ground Leases that remains uncured for the applicable cure period
under the applicable agreement.
(b) Remedies. Upon the occurrence of an Event of Default, the
non-defaulting party shall have the right to pursue any one or more of the
following courses of action: (i) to terminate this Agreement (which shall
extinguish the benefits conferred to the defaulting party hereunder) by written
notice to the defaulting party, which termination shall be effective as of the
effective date which is set forth in said
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notice; and (ii) to institute forthwith any and all proceedings permitted by law
or equity including, without limitation, actions for specific performance and/or
damages.
VI. Amendment of 2001 Omnibus Agreement.
It being the intention of the parties to eliminate any possibility of a
Contingent Restructuring (as such term is defined in the 2001 Omnibus
Agreement), Section V of the 2001 Omnibus Agreement is hereby deleted in its
entirety.
VII. Waiver of Automatic Stay.
The parties agree that, in the event of the filing of any voluntary or
involuntary petition under the U.S. Bankruptcy Code by or against Owner, Owner
shall not assert, or request any other party to assert, that the automatic stay
under ss. 362 of the Bankruptcy Code shall operate or be interpreted to stay,
interdict, condition, reduce or inhibit the ability of Marriott to enforce any
rights it has by virtue of this Agreement, any Franchise Agreement, any Ground
Lease, or any other rights that Marriott has, whether now or hereafter acquired,
against Owner or Guarantor. Further, Owner shall not seek a supplemental stay or
any other relief, whether injunctive or otherwise, pursuant to ss. 105 of the
Bankruptcy Code or any other provision therein to stay, interdict, condition,
reduce or inhibit the ability of Marriott to enforce any rights it has by virtue
of this Agreement, any Franchise Agreement, or any Ground Lease against Owner or
Guarantor. The waivers contained in this paragraph are a material inducement to
Marriott's willingness to enter into this Amendment and Owner acknowledges and
agrees that no ground exists for equitable relief which would bar, delay or
impede the exercise by Marriott of Marriott's rights and remedies against Owner
or Guarantor.
VIII. Lender Notice of Default under Certain Franchise Agreements
For any Hotel listed on Exhibit B until such time as such Hotel leaves the
System, Franchisor will copy Lender on any notice of default or termination
issued to Franchisee under a Franchise Agreement and Lender shall have the
right, but not the obligation, upon notice to Franchisor to cure such default on
behalf of Franchisee during the time period for cure established in the default
notice. Such notice shall be in writing, sent by certified mail, return receipt
requested, or by Federal Express or other national express delivery service and
addressed, if to Lender, to: Administrator for ASC Nomura 1997-MDVII; LaSalle
Bank N.A.; 135 South LaSalle Street; Suite 1625; Chicago, IL 60603-4159; Attn:
Susan Abbott. A copy of such notice shall be sent to: Pacific Life Insurance
Company; 700 Newport Center Drive; Newport Beach, CA 92660-6397 Attn: Ms. Wendy
Balden and Clarion Partners, LLC, 230 Park Avenue, 12th Floor, New York, New
York 10169 Attn: Mr. Michael O'Brien. Franchisor specifically acknowledges and
agrees that Lender shall not be liable for payment of any liquidated damages not
paid by the Franchisee.
IX. Miscellaneous.
(a) This Agreement may be executed in identical counterparts, each of which
shall be deemed an original for all purposes and all of which shall constitute,
collectively, one Agreement. This Agreement may be executed by facsimile
signature provided that an original of this Agreement is delivered immediately
thereafter.
(b) The parties hereto represent and warrant that they are duly authorized
to execute and deliver this Agreement on behalf of the party in accordance with
the party's organizational and governing documents, including, as applicable,
corporate charter, corporate bylaws and/or partnership agreements and that this
Agreement is binding upon the party in accordance with its terms.
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(c) This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns. No
assignment or other transfer of the rights or obligations of the parties shall
relieve the assignor or transferor of any obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
[SIGNATURES FOLLOW ON NEXT TWO PAGES]
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FRANCHISOR:
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MARRIOTT INTERNATIONAL, INC., a Delaware corporation,
By:
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Name: Julie Snowden Repetti
Title: Vice President
LANDLORD:
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BIG BOY PROPERTIES, INC., a Delaware corporation,
By:
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Name: Julie Snowden Repetti
Title: Vice President
OWNER:
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FAIRFIELD INN BY MARRIOTT LIMITED PARTNERSHIP, a Delaware limited partnership
By: AP-Fairfield GP, LLC, a Delaware limited liability company,
its general partner
By: AP-Fairfield Manager Corp., a Delaware corporation, its manager
By:
---------------------
Name:
---------------------
Title:
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LENDER:
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LASALLE BANK, N.A.,
a national banking association,
not in its individual capacity but solely as Trustee
By: Clarion Partners, LLC, as Special Servicer, its Attorney in Fact
By:
---------------------
Name:
---------------------
Title:
---------------------
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SAGE:
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SAGE MANAGEMENT RESOURCES III, LLC, a Colorado limited
liability company,
By:
--------------------------
Name:
------------------------
Title:
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GUARANTOR:
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WINTHROP FINANCIAL ASSOCIATES, A LIMITED PARTNERSHIP
a Maryland limited partnership,
By:
--------------------------
Name:
------------------------
Title:
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EXHIBIT A
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
AL Birmingham Homewood 132 155 Vulcan Road Homewood, AL 35209
CA Orange County Buena Park 135 7032 Orangethorpe Avenue Buena Park, CA 90621
CA Orange County Placentia 135 710 W. Kimberly Avenue Placentia, CA 92870
FL Gainesville Gainesville 135 6901 NW 4th Blvd Gainesville, FL 32607
FL Miami Airport-West 135 3959 NW 79th Avenue Miami, FL 33166
FL Orlando International Drive 135 8342 Jamaican Court Orlando, FL 32819
FL Orlando South-Beeline Pkwy 133 1850 Landstreet Road Orlando, FL 32809
GA Atlanta Airport 132 2451 Old National Highway College Park, GA 30349
GA Atlanta Gwinnett Mall 135 3500 Venture Parkway Duluth, GA 30096
GA Atlanta Northlake 133 2155 Ranchwood Drive Atlanta, GA 30345
GA Atlanta Northwest-Delk Road 132 2191 Northwest Parkway Marietta, GA 30067
GA Atlanta Peachtree Corners 135 6650 Bay Circle Drive Norcross, GA 30071
GA Savannah Savannah 135 2 Lee Blvd Savannah, GA 31405
IA Des Moines West-Clive 135 1600 NW 114th Street Clive, IA 50325
IL Bloomington Normal 132 202 Landmark Drive Normal, IL 61761
IL Peoria Peoria 135 4203 N. War Memorial Drive Peoria, IL 61615
IL Rockford Rockford 135 7712 Potawatomi Trail Rockford, IL 61107
IN Indianapolis Castleton 132 8325 Bash Road Indianapolis, IN 46250
IN Indianapolis College Park 132 9251 Wesleyan Road Indianapolis, IN 46268
KS Kansas City Overland Park 134 4401 W. 107th Street Overland Park, KS 66207
KS Kansas City West-Merriam 135 6601 Frontage Road Merriam, KS 66202
MI Detroit Airport 133 31119 Flynn Drive Romulus, MI 48174
MI Detroit Auburn Hills 134 1294 Opdyke Road Auburn Hills, MI 48326
MI Detroit Madison Heights/Troy 134 32800 Stephendson Highway Madison Heights, MI 48071
MI Detroit Warren 131 7454 Convention Blvd Warren, MI 48092
MI Detroit West/Canton 133 5700 Haggerty Road Canton, MI 48187
MI Kalamazoo Kalamazoo East 133 3800 E. Cork Street Kalamazoo, MI 49001
MO St. Louis Hazelwood 135 9079 Dunn Road Hazelwood, MO 63042
NC Charlotte Northeast 133 5415 N. I-85 Service Road Charlotte, NC 28262
NC Durham I-85 135 3710 Hillsborough Road Durham, NC 27705
NC Fayetteville Fayetteville 135 562 Cross Creek Mall Fayetteville, NC 28303
NC Greensboro Greensboro 135 2003 Athena Court Greensboro, NC 27407
NC Raleigh Northeast 132 2641 Appliance Court Raleigh, NC 27604
NC Wilmington Wilmington 134 306 S. College Road Wilmington, NC 28403
OH Cleveland Airport-Brook Park 135 16644 Snow Road Brook Park, OH 44142
OH Columbus North 135 887 Morse Road Columbus, OH 43229
OH Dayton North/West 135 6960 Miller Lane Dayton, OH 45414
OH Toledo Holland/Airport 135 1401 E. Mall Drive Holland, OH 43528
SC Florence Florence 135 140 Dunbarton Drive Florence, SC 29501
SC Greenville Greenville 132 60 Roper Mountain Road Greenville, SC 29607
SC Hilton Head Hilton Head 120 9 Marina Side Drive Hilton Head Island, SC 29928
TN Johnson City Johnson City 132 207 E. Mountcastle Drive Johnson City, TN 37601
VA Norfolk Hampton-Coliseum 134 1905 Coliseum Drive Hampton, VA 23666
VA Norfolk Virginia Beach-Euclid 134 4760 Euclid Road Virginia Beach, VA 23462
WI Madison East 135 4765 Hayes Road Madison, WI 53704
WI Milwaukee West 135 20150 W. Blue Mound Road Brookfield, WI 53045
EXHIBIT B
Hotels That Must Leave the System By September 1, 2004
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
FL Orlando South-Beeline Pkwy 133 1850 Landstreet Road Orlando, FL 32809
AL Birmingham Homewood 132 155 Vulcan Road Homewood, AL 35209
GA Atlanta Airport 132 2451 Old National Highway College Park, GA 30349
MI Detroit Warren 131 7454 Convention Blvd Warren, MI 48092
NC Raleigh Northeast 132 2641 Appliance Court Raleigh, NC 27604
OH Columbus North 135 887 Morse Road Columbus, OH 43229
NC Charlotte Northeast 133 5415 N. I-85 Service Road Charlotte, NC 28262
KS Kansas City West-Merriam 135 6601 Frontage Road Merriam, KS 66202
KS Kansas City Overland Park 134 4401 W. 107th Street Overland Park, KS 66207
SC Greenville Greenville 132 60 Roper Mountain Road Greenville, SC 29607
GA Atlanta Peachtree Corners 135 6650 Bay Circle Drive Norcross, GA 30071
GA Atlanta Northlake 133 2155 Ranchwood Drivfe Atlanta, GA 30345
EXHIBIT C
Hotels That Must Remain in the System
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
FL Miami Airport-West 135 3959 NW 79th Avenue Miami, FL 33166
IL Peoria Peoria 135 4203 N. War Memorial Drive Peoria, IL 61615
IN Indianapolis College Park 132 9251 Wesleyan Road Indianapolis, IN 46268
SC Hilton Head Hilton Head 120 9 Marina Side Drive Hilton Head Island, SC 29928
CA Orange County Placentia 135 710 W. Kimberly Avenue Placentia, CA 92870
TN Johnson City Johnson City 132 207 E. Mountcastle Drive Johnson City, TN 37601
CA Orange County Buena Park 135 7032 Orangethorpe Avenue Buena Park, CA 90621
EXHIBIT D
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
FL Gainesville Gainesville 135 6901 NW 4th Blvd Gainesville, FL 32607
FL Orlando International Drive 135 8342 Jamaican Court Orlando, FL 32819
GA Atlanta Gwinnett Mall 135 3500 Venture Parkway Duluth, GA 30096
GA Atlanta Northwest-Delk Road 132 2191 Northwest Parkway Marietta, GA 30067
GA Savannah Savannah 135 2 Lee Blvd Savannah, GA 31405
IA Des Moines West-Clive 135 1600 NW 114th Street Clive, IA 50325
IL Bloomington Normal 132 202 Landmark Drive Normal, IL 61761
IL Rockford Rockford 135 7712 Potawatomi Trail Rockford, IL 61107
IN Indianapolis Castleton 132 8325 Bash Road Indianapolis, IN 46250
MI Detroit Airport 133 31119 Flynn Drive Romulus, MI 48174
MI Detroit Auburn Hills 134 1294 Opdyke Road Auburn Hills, MI 48326
MI Detroit Madison Heights/Troy 134 32800 Stephendson Highway Madison Heights, MI 48071
MI Detroit West/Canton 133 5700 Haggerty Road Canton, MI 48187
MI Kalamazoo Kalamazoo East 133 3800 E. Cork Street Kalamazoo, MI 49001
MO St. Louis Hazelwood 135 9079 Dunn Road Hazelwood, MO 63042
NC Durham I-85 135 3710 Hillsborough Road Durham, NC 27705
NC Fayetteville Fayetteville 135 562 Cross Creek Mall Fayetteville, NC 28303
NC Greensboro Greensboro 135 2003 Athena Court Greensboro, NC 27407
NC Wilmington Wilmington 134 306 S. College Road Wilmington, NC 28403
OH Cleveland Airport-Brook Park 135 16644 Snow Road Brook Park, OH 44142
OH Dayton North/West 135 6960 Miller Lane Dayton, OH 45414
OH Toledo Holland/Airport 135 1401 E. Mall Drive Holland, OH 43528
SC Florence Florence 135 140 Dunbarton Drive Florence, SC 29501
VA Norfolk Hampton-Coliseum 134 1905 Coliseum Drive Hampton, VA 23666
VA Norfolk Virginia Beach-Euclid 134 4760 Euclid Road Virginia Beach, VA 23462
WI Madison East 135 4765 Hayes Road Madison, WI 53704
WI Milwaukee West 135 20150 W. Blue Mound Road Brookfield, WI 53045
EXHIBIT E
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UNCONDITIONAL LIMITED GUARANTY OF PAYMENT
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WHEREAS, Fairfield Inn by Marriott Limited Partnership, a Delaware
limited partnership ("Owner") owns or has a leasehold interest in certain real
property, improvements and personal property consisting of forty-six (46) hotel
properties that are commonly known as Fairfield Inns and identified on Exhibit A
attached hereto (each an "Inn" and collectively, the "Inns").
RECITALS
1. Marriott International, Inc. ("Franchisor") and Owner are parties to
those certain Franchise Agreements dated as of November 30, 2001 with respect to
the Inns (as amended from time to time, including by that Amendment to Certain
Franchise Agreements of even date hereof, the "Franchise Agreements").
2. Thirty (30) of the Inns are subject to an existing ground lease by and
between Big Boy Properties, Inc. ("Landlord") and Owner for each such Inn, as
amended by that certain Amendment of Ground Leases dated as of November 30, 2001
(as amended from time to time, including the Amendment of Ground Leases of even
date herewith, collectively the "Ground Leases").
3. To allow Owner to engage in an orderly liquidation of its assets, Owner
has requested from Franchisor and Landlord (collectively, "Marriott") the
following:
(a) waiver of the ground rent otherwise due and payable to Landlord
under the Ground Leases with respect to each Inn for one calendar year from
the date of this Agreement (the "Waiver Year") in an aggregate amount not
to exceed $1.2 million (the "Waiver Cap"), with payment of any ground rent
due and payable to Landlord with respect to the Waiver Year in excess of
the Waiver Cap deferred for each Inn until the earlier of (i) a sale of the
Inn; or (ii) April 1, 2005;
(b) deferral of the ground rent for each Inn otherwise due and payable
to Landlord under the Ground Leases with respect to the period of time
beginning upon termination of the Waiver Year and ending the earlier of (i)
a sale of the Inn; or (ii) April 1, 2005 (each, a "Deferral Termination
Event"), with such deferred rental to be paid in full by Tenant to Landlord
immediately upon the occurrence of any Deferral Termination Event;
(c) liquidated damages otherwise due and payable to Franchisor pursuant
to the Franchise Agreements to be waived with respect to each Inn sold by
Owner on or before September 1, 2004 or de-flagged on or before September
1, 2004.
4. As a condition to, and in consideration of Marriott entering into the
2003 Omnibus Agreement of even date hereof by and among Franchisor, Owner,
Landlord, Lender, Guarantor, and Sage Management Resources III, LLC (the "2003
Omnibus Agreement"), Marriott has required that the undersigned (hereinafter
called "Guarantor") guaranty the payment of the "Guarantied Obligations" (as
defined below).
5. Guarantor is an affiliate of the general partner of Owner, and believes
it is in the best interest of Owner to enter into the 2003 Omnibus Agreement and
that Guarantor will derive substantial benefit in the event the 2003 Omnibus
Agreement is entered into between Owner and Lender; and
NOW, THEREFORE, in consideration of $10.00 and other good and valuable
considerations, the receipt and adequacy of which are hereby acknowledged,
Guarantor hereby agrees as follows:
THE GUARANTY. The guaranty of Guarantor hereunder is as follows:
1.1. Guaranty of Payment. Subject to the limitations set forth in
Paragraph 17 below, Guarantor unconditionally guaranties (i) full and punctual
payment by Owner to Franchisor of all franchise fees and other sums due and
payable to Franchisor pursuant to the Franchise Agreements (as amended by the
Amendment to Certain Franchise Agreements of even date hereof); (ii) full and
punctual payment by Tenant to Landlord of all Rental and other sums due and
payable by Tenant to Landlord pursuant to the Ground Leases (as amended by that
certain Amendment of Ground Leases of even date hereof); and (iii) full and
punctual payment by Owner to Marriott of all sums due and payable to Marriott
pursuant to the 2003 Omnibus Agreement (including, without limitation, payment
of liquidated damages to Marriott pursuant to Section IV of the 2003 Omnibus
Agreement). Guarantor's liability for items (i) through (iii) in the immediately
preceding sentence (collectively, the "Guaranteed Obligation"), together with
all interest thereon and all other fees and expenses due and payable, shall not
exceed $5,000,000 in the aggregate. If an "Event of Default" (as defined in the
2003 Omnibus Agreement) occurs, then notwithstanding anything contained in any
of the 2003 Restructuring Documents or other agreements by or among the parties,
Guarantor shall, subject to the limitations set forth in Paragraph 17 below, on
demand, pay to Marriott the entire Guarantied Obligations, or so much as is then
due and payable.
1.2. Guaranty of Payment; Not Collection. Guarantor hereby agrees that
this Guaranty is a guaranty of payment and not of collection, that the
obligations of Guarantor are joint and several, and that its obligations under
this Guaranty shall be primary, absolute and unconditional, irrespective of and
unaffected by:
(a) the lack of genuineness, validity, regularity, enforceability or
any future amendment of or change in the 2003 Omnibus Agreement, the
Franchise Agreements, the Ground Leases (as amended, collectively the
"Documents"), or any agreement or instrument to which Owner and/or
Guarantor are or may be a party (including without limitation this
Guaranty);
(b) the absence of any action to enforce the Documents or the waiver or
consent by Marriott with respect to any provisions thereof;
(c) the existence, value or condition of any security for the
Guarantied Obligations or any action or the absence of any action by
Marriott with respect thereof (including without limitation the release
thereof); or
(d) any other action or circumstances which might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor, it
being agreed by Guarantor that its obligations under this Guaranty shall
not be discharged except by payment as provided herein. Guarantor shall be
regarded as, and shall be in the same position as, a principal debtor with
respect to the Guarantied Obligations.
1.3. Waivers. Guarantor hereby waives and agrees not to assert or take
advantage of any defense based upon failure of Marriott to commence an action
against Owner. In addition, Guarantor
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expressly waives all rights it may have now or in the future under any statute,
or at common law, or at law or in equity, or otherwise, to compel Marriott to
proceed in respect of the Guarantied Obligations against Owner, or any other
party or against any security for the payment of the Guarantied Obligations
before proceeding against, or as a condition to proceeding against Guarantor.
Guarantor agrees that any notice or directive given at any time to Marriott
which is inconsistent with the waivers in the immediately preceding sentences
shall be void and may be ignored by Marriott, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this Guaranty
for the reason that such pleading or introduction would be at variance with the
written terms of this Guaranty, unless Marriott has specifically agreed
otherwise in writing, signed by a duly authorized officer. It is agreed between
Guarantor and Marriott that the foregoing waivers are of the essence of the
transaction and that, but for this Guaranty and such waivers, Marriott would
decline to enter into the 2003 Omnibus Agreement and consummate the actions
contemplated thereby.
1.4. Payment Default by Owner. If any default shall remain after the
expiration of any grace period applicable under the terms of the Documents, then
Guarantor, shall, within ten (10) business days after demand in writing therefor
shall have been made by Marriott to Guarantor, pay to Marriott the amount of any
and all outstanding and unpaid Guarantied Obligations due and owing Marriott.
Payment by Guarantor shall be made to Marriott at the address indicated below
for the giving of notice to Marriott or at any other address that may be
specified in writing from time to time by Marriott.
1.5. Enforcement of Guaranty. Marriott may proceed to exercise any
right or remedy which it may have against any property, real or personal, of
Owner, it being agreed that in no event shall Marriott have any obligation to
(but may at its option) proceed against Owner or any other person or entity or
any such real or personal property before seeking satisfaction from Guarantor
under this Guaranty.
1.6. Additional Waivers. In addition to the waivers contained in
paragraph 1.3 above, Guarantor waives, and agrees that it will not at any time
insist upon, plead or in any manner whatever claim or take the benefit or
advantage of, any and all appraisal, valuation, stay, extension,
marshalling-of-assets or redemption laws, or right of homestead or exemption,
whether now or at any time hereafter in force, which may delay, prevent or
otherwise affect the performance by Guarantor of its obligations under, or the
enforcement by Marriott of this Guaranty. Guarantor hereby waives diligence,
presentment and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Guarantied
Obligations, acceptance of further security, release of security, composition or
agreement arrived at as to the amount of or the terms of the Guarantied
Obligations, notice of adverse change in Owner's financial condition and any
other fact which might materially increase the risk to Guarantor), with respect
to any of the Guarantied Obligations, and all other demands whatsoever, and
waive the benefit of all provisions of law which are or might be in conflict
with the terms of this Guaranty, except to the extent that this Guaranty may
otherwise specify the giving of notice. Guarantor represents and warrants and
agrees that, as of the date of this Guaranty, its obligations under this
Guaranty are not subject to any counterclaims, offsets or defenses against
Marriott of any kind. Guarantor further agrees that its obligations under this
Guaranty shall not be subject to any counterclaims, offsets or defense against
Marriott or against Owner of any kind which may arise in the future.
1.7. Benefit of Guaranty. The provisions of this Guaranty are for the
benefit of Marriott and its successors and assigns, and nothing herein contained
shall impair as between Owner and Marriott the obligations of Owner under the
Documents or under any other agreements, documents, instruments or certificates
by, between, or among Owner and Marriott.
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1.8. Reinstatement. This Guaranty shall remain in full force and effect
and continue to be effective should any petition be filed by or against Owner
under the Bankruptcy Reform Act of 1978, as at any time amended, (or under any
substitute or successor legislation relating to the same general subject
matter), for liquidation or reorganization, should Owner become insolvent or
make an assignment for the benefit of creditors or a receiver or trustee be
appointed for all or any significant part of Owner's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment of
the Guarantied Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by
Marriott whether as a preferential transfer, post-petition transfer, fraudulent
conveyance, or otherwise, all as though such reduction, repayment or restoration
by Marriott had not been made.
1.9. Subrogation. Guarantor hereby waives, to the fullest extent
possible, as against Owner and its assets any and all rights, whether at law, in
equity, by agreement or otherwise, to subrogation, indemnity, reimbursement,
contribution, or any other similar claim, cause of action or remedy that
otherwise would arise out of Guarantor's performance of its obligations to
Marriott under this Guaranty. The preceding waiver is intended by Guarantor and
Marriott to be for the benefit of Owner, and the waiver shall be enforceable by
Owner or any of its successors or assigns as an absolute defense to any action
by Guarantor against Owner or its assets which arises out of Guarantor having
made any payment to Marriott with respect to any of the liabilities guarantied
hereunder.
2. REPRESENTATIONS AND WARRANTIES. Full reliance by Marriott upon the
following representations and warranties is acknowledged:
2.1. Representations and Warranties of Guarantor. Guarantor represents
and warrants to Marriott as Zollows:
(a) Guarantor is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of its formation.
(b) Guarantor has full power, authority and legal right to enter into
this Guaranty and to perform its obligations under the terms hereof.
(c) Guarantor has duly executed and delivered this Guaranty. This
Guaranty constitutes a legal, valid and binding obligation of such
Guarantor, enforceable against it in accordance with the terms of this
Guaranty.
(d) No authorization, consent, approval, exemption, permit or license
of, or filing with, any governmental or public body or authority is
required to authorize, or is otherwise required in connection with, the
valid execution or delivery by Guarantor of this Guaranty, or the
performance of Guarantor's obligations hereunder, except such as have been
obtained and are in full force and effect. All conditions required to the
execution and delivery hereof and performance hereunder have been satisfied
on or before the date hereof.
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(e) Guarantor is not a party to, or otherwise bound by or subject to,
any agreement or instrument, the observance of the terms and provisions of
which would materially impair Guarantor's ability to perform his
obligations under, and to be bound by, this Guaranty. Neither the execution
and delivery by Guarantor of this Guaranty, nor compliance by Guarantor
with the terms and provisions of this Guaranty, will conflict with,
constitute a default under, or result in a breach of, any of the terms,
conditions or provisions of, any law or decree or any regulation, order,
writ, injunction, determination or award of any court, arbitrator or
governmental department, commission, board, bureau, agency or
instrumentality (domestic or foreign), or any agreement or instrument to
which Guarantor is a party or by which it or any of its properties may be
affected.
3. CONTINUING GUARANTY. Guarantor agrees that this Guaranty is a continuing
guaranty and shall remain in full force and effect until the payment in full of
the Guarantied Obligations.
4. PERMITTED ASSIGNMENT BY MARRIOTT. Marriott may freely assign its rights
and delegate its duties under this Guaranty, but no such assignment or
delegation shall increase Guarantor's obligation or diminish its rights
hereunder. In the event of any such assignment or delegation, Marriott agrees to
endeavor to give notice of such assignment or delegation at least ten (10) days
prior to such assignment or delegation, but the consent of Guarantor shall not
be required for any such assignment or delegation and failure to give such
notice shall not affect the validity or enforceability of any such assignment or
delegation or subject Marriott to any liability or diminish any of the
obligations of Guarantor under this Guaranty.
5. FURTHER ASSURANCE. Guarantor agrees, upon the written request of
Marriott, to execute and deliver to Marriott from time to time any additional
instruments or documents reasonably considered necessary by Marriott or its
counsel to cause this Guaranty to be, become or remain valid and effective in
accordance with its terms.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Guarantor set forth in this Guaranty shall survive for so long as
all or any portion of the Guarantied Obligations remains unpaid.
7. ENTIRE AGREEMENT; AMENDMENT. This Guaranty contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements relating to such subject matter (including but not by way of
limitation, any commitment or term letter which Marriott may have given to Owner
or Guarantor) and cannot be amended or supplemented as to Guarantor, except by a
written agreement signed by Guarantor and Marriott.
8. HEADINGS. The headings in this Guaranty are for convenience only and are
not part of the substance of this Guaranty.
9. SEVERABILITY. In the event that any one or more of the provisions
contained in this Guaranty shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and of
the remaining provisions of this Guaranty shall not be in any way impaired.
10. COUNTERPARTS. This Guaranty may be executed in multiple counterparts,
each of which shall be deemed to be an original and all of which shall
constitute one document and the signature of any party or partner to any
counterpart shall be deemed to be a signature to, and may be appended to, any
other counterpart.
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11. NOTICES. All notices, requests, demands and other communications under
or in connection with this Guaranty shall be in writing, shall be delivered by
federal express or similar overnight courier service, by hand or sent by
registered or certified mail and shall be deemed to have been given or made five
(5) days after the date when mailed, postage prepaid to the following addresses:
If to Marriott:
Marriott International, Inc.
Law Department
10400 Fernwood Road
Bethesda, MD 20817
Attention: Associate General Counsel, Franchise
Telephone: (301) 380-9555
Telefacsimile: (301) 380-6727
With a copy to:
Marriott International, Inc.
Law Department
10400 Fernwood Road
Bethesda, MD 20817
Attention: Lodging Operations (Dept. # 52/923.27)
Telephone: (301) 380-9555
Telefacsimile: (301) 380-6727
If to Guarantor:
First Winthrop Corporation
7 Bulfinch Place, Suite 500
P.O. Box 9507
Boston, Massachusetts 02114
Attention: Carolyn Tiffany
Telephone: (617) 570-4600
Telefacsimile: (617) 570-4710
with a copy to:
Post & Heymann, LLP
100 Jericho Quadrangle, Suite 214
Jericho, New York 11753
Attention: William W. Post
Telephone: (516) 681-3636
Telefacsimile: (516) 433-2777
The above addresses may be changed by either Marriott or Guarantor by
writing to the other addressed as above.
12. BINDING EFFECT. This Guaranty shall bind and inure to the benefit of
the parties and their respective heirs, permitted successors, delegees and
assigns.
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13. NON-WAIVER. The failure of Marriott to enforce any right or remedy
hereunder, or promptly to enforce any such right or remedy, shall not constitute
a waiver thereof, nor give rise to any estoppel against Marriott, nor excuse the
Guarantor from his obligations hereunder. Any waiver of any such right or remedy
must be in writing and signed by Marriott.
14. INITIATION OF SUIT. Any suit initiated by Marriott against Guarantor
under or in connection with this Guaranty may be brought in any state or federal
court in the state referred to under the paragraph "Governing Law" in any court
in such state having jurisdiction over the subject matter hereof. Guarantor
hereby submits itself to the jurisdiction of any such court and agrees that
service of process against it in any such action may be effected by any means
permissible under federal law or under the laws of such state. Guarantor agrees
to pay all expenses (including reasonable attorneys' fees and all out-of-pocket
costs and disbursements) which may be incurred by Marriott in the event of the
initiation of any suit under or in connection with this Guaranty.
15. ADDITIONAL COLLATERAL. In the event any other guarantor shall furnish a
letter of credit or other collateral to Marriott as additional collateral for
the Obligations of Owner to Marriott, whether heretofore or hereafter, such
additional collateral shall not diminish or modify Guarantor's liability to
Marriott hereunder unless Marriott shall otherwise specifically agree in
writing.
16. GOVERNING LAW. The terms of this Guaranty have been negotiated and
delivered, in the State of New York, and it is the intention of the parties that
this Guaranty be construed and enforced in accordance with the laws of such
State.
17. CONDITIONS AND TERMINATION.
17.1. Notwithstanding any other provision of this Guaranty to the
contrary, Guarantor shall have no liability under this Guaranty so long as no
"Bankruptcy Case" (as hereinafter defined) or "Common Law Civil Action" (as
hereinafter defined) has been filed or instituted.
17.2. For the avoidance of doubt, it is the intention of the parties
that, notwithstanding any other provisions of this Guaranty to the contrary, the
liability of Guarantor under this Guaranty shall cease and terminate without
need for any further act or agreement of Marriott (and at such time Marriott
shall execute and deliver such documents and writings as Guarantor may
reasonably request to confirm and evidence such termination) upon the
satisfaction of Owner's obligations under the 2003 Omnibus Agreement, the
Franchise Agreements (as amended by even date hereof), and the Ground Leases (as
amended by even date hereof), without there having been filed a Bankruptcy Case
or a Common Law Civil Action.
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17.3. As used in this Guaranty, the term "Bankruptcy Case" shall mean a
reorganization, liquidation or other similar bankruptcy proceeding under Title
11 of the United States Code or under any other federal or state debtor relief
laws or the re-opening of any bankruptcy proceeding instituted by Owner or on
behalf of Owner by Guarantor or its affiliates or instituted against Owner at
the instance, encouragement, or suggestion of Owner or Guarantor or their
affiliates, excluding, however, any proceeding instituted by the limited
partners of Owner not instituted at the instance, encouragement, or suggestion
of Guarantor or its affiliates. As used in this Guaranty, the term "Common Law
Civil Action" means any suit or other proceeding (whether by making any motion,
bringing any counterclaim, claiming any defense, seeking any injunction or other
restraint, commencing any action, or otherwise) instituted or filed by Owner or
on behalf of Owner by Guarantor or their affiliates or instituted by any third
party at the instance, encouragement, or suggestion of Owner or Guarantor which
wrongly contests in bad faith or in any way wrongly interferes with, in bad
faith, directly or indirectly, the exercise by Lender against Owner of any
rights or remedies available to Lender at law, in equity, by agreement or
otherwise, excluding, however, any proceeding instituted by the limited partners
of Owner not instituted at the instance, encouragement, or suggestion of
Guarantor or its affiliates.
17.4. As used in this Guaranty with respect to the definition of a
Bankruptcy Case or a Common Law Civil Action, the term "Guarantor" shall
include, in addition to Guarantor, any owners of all or any portion of or
interest in the Inns which are controlled by Guarantor or any general partner of
Owner.
18. Required Minimum Value of Guarantor's Net Worth.
(a) Net Worth. Guarantor hereby represents, warrants, and covenants to
Marriott that (i) as of the date of execution of this Agreement, its Net Worth
(defined below) is equal to or greater than Fifteen Million Dollars
($15,000,000.00); and (ii) true and correct copies of Guarantor's most recent
financial statements are attached hereto as Exhibit ___.
(b) Maintenance of Net Worth. Guarantor hereby represents, warrants,
covenants, and agrees that its Net Worth shall not fall below Five Million
Dollars ($5,000,000.00) during the term of this Guaranty.
(c) Definition of Net Worth. For purposes of this Guaranty, "Net Worth"
means the fair market value of (x) all assets (reduced by the amount of
intangible assets) of Guarantor, less (y) all liabilities of Guarantor.
19. INDEPENDENT OBLIGATIONS; EXCULPATORY LANGUAGE. The liability of
Guarantor to Marriott under this Guaranty shall not be affected, impaired,
diminished or limited by any provisions of the Documents, or any other document
or agreement that purports to in any way limit or exculpate the personal
liability of Guarantor.
[SIGNATURES ON FOLLOWING PAGE]
-8-
IN WITNESS WHEREOF, Guarantor have executed and delivered this Guaranty under
seal as of.
WITNESS:
WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP, a Maryland limited partnership
By:
------------------------
Name:
------------------------
Title:
------------------------
STATE OF }
} ss.:
COUNTY OF }
On this___ day of , in the year 2003, before me, the undersigned, a Notary
Public in and for said County and State, personally appeared personally known to
me or proved to me on the basis of satisfactory evidence to be the individual
that executed the within instrument.
WITNESS my hand and official seal.
-----------------------------------
[SEAL] Notary Public
-9-
EXHIBIT F
---------
RELEASE OF ALL CLAIMS
---------------------
THIS RELEASE (this "Release") is made effective as of the _____ day of
August, 2003 by FAIRFIELD INN BY MARRIOTT LIMITED PARTNERSHIP, a Delaware
limited partnership with a mailing address at 100 Jericho Quadrangle - Ste. 214,
Jericho NY 11753 ("Owner") and AP-FAIRFIELD GP LLC, a Delaware limited liability
corporation ("FIBMLP GP") in favor and for the benefit of MARRIOTT
INTERNATIONAL, INC., a Delaware corporation with a mailing address at 10400
Fernwood Road, Bethesda, MD 20817 ("Franchisor") and BIG BOY PROPERTIES, INC., a
Delaware corporation having its principal address at 10400 Fernwood Road,
Bethesda, Maryland 20817 ("Landlord").
RECITALS
--------
1. Franchisor and Owner are parties to those certain Franchise Agreements
dated as of November 30, 2001 (as amended from time to time, the "Franchise
Agreements") regarding forty-six (46) Fairfield Inn by Marriott hotels owned by
Owner listed on Schedule A hereto (each an "Inn" and collectively, the "Inns").
The FIBMLP GP is the general partner of Owner and owns a certain portion of the
limited partnership interests in Owner.
2. The Inns are operated and managed by Sage pursuant to management
agreements between Owner and Sage (the "Sage Management Agreements").
3. Thirty (30) of the Inns are subject to an existing ground lease by and
between Landlord and Owner for each such Inn, as amended by that certain
Amendment of Ground Leases dated as of November 30, 2001 (collectively, the
"Ground Leases").
4. Among other parties, Owner, Franchisor, Landlord, Sage, and Lender were
parties to a November 30, 2001 restructuring involving the Inns (the "2001
Restructuring"); in connection therewith, various documents were executed by and
among various of the parties (all such documents, collectively the "2001
Restructuring Documents"), including, without limitation: the Franchise
Agreements; that certain comfort letter from Franchisor to Lender dated as of
November 30, 2001 regarding the Franchise Agreements (the "2001 Comfort
Letter"); that certain Amendment of Ground Leases dated as of November 30, 2001;
that certain Omnibus Agreement dated as of November 30, 2001; that certain
Waterfall Agreement dated as of November 30, 2001; and that certain Agreement
Regarding Right to Terminate Certain Franchise Agreement ("Franchise Termination
Agreement").
5. To allow Owner to engage in an orderly liquidation of its assets, Owner
has requested from Franchisor and Landlord (collectively, "Marriott") that:
(a) the ground rent otherwise due and payable to Landlord under the
Ground Leases be waived with respect to each Inn for one calendar year from
the date of this Agreement (the "Waiver Year") in an aggregate amount not
to exceed $1.2 million, with payment of any ground rent due and payable to
Landlord in excess of the aggregate waived amount of $1.2 million deferred
with respect to each Inn until the earlier of (i) a sale of the Inn, or
(ii) April 1, 2005;
(b) liquidated damages otherwise due an payable to Franchisor pursuant
to the Franchise Agreements be waived upon a sale or deflagging of each Inn
for Inns that are sold or de-flagged by Owner on or before September 1,
2004.
6. Marriott is currently discussing a possible conversion of an existing
hotel located in Overland Park, KS (the "Proposed Inn") to a Fairfield Inn and
Suites that is in close proximity to the Inn owned by Owner located at 4401 W.
107th Street, Overland Park, KS 66207 (the "KS Inn")
7. Marriott desires to accommodate the aforementioned requests by Owner
provided that each of the 2003 Restructuring Preconditions set forth in that
certain Omnibus Agreement of even date hereof by and among Franchisor, Owner,
Landlord, Sage, and others (the "Omnibus Agreement") is satisfied, including
execution by Owner and FIBMLP GP of this Release of all claims and liabilities,
of whatever kind or nature, known or unknown, concerning the purchase,
renovation, franchising, operation, and/or management of the Inns, individually
and/or collectively, arising out of or relating to acts, omissions, and/or
events occurring on or before the date of this Release.
NOW, THEREFORE, without either party acknowledging any liability, the same
being expressly denied, in consideration of the mutual covenants contained
herein, and for good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, it is agreed as follows:
(a) The parties hereby incorporate by reference every recital set
forth above as a substantive part of this Release.
(b) Owner and Marriott, among others, have executed the Omnibus
Agreement as of even dated hereof, of which this Release is an
attachment and a material component thereof.
(c) Owner and FIBMLP GP, each on behalf of itself and each of its
heirs, partners, trustees, parents, affiliates, subsidiaries,
shareholders, officers,
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directors, employees, executors, administrators, predecessors,
successors, affiliates, and assigns ("Releasors"), hereby forever
and unrevocably releases, relinquishes, and discharges Franchisor
and Landlord, together with each of their predecessors,
successors, parents, subsidiaries, divisions, affiliates, and
related companies, and each of their respective employees,
officers, directors, partners, members, principals, trustees,
agents, servants, appraisers, underwriters, issuers,
shareholders, insurers, co-insurers, reinsurers, independent
contractors, wholesalers, resellers, distributors, retailers,
attorneys, accountants, auditors, consultants, investment
bankers, advisors, personal representatives, predecessors,
successors, parents, subsidiaries, divisions, assigns, spouses,
heirs, executors, administrators, associates, and related or
affiliated companies or entities (collectively, the "Marriott
Released Persons") from any and all past, present, existing,
future, pending or threatened, suspected or unsuspected, class,
derivative, representative, and individual claims, rights,
demands, assertions, actions, cause of action, litigation
lawsuits, allegations, debts, liens, accounts, dues, sums of
money, reckonings, bonds, bills, specialties, contracts,
covenants, agreements, controversies, promises, cross-actions,
liabilities, trespasses, obligations, losses, damages, costs,
expenses, judgments, executions, remedies, and suits, of every
kind and nature whatsoever; whether in contract or in tort;
whether at law or in equity; whether based upon fraud, breach of
contract, misrepresentation, negligent misrepresentation,
negligence, gross negligence, intentional conduct, libel,
slander, business disparagement, oppression, civil conspiracy,
deceit, tortuous interference, all other business torts, breach
of the duty of good faith and fair dealing, breach of fiduciary
duty, or any other duty or claim under common law or statute of
any nature or jurisdiction whether arising under or out of any
sale, purchase, offer, tender, contract, agreement, conspiracy,
combination, communication, meeting, joint or concerted action;
whether arising from the development, opening and operation of
those hotels currently operating (or under development to
operate) under brands owned or licensed by Marriott in the
Overland Park or Kansas City, KS market including, without
limitation, the development, opening and operation of the
Proposed Inn or any claim that the Proposed Inn encroaches on or
negatively impacts the economic performance of the KS Inn; or
whether arising under or by virtue of any statute or regulation
that now exists or may be created or recognized in the future in
any manner, including without limitation, by statute, regulation
or judicial decision, including without limitation, all claims
arising under or by virtue of the federal and/or state securities
laws; together with all past, present, existing,
-3-
future, liquidated or unliquidated, fixed or contingent, known or
unknown, suspected or unsuspected, pending or threatened
injuries, damages, losses, costs, expenses and remedies of every
kind and nature, including, but not limited to, actual damages;
all exemplary and punitive damages; all penalties of any kind,
including but not limited to tax liabilities or penalties; all
statutory damages; all property and economic damages; all damages
to loss of individual or business reputation, loss of business,
loss of company, loss of assets, diminution in assets or
investments, loss of standard of living, lost profits and
goodwill; all consequential damages; all mental anguish and other
similar emotional and psychological damages, including loss of
society, affection, consortium, enjoyment and the like, and all
other personal injury damages; together with all prejudgment and
postjudgment interest, costs and attorneys' fees; whether
heretofore or hereafter accruing (all collectively, the
"Claims"), regardless of whether such Claims are known or
unknown, that have, had, or may in the future arise, directly or
indirectly, collectively or individually, out of, in relation to,
or in connection with: (1) any one or more Franchise Agreements ;
(2) the purchase of, franchising, operation, or management of any
or more of the Inns; (3) any one or more of the 2001
Restructuring Documents; (4) any one or more of the Ground
Leases, and arising out of or relating to acts, omissions, and/or
events occurring on or before the date of this Release.
(d) Releasors each agree not to make any statements, orally or in
writing or otherwise, to any non-party to this agreement that, in
whole or in part, is disparaging or negative about the Marriott
Released Parties, individually or collectively, relating in whole
or in part to the Inns, the 2001 Restructuring, and/or the 2003
Restructuring.
OWNER:
FAIRFIELD INN BY MARRIOTT LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AP-Fairfield GP, LLC, a Delaware limited liability
company, its general partner
By: AP-Fairfield Manager Corp., a Delaware
corporation, its manager
By:
----------------------
-4-
Name:
----------------------
Title:
----------------------
FIBMLP GP:
AP-FAIRFIELD GP LLC, a Delaware limited liability company,
By: AP-Fairfield Manager Corp., a Delaware corporation,
its manager
By:
----------------------
Name:
----------------------
Title:
----------------------
By and on behalf of
STATE OF )
) SS:
COUNTY OF )
IN WITNESS HEREOF, I _____________________, being a Notary Public am
authorized to notarize documents within the above-stated State and County and
that swear that _____________________, appeared and signed before me said
Release on this ________ day of ____________________, 2003.
-------------------------------
Notary Public
My Commission Expires:
-5-
STATE OF )
) SS:
COUNTY OF )
IN WITNESS HEREOF, I _____________________, being a Notary Public am
authorized to notarize documents within the above-stated State and County and
that swear that _____________________, appeared and signed before me said
Release on this ________ day of ____________________, 2003.
-------------------------------
Notary Public
-6-
EXHIBIT G
---------
RELEASE OF ALL CLAIMS
---------------------
THIS RELEASE (this "Release") is made effective as of the _____ day of
October____, 2003 by LASALLE BANK, N.A., successor in interest to Nomura Asset
Capital Corporation ("Lender") in favor and for the benefit of MARRIOTT
INTERNATIONAL, INC., a Delaware corporation with a mailing address at 10400
Fernwood Road, Bethesda, MD 20817 ("Franchisor") and BIG BOY PROPERTIES, INC., a
Delaware corporation having its principal address at 10400 Fernwood Road,
Bethesda, Maryland 20817 ("Landlord").
RECITIALS
---------
1. Franchisor and Owner are parties to those certain Franchise Agreements
dated as of November 30, 2001 (as amended from time to time, the "Franchise
Agreements") regarding forty-six (46) Fairfield Inn by Marriott hotels owned by
Owner listed on Schedule A hereto (each an "Inn" and collectively, the "Inns").
The FIBMLP GP is the general partner of Owner and owns a certain portion of the
limited partnership interests in Owner.
2. The Inns are operated and managed by Sage pursuant to a management
agreement between Owner and Sage (the "Sage Management Agreements").
3. Lender is the successor in interest to Nomura Asset Capital Corporation
with respect to a $165,400,000 loan from Lender to Owner.
4. Thirty (30) of the Inns are subject to an existing ground lease by and
between Landlord and Owner for each such Inn, as amended by that certain
Amendment of Ground Leases dated as of November 30, 2001 (collectively, the
"Ground Leases").
5. Among other parties, Owner, Franchisor, Landlord, Sage, and Lender were
parties to a November 30, 2001 restructuring involving the Inns (the "2001
Restructuring"); in connection therewith, various documents were executed by and
among various of the parties (all such documents, collectively the "2001
Restructuring Documents"), including, without limitation: the Franchise
Agreements; that certain comfort letter from Franchisor to Lender dated as of
November 30, 2001 regarding the Franchise Agreements (the "2001 Comfort
Letter"); that certain Amendment of Ground Leases dated as of November 30, 2001;
that certain Omnibus Agreement dated as of November 30, 2001; that certain
Waterfall Agreement dated as of November 30, 2001; and that certain Agreement
Regarding Right to Terminate Certain Franchise Agreement ("Franchise Termination
Agreement").
6. To allow Owner to engage in an orderly liquidation of its assets, Owner
has requested from Franchisor and Landlord (collectively, "Marriott") the
following:
(a) waiver of the ground rent otherwise due and payable to Landlord
under the Ground Leases with respect to each Inn for one calendar year from
the date of this Agreement (the "Waiver Year") in an aggregate amount not
to exceed $1.2 million (the "Waiver Cap"), with payment of any ground rent
due and payable to Landlord with respect to the Waiver Year in excess of
the Waiver Cap deferred for each Inn until the earlier of (i) a sale of the
Inn; or (ii) April 1, 2005;
(b) deferral of the ground rent for each Inn otherwise due and payable
to Landlord under the Ground Leases with respect to the period of time
beginning upon termination of the Waiver Year and ending the earlier of (i)
a sale of the Inn; or (ii) April 1, 2005 (each, a "Deferral Termination
Event"), with such deferred rental to be paid in full by Tenant to Landlord
immediately upon the occurrence of any Deferral Termination Event;
(c) liquidated damages otherwise due and payable to Franchisor pursuant
to the Franchise Agreements to be waived with respect to each Inn sold by
Owner on or before September 1, 2004 or de-flagged on or before September
1, 2004.
7. Marriott desires to accommodate the aforementioned requests by Owner
provided that each of the 2003 Restructuring Preconditions set forth in that
certain 2003 Omnibus Agreement of even date hereof by and among Franchisor,
Owner, Landlord, Lender, Sage and others (the "2003 Omnibus Agreement") is
satisfied, including execution by Lender of this Release of all claims and
liabilities, of whatever kind or nature, known or unknown, concerning the
purchase, renovation, franchising, operation, and/or management of the Inns,
individually and/or collectively, arising out of or relating to acts, omissions,
and/or events occurring on or before the date of this Release.
NOW, THEREFORE, without either party acknowledging any liability to the
other, the same being expressly denied, in consideration of the mutual covenants
contained herein, and for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, it is agreed as follows:
(a) The parties hereby incorporate by reference every recital set
forth above as a substantive part of this Release.
-2-
(b) Lender and Marriott, among other parties, have executed the 2003
Omnibus Agreement as of even dated hereof, of which this Release
is an attachment and a material component thereof.
(c) Lender, on behalf of itself and each of its heirs, partners,
trustees, parents, affiliates, subsidiaries, shareholders,
officers, directors, employees, executors, administrators,
predecessors, successors, and assigns ("Releasors"), hereby
forever and unrevocably releases, relinquishes, and discharges
Franchisor and Landlord, together with each of their
predecessors, successors, parents, subsidiaries, divisions,
affiliates, and related companies, and each of their respective
employees, officers, directors, partners, members, principals,
trustees, agents, servants, appraisers, underwriters, issuers,
shareholders, insurers, co-insurers, reinsurers, independent
contractors, wholesalers, resellers, distributors, retailers,
attorneys, accountants, auditors, consultants, investment
bankers, advisors, personal representatives, predecessors,
successors, parents, subsidiaries, divisions, assigns, spouses,
heirs, executors, administrators, associates, and related or
affiliated companies or entities (collectively, the "Marriott
Released Persons") from any and all past, present, existing,
future, pending or threatened, suspected or unsuspected, class,
derivative, representative, and individual claims, rights,
demands, assertions, actions, cause of action, litigation
lawsuits, allegations, debts, liens, accounts, dues, sums of
money, reckonings, bonds, bills, specialties, contracts,
covenants, agreements, controversies, promises, cross-actions,
liabilities, trespasses, obligations, losses, damages, costs,
expenses, judgments, executions, remedies, and suits, of every
kind and nature whatsoever; whether in contract or in tort;
whether at law or in equity; whether based upon fraud, breach of
contract, misrepresentation, negligent misrepresentation,
negligence, gross negligence, intentional conduct, libel,
slander, business disparagement, oppression, civil conspiracy,
deceit, tortuous interference, all other business torts, breach
of the duty of good faith and fair dealing, breach of fiduciary
duty, or any other duty or claim under common law or statute of
any nature or jurisdiction whether arising under or out of any
sale, purchase, offer, tender, contract, agreement, conspiracy,
combination, communication, meeting, joint or concerted action;
or whether arising under or by virtue of any statute or
regulation that now exists or may be created or recognized in the
future in any manner, including without limitation, by statute,
regulation or judicial decision, including without limitation,
all claims arising under or by virtue of the federal and/or state
-3-
securities laws; together with all past, present, existing,
future, liquidated or unliquidated, fixed or contingent, known or
unknown, suspected or unsuspected, pending or threatened
injuries, damages, losses, costs, expenses and remedies of every
kind and nature, including, but not limited to, actual damages;
all exemplary and punitive damages; all penalties of any kind,
including but not limited to tax liabilities or penalties; all
statutory damages; all property and economic damages; all damages
to loss of individual or business reputation, loss of business,
loss of company, loss of assets, diminution in assets or
investments, loss of standard of living, lost profits and
goodwill; all consequential damages; all mental anguish and other
similar emotional and psychological damages, including loss of
society, affection, consortium, enjoyment and the like, and all
other personal injury damages; together with all prejudgment and
postjudgment interest, costs and attorneys' fees; whether
heretofore or hereafter accruing (all collectively, the
"Claims"), regardless of whether such Claims are known or
unknown, that have, had, or may in the future arise, directly or
indirectly, collectively or individually, out of, in relation to,
or in connection with any events occurring prior to the date
hereof.
(d) Releasors agree not to make any statements, orally or in writing
or otherwise, to any non-party to this agreement that, in whole
or in part, is disparaging or negative about the Marriott
Released Parties, individually or collectively, relating in whole
or in part to the Inns, the 2001 Restructuring, and/or the 2003
Restructuring.
By:
LASALLE BANK, N.A.,
a national banking association,
not in its individual capacity but solely as Trustee
By: Clarion Partners, LLC, as Special Servicer,
its Attorney-in-Fact
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
-4-
STATE OF )
) SS:
COUNTY OF )
IN WITNESS HEREOF, I _____________________, being a Notary Public am
authorized to notarize documents within the above-stated State and County and
that swear that _____________________, appeared and signed before me said
Release on this ________ day of ____________________, 2003.
-------------------------------
Notary Public
-5-
EXHIBIT H
---------
__________________, 2003
Administrator for ASC Nomura 1997-MDVII
LaSalle Bank N.A.
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60603-4159
Attention: Susan Abbott
Re: Fairfield Inn Hotels
Dear Lender:
Marriott International, Inc. ("Franchisor") has entered into a series of
Franchise Agreements, as amended (collectively, the "Franchise Agreements" and
each individually, a "Franchise Agreement") dated as of November 30, 2001, with
Fairfield Inn by Marriott Limited Partnership ("Franchisee"). The Franchise
Agreements permit Franchisee to operate the thirty four (34) hotels identified
on Schedule A attached hereto as Fairfield Inn hotels (collectively, the
"Hotels" and each individually, a "Hotel").
LaSalle Bank, N.A., as trustee ("Lender"), and Franchisee have informed
Franchisor that Lender has loaned funds that are secured by the Hotels (the
"Loan"). In exchange for Lender's agreement to approve a restructuring plan with
respect to the Hotels, Lender and Franchisee have requested that Franchisor
enter into this comfort letter, and the undersigned parties agree as follows:
1. Franchisee Default. Franchisor will copy Lender on any notice of default or
termination issued to Franchisee under a Franchise Agreement. Lender shall have
the right, but not the obligation, upon notice to Franchisor to cure such
default on behalf of Franchisee during the time period for cure established in
the default notice for any default under the Franchise Agreement. For any
default under the Franchise Agreement other than a default of Article III or
Section VII.E of the Franchise Agreement, or a default set forth in Sections
XVII.B.9 or XVII.B.10 of the Franchise Agreement or a default under Paragraph 8
of the Amendment between Franchisee or Franchisor dated _________, Franchisor
shall extend Lender's right to cure for such reasonable period of time beyond
the cure period established in the default notice (but in no event for more than
an additional thirty (30) days if: (i) the default is not related to health or
safety as determined by Franchisor; (ii) the default is susceptible to cure by
Lender; (iii) Lender notifies Franchisor of Lender's agreement to cure the
default as soon as reasonably possible but no later than the two (2) days prior
to expiration of the cure period established in the default notice; (iv) all
royalties, fees, charges and other amounts due to Franchisor or any of its
affiliates under the Franchise Agreement or in connection with the Hotel are
kept current; (v) Lender diligently pursues the cure of the default; and (vi)
the Hotel is at all times operated in accordance with the Franchise Agreement
except for the specific default described in the default notice. Notwithstanding
anything to the contrary stated herein, Lender shall have no obligation to cure
any default on behalf of Franchisee. For the avoidance of doubt, Lender and
Franchisor agree that after the Franchisee's applicable cure period established
in the default notice for
LaSalle Bank, N.A.
_______________, 2003
Page 2
any default under any Franchise Agreement, for any default that Lender is
entitled to an additional cure period under this Section 1, Lender shall have
the additional cure period set forth in this Section 1, however if said default
is not cured within the applicable cure period established in the default notice
and the additional Lender cure period set forth in this Section 1, Franchisor
shall have the right to terminate said Franchise Agreement and all of the other
Franchise Agreements without any further right of Lender or Franchisee to cure
any defaults. Lender and Franchisor agree and acknowledge that except as set
forth in this Section 1, this Comfort Letter is not intended to confer on Lender
any rights in addition to the rights Franchisee has under the Franchise
Agreement, as amended, and that therefore, Franchisor is not required to extend
Lender's right to cure for such reasonable period of time beyond the cure period
established in the default notice for those defaults specifically enumerated in
the third sentence of this Section.
2. Lender Foreclosure.
A. If Lender acquires a Hotel through foreclosure, a transfer of deed in
lieu of foreclosure, or through any other exercise of its rights as a secured
lender, and Lender desires the Hotel to continue to be operated as a Fairfield
Inn hotel, Lender may, by notice to Franchisor within ten (10) days of Lender's
acquisition, request Franchisor to approve substitute qualified management for
the Hotel pursuant to Paragraph 4. If Franchisor approves substitute management,
Lender and Franchisor will execute a new Fairfield Inn franchise agreement ("New
Franchise Agreement") within thirty (30) days of Lender's acquisition of the
Hotel. The New Franchise Agreement shall be dated as of the date that Lender
acquired the Hotel from Franchisee, shall be for a term equal to Franchisee's
then remaining term and shall be identical to the Franchise Agreement for such
Hotel (as such agreement may have been modified, amended, or supplemented),
except that (a) Lender will be the franchisee thereunder and the identity of the
management company may change to reflect the approved substitute management, (b)
Lender shall not be charged any initial fee, (c) Lender will be required to cure
any quality or service deficiencies and shall be subject to any renovation or
upgrading requirements that are required under the Franchise Agreement,
including commencing the work set forth in the Property Improvement Addendum
attached thereto by no later than October 1, 2004 and completing such work no
later than April 1, 2005, and (d) Lender shall be given the unconditional right,
exercisable upon not less than thirty (30) days' written notice, as its sole
remedy to terminate the New Franchise Agreement for any reason for a period
ending November 30, 2004. If such termination occurs prior to September 1, 2004,
Lender shall have no obligation to pay Franchisor liquidated damages or any
other termination fee as a consequence of such termination. If such termination
occurs between September 1, 2004 and November 30, 2004, Lender shall be
obligated to pay Franchisor liquidated damages in the amount of $25,000 for each
New Franchise Agreement that is terminated pursuant to this Paragraph
2.A.(ii).(c). In no event shall Lender be responsible for payment of any amounts
owed to Franchisor by Franchisee under the Franchise Agreement.
B. If Lender acquires a Hotel through foreclosure, a transfer of deed in
lieu thereof, or through any other exercise of its rights as a secured lender,
and Lender no longer desires that the Hotel be operated as a Fairfield Inn
hotel, Lender agrees to notify Franchisor within ten (10) days of Lender's
acquisition of same, to cooperate with Franchisor in the removal of the Hotel
from the Fairfield Inn hotel system, and to promptly comply with Paragraph 13
hereof.
C. If Lender, in connection with a foreclosure or similar proceeding, or
following Lender's acquisition of the Hotel through foreclosure, a transfer of
deed in lieu of foreclosure, or through any other
-2-
LaSalle Bank, N.A.
_______________, 2003
Page 3
exercise of its rights as a secured lender, desires to sell a Hotel or cause a
Hotel to be sold to a third party (such party being hereinafter referred to as a
"Foreclosure Buyer"), and the Foreclosure Buyer desires such Hotel to continue
to be operated as a Fairfield Inn hotel, such Foreclosure Buyer may by notice
and payment to Franchisor of a non-refundable application fee no later than
thirty (30) days prior to the anticipated closing date on the purchase and sale
enter into a New Franchise Agreement with Franchisor with respect to the Hotel,
provided that Franchisor has approved the Foreclosure Buyer to be a franchisee
of Fairfield Inn hotels, which approval Franchisor may grant or withhold in its
sole discretion. Prior to the submission of an application and only after
Franchisor receives its then current Property Improvement Plan ("PIP") fee
(currently, Five Thousand Dollars ($5,000)) to cover Franchisor's costs
associated with such PIP, Franchisor will review the Hotel to determine the
renovations necessary to bring the Hotel into good repair and to conform the
Hotel to Franchisor's then current standards to transfer. Franchisor shall have
no obligation to perform the PIP until it receives payment of the PIP fee and no
obligation to review the application until such time as the PIP is completed.
The terms of any such New Franchise Agreement shall be substantially identical
to Franchisor's then current form of agreement (as same is described in
Franchisor's then current franchise offering circular) except that the
Foreclosure Buyer will be required to cure any quality or service deficiencies
and shall be subject to any renovation or upgrading requirements that are
required under the Franchise Agreement or the PIP. Franchisor agrees to follow
its then current standard policies and procedures for evaluating prospective
Fairfield Inn franchisees in assessing whether to approve a Foreclosure Buyer
for purposes of this Paragraph 2.C. The amount of the application fee paid to
Franchisor by any Foreclosure Buyer under this Paragraph 2.C shall be determined
according to the following schedule:
Number of Hotels
Purchased by Foreclosure Buyer* Application Fee
------------------------------- ---------------
All $5,000
More than 20 but less than all $6,000
4-20 $7,500
1-3 $10,000
(* Purchase must be in a single transaction or a series of related
transactions, closing on all of which occurs within a period of no more
than ninety (90) consecutive days; provided, however, that if closing on
any one or more of such Hotels occurs outside such 90-day time period, the
Foreclosure Buyer will be obligated to pay Franchisor the higher
application fee only with respect to such Hotels, and not with respect to
those that close within the requisite time period.)
D. Notwithstanding anything to the contrary stated in this comfort letter:
-3-
LaSalle Bank, N.A.
_______________, 2003
Page 4
(i) Neither Lender nor any Foreclosure Buyer shall be liable for any
act or omission of Franchisee under the Franchise Agreement,
including without limitation any failure by Franchisee to make
any payments due to Franchisor under the Franchise Agreement;
(ii) Neither Lender nor any Foreclosure Buyer shall be subject to any
offsets, defenses or counterclaims accruing prior to the date or
dates of foreclosure or delivery of a deed in lieu of foreclosure
that Franchisor might have against Franchisee under the Franchise
Agreement;
(iii) Neither Lender nor any affiliate thereof shall in any event or at
any time be personally liable for the payment or performance of
the obligations required by or permitted of Franchisee under the
Franchise Agreement;
(iv) If as of the date Lender or any Foreclosure Buyer acquires title
to the Hotel there remains to be performed any work required to
be performed pursuant to the Property Improvement Addendum to the
Franchise Agreement or any other upgrading of the Hotel that is
required in accordance with the terms of the Franchise Agreement
or any New Franchise Agreement, then, notwithstanding any other
terms, covenants or conditions contained in the Franchise
Agreement or in any New Franchise Agreement to the contrary,
Lender or such Foreclosure Buyer shall have until October 1, 2004
to commence, and until April 1, 2005 to complete, the work
required to be performed pursuant to the Property Improvement
Addendum to the Franchise Agreement or any other upgrading of the
Hotel that is required in accordance with the terms of the
Franchise Agreement or any New Franchise Agreement. For purposes
of this letter, commencement of work shall mean that Lender or
Foreclosure Buyer has entered into a contract with a contractor
relating to the physical renovation of the Hotel that requires
contractor to begin work within the next 30 days and complete the
work no later than April 1, 2005, and sets forth a realistic and
reasonable project plan for achieving those results, and has
ordered the necessary FF&E required for the renovation;
(v) The definition of "Gross Room Revenues" in any New Franchise
Agreement shall be amended as follows:
(a) By the exclusion of any imputed charges for rooms made
available on a complimentary basis;
(b) By the exclusion of gratuities intended for employees of the
Hotel;
(c) By the exclusion of any interest income and the proceeds of
sale of any furnishings, fixtures and equipment; and
(d) By the exclusion of any revenue from telephones, televisions
or vending machines; and
3. Receivership. If Lender has a receiver appointed for a Hotel during a
foreclosure proceeding, Lender shall have the right to have the Hotel operated
by a management company approved by Franchisor
-4-
LaSalle Bank, N.A.
_______________, 2003
Page 5
pursuant to Paragraph 4 if, with respect to the Hotel: (i) Franchisor and Lender
have reached agreement concerning the cure of any defaults under the Franchise
Agreement for such Hotel, including any defaults under any other agreements with
Franchisor and its affiliates relating to the Hotel and defaults related to the
Property Improvement Addendum attached to the Franchise Agreement; (ii) Lender
or the receiver enter into a franchise agreement on terms acceptable to
Franchisor; and (iii) the receiver is specifically authorized by order of the
court appointing such receiver to enter into a franchise agreement as described
herein and such order further requires the Hotel to be operated in accordance
with state, local and federal laws. If the receiver is the party contracting
with Franchisor, Franchisor may condition its obligations under this Paragraph 3
on posting of a performance bond for the receiver's obligations to Franchisor,
on terms and conditions acceptable to Franchisor, or on receipt of Lender's
guaranty of such receiver's obligations under any agreement with Franchisor.
4. Substitute Manager. Lender's right to propose a substitute manager for a
Hotel under this comfort letter shall be on the terms and conditions of this
Paragraph 4. Upon Lender's request, Franchisor will provide Lender a list of
management companies that Franchisor would approve for operation of the Hotel
and, if possible, such list shall contain at least three (3) management
companies. Franchisor reserves the right to approve only those management
companies to operate the Hotel that, in Franchisor's sole judgment, are
experienced and qualified in operating Fairfield Inn hotels and are otherwise
able to adhere fully to the obligations and requirements of the Franchise
Agreement. Notwithstanding anything to the contrary in this comfort letter, if
the Hotel is operated by a management entity not approved by Franchisor,
Franchisor shall have the right immediately upon notice and without further
action to terminate the Franchise Agreement, this comfort letter and the Hotel's
relationship with the Fairfield Inn system of hotels. Notwithstanding anything
to the contrary contained in this comfort letter, Franchisor will not be
obligated to manage the Hotel if in Franchisor's reasonable judgement such
management would violate any contractual or other legal obligation of Franchisor
or its affiliates.
5. Notification of Franchisor. Lender agrees to notify Franchisor not later than
upon actually taking any action to: (i) commence foreclosure proceedings
regarding a Hotel; (ii) petition for appointment of a receiver, obtain the entry
of an order for relief or take any action under federal or state bankruptcy laws
or similar laws with regard to a Hotel; (iii) accept a deed for a Hotel in lieu
of foreclosure; or (iv) take ownership or possession of a Hotel in any manner.
Lender shall notify Franchisor in writing of the commencement by another party
of foreclosure proceedings or the filing of an action for the appointment of a
receiver or petition for relief under state or federal bankruptcy laws within
thirty (30) days after Lender receives notice of commencement of such
proceedings. Franchisee agrees to notify Franchisor within ten (10) days after
any termination or release of Lender's mortgage, security deed or interest in a
Hotel. Lender's obligations under this Paragraph 5 shall survive termination of
this comfort letter.
6. No Assignment of Franchise Agreement. Lender and Franchisee represent,
warrant and covenant to Franchisor that Franchisee has not and will not
collaterally assign, pledge, grant a security interest or otherwise transfer to
Lender or its affiliates any interest in the Franchise Agreements without
Franchisor's written consent and except as expressly provided below. Franchisee
further represents, warrants and covenants to Franchisor that the granting of
the Loan will not cause Franchisee to violate any financial covenants contained
in the Franchise Agreements. If a Hotel is acquired by anyone other than Lender,
neither Lender nor Franchisee shall have the right or authority to sell, convey,
assign or in any manner transfer any rights hereunder or under the Franchise
Agreements without the consent of Franchisor. Franchisor acknowledges that any
rights in the Hotels that it may have pursuant to the Franchise
-5-
LaSalle Bank, N.A.
_______________, 2003
Page 6
Agreements shall be subject and subordinate to the rights and interests of
Lender; provided, however, that nothing in the previous clause shall be
construed to relieve Franchisee of any of its obligations to operate the Hotel
in a manner consistent with the requirements of the Franchise Agreement.
Notwithstanding anything to the contrary stated in this comfort letter,
Franchisor hereby consents to a grant of a security interest in and/or a
collateral assignment of the Franchise Agreements to Lender, provided that
Lender's rights with respect to this security interest are limited by and
subject to the terms and conditions of this comfort letter.
7. Transition of Control of the Hotel. Lender, Franchisor and Franchisee shall
cooperate so that any change in control of a Hotel pursuant to this comfort
letter shall be conducted efficiently without inconvenience to the guests and
employees of the Hotel and in accordance with applicable law, including, but not
limited to, the WARN Act (29 U.S.C. ss.ss.2101et seq.) (1999).
8. No Claims. Franchisor may discuss with Lender the terms of the Franchise
Agreements or any of the matters to which Lender is entitled to notice. If
Lender exercises any rights pursuant to this comfort letter, Franchisee hereby
releases Franchisor and its respective affiliates, agents, employees, officers,
directors, successors, assigns and representatives of and from any and all
actions, causes of action, suits, claims, demands, contingencies, debts,
accounts and judgments whatsoever, at law or in equity, as a result of such
exercise of rights.
9. Notices. All notices required under this comfort letter shall be in writing,
sent by certified mail, return receipt requested, or by Federal Express or other
national express delivery service and addressed, if to Lender, to the address
stated above, with copies to:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attention: Ms. Wendy Balden
Clarion Partners, LLC
230 Park Avenue
12th Floor
New York, New York 10169
Attn: Mr. Michael O'Brien
and, if to Franchisor, to:
Marriott International, Inc.
10400 Fernwood Road
Department 52/923
Bethesda, Maryland 20817
Attention: Franchise Attorney
Any notice sent pursuant to this comfort letter shall be deemed to be given
three (3) days after mailing or on the day of delivery by hand.
-6-
LaSalle Bank, N.A.
_______________, 2003
Page 7
10. No Representations or Warranties. In no event shall this comfort letter or
any other circumstances surrounding the provision of financing by Lender be
construed to involve: (i) any representation by Franchisor that it endorses,
approves, recommends or otherwise concurs in the financing; (ii) any guarantee
or assurance by Franchisor that Franchisee or any other party to the Loan will
necessarily be in a financial position to repay the Loan in accordance with its
terms; (iii) any endorsement, approval, recommendation or concurrence in any
financial projections submitted to Lender in connection with the Loan; or (iv)
any endorsement, approval or recommendation of Franchisee's character or
reputation; it being understood as to all such matters that the decision of
Lender to provide financing was made by Lender without intervention or support
by Franchisor.
11. Substitute Comfort Letter. Upon receipt of a written request from Lender,
Franchisor will issue a replacement comfort letter, identical to this comfort
letter, to a wholly owned subsidiary of Lender, to the trustee of a trust
established in connection with the securitization of the Loan, to a third-party
loan servicing agent or to a successor mortgagee that is a financial institution
in the business of routinely financing real estate transactions, in good
financial condition, and is not a "Competitor," or an affiliate of a Competitor,
as defined in the Franchise Agreements. Any such replacement comfort letter
shall supersede this comfort letter.
12. Lender not Liable for Liquidated Damages. Franchisor specifically
acknowledges and agrees that Lender shall not be liable for payment of any
liquidated damages not paid by the Franchisee.
13. Possession of the Hotel. If Lender owns, controls or possesses a Hotel after
termination of the Franchise Agreement for any reason, Lender shall (i) upon
Franchisor's request immediately perform the requirements of Section XVIII of
the Franchise Agreement with respect to de-identifying the Hotel as a Fairfield
Inn hotel and (ii) indemnify, defend and hold harmless Franchisor and its
affiliates from and against any loss, claim or other liability of any kind
arising from or in connection with the operation of the Hotel as a Fairfield Inn
hotel during such ownership, control or possession. Lender's obligations under
this Paragraph 13 shall survive termination of this comfort letter.
14. Termination. This comfort letter shall terminate with respect to any Hotel
and Lender shall have no rights hereunder if:
(i) Lender has been taken over in any manner by any state or federal
agency or is in a receivership, conservatorship, reorganization,
or liquidation, or Lender or any of its officers or directors has
entered into or is subject to a cease and desist order or any
other formal or informal written agreement with a federal or
state regulatory agency;
(ii) Lender no longer holds a valid first mortgage or security deed
with respect to such Hotel;
(iii) the Franchise Agreement for such Hotel has expired or terminated,
unless such occurrence is the result of the timely exercise of
Lender's rights pursuant to Paragraphs 2, 3 or 4 of this comfort
letter, in which such event this comfort letter shall terminate
with respect to such Hotel upon the exercise or expiration of
such rights, which in any event shall expire no more than one
hundred twenty (120) days after the expiration or termination of
such Franchise Agreement; or
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LaSalle Bank, N.A.
_______________, 2003
Page 8
(iv) Lender breaches this comfort letter.
15. Estoppel Statement and Letter. As of the date hereof, to the best of our
knowledge, and except as specifically provided in this comfort letter: (i)
Franchisor is the franchisor under the Franchise Agreement and the Franchise
Agreement is in effect as to each Hotel; (ii) the Franchise Agreements
(including the exhibits and addenda thereto and all documents executed
contemporaneously therewith with respect to the Hotels) constitute the entire
written agreement between Franchisee and Franchisor with respect to the
operation of the Hotels under the Fairfield Inn trade name and the licensing of
Franchisee to utilize such trade name in connection therewith; (iii) the
Franchise Agreements are in full force and effect and have not been modified,
amended or assigned except as stated in this comfort letter, including the
Amendment to Certain Franchise Agreements, dated _______; (iv) Franchisor has
not delivered or received any termination notice under the Franchise Agreements,
and (v) Franchisee is current on all sums due and payable to Franchisor under
the Franchise Agreements (the "Estoppel Statement").
Because the Estoppel Statement above only covers the status of the Franchise
Agreements as of the date of this comfort letter, Lender shall not rely on its
belief, whether or not correct, that Franchisor has not given any notice under
this comfort letter when Lender is making any decision or representation or
warranty in connection with any material modification, securitization, or sale
of the Loan. In connection with any material modification, securitization, or
sale of the Loan, Franchisor shall, at the written request of Lender, execute a
written estoppel letter stating whether or not, as of that date, the following
statements are correct to the best of Franchisor's knowledge (and indicating in
reasonable detail, where applicable, the circumstances causing any of the
statements not to be correct): (a) the Franchise Agreements are in full force
and effect and have not been modified, amended or assigned, (b) neither Julie
Repetti nor Liam Brown are aware of any default under any of the terms,
covenants or provisions of the Franchise Agreements or of any event which, but
for the passage of time or the giving of notice or both, would constitute an
event of default under any of the Franchise Agreements, (c) Franchisor has not
delivered or received any termination notice under the Franchise Agreements, and
(d) Franchisee is current on all sums due and payable to Franchisor under the
Franchise Agreements.
16. Effectiveness. This Comfort Letter supercedes and replaces the Comfort
Letter by and among the same parties dated November 30, 2001. Franchisor shall
have no obligations hereunder unless Lender and Franchisee have evidenced their
agreement with the provisions hereinabove by the execution of a copy of this
comfort letter and the delivery to Franchisor of such copy within twenty (20)
days of the date hereof.
17. No Involuntary Bankruptcy Filings. Franchisor agrees not to file an
involuntary petition in bankruptcy against Franchisee for non-payment to
Franchisor of any amounts payable to Franchisor under the Franchise Agreement
until the Loan has been paid in full and the period equal to the applicable
preference period under the Federal Bankruptcy Code (Title 11 of the United
States Code) plus ten (10) days following the date on which the Loan has been
paid in full has passed.
Very truly yours,
MARRIOTT INTERNATIONAL, INC.
-8-
LaSalle Bank, N.A.
_______________, 2003
Page 9
By:
----------------------------
Vice President
-9-
LaSalle Bank, N.A.
_______________, 2003
Page 10
Accepted and agreed to as of this ___ day of October, 2003:
FAIRFIELD INN BY MARRIOTT LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AP-Fairfield GP, LLC,
a Delaware limited liability company,
its general partner
By: AP-Fairfield Manager Corp.,
a Delaware corporation,
its manager
By:
---------------------------
Name:
Title:
Accepted and agreed to as of this ___ day of October, 2003:
LASALLE BANK, N.A.,
a national banking association,
not in its individual capacity, but solely as trustee
By: Clarion Partners, LLC, as special servicer, its attorney-in-fact
By:
--------------------
Name:
Title:
cc: Noah J. Silverman, Esq.
-10-
SCHEDULE A TO COMFORT LETTER
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
CA Orange County Placentia 135 710 W. Kimberly Avenue Placentia, CA 92870
FL Gainesville Gainesville 135 6901 NW 4th Blvd Gainesville, FL 32607
FL Miami Airport-West 135 3959 NW 79th Avenue Miami, FL 33166
FL Orlando International Drive 135 8342 Jamaican Court Orlando, FL 32819
GA Atlanta Gwinnett Mall 135 3500 Venture Parkway Duluth, GA 30096
GA Atlanta Northwest-Delk Road 132 2191 Northwest Parkway Marietta, GA 30067
GA Savannah Savannah 135 2 Lee Blvd Savannah, GA 31405
IA Des Moines West-Clive 135 1600 NW 114th Street Clive, IA 50325
IL Bloomington Normal 132 202 Landmark Drive Normal, IL 61761
IL Peoria Peoria 135 4203 N. War Memorial Drive Peoria, IL 61615
IL Rockford Rockford 135 7712 Potawatomi Trail Rockford, IL 61107
IN Indianapolis Castleton 132 8325 Bash Road Indianapolis, IN 46250
IN Indianapolis College Park 132 9251 Wesleyan Road Indianapolis, IN 46268
MI Detroit Airport 133 31119 Flynn Drive Romulus, MI 48174
MI Detroit Auburn Hills 134 1294 Opdyke Road Auburn Hills, MI 48326
MI Detroit Madison Heights/Troy 134 32800 Stephendson Highway Madison Heights, MI 48071
MI Detroit West/Canton 133 5700 Haggerty Road Canton, MI 48187
MI Kalamazoo Kalamazoo East 133 3800 E. Cork Street Kalamazoo, MI 49001
MO St. Louis Hazelwood 135 9079 Dunn Road Hazelwood, MO 63042
NC Durham I-85 135 3710 Hillsborough Road Durham, NC 27705
NC Fayetteville Fayetteville 135 562 Cross Creek Mall Fayetteville, NC 28303
NC Greensboro Greensboro 135 2003 Athena Court Greensboro, NC 27407
NC Wilmington Wilmington 134 306 S. College Road Wilmington, NC 28403
OH Cleveland Airport-Brook Park 135 16644 Snow Road Brook Park, OH 44142
OH Dayton North/West 135 6960 Miller Lane Dayton, OH 45414
OH Toledo Holland/Airport 135 1401 E. Mall Drive Holland, OH 43528
SC Florence Florence 135 140 Dunbarton Drive Florence, SC 29501
SC Hilton Head Hilton Head 120 9 Marina Side Drive Hilton Head Island, SC 29928
TN Johnson City Johnson City 132 207 E. Mountcastle Drive Johnson City, TN 37601
VA Norfolk Hampton-Coliseum 134 1905 Coliseum Drive Hampton, VA 23666
VA Norfolk Virginia Beach-Euclid 134 4760 Euclid Road Virginia Beach, VA 23462
WI Madison East 135 4765 Hayes Road Madison, WI 53704
WI Milwaukee West 135 20150 W. Blue Mound Road Brookfield, WI 53045
EXHIBIT I
AMENDMENT OF GROUND LEASES
--------------------------
THIS AMENDMENT OF GROUND LEASES (this "Amendment") is entered into as of
this ______ day of ____________, 2003, by and among FAIRFIELD INN BY MARRIOTT
LIMITED PARTNERSHIP, a Delaware limited partnership with its principal address
at 100 Jericho Quadrangle - Ste. 214, Jericho, New York 11753 (the "Tenant"),
and BIG BOY PROPERTIES, INC., a Delaware corporation, having its principal
address at 10400 Fernwood Road, Bethesda, Maryland 20817 ("Landlord").
RECITALS
A. Landlord is the landlord under the ground lease agreements identified on
EXHIBIT A attached hereto, each as amended by a certain Subordination, Estoppel,
Consent and Amendment of Ground Leases (the "Subordination Agreement") dated
January 13, 1997 by and among Tenant, Landlord, and Marriott International, Inc.
and Essex House Condominium Corporation (Landlord's predecessors-in-interest as
to certain of the Ground Leases), and the November 30, 2001 Amendment (as
defined below) (such ground lease agreements listed on EXHIBIT A, as so amended,
and as amended by the November 30, 2001 Amendment, being hereinafter referred to
each as a "Lease" and collectively as the "Leases", and the land that is subject
to each Lease being hereinafter referred to as the "Leased Premises"). Each of
the Leased Premises is improved with a hotel (each a "Hotel" and collectively,
the "Hotels"). Prior to the date of this Amendment, each Hotel was managed by
Fairfield FMC Corporation pursuant to a certain Management Agreement dated
November 17, 1989, by and between Fairfield FMC Corporation and Tenant, as
amended by a First Amendment to Management Agreement dated July 31, 1990 by and
between Tenant and Fairfield FMC Corporation, as further amended by a Second
Amendment to Management Agreement dated July 13, 1997 by and between Tenant and
Fairfield FMC Corporation and by letter agreement dated April 28, 1999.
B. On or about August 16, 2001, AP Fairfield GP, LLC acquired from Marriott
FIBM One Corporation, the general partnership interest in Tenant (the
"Partnership Interest Acquisition"). The Management Agreement was terminated
pursuant to an Agreement for Termination of Management Agreement and Working
Capital Maintenance Agreement dated November 30, 2001, by and between Fairfield
FMC Corporation and Tenant.
C. In connection with the Partnership Interest Acquisition and pursuant to
the terms of an Omnibus Agreement dated November 30, 2001 by and among Landlord,
Tenant, Marriott International, Inc., Fairfield FMC Corporation, and
AP-Fairfield GP LLC, the parties hereto executed an Amendment of Ground Leases,
amending certain terms of the Leases (the "November 30, 2001 Amendment").
D. Marriott International, Inc. and Tenant are parties to those certain
Franchise Agreements dated as of November 30, 2001 (as amended from time to
time, the "Franchise Agreements") regarding each of the Hotels.
E. Marriott International, Inc., Big Boy Properties, Inc., Fairfield Inn by
Marriott Limited Partnership, LaSalle Bank, N.A., Sage Management Resources III,
LLC, and Winthrop Financial Associates, a Limited Partnership, are now entering
into an Omnibus Agreement of even date herewith (the "Omnibus Agreement") in
connection with certain agreements among the parties thereto. Pursuant to
the terms of the Omnibus Agreement, Tenant and Landlord have agreed to execute
and deliver this Amendment.
NOW THEREFORE, in consideration of these premises, and for other good and
valuable consideration, the receipt and sufficiency of which each of the parties
acknowledges, the parties agree as follows:
1.01 GENERAL
A representative form of one of the Leases is attached hereto as EXHIBIT B.
The amendments herein sometimes refer to particular sections of EXHIBIT B. If
the Section numbering in any Lease differs from the Section numbering in EXHIBIT
B, the amendments herein shall be deemed to be amendments to the corresponding
sections of such other Lease so that each Lease is amended in accordance with
the substantive intent of the parties as reflected herein. From and after the
date hereof, each of the Leases shall be deemed to be amended in the following
respects.
2.01 CAPITALIZED TERMS
Capitalized terms that are used herein shall have the meanings ascribed to
them (a) where such capitalized terms are otherwise defined herein or (b) in the
Leases.
3.01 TENANT OWNS IMPROVEMENTS; LANDLORD OWNER LEASED PREMISES
The Tenant represents that the Improvements (as defined in the applicable
Lease) are the sole property of the Tenant, subject only to the Landlord's
reversionary interest in the Improvements, and the lien in favor of the Lender
holding the first leasehold mortgage loan on the Improvements. The Landlord
represents that it is the fee owner of the Leased Premises.
4.01 AMENDMENTS TO LEASES
The following amendments shall be made to each Lease:
(1) A new Section 3.07 is hereby added to each Lease to read as follows:
3.07 Obligation to Purchase Landlord's Interest
Tenant shall have the absolute obligation to purchase Landlord's Interest under
this Lease in accordance with the terms of Section 3.03 of this Lease (including
the purchase price for Landlord's Interest established under Section 3.03(a)(2)
of this Lease), on the date that the Franchise Agreement for the Hotel located
on the Leased Premises is terminated, whether or not such termination is in
connection with an assignment, transfer or sale of this Lease (including an
assignment by operation of law, including the sale, transfer or assignment of
any ownership interests in the Tenant) by Tenant.
(2) Landlord hereby waives all Minimum Rental and Percentage Rental due under
each Lease for the Rent Waiver Period (as defined below), not to exceed the Rent
Waiver Cap (as defined below).
The "Rent Waiver Period" shall mean, as to each Lease, the period commencing on
the date of this Agreement and terminating on the earlier of (a) _____________,
2004 [one year from the date of this Agreement], or (b) as to an individual
Lease, the date on which Tenant assigns, transfers or sells its interest in such
Lease (including any assignment by operation of law, including a sale, transfer
or
-2-
assignment of any ownership interest in the Tenant); provided that the Rent
Waiver Period shall terminate and any and all Minimum Rental and Percentage
Rental which was waived during the Rent Waiver Period pursuant to this Section
4.01 (2) shall become immediately due and payable, upon (i) the occurrence of an
Event of Default under any Lease, as modified by this Agreement or (ii) the
occurrence of an Event of Default (as defined therein) under the Omnibus
Agreement or (iii) the occurrence of any default under any Franchise Agreement
which continues past any applicable notice or cure period available to the
Tenant, as franchisee, unless the Tenant, as franchisee, delivers to Landlord,
as franchisor, written notice that it is immediately terminating such Franchise
Agreement prior to the expiration of the applicable notice or cure period under
such Franchise Agreement (which termination will require Tenant, as franchisee,
to pay all applicable liquidated damages and perform all post-termination
obligations under such Franchise Agreement). Landlord hereby agrees that the
late charge payable on the Minimum Rental and Percentage Rental which was
originally waived for the Rent Waiver Period pursuant to the terms of this
Section 4.01(2), but which subsequently becomes payable by Tenant as provided
above in this Section 2.01(2), shall be seven percent (7%) per annum, rather
than fifteen percent (15%) per annum as provided in Section 4.06 of each Lease.
The "Rent Waiver Cap" shall mean, as to all thirty (30) Hotels collectively, the
amount of One Million Two Hundred Thousand Dollars ($1,200,000), which amount is
allocated to each Hotel on a percentage basis as shown on EXHIBIT C, attached
hereto. The Rent Waiver Cap shall be reduced upon the termination of any Lease
by an amount equal to the unutilized portion of the Rent Waiver Cap allocated to
the Hotel subject to such Lease.
(3) From the date of this Agreement until the Deferral Termination Date (defined
below), Landlord hereby agrees to defer the payment of (a) all Minimum Rental
and Percentage Rental in excess of the Rent Waiver Cap due for the Rent Waiver
Period, and (b) all Minimum Rental and Percentage Rental which is due for the
period from the expiration of the Rent Waiver Period through the Deferral
Termination Date.
The "Deferral Termination Date" shall mean the earlier of (i) April 1,
2005, (ii) as to any individual Lease, the date on which the Tenant assigns,
transfers or sells its interest in such Lease (including an assignment by
operation of law, including a sale, transfer or assignment of any ownership
interest in the Tenant), or (iii) the date of any Event of Default under any
Lease, as modified by this Agreement, or under the Omnibus Agreement or any
Franchise Agreement.
On and after the Deferral Termination Date, all Minimum Rental and
Percentage Rental which was deferred pursuant to this Section 4.01(3) shall
become immediately due and payable by Tenant.
(4) The following new Section 4.06 is hereby added to each Lease:
4.06 All Rental and other sums payable by Tenant under this Lease, accruing
under this Lease and not paid when due, shall bear interest at the rate of
fifteen percent (15%) per annum from the due date until paid. Additionally, any
monthly or quarterly installment of Minimum Rental or Percentage Rental not paid
within five (5) days of the due date shall be considered delinquent and subject
to a late payment charge equal to five percent (5%) of the amount which is
overdue and payable. This late payment charge shall be in addition to the
interest provided for above and shall be due and payable with the payment of the
arrearage.
(5) The following Sections are hereby added to Section 10.01 of each Lease:
-3-
10.01 (c) The failure of the Tenant to purchase Landlord's Interest in
accordance with the terms of Section 3.07 hereof, without any grace, cure or
notice period.
10.01(d) The filing of a voluntary petition in bankruptcy or insolvency or a
petition for reorganization under any bankruptcy law by Tenant, or the admission
by Tenant that it is unable to pay its debts as they become due.
10.01(e) The consent to an involuntary petition in bankruptcy or the failure to
vacate, within ninety (90) days from the date of entry thereof, any order
approving an involuntary petition by Tenant.
10.01(f) The entering of an order, judgment or decree by any court of competent
jurisdiction, on the application of a creditor, adjudicating either party as
bankrupt or insolvent or approving a petition seeking reorganization or
appointing a receiver, trustee, or liquidator of all or a substantial part of
Tenant's assets, and such order, judgment or decree's continuing unstayed and in
effect for an aggregate of sixty (60) days (whether or not consecutive).
(6) The Landlord hereby waives all Subordinated Rental Obligations (as defined
in the Subordination Agreement) of Tenant accrued for Fiscal Years 2002 and
2003.
5.01 LEASES OTHERWISE IN EFFECT
Except as specifically amended hereby, each of the Leases is unmodified and is
in full force and effect.
6.01 CONSTRUCTION
No term or provision of any Lease or of this Amendment shall be construed more
strictly against one party hereto or thereto than against any other party hereto
or thereto. The parties hereto have been represented by competent counsel and
all have participated in the negotiation and drafting hereof.
7.01 HEADINGS
Headings of particular sections are inserted only for the convenience of the
parties and are in no way to be construed as a part of this Amendment or as a
limitation on the scope of the particular section to which they refer.
8.01 APPLICABLE LAW
The laws of the state in which the Leased Premises are situated shall govern the
validity, performance, and enforcement hereof.
9.01 COUNTERPARTS
This Amendment may be executed in several counterparts, each of which shall be
an original and all of which shall constitute one and the same instrument.
10.01 FURTHER ASSURANCE
The parties hereto agree, at the sole expense of the requesting party, to
execute, acknowledge and deliver such further instruments and agreements
reasonably required.
-4-
IN WITNESS WHEREOF, this Amendment of Ground Leases has been duly executed
and delivered by the parties hereto as of the day and year first above written.
-5-
TENANT:
FAIRFIELD INN BY MARRIOTT LIMITED PARTNERSHIP, a Delaware limited partnership,
BY: AP - FAIRFIELD GP LLC, A DELAWARE
LIMITED LIABILITY COMPANY,
ITS GENERAL PARTNER
By: ______________________________
Its: ______________________________
LANDLORD:
BIG BOY PROPERTIES, INC.
By: ______________________________
Its: ______________________________
LASALLE BANK, N.A., AS TRUSTEE, SUCCESSOR-IN-INTEREST TO NOMURA ASSET CAPITAL
CORPORATION, HEREBY CONSENTS TO THE TERMS OF THIS AMENDMENT.
LASALLE BANK, N.A., a national banking association, not in its individual
capacity but solely as Trustee
By: Clarion Partners, LLC, as Special Servicer, its Attorney-in-Fact
By:_____________________________
Name:
Title:
-6-
STATE OF _____________ )
) ss:
COUNTY OF ___________ )
I, _____________________________, a notary public in and for said County,
in said State, hereby certify that ___________________, whose name as
________________ of AP - Fairfield GP LLC, the General Partner of Fairfield Inn
by Marriott Limited Partnership, is signed to the foregoing instrument, and who
is known to me, acknowledged before me on this day, that being informed of the
contents of said instrument, he, as such officer, and with full authority,
executed the same voluntarily for and as the act of said corporation, acting in
its capacity as the sole general partner of said limited partnership as
aforesaid.
Given under my hand this the ______ day of _____________, 2003.
- ------------------------------------
Notary Public
STATE OF _____________ )
) ss:
COUNTY OF ___________ )
I, _____________________________, a notary public in and for said County,
in said State, hereby certify that ______________________, whose name as
______________________ of Big Boy Properties, Inc., a Delaware corporation, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day, that being informed of the contents of said instrument, he, as
such officer, and with full authority, executed the same voluntarily for and as
the act of said corporation.
Given under my hand this the ______ day of _____________, 2003.
- ------------------------------------
Notary Public
-7-
EXHIBITS
--------
EXHIBIT A - Ground Lease Agreements
EXHIBIT B - Sample Lease
EXHIBIT C - Allocation of Rent Waiver Cap to each Hotel
-8-
EXHIBIT A
---------
-9-
EXHIBIT B
---------
-10-
EXHIBIT C
---------
ALLOCATION OF RENT WAIVER CAP
Hotel/Lease Percentage of Rent Waiver Cap Amount of Rent Waiver Cap
- ----------- ----------------------------- -------------------------
------% ------%
-11-
EXHIBIT J
---------
AMENDMENT TO CERTAIN FRANCHISE AGREEMENTS
-----------------------------------------
This Amendment (the "Amendment") to the Franchise Agreements identified in
Attachment A hereto (individually, a "Franchise Agreement" and when referring to
more than one, the "Franchise Agreements") is made and entered into as of the
_____ day of ________, 2003, between Marriott International, Inc., a Delaware
corporation ("Franchisor"), and Fairfield Inn by Marriott Limited Partnership, a
Delaware limited partnership ("Franchisee").
WITNESSETH:
WHEREAS, Franchisor and Franchisee are parties to those certain Franchise
Agreements pursuant to which Franchisor has authorized Franchisee to operate the
forty-six (46) hotels that are the subject of the Franchise Agreements
identified on Attachment A hereto as Fairfield Inn hotels (individually, a
"Hotel" and when referring to more than one, the "Hotels");
WHEREAS, Property Improvement Plans have been prepared for each Hotels and
attached to each Hotel's Franchise Agreement (the "Existing PIPs");
WHEREAS, Franchisor and Franchisee are parties to that certain Agreement
Regarding Right to Terminate Certain Franchise Agreement ("Franchise Termination
Agreement");
WHEREAS, Franchisor and Franchisee have agreed that certain Hotels will
leave the System no later than September 1, 2004, certain Hotels, regardless of
whether they are sold, must remain in the System and that all Hotels must be
renovated by no later than April 1, 2005 in order to remain in the System, on
the terms and conditions stated in this Amendment;
WHEREAS, thirty (30) of the Hotels are subject to an existing ground lease
by and between Big Boy Properties, Inc. ("Landlord") and Franchisee for each
such Hotel, as amended by that certain Amendment of Ground Leases dated as of
November 30, 2001 (the "Ground Leases");
WHEREAS, among other parties, Franchisee and Franchisor have entered into
that certain 2003 Omnibus Agreement, dated on a date contemporaneous herewith
(the "2003 Omnibus Agreement"); and
WHEREAS, Winthrop Financial Associates, A Limited Partnership, a Maryland
limited partnership with a mailing address at 100 Jericho Quadrangle - Ste. 214,
Jericho, NY 11753 ("Guarantor") has provided Franchisor an unconditional limited
guarantee of Franchisee's obligations under the Franchise Agreements, the Ground
Leases and the 2003 Omnibus Agreement.
NOW, THEREFORE, the parties, in consideration of the premises and the
undertakings and commitments of each party to the other party set forth herein
and in the Franchise Agreements, agree as follows:
1. Section II.A of the Franchise Agreements for the Hotels identified in
Attachment B hereto is hereby amended and restated in its entirety as follows:
"Except as otherwise provided in this Agreement, including without
limitation, Section 8 of the Amendment, the term of this franchise shall begin
on the date first set forth above and expire September 1, 2004. This Agreement
and the franchise granted by this Agreement is not renewable."
2. The last paragraph of Section VII.E of all Franchise Agreements is
hereby amended and restated in its entirety as follows:
"Notwithstanding anything to the contrary stated in the Agreement, for each
Hotel in Attachment A to the Amendment, all funds currently in the Reserve, owed
to the Reserve after June 1, 2003 but not yet paid, or to be paid to the Reserve
in the future shall be deposited in one escrow reserve account that will hold
all the funds that each Hotel is required to deposit in the Reserve (the "Master
Reserve"). All funds currently in each Hotel's Reserve or owed to each Hotel's
Reserve after June 1, 2003 but not yet paid must be deposited into the Master
Reserve within twenty-four (24) hours after execution of this Amendment. All
funds to be paid to each Hotel's Reserve in the future must be deposited in the
Master Reserve no later than fifteen (15) days following the end of each
Accounting Period. All funds deposited in the Master Reserve must be spent
within one hundred and eighty (180) days of its being deposited in the Master
Reserve to accomplish renovation, repair, replacements or other work required by
the Existing PIPs, provided that in no event shall the Master Reserve be allowed
to accumulate an amount in excess of the lesser of (x) the amount reasonably
necessary to undertake the renovation, repair, replacements or other work
required by an Existing PIP or (y) $2,000,000, in which event Franchisee must
immediately spend such money to accomplish the renovation, repair, replacements
or other work required by an Existing PIP or Existing PIPs in accordance with
this section. Franchisee shall perform all renovation, repair, replacements or
other work required by the Existing PIPs in the following order: (i) the Hotels
identified in Attachment C attached hereto first, then (ii) upon such
completion, the Hotels identified in Attachment D and then, (iii) upon such
completion, the Hotels identified in Attachment B. All renovation, repair,
replacements or other work required by the Existing PIPs for the Hotels
identified in Attachment C attached hereto shall commence no later than two
months after the date of execution of this Amendment. In the event the available
funds in the Master Reserve are insufficient to complete all the renovation,
repair, replacements or other work required by the Existing PIPs for the Hotels
on Attachment C and those Hotels in Attachment D that as of October 1, 2004 are
still subject to a Franchise Agreement, Franchisee will provide the necessary
additional funds so that the work required by the Existing PIPs shall not be
delayed and will remain on schedule to be completed by April 1, 2005. Franchisee
agrees and acknowledges that the Hotels are in critical need of renovation and
that the renovations set forth in the Existing PIPs must be performed in
accordance with the time frames set forth in this Amendment for performing the
Existing PIPs. Franchisee further agrees and acknowledges that its failure to
perform the Existing PIPs in accordance with the time frames set forth in this
Amendment for performing the Existing PIPs will cause Franchisor substantial
damage and injury to the good will in Marriott's proprietary marks and brands.
Franchisee shall deliver to Franchisor, or shall cause Manager to deliver to
Franchisor, each month a written report that identifies in detail the capital
expenditures that Franchisee has made with respect to the Hotels, regardless of
whether the source of funds for such expenditures is the Master Reserve, and a
Master Reserve analysis, which identifies each month's Master Reserve beginning
and ending balance and a detailed description of each expenditure made with
funds from the Master Reserve and each contribution to the Master Reserve in
such month."
3. The following new Section XV.N is hereby added to Section XV of the
Franchise Agreements for the Hotels identified in Attachment B attached hereto.
"Notwithstanding anything to the contrary stated in this Agreement,
Franchisee and Franchisor hereby agree that Franchisee may not Transfer this
franchise, including any direct or indirect ownership interest in Franchisee, or
this Agreement under any circumstances and that this Agreement will terminate
immediately without any further action upon any sale of the Franchise Business
or a substantial portion of the assets of the Franchise Business."
4. Section XV.C.3 of the Franchise Agreements for the Hotels identified in
Attachments C and D is hereby amended and restated in its entirety as follows:
-2-
"3. the proposed transferee shall submit to Franchisor an application, in
the form prescribed by Franchisor, for a new franchise agreement to replace this
Agreement for its unexpired term, and shall pay to Franchisor a transfer fee
(which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover
Franchisor's cost of processing the application, in the event the application is
disapproved) and Franchisor may charge its then current Property Improvement
Plan ("PIP") fee (currently, Five Thousand Dollars ($5,000)) to cover
Franchisor's costs associated with such PIP and consent review under this
Paragraph XV.C. The amount of the transfer fee shall be equal to the amount of
the application fee then being charged by Franchisor per room for System
franchises for new development multiplied by the number of rooms in the Hotel or
the minimum amount per hotel then being charged by Franchisor for System
franchises for new development, whichever amount is greater. Prior to the
submission of an application, so long as the PIP fee is paid, Franchisor will
review the Hotel to determine the renovations necessary to bring the Hotel into
good repair and to conform the Hotel to Franchisor's then current standards to
transfer. Franchisor shall have no obligation to provide or review a proposed
transferee's application or perform the PIP and consent review under this
Paragraph XV.C unless and until it is paid the PIP fee, regardless of whether
such delay shall negatively impact Franchisee or the proposed transferee. If
Franchisor enters into a new franchise agreement with the transferee for this
Hotel within six (6) months after the PIP and a full transfer fee has been paid
to Franchisor in connection therewith, the PIP fee paid to Franchisor will be
refunded or credited against other amounts due from the party that paid for the
PIP to Franchisor. Franchisor reserves the right to reject an application for a
Transfer if (i) Franchisor, in its Reasonable Business Judgment, deems the
transferee's proposed debt service to be too great to permit the transferee to
operate the Hotel successfully under the System or (ii) the proposed transferee
or any of its affiliated entities (other than those holding interests as limited
partners only) is a Competitor (as defined in Paragraph XV.D.). In all events,
the transferee will be required to certify in writing that (a) Franchisor did
not endorse, recommend, or otherwise concur with the terms of the Transfer, (b)
Franchisor did not comment upon any financial projections submitted by
Franchisee to the transferee, and (c) Franchisor did not participate in the
decision of the price to be paid for the Hotel, which decision was made without
any intervention, support or participation by Franchisor;"
5. The first paragraph of Section XVII.B of the Franchise Agreements for
the Hotels identified in Attachments C and D is hereby amended and restated in
its entirety as follows:
"Franchisee shall be deemed to be in material default under this Agreement
and Franchisor may, at its option, terminate this Agreement and all rights
granted hereunder, upon the occurrence of any of the events in the immediately
following subparagraphs (i) with respect to the following subparagraphs 1, 2, 3,
5, and 8 only, without affording Franchisee any opportunity to cure the default,
effective immediately upon Franchisee's receipt of notice (or refusal of
delivery), or (ii) with respect to the following subparagraphs 4, 6, 7 and 9
only, effective upon expiration of the cure period established by Franchisor in
the notice to Franchisee if such default is then uncured."6. The following new
Sections XVII.B.9 and XVII.B.10 are hereby added to Section XVII.B of the
Franchise Agreements for the Hotels identified in Attachments C and D:
"8. If all renovation, repair, replacement or other work required by the
Existing PIPs for the Hotel has not been completed by April 1, 2005;
9. If substantially all renovation, repair, replacement or other work
required by the Existing PIPs for the Hotel has not commenced as of October 1,
2004. For purposes of this Agreement, commencement of work on the Existing PIPs
shall mean that Franchisee has entered into a contract with a contractor
relating to the physical renovation of the Hotel that requires contractor to
begin work within the next 30 days and complete the work no later than April 1,
2005, and sets forth a realistic and reasonable project plan for achieving those
results, and has ordered the necessary FF&E required for the renovation."
-3-
7. The following new Section XVII.E shall be added to the Franchise
Agreements for the Hotels identified in Attachments C and D:
"Franchisee shall be deemed to be in material default under this Agreement
and Franchisor may, at its option, terminate this Agreement and all rights
granted hereunder without affording Franchisee any opportunity to cure the
default, effective immediately upon Franchisee's receipt of notice (or refusal
of delivery), if Franchisee is in default of any other Franchise Agreement and
such default remains uncured for the applicable notice or cure period set forth
in such Franchise Agreement, or there is any Event of Default under any Ground
Lease or the 2003 Omnibus Agreement (Event of Default under any Ground Lease and
the 2003 Omnibus Agreement is defined to include the applicable tenant cure
period)"
8. Section XVIII.E of all the Franchise Agreements is hereby amended by
adding the following three sentences to the end of the section:
"Notwithstanding the foregoing, Franchisee shall not be required to pay the
foregoing liquidated damages if this Agreement is terminated prior to September
1, 2004. If such termination occurs between September 1, 2004 and November 30,
2004, Franchisee shall only be obligated to pay Franchisor liquidated damages in
the amount of $25,000. If such termination occurs after November 30, 2004,
Franchisee shall be obligated to pay the liquidated damages set forth above in
this Section XVIII.E."
9. Franchisee hereby agrees and acknowledges that many of the Franchise
Agreements for the Hotels identified in Attachment B attached hereto, as well as
some of the other Franchise Agreements, are in default based on these Hotels'
performance under Franchisor's Quality Assurance Program. In exchange for
Franchisor's agreement not to exercise its right to terminate these Franchise
Agreements immediately, which Franchisee acknowledges, Franchisee agrees that
the Franchise Agreements for the Hotels identified in Attachment B will
terminate without further action and the Hotels will voluntarily leave the
System no later than September 1, 2004 with at least two (2) Hotels listed on
Exhibit B leaving the System on or before April 1, 2004, and at least four (4)
additional Hotels (for a total of six (6) Hotels) listed on Exhibit B leaving
the System no later than July 1, 2004. Franchisee shall give Franchisor written
notice no later than (i) March 1, 2004 identifying the two (2) Franchise
Agreements that are to terminate no later than April 1, 2004 and (ii) June 1,
2004 identifying the four (4) Franchise Agreements that are to terminate no
later than July 1, 2004. Accordingly, the parties agree that if Franchisee has
not provided such notice identifying the two (2) Franchise Agreements governing
the Hotels listed on Exhibit B that are to terminate no later than April 1, 2004
by March 1, 2004 and/or the four (4) additional Franchise Agreements governing
the Hotels listed on Exhibit B that are to terminate on or before July 1, 2004
no later than June 1, 2004, then in such event Franchisor may designate the two
(2) Franchise Agreements governing the Hotels listed on Exhibit B that will
terminate on April 1, 2004 and/or the four (4) additional Franchise Agreements
governing the Hotels listed on Exhibit B that will terminate on July 1, 2004 and
such Franchise Agreements will terminate without further action by any party and
such Hotels will leave the System as of that date. The liquidated damages, if
any, otherwise due under the Franchise Agreement for such Hotel will be waived
as part of Franchisee's execution of Marriott's standard form Termination
Agreement to be executed by the parties upon such termination. Upon any such
termination, Franchisee will perform all de-identification and all
post-termination requirements and obligations under the applicable Franchise
Agreement and Franchisor's normal procedures.
10. In the event of the filing of any voluntary or involuntary petition
under the U.S. Bankruptcy Code by or against Franchisee (other than an
involuntary petition filed by or joined in by Franchisor), the Franchisee shall
not assert, or request any other party to assert, that the automatic stay under
ss. 362 of the Bankruptcy Code shall operate or be interpreted to stay,
interdict, condition, reduce or inhibit the ability of Franchisor to enforce any
rights it has by virtue of any Franchise Agreement, or any other rights that
Franchisor has, whether now or hereafter acquired, against Franchisee or
Guarantor.
-4-
Further, Franchisee shall not seek a supplemental stay or any other relief,
whether injunctive or otherwise, pursuant to ss. 105 of the Bankruptcy Code or
any other provision therein to stay, interdict, condition, reduce or inhibit the
ability of Franchisor to enforce any rights it has by virtue of any Franchise
Agreement against Franchisee or Guarantor. The waivers contained in this
paragraph are a material inducement to Franchisor's willingness to enter into
this Amendment and Franchisee acknowledges and agrees that no ground exists for
equitable relief which would bar, delay or impede the exercise by Franchisor of
Franchisor's rights and remedies against Franchisee or Guarantor.
11. The parties hereby agree that the Franchise Termination Agreement is
terminated.
12. Capitalized terms not otherwise defined herein shall the same meaning
as set out in the Franchise Agreements.
13. The matters set forth in this Amendment are strictly confidential and,
except as otherwise required by law, the parties shall not disclose the terms
hereof without the prior written consent of the other party. Notwithstanding the
foregoing, Franchisee shall be permitted to disclose the terms of this Amendment
to the management company that has been approved by Franchisor to operate the
Hotel, provided that, in the event of such disclosure, Franchisee shall (i)
advise the management company of the confidential nature of the information
being provided and of the confidentiality requirements set forth herein and (ii)
ensure that the management company agrees to be bound by such terms.
14. This Amendment (a) sets forth the entire agreement between the parties
and fully supersedes any and all prior agreements and understandings (whether
written or oral) between the parties and pertaining to the subject matter
hereof, (b) is governed by, and interpreted and construed in accordance with,
the laws of the State of Maryland (without regard to its conflicts of law
principles), (c) shall be binding upon and shall inure to the benefit of the
parties and their permitted successors and assigns, and (d) may be executed in
counterparts, all of which taken together shall constitute one document. Items
capitalized but not defined herein shall have the same meaning as set forth in
the Agreement.
15. Except as specifically modified by this Amendment, the terms and
conditions of the Agreement remain in full force and effect.
{SIGNATURES ON NEXT PAGE}
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to
Franchise Agreement in duplicate as of the day and year first written above.
FRANCHISOR
ATTEST: MARRIOTT INTERNATIONAL, INC.
By: (SEAL)
- -------------------------------- --------------------------
Assistant Secretary Vice President
FRANCHISEE
FAIRFIELD BY MARRIOTT
LIMITED PARTNERSHIP
By: AP-Fairfield GP, LLC,
a Delaware limited liability
company, its general partner
ATTEST: By: AP-Fairfield Manager Corp.,
a Delaware corporation,
its manager
By: (SEAL)
- ----------------------------------- ---------------------
Assistant Secretary Name:
-------------------
Title:
------------------
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ATTACHMENT A
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
AL Birmingham Homewood 132 155 Vulcan Road Homewood, AL 35209
CA Orange County Buena Park 135 7032 Orangethorpe Avenue Buena Park, CA 90621
CA Orange County Placentia 135 710 W. Kimberly Avenue Placentia, CA 92870
FL Gainesville Gainesville 135 6901 NW 4th Blvd Gainesville, FL 32607
FL Miami Airport-West 135 3959 NW 79th Avenue Miami, FL 33166
FL Orlando International Drive 135 8342 Jamaican Court Orlando, FL 32819
FL Orlando South-Beeline Pkwy 133 1850 Landstreet Road Orlando, FL 32809
GA Atlanta Airport 132 2451 Old National Highway College Park, GA 30349
GA Atlanta Gwinnett Mall 135 3500 Venture Parkway Duluth, GA 30096
GA Atlanta Northlake 133 2155 Ranchwood Drive Atlanta, GA 30345
GA Atlanta Northwest-Delk Road 132 2191 Northwest Parkway Marietta, GA 30067
GA Atlanta Peachtree Corners 135 6650 Bay Circle Drive Norcross, GA 30071
GA Savannah Savannah 135 2 Lee Blvd Savannah, GA 31405
IA Des Moines West-Clive 135 1600 NW 114th Street Clive, IA 50325
IL Bloomington Normal 132 202 Landmark Drive Normal, IL 61761
IL Peoria Peoria 135 4203 N. War Memorial Drive Peoria, IL 61615
IL Rockford Rockford 135 7712 Potawatomi Trail Rockford, IL 61107
IN Indianapolis Castleton 132 8325 Bash Road Indianapolis, IN 46250
IN Indianapolis College Park 132 9251 Wesleyan Road Indianapolis, IN 46268
KS Kansas City Overland Park 134 4401 W. 107th Street Overland Park, KS 66207
KS Kansas City West-Merriam 135 6601 Frontage Road Merriam, KS 66202
MI Detroit Airport 133 31119 Flynn Drive Romulus, MI 48174
MI Detroit Auburn Hills 134 1294 Opdyke Road Auburn Hills, MI 48326
MI Detroit Madison Heights/Troy 134 32800 Stephendson Highway Madison Heights, MI 48071
MI Detroit Warren 131 7454 Convention Blvd Warren, MI 48092
MI Detroit West/Canton 133 5700 Haggerty Road Canton, MI 48187
MI Kalamazoo Kalamazoo East 133 3800 E. Cork Street Kalamazoo, MI 49001
MO St. Louis Hazelwood 135 9079 Dunn Road Hazelwood, MO 63042
NC Charlotte Northeast 133 5415 N. I-85 Service Road Charlotte, NC 28262
NC Durham I-85 135 3710 Hillsborough Road Durham, NC 27705
NC Fayetteville Fayetteville 135 562 Cross Creek Mall Fayetteville, NC 28303
NC Greensboro Greensboro 135 2003 Athena Court Greensboro, NC 27407
NC Raleigh Northeast 132 2641 Appliance Court Raleigh, NC 27604
NC Wilmington Wilmington 134 306 S. College Road Wilmington, NC 28403
OH Cleveland Airport-Brook Park 135 16644 Snow Road Brook Park, OH 44142
OH Columbus North 135 887 Morse Road Columbus, OH 43229
OH Dayton North/West 135 6960 Miller Lane Dayton, OH 45414
OH Toledo Holland/Airport 135 1401 E. Mall Drive Holland, OH 43528
SC Florence Florence 135 140 Dunbarton Drive Florence, SC 29501
SC Greenville Greenville 132 60 Roper Mountain Road Greenville, SC 29607
SC Hilton Head Hilton Head 120 9 Marina Side Drive Hilton Head Island, SC 29928
TN Johnson City Johnson City 132 207 E. Mountcastle Drive Johnson City, TN 37601
VA Norfolk Hampton-Coliseum 134 1905 Coliseum Drive Hampton, VA 23666
VA Norfolk Virginia Beach-Euclid 134 4760 Euclid Road Virginia Beach, VA 23462
WI Madison East 135 4765 Hayes Road Madison, WI 53704
WI Milwaukee West 135 20150 W. Blue Mound Road Brookfield, WI 53045
-7-
ATTACHMENT B
Hotels That Must Leave the System By September 1, 2004
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
FL Orlando South-Beeline Pkwy 133 1850 Landstreet Road Orlando, FL 32809
AL Birmingham Homewood 132 155 Vulcan Road Homewood, AL 35209
GA Atlanta Airport 132 2451 Old National Highway College Park, GA 30349
MI Detroit Warren 131 7454 Convention Blvd Warren, MI 48092
NC Raleigh Northeast 132 2641 Appliance Court Raleigh, NC 27604
OH Columbus North 135 887 Morse Road Columbus, OH 43229
NC Charlotte Northeast 133 5415 N. I-85 Service Road Charlotte, NC 28262
KS Kansas City West-Merriam 135 6601 Frontage Road Merriam, KS 66202
KS Kansas City Overland Park 134 4401 W. 107th Street Overland Park, KS 66207
SC Greenville Greenville 132 60 Roper Mountain Road Greenville, SC 29607
GA Atlanta Peachtree Corners 135 6650 Bay Circle Drive Norcross, GA 30071
GA Atlanta Northlake 133 2155 Ranchwood Drivfe Atlanta, GA 30345
-8-
ATTACHMENT C
Hotels That Must Remain in the System
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
FL Miami Airport-West 135 3959 NW 79th Avenue Miami, FL 33166
IL Peoria Peoria 135 4203 N. War Memorial Drive Peoria, IL 61615
IN Indianapolis College Park 132 9251 Wesleyan Road Indianapolis, IN 46268
SC Hilton Head Hilton Head 120 9 Marina Side Drive Hilton Head Island, SC 29928
CA Orange County Placentia 135 710 W. Kimberly Avenue Placentia, CA 92870
TN Johnson City Johnson City 132 207 E. Mountcastle Drive Johnson City, TN 37601
CA Orange County Buena Park 135 7032 Orangethorpe Avenue Buena Park, CA 90621
-9-
ATTACHMENT D
ST CITY/METRO MARKET ROOMS STREET ADDRESS CITY AND SATE ZIP
-- ---------- ------- ----- -------------- -------------- ---
FL Gainesville Gainesville 135 6901 NW 4th Blvd Gainesville, FL 32607
FL Orlando International Drive 135 8342 Jamaican Court Orlando, FL 32819
GA Atlanta Gwinnett Mall 135 3500 Venture Parkway Duluth, GA 30096
GA Atlanta Northwest-Delk Road 132 2191 Northwest Parkway Marietta, GA 30067
GA Savannah Savannah 135 2 Lee Blvd Savannah, GA 31405
IA Des Moines West-Clive 135 1600 NW 114th Street Clive, IA 50325
IL Bloomington Normal 132 202 Landmark Drive Normal, IL 61761
IL Rockford Rockford 135 7712 Potawatomi Trail Rockford, IL 61107
IN Indianapolis Castleton 132 8325 Bash Road Indianapolis, IN 46250
MI Detroit Airport 133 31119 Flynn Drive Romulus, MI 48174
MI Detroit Auburn Hills 134 1294 Opdyke Road Auburn Hills, MI 48326
MI Detroit Madison Heights/Troy 134 32800 Stephendson Highway Madison Heights, MI 48071
MI Detroit West/Canton 133 5700 Haggerty Road Canton, MI 48187
MI Kalamazoo Kalamazoo East 133 3800 E. Cork Street Kalamazoo, MI 49001
MO St. Louis Hazelwood 135 9079 Dunn Road Hazelwood, MO 63042
NC Durham I-85 135 3710 Hillsborough Road Durham, NC 27705
NC Fayetteville Fayetteville 135 562 Cross Creek Mall Fayetteville, NC 28303
NC Greensboro Greensboro 135 2003 Athena Court Greensboro, NC 27407
NC Wilmington Wilmington 134 306 S. College Road Wilmington, NC 28403
OH Cleveland Airport-Brook Park 135 16644 Snow Road Brook Park, OH 44142
OH Dayton North/West 135 6960 Miller Lane Dayton, OH 45414
OH Toledo Holland/Airport 135 1401 E. Mall Drive Holland, OH 43528
SC Florence Florence 135 140 Dunbarton Drive Florence, SC 29501
VA Norfolk Hampton-Coliseum 134 1905 Coliseum Drive Hampton, VA 23666
VA Norfolk Virginia Beach-Euclid 134 4760 Euclid Road Virginia Beach, VA 23462
WI Madison East 135 4765 Hayes Road Madison, WI 53704
WI Milwaukee West 135 20150 W. Blue Mound Road Brookfield, WI 53045
-10-