Exhibit 10.4
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "AGREEMENT") is entered into as of
this _____ day of _______, 1997, by and between ________ ______________, a
________ ___________ (the "TENANT"), and _________________________, a
Maryland real estate investment trust "SECURED PARTY").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Lease Agreement, dated as of the
date hereof (the "LEASE"), the Secured Party leased to the Tenant and the
Tenant leased from the Secured Party certain premises, as more particularly
described in EXHIBITS A-1 THROUGH A-14, attached hereto and made a part
hereof, and subject to and upon the terms and conditions set forth in the
Lease; and
WHEREAS, as security for the payment and performance of each and
every obligation and liability of the Tenant to the Secured Party under the
Lease (collectively, the "OBLIGATIONS"), including, without limitation, the
payment of the Rent (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in
SECTION 1), the Tenant has agreed to grant to the Secured Party a first and
perfected lien and security interest in the Collateral;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings specified below:
"BUSINESS DAY" shall have the meaning given such term in the
Lease.
"COLLATERAL" shall mean all of the Tenant's right, title and
interest in and under or arising out of all and any personal property,
intangibles and fixtures of any type or description which constitute or
arise from the operation, maintenance or repair of the Leased Property,
together with any and all additions, replacements, products and proceeds,
including, but not limited to, the following:
(a) all goods, including, without limitation, the Equipment;
(b) all of the Leased Intangible Property;
(c) all Licenses; and
(d) all other personal property or fixtures of any nature
whatsoever which relate to the operation, maintenance or
repair of the Leased Property and all property from time to
time described in any financing statement signed by the
Tenant naming the Secured Party as secured party.
"EQUIPMENT" shall mean all structures, improvements, fixtures and
items of machinery, equipment and other tangible personal property which
constitute, arise from or relate to the operation, maintenance or repair of
the Leased Property, together with all repairs, replacements, improvements,
substitutions, extensions or renewals thereof or additions thereto, all
parts, additions and accessories incorporated therein or affixed thereto,
and all cash and non-cash proceeds therefrom.
"EVENT OF DEFAULT" shall have the meaning given such term in
SECTION 4.
"HOTELS" shall have the meaning given such term in the Lease.
"INSTRUMENT" shall have the meaning give such term in Article 3
of the Uniform Commercial Code, as in effect from time to time in the
jurisdiction in which any of the Collateral is located.
"LEASED INTANGIBLE PROPERTY" shall have the meaning given such
term in the Lease.
"LEASED PROPERTY" shall have the meaning given such term in the
Lease.
"LEASE" shall have the meaning given such term in the preambles
to this Agreement.
"LICENSES" shall mean all licenses, permits, rights of use,
covenants or rights otherwise benefiting or permitting the use and
operation of the Leased Property or any part thereof pertaining to the
operation, maintenance or repair of the Leased Property, other than liquor
licenses.
"OBLIGATIONS" shall have the meaning given such term in the
preambles to this Agreement.
"OVERDUE RATE" shall have the meaning given such term in the
Lease.
"PERSON" shall have the meaning given such term in the Lease.
"RENT" shall have the meaning given such term in the Lease.
SECTION 2. SECURITY INTEREST. As security for the prompt
payment and performance of all the Obligations, the Tenant hereby grants,
pledges, transfers and assigns to the Secured Party, its successors and
assigns and all other holders from time to time of the Obligations, a
continuing security interest under the Uniform Commercial Code from time to
time in effect in the jurisdiction in which any of the Collateral is
located in and a continuing lien upon all of the Tenant's right, title and
interest in the Collateral, together with any and all additions thereto and
replacements, products and proceeds thereof, whether now existing or
hereafter arising or acquired and wherever located.
SECTION 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Tenant represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this
Agreement, as follows:
(a) The chief executive offices and chief place of business
of the Tenant is set forth in SCHEDULE 1 and the Tenant will not move its
chief executive office or its chief place of business or operations without
giving prior written notice thereof to the Secured Party. The originals of
all documents evidencing Collateral and the only original books of account
and records of the Tenant relating thereto are, and will continue to be,
kept at such chief executive office or the Hotels.
(b) The name of the Tenant is as set forth on the signature
page hereto. The name under which each of the Hotels is operated is set
forth on SCHEDULE 2. The Tenant shall not change such names, conduct its
business at or related to the Hotel in any other name or take title to any
Collateral in any other name, except as otherwise permitted by the Lease
without prior written notification to Secured Party.
(c) The Secured Party is authorized (but is under no
obligation) to make, upon ten (10) Business Days' notice to the Tenant
(except in the case of exigent circumstances, in which circumstances upon
such notice, if any, as may then be reasonably practical), any payments
which in the Secured Party's opinion are necessary to discharge any liens
which have or may take priority over the lien hereof, upon the failure of
the Tenant to make such payments within the time permitted therein. The
Tenant shall have no claim against the Secured Party by reason of its
decision not to make any payments or perform such obligations permitted
under this SECTION 3(C). The Tenant shall repay to the Secured Party any
sums paid by the Secured Party upon demand. Any sums paid and expenses
incurred by the Secured Party pursuant to this paragraph shall bear
interest at the Overdue Rate.
(d) If any of the Collateral at any time becomes evidenced
by an Instrument, the Tenant shall promptly deliver such Instrument to the
Secured Party, appropriately endorsed to the order of the Secured Party, to
be held pursuant to this Agreement.
SECTION 4. EVENT OF DEFAULT. For purposes of this Agreement,
the term "EVENT OF DEFAULT" shall mean (a) the occurrence of an Event of
Default under the Lease; (b) the failure of the Tenant to comply with any
of its covenants or obligations under this Agreement and the continuance
thereof for a period of thirty (30) days after written notice thereof;
PROVIDED, HOWEVER, that if such default is susceptible of cure but such
cure cannot be accomplished with due diligence within such period of time
and if in addition the Tenant commences to cure or cause to be cured such
default within thirty (30) days after written notice thereof from the
Secured Party and thereafter prosecutes the curing of such default with all
due diligence, such period of time shall be extended to such period of time
(not to exceed an additional one (1) year in the aggregate) as may be
necessary to cure such default with all due diligence; or (c) any
representation or warranty contained herein or made by the Tenant in
connection herewith shall prove to have been false or misleading in any
material respect when made.
SECTION 5. REMEDIES.
(a) Upon the occurrence and during the continuation of an
Event of Default, in addition to any rights and remedies now or hereafter
granted under applicable law, under the Lease or under any other documents
or agreements entered into in connection herewith or therewith, and not by
way of limitation of any such rights and remedies, the Secured Party shall
have all of the rights and remedies of a secured party under the Uniform
Commercial Code as enacted in any applicable jurisdiction, and the right,
without notice to, or assent by, the Tenant, to the extent permitted by
law, in the name of the Tenant or in the name of the Secured Party or
otherwise:
(i) with respect to the Leased Intangible Property and any other
accounts receivable, general intangibles and contract rights, to ask for,
demand, collect, receive, compound and give acquittance therefor or any
part thereof, to extend the time of payment of, compromise or settle for
cash, credit or otherwise, and upon any terms and conditions, any thereof,
to endorse the name of the Tenant on any checks, drafts or other orders or
instruments for the payment of moneys payable to the Tenant which shall be
issued in respect thereof, to exercise and enforce any rights and remedies
in respect thereof, to file any claims, commence, maintain or discontinue
any actions, suits or other proceedings deemed by the Secured Party
necessary or advisable for the purpose of collecting or enforcing payment
and performance thereof, to make test verifications thereof, to notify any
or all account debtors thereunder to make payment thereof directly to the
Secured Party for the account of the Secured Party and to require the
Tenant to forthwith give similar notice to the account debtors, and to
require the Tenant forthwith to account for and transmit to the Secured
Party in the same form as received all proceeds (other than physical
property) of collection thereof received by the Tenant and, until so
transmitted, to hold the same in trust for the Secured Party and not
commingle such proceeds with any other funds of the Tenant;
(ii) to take possession of any or all of the Collateral and to
use, hold, store, operate, merge and/or control the same and to exclude the
Tenant and all Persons claiming under it wholly or partly therefrom, and,
for that purpose, to enter, with the aid and assistance of any Person or
Persons and with or without legal process, any premises where the
Collateral, or any part thereof, are, or may be, placed or assembled, and
to remove any such Collateral;
(iii) from time to time, at the expense of the Tenant, to make
all such repairs, replacements, alterations, additions and improvements to
and of the Collateral as the Secured Party may reasonably deem proper; to
collect and receive all rents, issues, profits, fees and other income of
the same and every part thereof which may be applied to pay the expenses of
holding and operating the Collateral and of all maintenance and repairs and
to make all payments which the Secured Party may be required or may elect
to make, if any, for taxes, assessments, insurance and other charges upon
the Collateral and all other payments which the Secured Party may be
required or authorized to make under any provision of this Agreement
(including, without limitation, reasonable legal costs and attorneys'
fees);
(iv) upon notice to such effect, and if reasonably necessary to
protect Secured Party's interest in the Collateral, to require the Tenant
to deliver, at the Tenant's expense, any or all Collateral which is
reasonably movable to the Secured Party at a place designated by the
Secured Party; and
(v) without obligation to resort to other security, at any time
and from time to time, to sell, re-sell, assign and deliver all or any of
the Collateral, in one or more parcels at the same or different times, and
all right, title and interest, claim and demand therein and right of
redemption thereof, at public or private sale, for cash, upon credit or for
future delivery, and at such price or prices and on such terms as the
Secured Party may determine, with the amounts realized from any such sale
to be applied to the Secured Obligations in the manner determined by the
Secured Party.
The Tenant hereby agrees that all of the foregoing may be effected without
advertisement (except as hereinafter provided or as may be required by
law), all of which (except as hereinafter provided) are hereby expressly
waived, to the maximum extent permitted by law. The Secured Party shall
not be obligated to do any of the acts hereinabove authorized and in the
event that the Secured Party elects to do any such act, the Secured Party
shall not be responsible to the Tenant except for the Secured Party's gross
negligence or willful misconduct.
(b) Upon the occurrence of an Event of Default, the Secured
Party may take legal proceedings for the appointment of a receiver or
receivers (to which the Secured Party shall be entitled as a matter of
right) to take possession of the Collateral pending the sale thereof
pursuant either to the powers of sale granted by this Agreement or to a
judgment, order or decree made in any judicial proceeding for the
foreclosure or involving the enforcement of this Agreement. If, after the
exercise of any or all of such rights and remedies, any of the Obligations
shall remain unpaid or unsatisfied, the Tenant shall remain liable for any
deficiency or performance thereof, as applicable.
(c) Upon any sale of any of the Collateral, whether made under
the power of sale hereby given or under judgment, order or decree in any
judicial proceeding for the foreclosure or involving the enforcement of
this Agreement:
(i) the Secured Party may bid for and purchase the property
being sold and, upon compliance with the terms of sale, may hold, retain
and possess and dispose of such property in its own absolute right without
further accountability, and may, in paying the purchase money therefor,
deliver any instruments evidencing the Obligations or agree to the
satisfaction of all or a portion of the Obligations in lieu of cash in
payment of the amount which shall be payable thereon, and such instruments,
in case the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the Secured Party after being appropriately
stamped to show partial payment;
(ii) the Secured Party may make and deliver to the purchaser or
purchasers a good and sufficient deed, xxxx of sale and instrument of
assignment and transfer of the property sold;
(iii) all right, title, interest, claim and demand whatsoever,
either at law or in equity or otherwise, of the Tenant of, in and to the
property so sold shall be divested; such sale shall be a perpetual bar both
at law and in equity against the Tenant, its successors and assigns, and
against any and all Persons claiming or who may claim the property sold or
any part thereof from, through or under the Tenant, its successors or
assigns; and
(iv) the receipt of the Secured Party or of the officer thereof
making such sale shall be a sufficient discharge to the purchaser or
purchasers at such sale for his or their purchase money, and such purchaser
or purchasers, and his or their assigns or personal representatives, shall
not, after paying such purchase money and receiving such receipt of the
Secured Party or of such officer therefor, be obliged to see to the
application of such purchase money or be in any way answerable for any
loss, misapplication or nonapplication thereof.
In the event of any sale of Collateral pursuant to this SECTION 5, the
Secured Party shall, at least 10 days before such sale, give the Tenant
written, telegraphic or telex notice of its intention to sell, except that,
if the Secured Party shall determine in its reasonable discretion that any
of the Collateral threatens to decline in value, any such sale may be made
upon three (3) days' written, telegraphic or telex notice to the Tenant,
which time periods the Tenant hereby agrees are reasonable.
SECTION 6. APPLICATION OF MONEYS. All moneys which the Secured Party
shall receive pursuant hereto shall first be applied (to the extent
thereof) to the payment of all reasonable costs and expenses incurred in
connection with the administration and enforcement of, or the preservation
of any rights under, this Agreement or any of without limitation, the
reasonable fees and disbursements of its counsel and agents), and the
balance, if any, shall be applied first to accrued and unpaid interest,
charges and fees on, and then to outstanding principal of, any Obligations
of the Tenant to the Secured Party, and then to any other amounts
outstanding on any such Obligations and then to the Tenant unless otherwise
provided by law or directed by a court of competent jurisdiction.
SECTION 7. WAIVERS, ETC. To the extent permitted by law the Tenant
hereby waives presentment, demand, protest and, except as is otherwise
specifically provided herein, all other demands and notices in connection
with this Agreement or the enforcement of the rights of the Secured Party
hereunder and waives all rights to require a marshaling of assets by the
Secured Party.
The Secured Party shall not be required to marshal any present or
future security for (including without limitation this Agreement and the
Collateral pledged hereunder), or guaranties of, the Obligations or any of
them, or to resort to such security or guaranties in any particular order;
and all of the rights hereunder and in respect of such securities and
guaranties shall be cumulative and in addition to all other rights, however
existing or arising. To the maximum extent permitted by applicable law,
the Tenant hereby agrees that it will not invoke any law relating to the
marshalling of collateral which, might cause delay in or impede the
enforcement of the Secured Party's rights under this Agreement or under any
other instrument evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is
secured or guaranteed, and, to the maximum extent permitted by applicable
law, the Tenant hereby irrevocably waives the benefits of all such laws.
SECTION 8. FURTHER ASSURANCES, ETC. From time to time hereafter, the
Tenant will execute and deliver, or will cause to be executed and
delivered, such additional instruments, certificates or documents and will
take all such actions as the Secured Party may reasonably request for the
purposes of implementing or effectuating the provisions of this Agreement.
SECTION 9. MISCELLANEOUS.
(a) The Tenant agrees that its obligations and the rights of
the Secured Party hereunder and in respect of the Obligations may be
enforced by specific performance hereof and thereof and by temporary,
preliminary and/or final injunctive relief relating hereto and thereto,
without necessity for proof by the Secured Party or any holder of the
Obligations that it would otherwise suffer irreparable harm, and the Tenant
hereby consents to the issuance of such specific and injunctive relief.
(b) Any notice or demand upon the Tenant or the Secured Party
shall be deemed to have been sufficiently given when given in accordance
with Section 22.10 of the Lease.
(c) None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Tenant and the Secured Party. No notice to or
demand on the Tenant in any case shall entitle the Tenant to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Secured Party to any other or further
action in any circumstances without notice or demand.
(d) The obligations of the Tenant hereunder shall remain in
full force and effect without regard to, and shall not be impaired by, (i)
any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of the Tenant; (ii) any exercise or
non-exercise, or any waiver of, any right, remedy, power or privilege under
or in respect of this Agreement, the Lease or any document or agreement
executed in connection herewith or therewith, the Obligations or any
security for any of the Obligations; or (iii) any amendment to or
modification of any of the Lease or any document or agreement executed in
connection herewith or therewith, the Obligations or any security for any
of the Obligations; whether or not the Tenant shall have notice or
knowledge of any of the foregoing. The rights and remedies of the Secured
Party herein provided for are cumulative and not exclusive of any rights or
remedies which the Secured Party would otherwise have, including, without
limitation, under the Lease or any document or agreement executed in
connection herewith or therewith. This Agreement is intended as a
supplement for and is not intended to supersede in any respect the Lease or
any document or agreement executed in connection herewith or therewith.
(e) This Agreement shall be binding upon the Tenant and its
successors and assigns and shall inure to the benefit of the Secured Party,
and its respective successors and assigns. All agreements, representations
and warranties made herein shall survive the execution and delivery of this
Agreement.
(f) The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
(g) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibitions or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(h) This Agreement shall be interpreted, construed, applied and
enforced in accordance with the laws of The Commonwealth of Massachusetts
applicable to contracts between residents of Massachusetts which are to be
performed entirely within Massachusetts, regardless of (i) where this
Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or
(iii) where any breach of any provision of this Agreement occurs, or any
cause of action otherwise accrues; or (iv) where any action or other
proceeding is instituted or pending; or (v) the nationality, citizenship,
domicile, principal place of business, or jurisdiction of organization or
domestication of any party; or (vi) whether the laws of the forum
jurisdiction otherwise would apply the laws of a jurisdiction other than
Massachusetts; or (vii) any combination of the foregoing. Notwithstanding
the foregoing, the laws of the State shall apply to the perfection and
priority of liens upon and the disposition of any Property.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions
of this Agreement may be brought and prosecuted in such court or courts
located in The Commonwealth of Massachusetts as is provided by law; and the
parties consent to the jurisdiction of said court or courts located in
Massachusetts and to service of process by registered mail, return receipt
requested, or by any other manner provided by law.
(i) THE DECLARATION OF TRUST ESTABLISHING THE SECURED PARTY, A
COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS
DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF
MARYLAND, PROVIDES THAT THE NAME "_______________________" REFERS TO THE
TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE SECURED PARTY SHALL BE HELD TO ANY PERSONAL
LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF OR CLAIM AGAINST,
THE SECURED PARTY. ALL PERSONS DEALING WITH THE SECURED PARTY, IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF THE SECURED PARTY FOR THE PAYMENT OF ANY
SUM OR THE PERFORMANCE OF ANY OBLIGATION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal as of the date first above written.
TENANT:
By:
Its (Vice) President
SECURED PARTY:
By:
Its (Vice) President
EXHIBITS A-1 THROUGH A-14
LEASED PREMISES
[See attached copy.]
SCHEDULE 1
CHIEF EXECUTIVE OFFICE:
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, Xxxxxxxxx 00000
PRINCIPAL PLACE OF BUSINESS
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, Xxxxxxxxx 00000
SCHEDULE 0
Xxxxxx Xxxxx Xxxxx - Xxxxx, Xxxxxxx
Xxxxxx Suite Hotel - Cumberland, Xxxxxxx
Xxxxxx Suite Hotel - San Antonio/Riverwalk, Texas
Xxxxxx Suite Hotel - Dallas/Galleria, Texas
Xxxxxx Suite Hotel - El Paso, Texas
Xxxxxx Suite Hotel - Atlanta Airport, Xxxxxxx
Xxxxxx Suite Hotel - Cumberland, Xxxxxxx
Xxxxxx Suite Hotel - Gwinett, Xxxxxxx
Xxxxxx Suite Hotel - Fort Xxxxx, Indiana
Xxxxxx Suite Hotel - Alburquerque, New Mexico
Xxxxxx Suite Hotel - Columbus, Ohio
Xxxxxx Suite Hotel - Hendersonville, Tennessee
Xxxxxx Suite Hotel - Tempe, Arizona
Xxxxxx Suite Hotel - Tucson, Arizona
