EXHIBIT 4.5
TENANT SECURITY AGREEMENT
THIS TENANT SECURITY AGREEMENT is entered into as of August 28,
2002 by and between MARRIOTT RESIDENCE INN II LIMITED PARTNERSHIP, a Delaware
limited partnership with its principal office at 0 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 ("Secured Party"), and AHM RES II LIMITED PARTNERSHIP, a Virginia
limited partnership with its principal office at 0 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 ("Debtor").
WHEREAS, Secured Party, as landlord, and Debtor, as tenant, have
executed and delivered a Master Lease Agreement (the "Lease") dated as of August
28, 2002; and
WHEREAS, Debtor has agreed to purchase from Secured Party, and
Secured Party has agreed to sell to Debtor, certain existing Working Capital (as
hereinafter defined); and
WHEREAS, as a condition to the obligation of Secured Party to enter
into the Lease and to sell the Working Capital to Debtor, Debtor is required to
enter into this Agreement and to grant to Secured Party a security interest in
the Collateral (as hereinafter defined) to secure, among other things, Debtor's
obligations under the Lease; and
WHEREAS, unless otherwise defined herein, defined terms shall have
the meanings specified in Section 8 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. SECURITY INTEREST
1.1. Collateral
As security for the Secured Obligations, Debtor hereby grants to
Secured Party a security interest in and lien on, and assigns and pledges to
Secured Party, all of the following (the "Collateral"):
(a) all of Debtor's rights, title and interests in and to tangible
and intangible personal property of every kind or nature including without
limitation all present and future Inventory, Equipment (including items of
equipment which are or become fixtures), Inventories, Fixed Asset Supplies,
Accounts, net receivables due from the manager under the Management Agreement,
permits, licenses, General Intangibles, Chattel Paper, Documents, Instruments,
Excess FF&E and Working Capital now or hereafter owned, held or leased;
(b) all of Debtor's rights, title and interests in and to all
Assigned Agreements;
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(c) any and all additions to any of the foregoing, and any and
all replacements, products and proceeds (including, without limitation,
insurance proceeds) of any of the foregoing; and
(d) all of Debtor's rights, title and interests in and to all
funds from time to time on deposit in lockboxes maintained pursuant to the
Lease.
1.2. Right of Secured Party to Pay Taxes or Costs Relating to
Collateral
Secured Party shall have the right, but not the obligation, to pay
any taxes or levies on the Collateral or any costs to repair, maintain, protect
or preserve the Collateral, which payment shall be made for the account of
Debtor and shall constitute a part of the Secured Obligations.
1.3. Financing Statements
Debtor will promptly join with Secured Party in executing financing
statements, continuation statements, assignments, certificates and other
documents with respect to the Collateral pursuant to the Uniform Commercial Code
and otherwise as may be reasonably requested by Secured Party to create,
perfect, preserve, validate or otherwise protect the security interests granted
hereby (including without limitation such financing statements, continuation
statements, assignments, certificates and other documents as may be requested by
Secured Party to perfect a security interest in any additional property or
rights hereafter acquired by Debtor or in any replacements or proceeds thereof
in each case, in the form prepared by Secured Party, and Secured Party will pay
the cost of filing the same in all public offices wherever Secured Party deems
filing to be necessary or desirable. Debtor grants Secured Party the right, at
Secured Party's option, to file any or all such financing statements,
continuation statements, assignments, certificates and other documents pursuant
to the Uniform Commercial Code and otherwise on Debtor's behalf, without
Debtor's signature. Debtor hereby irrevocably appoints Secured Party as Debtor's
attorney in fact (such appointment being coupled with an interest) to execute
any such financing statements, continuation statements, assignments,
certificates and other documents in Debtor's name, and to perform all other acts
which Secured Party deems appropriate to perfect and continue the security
interests conferred or intended to be conferred by this Agreement, if Debtor
shall have failed to execute and deliver to Secured Party such statement,
assignment, certificate or other document, or to perform such act, within 15
days following Secured Party's written request to Debtor to do so.
1.4. Injury to Collateral
No injury to, or loss or destruction of, the Collateral shall
relieve Debtor of any of the Secured Obligations or any of its obligations under
this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF DEBTOR
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Debtor hereby represents and warrants to Secured Party that:
2.1. Authority
Debtor is duly organized, validly existing and in good standing under
the laws of the state of its organization identified hereinabove, is qualified
to do business and is in good standing in all jurisdictions where its activities
or ownership of property require it to be so qualified, and has the full and
unrestricted power and authority to own, operate and lease its properties, to
carry on its business as currently conducted, to execute, deliver and perform
this Agreement and any other instruments or agreements executed in connection
herewith, and to incur the obligations provided for herein and therein and to
perform the transactions contemplated hereby and thereby, all of which have been
duly and validly authorized by all proper and necessary actions, all of which
actions are in full force and effect.
2.2. Approvals
No approval, consent or other action by any holder of equity
interests in Debtor, by any governmental authority, or by any other person or
entity, is or will be necessary to permit the valid execution, delivery or
performance by Debtor of this Agreement or of any other instruments or
agreements executed in connection herewith.
2.3. Binding Effect, No Violations
Each of this Agreement and the other instruments or agreements
executed in connection herewith, upon its execution and delivery, will
constitute a legal, valid and binding obligation of Debtor, enforceable against
Debtor in accordance with its terms. The execution, delivery and performance of
this Agreement and of all other instruments or agreements executed in connection
herewith will not (a) violate, conflict with, or constitute a default under any
applicable law, regulation, order or any other requirement of any governmental
authority or arbitrator, any terms of the organizational documents of Debtor, or
any contract, agreement or other arrangement binding upon or affecting Debtor or
any of its properties, (b) except as contemplated hereby, result in the
creation, imposition or acceleration of any indebtedness or any security
interest, pledge, mortgage, lien, reservation, covenant, restriction or other
encumbrance (each of the foregoing hereinafter referred to as an "Encumbrance")
of any nature upon, or with respect to, Debtor or any of its properties, (c)
have an adverse effect on the conduct of Debtor's business as it is now being
conducted, or (d) otherwise impair the value, perfection or enforceabilty of the
security interests granted to Secured Party hereunder.
2.4. Title to Collateral
As of the date hereof, Debtor owns the Collateral free from all
Encumbrances created by Debtor or arising in respect of any obligation of Debtor
or arising by reason of any
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act or omission of Debtor in favor of any person other than Secured Party. Upon
the execution and delivery of this Agreement, and upon the filing of financing
statements referred to in Section 1.3 hereof, Secured Party will have a good,
valid and perfected lien on and security interest in the Collateral, subject to
no Encumbrances created by Debtor in favor of any other person or entity, but
subject to any security interests in the Collateral that may have been created
prior to Debtor's acquisition thereof, including, without limitation, security
interests in favor of Mortgage Lender with respect to the Working Capital sold
by Secured Party to Debtor and with respect to any Excess FF&E acquired by
Debtor from time to time.
2.5. No Default
No event which constitutes, or with notice, lapse of time or other
condition could constitute, an Event of Default has occurred or is continuing.
Debtor is not, to its knowledge, in default under any contract or agreement,
which default would have a material adverse effect on the business, properties
or condition, financial or otherwise, of Debtor, or in default in the
performance of any representations, warranties, covenants or conditions
respecting any of its indebtedness, and no holder of any indebtedness of Debtor
has given notice of any asserted default thereunder, and no liquidation or
dissolution of Debtor and no receivership, insolvency, bankruptcy,
reorganization or other similar proceedings relative to Debtor or its properties
is pending or, to its knowledge, is threatened against it.
2.6. Financing Statements
No financing statement (other than any which may have been filed on
behalf of Secured Party or Mortgage Lender) relating to any of the Collateral
has been or will be signed by Debtor; provided, however, that such financing
statements may be filed by Debtor with respect to such liens in favor of other
lessors of Equipment as (i) are permitted by the terms of the Lease, (ii) arise
in the ordinary course of Debtor's business and (iii) are of types for which
Secured Party customarily filed financing statements for similar Equipment used
in the Facilities prior to the Commencement Date of the Lease.
2.7. Location of Offices, Collateral and Records
Debtor maintains its places of business and its chief executive
office only in the locations set forth in Exhibit A attached hereto. Debtor's
Inventory, Equipment, Inventories and Fixed Asset Supplies are located only at
the foregoing locations or at the Hotels. The records and books of account
relating to the Collateral are located only at Debtor's chief executive office
or at the Hotels.
3. AFFIRMATIVE COVENANTS OF DEBTOR
From and after the Commencement Date and until all Secured
Obligations of Debtor have been paid in full and performed, Debtor hereby
covenants that it shall, unless Secured Party otherwise consents in advance in
writing:
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3.1. Maintenance of Property
Keep all Collateral in good repair, working order and condition, and
from time to time make all necessary or desirable repairs, renewals and
replacements thereof, as provided in the Lease with respect to the "Leased
Property" and "Lessee's Personal Property' (as such terms are defined in the
Lease).
3.2. Books and Records
Keep and maintain, at the Debtor's chief executive office described
in Section 3.5 hereof or at the Hotels, adequate and proper records and books of
account pertaining to the Collateral, in which complete entries are made in
accordance with generally accepted accounting principles consistently applied
and in accordance with all laws, regulations, orders and other requirements of
any court, tribunal, arbitrator or governmental authority, reflecting all
financial and other transactions of Debtor pertaining to the Collateral normally
and customarily included in records and books of account of companies engaged in
the same or similar businesses and activities as Debtor.
3.3. Access to Debtor's Employees and Books and Records
Permit Secured Party and any agents or representatives thereof, at
Secured Party's sole cost and expense, at any and all reasonable times during
normal business hours and upon reasonable prior written notice, to (i) visit and
inspect the Collateral, (ii) examine and make abstracts from any of Debtor's
books and records and (iii) discuss the business, operations, properties and
condition (financial or otherwise) of Debtor with any of the officers, directors
and employees of Debtor.
3.4. Collateral
Maintain, or cause to be maintained, at all times, Secured Party's
security interest in the Collateral; immediately upon learning thereof, report
to Secured Party any material reclamation, return or repossession of goods, any
claim or dispute asserted by any debtor or other obligor of Debtor, and any
other matters affecting Debtor's rights or the value or enforceability or
collectibility of any of the Collateral; defend the Collateral against all
claims and demands of all persons at any time claiming the same or any interest
therein adverse to Secured Party (other than any claim or demand of Mortgage
Lender, or any claim or demand of any other person with respect to any
indebtedness or other obligation of Secured Party arising prior to the date (if
any) on which Debtor acquired the relevant Collateral from Secured Party) and
pay all costs and expenses (including attorneys' fees and expenses) incurred in
connection with such defense; at Debtor's sole cost and expense (including
attorneys' fees and expenses), settle any and all such claims and disputes and
indemnify and protect Secured Party against any liability, loss or expense
arising therefrom or out of any such reclamation, return or repossession of any
of the Collateral, provided, however, if Secured Party shall so elect, it shall
have the right at all times to settle, compromise, adjust or litigate all claims
or disputes directly with Debtor or other obligor of
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Debtor upon such terms and conditions as Secured Party deems advisable, and to
charge all costs and expenses thereof (including attorneys' fees and expenses)
to Debtor's account and to add them to the Secured Obligations.
3.5. Change in Places of Business or Chief Executive Office
Maintain Debtor's places of business and its chief executive office
only in the locations set forth in Exhibit A attached hereto, and in such other
places as Debtor may select, provided that Debtor shall provide to Secured Party
at least thirty (30) days'prior written notice of any changes in or additions to
the locations of Debtor's places of business or of Debtor's chief executive
office; maintain Debtor's Inventory, Equipment, Inventories and Fixed Asset
Supplies only at the foregoing locations or at the Hotels; and maintain the
records and books of account relating to the Collateral only at Debtor's chief
executive office or at the Hotels.
3.6. Notice of Default and Loss
Provide to Secured Party written notice of any Default or Event of
Default and of any loss or damage to the Collateral, however occasioned,
immediately upon the occurrence of such Default or Event of Default or loss or
damage.
4. NEGATIVE COVENANTS OF DEBTOR
Until all Secured Obligations of Debtor are paid in full and
performed, Debtor hereby covenants and agrees that it shall not, unless Secured
Party otherwise consents in advance in writing:
4.1. Encumbrances
Directly or indirectly create, incur, assume or permit to continue in
existence any Encumbrance on the Collateral, except for Encumbrances expressly
permitted by the terms of the Lease.
4.2. Transfer of Assets
Sell, lease, assign, transfer or otherwise dispose of any of the
Collateral, or any interest in any of the foregoing (any such act, a
"Disposition") except that Debtor may make such Dispositions of Collateral as
shall (a) occur in the ordinary course of Debtor's business with respect to the
use and replacement of Working Capital and Excess FF&E or with respect to the
expiration, termination, revocation, nonrenewal or replacement of Assigned
Agreements, as the case may be (provided, that the property disposed of is
replaced with property of similar utility and value), or (b) be required or
contemplated by this Agreement, the Lease or the Working Capital Note upon the
expiration or termination of the Hotel Lease; provided, however, that, in the
case of clauses (a) and (b), any such Disposition shall be made in compliance
with an other applicable provisions of this Agreement, the Lease, the Facility
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Mortgagee Agreement and any other agreement to which Debtor is a party and which
is applicable to the Collateral involved in such Disposition.
4.3. Location of Collateral
Change the location of any items of Inventory, Equipment,
Inventories or Fixed Asset Supplies from the places of business where such items
of Collateral are required to be located by Section 3.6 hereof.
5. EVENTS OF DEFAULT
Debtor shall be in default under this Agreement upon the happening
of any one or more of the following events or conditions ("Events of Default"):
5.1. Representations and Warranties
Any representation or warranty of Debtor made herein shall prove to
have been incorrect or misleading in any material respect on or as of any date
as of which made.
5.2. Observance of Covenants and Agreements
Debtor shall fail to observe or perform any term, covenant or
agreement contained in this Agreement (other than those referenced in Section
5.1 hereof and such failure shall continue unremedied for a period of fifteen
(15) Business Days after written notice thereof from Secured Party to Debtor.
5.3. Event of Default under Lease
An "Event of Default" under, and as such term is defined in the
Lease shall occur.
6. RIGHTS OF SECURED PARTY UPON OCCURRENCE OF EVENT OF DEFAULT
6.1. Miscellaneous Rights of Secured Party
In the event that the Lease is terminated in connection with the
occurrence of any Event of Default, Secured Party shall have the right (a) to
declare all of the Secured Obligations to be immediately due and payable,
whereupon all such Secured Obligations shall become immediately due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by Debtor, anything contained herein to the contrary
notwithstanding; (b) to exercise any one or more of the rights and remedies
exercisable by Secured Party under other provisions of this Agreement or
exercisable by a secured party under the Uniform Commercial Code or under any
other applicable law; and (c) to exercise, in the name of Debtor or in the name
of Secured Party,
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such rights and powers with respect to the Collateral as Debtor might otherwise
be entitled to exercise, including without limitation the right to:
(i) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for, the Collateral or any part
thereof;
(ii) insure, maintain, repair, protect, process and preserve
the Collateral;
(iii) transfer the Collateral or any part thereof to the name of
Secured Party or to the name of the Secured Party's nominee;
(iv) receive, open and dispose of mail `addressed to Debtor
relating to the Collateral or any part thereof;
(v) initiate, pursue, compromise, settle or withdraw any
claims, suits or proceedings pertaining to the Collateral or any part thereof or
on account of its sale or lease;
(vi) appoint another (who may be an employee, officer or other
representative of Secured Party) to do any of the foregoing on behalf of Secured
Party; and
(vii) take any other action which Secured Party deems necessary
or desirable to protect and realize upon its security interest in the Collateral
or any part thereof, and Debtor hereby irrevocably appoints Secured Party as
Debtor's attorney in fact to take any such action which Debtor shall have failed
to take within 15 days of Secured Party's written request to Debtor to do so,
including the execution and delivery of any and all documents or instruments
related to the Collateral or any part thereof in Debtor's name, and said
appointment shall create in Secured Party a power coupled with an interest,
which shall be irrevocable.
Failure to exercise such rights or remedies shall not constitute a waiver of
such rights or remedies or of the right to exercise any of the same in the event
of any subsequent Event of Default.
6.2. Right of Secured Party to Take Possession and Foreclose
In the event that the Lease is terminated in connection with the
occurrence of any Event of Default, Secured Party shall have the right to take
possession of the Collateral and of any and all books of account and records of
Debtor relating to any of the Collateral, the right to place Secured Party's
representatives upon any premises on which the Collateral or any part thereof or
any such books of account and records may be situated with fun power to remove
the same therefrom, and the right to exclude Debtor and all persons claiming
under Debtor from any access to the Collateral or to any part thereof. Secured
Party may require
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Debtor to assemble the Collateral or any part thereof and to make the same (to
the extent the same is moveable) available to Secured Party at a place to be
designated by Secured Party which is reasonably convenient to all parties.
Secured Party may render the Collateral or any part thereof unusable without
removing the same from the premises on which it may be situated, and may sell
the same on the premises of Debtor if such Collateral or part thereof is
situated thereon. Secured Party will give Debtor at least ten (10) days' prior
written notice of the time and place of any public sale of the Collateral or of
the time after which any private sale or any other intended disposition thereof
is to be made, which notice shall constitute reasonable notice. In addition to
exercising the foregoing rights, Secured Party may, to the extent permitted by
law, arrange for and conduct the sale of the Collateral at a public or private
sale, as Secured Party may elect, which sale may be conducted by an employee or
representative of Secured Party, and such sale shall be considered or deemed to
be a sale in a commercially reasonable manner. Secured Party may release,
temporarily or otherwise, to Debtor any item of Collateral of which Secured
Party has taken possession pursuant to any right granted to Secured Party by
this Agreement without waiving any rights granted to Secured Party under this
Section 6.2. Secured Party, in dealing with or disposing of the Collateral or
any part thereof, shall not be required to give priority or preference to any
item of Collateral or otherwise to xxxxxxxx assets.
6.3. Right of Secured Party to Collect and Service Receivables and
Other Collateral
In the event that the Lease is terminated in connection with the
occurrence of any Event of Default, Secured Party may notify or may require
Debtor to notify any person or entity obligated to Debtor under any Collateral
that the right to receive payment and/or performance of such obligations has
been assigned to Secured Party and that such obligor should make payment or
performance of such obligations directly to Secured Party, and Secured Party may
take possession of and exercise control over all proceeds of such payments in
Debtor's possession or otherwise, and may take any other action which Secured
Party deems necessary or desirable to collect such payments or enforce such
performance. To evidence Secured Party's rights hereunder, Debtor shall execute
such assignments or endorsements as Secured Party may request, including without
limitation assignments as required by the Assignment of Claims Act or other
applicable law.
6.4. Right of Secured Party to Use and Operate Collateral
In the event that the Lease is terminated in connection with the
occurrence of any Event of Default, upon Secured Party's taking possession of
all or any part of the Collateral pursuant to any right granted Secured Party by
this Agreement, Secured Party shall have the right to hold, store and/or use,
operate, manage and control the same. Upon any such taking of possession,
Secured Party may, from time to time, at the expense of Debtor, make all such
repairs, replacements, alterations, additions and improvements to and of all or
any of the Collateral as Secured Party may deem proper. In any such case Secured
Party shall have the right to exercise all rights and powers of Debtor in
respect of the Collateral or any part thereof as Secured Party shall deem best,
including the right to enter into any and all such
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agreements with respect to the leasing and/or operation of the Collateral or any
part thereof as Secured Party may see fit; and Secured Party shall be entitled
to collect and receive all dividends, interest, rents, issues, profits, fees,
revenues, income and other proceeds of the same and every part thereof.
6.5. Application of Proceeds
All dividends, interest, rents, issues, profits, fees, revenues,
income and other proceeds from collecting, leasing, holding, operating,
managing, selling or otherwise disposing of the Collateral or any part thereof
shall be applied in such order as Secured Party shall determine in its sole
discretion.
6.6. Right of Secured Party to Appoint Receiver
Without limiting any other rights granted to Secured Party under
this Agreement, in the event that the Lease is terminated in connection with the
occurrence of any Event of Default, Secured Party shall have the right to apply
for and have a receiver appointed by a court of competent jurisdiction in any
action taken by Secured Party to enforce its rights and remedies hereunder in
order to manage, protect and preserve the Collateral and continue the operation
of the business of Debtor and to collect all revenues and profits thereof and
apply the same to the payment of all expenses and other charges of such
receivership, including the compensation of the receiver, and to the payments as
aforesaid until a sale or other disposition of such Collateral shall be finally
made and consummated.
7. MISCELLANEOUS PROVISIONS
7.1. Additional Actions and Documents
Debtor hereby agrees to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments, and to obtain such consents, as
may be necessary or as may be reasonably requested in order to fully effectuate
the purposes, terms and conditions of this Agreement, whether before, at or
after the closing of transactions contemplated hereby or the occurrence of an
Event of Default hereunder.
7.2. Expenses
Debtor agrees, whether or not the transactions hereby contemplated
shall be consummated, to reimburse and save Secured Party harmless against
liability for the payment of all out-of-pocket expenses arising in connection
with the enforcement of, or the preservation or exercise of any rights
(including the right to collect and dispose of the Collateral) under, this
Agreement, including without limitation the reasonable fees and expenses of
counsel to Secured Party arising in such connection.
7.3. Notices
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(a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
shall be deemed adequately given if in writing and the same shall be delivered
either in hand, by telecopier with computer generated acknowledgment of receipt,
or by mail or Federal Express or similar expedited commercial carrier, addressed
to the recipient of the notice, postpaid and certified with return receipt
requested (if by mail), or with all freight charges prepaid (if by Federal
Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
(c) All such notices shall be addressed:
If to Debtor to:
AHM Res II Limited Partnership
c/o Apple Hospitality Two, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
with a copy (which shall not constitute notice) to:
Jenkens & Xxxxxxxxx, P.C.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx, Esq.
If to Secured Party to:
Marriott Residence Inn II Limited Partnership
c/o Apple Hospitality Two, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
with a copy (which shall not constitute notice) to:
Jenkens & Xxxxxxxxx, P.C.
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0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx, Esq.
(d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time to time
and at any time to change their respective addresses effective upon receipt by
the other parties of such notice and each shall have the right to specify as its
address any other address within the United States of America.
7.4. Waiver by Secured Party
No waiver by Secured Party of, or consent by Secured Party to, a
variation from the requirements of any provision of this Agreement Shan be
effective unless made in a written instrument duly executed on behalf of Secured
Party by its duly authorized officer, and any such waiver Shan be limited solely
to those rights or conditions expressly waived. No single or partial exercise by
Secured Party of any right under this Agreement, under the Note or under any
other agreement given as security for the Note or pertaining thereto, Shan
preclude any other or further exercise thereof or the exercise of any other
rights. No delay or omission on the part of Secured Party in exercising any
right under this Agreement shall operate as a waiver of such right or of any
other right under this Agreement.
7.5. Termination; Release of Collateral
Promptly following performance and indefeasible payment in
full of the Secured Obligations, the security interest created hereby shall
terminate, and Secured Party shall execute and deliver such documents, at
Debtor's expense, as are necessary to release Secured Party's security interest
in the Collateral.
7.6. Benefit and Assignment
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement may not be assigned by Debtor without the prior written
consent of Secured Party. Debtor acknowledges that Secured Party may assign its
rights hereunder to one or more third parties, including, without limitation,
Mortgage Lender.
7.7. Severability
In the event that any term or provision of this Agreement or
any other Loan Document shall be finally determined to be superseded, invalid,
illegal or otherwise
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unenforceable pursuant to applicable law by a governmental authority or agency
having jurisdiction and venue, that determination shall not impair or otherwise
affect the validity, legality or enforceability (a) by or before that
governmental authority or agency of the remaining terms and provisions of this
Agreement and the other Loan Documents, which shall be enforced as if the
unenforceable term or provision were deleted, or (b) by or before any other
governmental authority or agency of any of the terms and provisions of this
Agreement and the other Loan Documents.
7.8. Survival
It is the express intention and agreement of the parties hereto that
all covenants and agreements, statements, representations, warranties and
indemnities made by Debtor shall survive the execution and delivery of this
Agreement.
7.9. Rights Cumulative
The rights and remedies of Secured Party described herein are
cumulative and not exclusive of any other rights or remedies which Secured Party
otherwise would have at law or in equity or otherwise. No notice to or demand on
Debtor in any case shall entitle Debtor to any other notice or demand in similar
or other circumstances.
7.10. Modification
This Agreement and the exhibits hereto (which constitute an integral
part hereof and are hereby incorporated herein by this reference) may not be
modified, deleted or amended in any manner except by agreement in writing
executed by the parties.
7.11. Construction
This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of the State of New York (other than those conflict
of law provisions that would defer to the substantive laws of another
jurisdiction); it being understood, however, that to the extent that this
Agreement refers to any right or obligation of a party hereto under any other
agreement, such right or obligation shall be governed by and construed in
accordance with the governing law provided in such other agreement. Without in
any way limiting the preceding choice of law, the parties elect to be governed
by New York law in accordance with, and are hereby relying (at least in part) on
Section 5-1401 of the General Obligations Law of the State of New York. Each
party hereto hereby acknowledges that all parties hereto participated equally in
the negotiation and drafting of this Agreement and that, accordingly, no court
construing this Agreement shall construe it more stringently against one party
than against the other.
7.12. Pronouns
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All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the person or entity may require.
7.13. Headings
Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
7.14. Execution
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for any particular number of counterparts; but rather any
number of counterparts shall be sufficient so long as those counterparts contain
the respective signatures of, or on behalf of, all of the parties hereto.
7.15. Filing
A photographic or other copy of this Agreement may be filed in
lieu of a financing statement.
7.16. Subordinate Security Interest
Each party hereto hereby acknowledges that the security interests
created hereby are subordinate to any security interest held by the Mortgage
Lender in the Collateral.
8. DEFINITIONS AND REFERENCES
As used in this Agreement, the following terms shall have the
meanings specified in this Section 8, unless the context otherwise requires:
"Accounts" shall mean "accounts" under and as defined in Article 9
of the Uniform Commercial Code.
"Agreement" shall mean this Security Agreement, as the same from
time to time may be amended, supplemented or modified.
"Assigned Agreements" shall mean:
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(a) All contracts for the use or occupancy of guest rooms and/or
the meeting, dining, banquet, and spa and health facilities of the Facilities;
(b) All service and maintenance contracts, equipment leases,
purchase orders and other contracts pertaining to the ownership, maintenance,
operation, provisioning or equipping of the Facilities, including warranties and
guaranties relating thereto;
(c) All Licenses and permits used in or relating to the
ownership, occupancy or operation of any part of the Facilities;
(d) Any developer's, declarant's, or owner's interests under any
operating agreements or reciprocal easement agreements or other similar
agreements affecting and/or benefiting the Facilities;
(e) Debtor's interest as owner under the Management Agreement as
and to the extent provided in the Asignment Agreement; and
(f) All leases of space (including any security deposits held by
Debtor pursuant thereto, which will be paid over to Debtor by check on the
effective date of the Master Lease, in the Facilities to tenants thereof.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in the State of Maryland are authorized or
required by law to close.
"Chattel Paper" shall mean "chattel paper" under and as defined in
in Article 9 of the Uniform Commercial Code.
"Collateral" shall have the meaning assigned to that term in Section
1.1 hereof
"Commencement Date" shall have the meaning assigned to that term in
the Lease.
"Debtor" shall have the meaning assigned to that term in the
Preamble hereof
"Default" shall mean any of the events specified in Section 5
hereof, whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Documents" shall mean "documents" under and as defined in in
Article 9 of the Uniform Commercial Code.
"Encumbrance" shall have the meaning assigned to that term in
Section 2.3 hereof
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"Equipment" shall mean "equipment" under and as defined in Article 9
of the Uniform Commercial. Code.
"Event of Default" shall mean any of the events specified in
Section 5 hereof, provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been satisfied.
"Excess FF&E" shall mean any FF&E acquired by Debtor in its own name
for use in connection with the Facilites.
"Facilities" shall mean the hotel properties listed on Exhibit B
attached hereto.
"Facility Mortgagee Agreement" shall mean the Facility Mortgagee
Agreement, dated as of August 28, 2002, between Debtor, Secured Party, Lasalle
Bank National Association (F/K/A Lasalle National Bank), As Trustee For Nomura
Asset Securities Corporation Commercial Mortgage Pass-Through Certificates,
Series 1996-Md V and Apple Hospitality Two, Inc., a Virginia corporation, as the
same from time to time may be amended, supplemented or modified.
"Fixed Asset Supplies" shall have the meaning assigned to that term
in the Uniform System.
"General Intangibles" shall mean "general intangibles" under and as
defined in Article 9 of the Uniform Commercial Code.
"Instruments" shall mean "instruments" under and as defined in
Article 9 of the Uniform Commercial Code.
"Inventories" shall have the meaning assigned to that term in the
Uniform System, including without limitation provisions in storerooms,
refrigerators, pantries and kitchens; beverages in wine cellars and bars; other
merchandise intended for sale; fuel; mechanical supplies; stationery; and other
expensed supplies and similar items.
"Inventory" shall mean "inventory" under and as defined in Article 9
of the Uniform Commercial Code.
"Lease" shall have the meaning assigned to that term in the Recitals
hereof.
"Manager" shall mean Residence Inn by Marriott, Inc. a Delaware
corporation.
"Management Agreement" shall mean that certain Amended and Restated
Management Agreement by and between Debtor and Manager dated August 28, 2002.
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"Mortgage Lender" shall mean the holder or holders from time to time
of any indebtedness of Secured Party, its successors and assigns, secured by a
mortgage, deed of trust or similar lien on the properies covered by the Lease.
"Secured Obligations" shall mean (i) any and all payment and other
obligations of Debtor under the Lease, and any and all renewals, modifications
or extensions thereof, (ii) any and all payment and other obligations of Debtor
hereunder, and any and all renewals, modifications or extensions hereof, and
(iii) any and all payment and other obligations of Debtor to Secured Party under
any other agreement or instrument referred to in, contemplated by, or delivered
in connection with, the Lease or this Agreement.
"Secured Party" shall have the meaning assigned to that term in the
Preamble hereof
"Uniform Commercial Code" shall mean the Uniform Commercial Code in
effect from time to time in the State of Virginia.
"Uniform System" shall mean the Uniform System of Accounts for the
Lodging Industry (9th Revised Edition, 1996) as published by the Hotel
Association of New York City, Inc., as the same may hereafter be revised.
"Working Capital" shall mean working capital (including (a)
Inventories, Fixed Asset Supplies, and net receivables due from the Manager, and
(b) accounts payable, accrued payroll expenses and other accrued expenses
related to the Facilities).
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered in its name and on its behalf, all
as of the day and year first above written.
SECURED PARTY:
MARRIOTT RESIDENCE INN II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AHT Res II GP, L.P., a Virginia limited
partnership, its General Partner
By: /s/ Xxxxx X Xxxxxx
--------------------
Name: Xxxxx X Xxxxxx
------------------
Its: CEO
------------------
DEBTOR:
AHM RES II LIMITED PARTNERSHIP, a Virginia
limited partnership
By: AHM Res II GP, Inc., a Virginia
corporation
By: /s/ Xxxxx X Xxxxxx
--------------------
Name: Xxxxx X Xxxxxx
------------------
Its: CEO
------------------
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Exhibit A to
Tenant Security
Agreement
Places of Business, Chief Executive Office and Location of Collateral
Principal office, as set forth in the heading of this Agreement
Locations of the Facilities
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Exhibit B to
Tenant Security Agreement
Facilities
1) Birmingham, Alabama
#0 Xxxxxxxxx Xxxxxxx at U.S. Hwy. 280
Birmingham, Alabama 35243
2) Arcadia, California
Huntington Drive and Second Street just off I-210
Arcadia, California
3) Irvine, California
Xxxxx Pkwy and Xxxxxx near I-5 and X-000
Xxxxxx, Xxxxxxxxxx
4) Placentia, California
000 Xxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
5) Boca Raton, Florida
000 XX 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
6) Jacksonville, Florida
Interstate 95 and Baymeadows Exit
0000 Xxx Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
7) Pensacola, Florida
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
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8) St. Petersburg/Clearwater, Florida
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
9) Chicago/Deerfield, Illinois
Corporate 000 Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
10) Boston/Danvers, Massachusetts
U.S. Route 1
Danvers, Massachusetts
11) Kalamazoo, Michigan
X-00 xxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx
12) Jackson, Mississippi
000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
13) Santa Fe, New Mexico
0000 Xxxxxxxx Xxxxxx
Xxxxx Xx, Xxx Xxxxxx 00000
14) Charlotte North, North Carolina
0000 X.X. Xxxxxxx 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
15) Greensboro, North Carolina
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
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00) Xxx Xxxxx, Xxxxxx
Xxxxxxxx Xxxx and Convention Center Drive
Las Vegas, Nevada
17) Akron, Ohio
000 Xxxxxxxx Xxxx Xxxxxx
X-00 at Xxxxx 00
Xxxxx, Xxxx 00000
18) Philadelphia/Berwyn, Pennsylvania
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
19) Columbia, South Carolina
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
20) Spartanburg, South Carolina
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
21) Memphis East, Tennessee
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
22) Lubbock, Texas
0000 Xxxxx Xxxx 000
Xxxxxxx, Xxxxx 00000
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