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HomeMy WebLinkAboutItem 19 - Verification of Lender's Rights AgreementMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROGER NELSON, CITY MANAGER(/ MEETING DATE: FEBRUARY 18, 2003 SUBJECT: APPROVAL OF VERIFICATION OF LENDER'S RIGHTS AGREEMENT BETWEEN THE CITY OF GRAPEVINE, CORPS OF ENGINEERS AND THE OPRYLAND HOTEL -TEXAS RECOMMENDATION: Recommend City Council approve a Verification of Lender's Rights Agreement between the City of Grapevine, Corps of Engineers and Opryland Hotel -Texas. FUNDING SOURCE: No funds are required. BACKGROUND: The Verification of Lender's Rights Agreement has been reviewed and approved by the City Attorney. The agreement establishes the legal rights available to lenders who finance the Gaylord Opryland Hotel -Texas in Grapevine. This agreement is standard for this type of project according to the City Attorney, and is required before permanent financing of the hotel can be completed. Staff recommends approval. February 12, 2003 (2:07PM) 9726507105 Feb -11-2003 13;54 From -Boyle & Lowry 9726507105 7-210 P,031/039 F-551 VERIFICATION OF LENDER'S RIGHTS AGREEMENT by and among ()pryland Hotel — Texas Limited Partnership me The United States of America by and through the Secretary of the Army W-1 ' the City of Grapevine, Texas Dated, 12003 9726507105 Feb -11-2003- 13:54 From—Boyle & Lowry 9726507105 T—M P-032/039 F-551 This Verification of Lender's Rights Agreement (the "Agreement") is made and entered into as of this day of 2003 by and among OPRYLAND HOTEL — TEXAS LIMITED PARTNERSHIP, a limited partnership ("Opryland`�; the UNITED STATES OF AMERICA, by and through the Secretary of the Army ("United States"); and the CITY OF GRAPEVINE, TEXAS ("City"). Recital WHEREAS, the United States is the Owner in fee simple of certain land located in the County of Tarrant, Texas, more particularly described in Exhibit A attached hereto and incorporated herein (the "Fee Property"); and WHEREAS, the United States and City entered into a Lease dated March 18, 1994, as amended by Supplemental Agreement No, 1 to Lease No. DACW63-1-94-0522, dated May 28, 1998, further amended by Supplemental Agreement No- 2 to Lease No. DACW63-1-94-0522, dated July 31, 1998, further amended by Supplemental Agreement No. 3 to Lease No. 'DACW63-1-94-0522, dated April 21, 1999, further amended by Supplemental Agreement No- 4 to Lease No. DACW63-1-94-0522, dated October 5, 1999, further amended by Supplemental Agreement No. 5 to Lease No. DACW63-1-94- 0522, dated October 8, 1999 and further amended by Supplemental Agreement No. 6 to Lease No. DACW63-1-94-0522, dated May 22, 2000 providing for the letting of the Fee Property and other land for the period and on the terms and conditions set forth therein (the above lease is herein refprred to as the "Fee Lease"); and referred WHEREAS, Opiyland and City entered into a Hotel/Convention Center Sublease Agreement dated May 16, 2000 as amended by Sublease Addendum No. 1 dated July 28, 2000, providing for the, subletting of the Fee )Property for the period and upon the terms and conditions set forth therein (the above sublease, as modified by the provisions of This Agreement and as affected by a certain Non -Disturbance Agreement between the United States and Opryland dated , 2003, (herein referred to as the "Sublease"). WHEREAS, Opryland desires to borrow funds from one or more lenders (each, a "Lender") from tirric: to time, and to secure such borrowing with a subleasehold deed of trust and security agreement (a "Mortgage") encumbering Opryland's rights in and to the Sublease; and WfMREAS, to induce a Lender to make loans to Opryland, the United States and City have agreed to consent to such Mortgage in accordance with the provisions of the Sublease. Agreement lan NOW THEREFORE, for and in consideration of the mutual -al cove, ts and promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the parties hereto, the parties agree as follows' - I — `.enjdoe Feb -11-2003 13:54 9726507105 From -Boyle & Lowry 9726507105 T-210 P.033/039 F-551 I. Consent to Mortgage. The United States and City consent to Opryland's execution of the Mortgage, pursuant to which Opryland grants to the Lender a first lien on, inter alis, Opryland's right, title and interest in and to the Fee Property under the Sublease subject to the terms and conditions of the Sublease. The United States acknowledges and agrees that Opryland's grant of the Mortgage will not be deemed to violate any of the terms of the Lease or cause a default there under. City acknowledges and agrees that Opryland's grant of the Mortgage will not be deemed to violate any of the terms of the Sublease or cause a default there under. 2. Notices to Lender. The United States agrees to give notice of default or non- performance by City of its obligations under the Lease to Lender and. Opryland as Provided for by Sections 5.3 and 11.4 of the Sublease. City agrees to give notice of default or the non-performance by Opryland of its obligations under the Sublease to Lender in the manner set forth in Section. 11 hereof, concurrently with the giving of such notice to Opryland. 3. Right of Lender and Opryland to Perform. Obligations of City. At all times while the Lease and Sublease are in effect, Optylai3d and/or Lender shall have the concurrent right, but not the obligation, to perform on behalf of City any and all of the obligations of City under the Lease in accordance with the terms of Section 5.3 of the Sublease and subject to the terms of the Lease, and United States shall accept any such performance by Lender or Opryland on behalf of City as performance by City without any prejudice to the rights " of City under the Lease. 4. Right of Lender to Perform Obligations of Opryland_ At all times while the Sublease is in effect, Lender shall have the right, but not the obligation, to perform on behalf of Opryland, any and all of the obligations of Opryland under the Sublease in accordance with the terms of the Sublease, and City shall accept any such perfonnance by Lender on behalf of Opryland as performance by Opryland without any prejudice to the rights of Opryland under the Sublease. 5_ Right to Cure Prior to^Termination of Lease. Opryland and/or Lender shall -have the concurrent right, but not the obligation, to cure any default by City under the Lease upon the same terms and conditions set forth, therein, pursuant to the provisions of Section 5.3 of the Sublease. 6. Rights on .Termination of the Sublease. Lender shall have the right, but not the obligation, to cure any default by Opryland under the Sublease upon the terms and conditions set forth in Section 11.4 of the Sublease. In the event of a termination of the Sublease wbich occurs as a result of a default by Opryland regarding Section 11.0(b), Section 11.0(c) or Section 11.0(d) of the Sublease, or any other event of default by Opryland under the Sublease which, by virtue of the fact that the event is triggered upon the passage of a stated date or period of time, which has elapsed prior to the time that is aliotted for cure of the same or otherwise, or any; event of default by Opryland of the Sublease which is not otherwise curable by Lender due to Lender's inability to take possession of the Fee Property within the time allotted for cure or otherwise (collectively, . 2 -- mnj'm inion of lender."" 9726507105 Feb -H-2003 13:54 From -Boyle & Lowry 9726507105 T-210 P.034/039 F-551 the "Noncurable Defaults"), City agrees, following any such termination of the Sublease, to execute a sublease agreement with Lender under terms and conditions as identical as possible to the Sublease, subject to the provisions of Section 7.10 of the Sublease. Lender's right to execute a sublease agreement for the Fee Property under this provision is conditioned on Lender's cure of ay other outstanding default, excepting Non -curable Defaults, which Noncurabic Defaults nshall be deemed permanently and fully remedied. 7. Lender's Rights Upon Opryland's Default under Loan Documents. In the event of Opryland's default under the Mortgage or any other agreement evidencing or securing - any borrowing of Opryland from Lender or any other future obligations or indebtedness eluding all extensions an of Opryland to Lender in d renewals thereof (all of such obligations are herein collectively referred to as "Opryland Obligations"), the Lender may, at its option, upon giving written notice to City (or the United States as to Opryland's rights under the Lease), enter upon the Fee Property and exercise all of Opryland's rights under the Sublease (or the Lease as provided therein and herein) provided that Lender during any suchtime assumes and performs the obligations of Opryland under the Sublease. Lender shall have the right to sublet the Sublease Premises or any part thereof and collect rents there from whicb are due or to become due, and apply the same after payment of all charges and expenses, to the Opryland Obligations, subject to the provisions of Section 7.10 of the Sublease. S. Lease Subordination. Notwithstanding the provisions of the Lease to the contrary, City shall neither be obligated nor permitted to execute any instrument which 0 the Fee subordinates the Lease to a mortgage on the United States' fee interest in and to Property (the "Fee Mortgage") unless such subordination instrument is in form and substance satisfactory to Opryland and Lender and provides that the foreclosure of the Fee Mortgage will not extinguish the Lease, the Sublease, any tenancy there under, or the Lender's Mortga-e or in any way impair the City's rights under the Lease, Opryland's z'ty interest in its collateral for the Opryland rights under the Sublease, or Lendcr's security Obligations, provided that all obligations of Opyrland under the Sublease have been satisfied. if the subordination instrument is in a forrn satisfactory to Opryland and Lender, Opryland and Lende shall be obligated to sign such insti-iiinent. 9. Sublease Subordination. 'Notwithstanding the provisions of the Sublease to the contrary, Opyr-land shall neither be obligated to nor permitted to execute any instrumentC� which subordinates the Sublease to a mortgage on city's leasehold interest in and to the Fee Property (the "Sublease Mortgage") unless such subordination instTument is in form and substance satisfactory to Lender and provides that the, foreclosure of the Sublease Mortgage will not extinct ish the lien of the Lender's Mortgage Or in any way impair the Lender's security interest in its collateral for the Opryland Obligations, provided that all obligations of Opryland under the Sublease have been satisfied. If the subordination instrument is in a form satisfactory to Lender, Lender shall be obligated to sign such instrument. permitted rTn d 10. NO tice, Each notice, demand, election or request provided for or itte to be given Pursuant to this Agreement (hereinafter in this Section referred to as"Notice") -must be in 9726507105 Feb -11-2003 13:55 From -Boyle & Lowry 9726507105 T-210 P.035/039 F-551 writing and shall be deemed to have been properly given or served by personal delivery or by sending same by overnight courier or by depositing same n the United States Mail, postage prepaid and registered or certified, return receipt requested, or by facsimile transmission or telegraph and addressed as follows: (A) If to Opryland: Gaylord Entertainment Company One Gaylord Drive Nashville, TN 37214 Attn_ Bennett Westbrook Senior Vice -President ofDevelopment (615) 316-6557 Facsimile with a copy to: Gaylord Entertairunent Company One Gaylord Drive Nashville, TN 37214 Attn. Carter Todd, Esq. General Counsel (615) 316-6544 Facsimile (B) If to Lender to the address or facsimile number provided by written notice of Lender or Opryland to City and the United States. (C) If to the United States: U -S. Army Corps of Engineers District Engineer Fort Worth District CES WF -RE -MM P.O. Box 17300 Fort Worth, Texas 76102 —0300 (8 17) 8867 Facsimile (D) If to City: City of Grapevine, Texas c/o Mayor P.O. Box 95104 Grapevine, Texas 76051 (817) 410- Facsimile Each notice shall be effective upon being personally delivered or upon being sent by ovemight courier or by facsimile transmission or telegraph or upon being deposited in the United States Mail as aforesaid. The time period within which a response to such notice must be given or any action taken with respect thereto (if any), however, shall coinruence to run from the date of receipt if personally delivered, sent by overnight courier, or sent by facsimile transmission or telegraph, or if so deposited in the United States Mail, the earlier of three (3) Business Days following such deposit or the date of receipt as disclosed on the return receipt. Rejection or other refusal to accept or the inability to gsyicrc�✓csxJ`erii�.:aron orlrndts.Joc 9726507105 Feb -it -2003 13:55 From -Boyle & Lowry 9726507105 T-210 P-036/039 F-551 deliver because of changed address for which no notice was given shall be deemed to be receipt of the notice sent. By giving at least thirty (3)) days prior notice thereof, Opryland and Lender shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America. Notwithstanding anything herein to the contrary, the "copy to" notice to be given as set forth above is a courtesy copy only; and a notice given to such person is not sufficient to effect giving a notice to the principal party, nor does a failure to give such a courtesy copy of a notice constitute a failure to give notice, to the principal party. 11. Liability of Lender. Nothing contained herein shall be held or construed to transfer or pass to or impose upon Lender any liability, obligation, warranty, duty or undertaking of any kind or nature which has been or is imposed upon, agreed to, or assumed by City or Opryland under the Lease or the Sublease respectively, unless Lender assumes such obligation for the purpose of maintaining such respective agreement in effect or curing a default or defaults by City or Opryland as provided herein, whether prior to or after termination of such agreement. The Lender shall be released and discharged from any liability it assumes with respect to either the Lease or the Sublease at such time as the Lender sells and assigns the respective tenancy created thereby. 12. Liability of City. Nothing contained herein shall affect, modify, release or relieve City from any obligations, warranties, liabilities, duties or undertakings -under the terms of the Lease, all of which shall be and remain enforceable against City. City hereby consents to the provisions hereof. I , 13. Liability of Opryland. Nothing contained herein shall affect, modify, release or C, relieve Opryland from any obligations, warranties, liabilities, duties or undertakings under the terms of the Sublease, all of which shall be and remain enforceable against Opryland. Opryland consents to the provisions hereof. 14. Successors and Assigns. This Agreement shall, be binding upon and inure to the benefit of the parties hereto and their successors and assigns. For the, purposes hereof, the - terms "United States", "City", "Opryland" and "Lender" shall be deemed to include the respective successors and assigns of each of said parties. 15, Recordation- Lender or Opryland shall be entitled to record this Agreement. 16, Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Texas and applicable Federal law. 17. Headings. The captions in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof. 18. Counterparls, This Agreement any amendment hereof may be executed M several QoLuiterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one -5— 9726507105 Feb -11-2003 13:55 From—Boyle & Lowry 9726507105 T-210 P.037/039 F-551 instrument. In proving this Agreement, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. 19. Third Party ,beneficiary_ This Agreement shall be binding upon aad enforceable by the parties hereto and by each Lender that from time to time mares a loan to Opryland secured by a Mortgage. Each such Lender shall be a third party beneficiary of this Agreement. Landlord will, within seven (7) days after written request providing the name and address of a prospective lender, confirm in writing the application of this agreement to such Iender and its Mortgage. IN WITNESS WHEREOF, this Verification of Lender's Rights is executed as of the day and year first above written. OPRYLAND HOTEL —TEXAS LIMITED :PARTNERSHIP BY: OPRYLAND HOSPITALITY, LLC ITS: GENERAL PARTNER BY: David Kloeppel ITS: Chief Financial Officer I THE UNITED STATES OF AMERICA BY AND THROUGH THE SECRETARY OF THE ARMY WA Hyla J'_ Head ITS: - Chief, Real Estate Division Fort 'Worth District U.S. Army Corps of Engineers CITY OF GRAPEVINE, TEXAS : Roger Nelson ITS: City Manager -6-- Bns�1':cca�wrificot�v� �f Irndcr.d.c 9726507105 Feb -11-2003 13:56 From -Boyle & Lowry 9726507105 T-210 P-038/039 F-551 Exhibit A Fee Property pYCran=U'vcH6ca,,ioj 01 i_,nder do< 9726507105 Feb-11-2003 13:56 From-Boyle & Lowry 9726507105 T-210 P.039/039 F-551 A `I �� z y EXHIBIT A 1 1�' PUBLIC APO t%IV BOAi •v Ctt ! •S%t.lyiylst ry4�+�.-_�+ �i.SiL ,•r ' �. ':t�:l . 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