EXHIBIT 10.K
EXECUTION COUNTERPART
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COLLATERAL ASSIGNMENT OF CONTRACTS,
LICENSES AND PERMITS
AND SECURITY AGREEMENT
HANOVER MARRIOTT
HANOVER, NEW JERSEY
THIS COLLATERAL ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS AND SECURITY
AGREEMENT (this "Collateral Assignment") dated as of the 18th day of August,
1997, by HANOVER MARRIOTT LIMITED PARTNERSHIP, a Delaware limited partnership
("Assignor") to CONNECTICUT GENERAL LIFE INSURANCE COMPANY, a Connecticut
corporation ("Assignee"), provides:
R E C I T A L S :
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Assignee has made a permanent loan (the "Loan") to Assignor in the original
principal amount of Twenty Nine Million Eight Hundred Seventy Five Thousand and
00/100 Dollars ($29,875,000.00) as evidenced by a Promissory Note (the "Note")
in said principal amount of even date herewith, given by Assignor to Assignee,
which Note is secured, inter alia, by a Mortgage and Security Agreement and an
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Assignment of Leases, Rents and Revenues (jointly, the "Mortgage"), each of even
date herewith on a fee simple interest in certain real property located in
Hanover, New Jersey, as more particularly described in EXHIBIT A attached hereto
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and made a part hereof (the "Property"). As a condition precedent to the Loan,
Assignor agreed to assign to Assignee as security for the performance of
Assignor's obligations under all documents evidencing or securing the Loan (the
"Loan Documents") all of Assignee's rights, title and interest in and to any and
all contracts, licenses and permits, now existing or hereafter entered into or
obtained (the "Contracts"), relating to Assignor's operations at, or in
connection with, the Property and the improvements ("Improvements") thereon.
The Contracts include, but are not limited to, those matters designated on
EXHIBIT B hereto.
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ASSIGNMENT
NOW, THEREFORE, Assignor hereby agrees as follows:
1. Assignor hereby assigns, transfers and sets over to Assignee (to the
extent permitted by law and any such Contract) all the rights, title and
interest of Assignor in and to the Contracts, together with, as appropriate, all
proceeds, distributions, income, revenue, issues, and profits (the "Proceeds")
now or hereafter arising therefrom.
If any such Contracts which are material are not freely assignable by
Assignor, Assignor shall notify Assignee, and upon Assignee's written request,
Assignor shall utilize its reasonable efforts to obtain any required consent to
such assignment.
2. Assignor agrees that it shall not, except in the ordinary course of its
business, agree to cancel, terminate or modify the terms of the Contracts, or
any of them.
3. Unless an Event of Default (as hereinafter defined) has occurred and
is continuing, Assignor shall have a revocable license (i) to collect, receive
and apply for its own account all Proceeds arising from or in connection with
the Contracts and (ii) to proceed in accordance with the Contracts.
4. Immediately upon the occurrence and during the continuance of an Event
of Default, the license set forth in the foregoing Section 3(i) to collect,
receive and apply Proceeds, and Section 3(ii) to proceed under the Contract,
shall, at the option of Assignee, cease and terminate, and in such event
Assignee shall be entitled to and is hereby expressly and irrevocably authorized
to take possession of all rights, title and interest of Assignor in and to the
Contracts and the Proceeds.
5. Assignor hereby agrees to indemnify and hold Assignee and its
officers, directors, employees and agents harmless from and against any and all
liability, loss, damage, cost and expense, including reasonable, actual
attorneys' fees, which Assignee or said other parties may incur under the
Contracts or by reason of this Agreement, or by reason of any action properly
taken hereunder, and from and against any and all claims and demands whatsoever
which may be asserted against Assignee or such other parties by reason of any
alleged obligation or undertaking on Assignee's part to perform or discharge any
of the terms, covenants or conditions contained in the Contracts, except for
matters arising from the gross negligence or willful misconduct of Assignee or
such officers, directors, employees or agents. Should Assignee incur any such
liability, the principal amount of such liability shall be payable by Assignor
within five (5) Business Days after demand therefor or, at the election of
Assignee, Assignee shall have the right to reimburse itself therefor from any
Proceeds collected by Assignee, and if such amount shall not be paid or
reimbursed within said five (5) Business Day period interest shall accrue
thereon from the date of demand therefor until paid and be immediately payable
to Assignee at the Default Rate (as defined in the Note). Nothing contained
herein shall obligate or be construed to obligate Assignee to perform any of the
terms, covenants or conditions contained in the Contracts or otherwise to impose
any obligation upon Assignee with respect to the Contracts and Assignee shall
not in any event become or be deemed to be a substituted obligor under the
Contracts, unless and until such time as Assignee shall have enforced its rights
and remedies in connection with an Event of Default.
6. Assignor covenants that it has not sold, assigned, transferred,
mortgaged or pledged its interest in the Contracts or the Proceeds, or any part
thereof, and agrees that it shall not sell, assign, transfer, mortgage or pledge
its interest in the Contracts or the Proceeds, or any part thereof, whether now
due or hereafter to become due, to any person, firm or corporation, except for
Assignee and the holder of any subordinate mortgage financing permitted under
the Loan Documents.
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7. Assignor agrees to execute and deliver to Assignee, at any time or
times during which this Agreement shall be in effect, such further instruments
as Assignee may deem necessary to make effective or more effective the
assignment of the rights of Assignor assigned to Assignee hereby and the
covenants of Assignor herein contained.
8. Upon demand and notice from Assignee of the occurrence of an Event of
Default, Assignor irrevocably directs all other parties under the Contracts to
deal directly with Assignee in lieu of and in the place and stead of Assignor
from and after the receipt of such demand or notice. Such parties in
undertaking such dealings with Assignee shall be under no obligation to inquire
into or determine the actual existence of any such default claimed by Assignee.
If such Event of Default shall cease to exist after Assignee has made such
demand and notice, Assignee shall thereafter give notice to such other parties
terminating its prior demand and notice.
9. Upon the payment of all indebtedness secured by, and the performance
of all the terms and conditions of, the Loan Documents and this Agreement, this
Agreement shall terminate and thereafter be void and of no further force and
effect and, upon the request of the Assignor, Assignee shall execute and deliver
to Assignor instruments effective to evidence the termination of this Assignment
or the reassignment to Assignor of the rights, power and authority granted to
Assignee hereunder.
10. To the extent applicable, this Agreement shall serve as a security
agreement as defined in the Uniform Commercial Code as enacted in the State of
New Jersey and the Assignee shall have a security interest in Contracts and the
Proceeds.
11. Upon the occurrence of an Event of Default, Assignee may proceed to
enforce and exercise any or all of the rights and remedies provided by the
Uniform Commercial Code (to the extent applicable), in addition to all of
Assignee's other rights at law or equity and those rights provided herein and in
the Loan Documents. The rights and remedies of the Assignee hereunder are
cumulative and are not in lieu of but are in addition to any other rights and
remedies which Assignee shall have under or by virtue of the Loan Documents.
The rights and remedies of the Assignee hereunder may be exercised from time to
time, and as often as such exercise shall be deemed expedient by the Assignee.
12. Failure of Assignee to avail itself of any of the terms, covenants and
conditions of this Agreement for any period of time or times, shall not be
construed or deemed to be a waiver of any of the rights of the Assignee
hereunder.
13. No change, amendment, modification, cancellation or discharge hereof,
shall be valid unless Assignee shall have consented thereto in writing.
14. An "Event of Default" hereunder shall be defined as the breach of any
obligation or covenant of Assignor hereunder or under the Loan Documents beyond
any applicable notice or grace period set forth herein or therein.
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15. Section 15 of the Note and Section 40 of the Mortgage (which are Loan
Documents of even date herewith) are incorporated herein by this reference
thereto.
16. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Any notice, request, demand, statement or consent made hereunder shall
be in writing signed by the party giving such notice, request, demand, statement
or consent, and shall be deemed to have been properly given when either
delivered personally, delivered to a reputable overnight delivery service
providing a receipt or deposited in the United States Mail, postage prepaid and
registered or certified return receipt requested, in each case addressed to the
other party hereto at its address set forth below, or at such other address
within the continental United States of America as such party may have
theretofore designated in writing pursuant to this Section 17. The effective
date of any notice given as aforesaid shall be the date of personal service, one
(1) business day after delivery to such overnight delivery service, or five (5)
business days after being deposited in the United States Mail, whichever is
applicable. For purposes hereof, the addresses are as follows:
If to Assignee:
Connecticut General Life Insurance Company
CIGNA Investments, Inc.
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Attention: Investment Services, S-319
With a copy to:
CIGNA Corporation
Investment Law Department
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Attention: Real Estate Division, S-215A
If to Assignor:
Hanover Marriott Limited Partnership
Host Marriott Corporation
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
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With a copy to:
Host Marriott Corporation
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Attention: Law Department
ASSIGNOR:
HANOVER MARRIOTT LIMITED PARTNERSHIP, a Delaware
limited partnership
By: Marriott Hanover Hotel Corporation,
a Delaware corporation and its general partner
By ▇.▇. ▇▇▇▇▇
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EXHIBIT A
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ALL that certain tract, parcel and lot of land lying and being situate in
the Township of Hanover, County of ▇▇▇▇▇▇, State of New Jersey, being more
particularly described as follows:
BEGINNING at a point in the present southwesterly side of New Jersey ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ at a point where the westerly line of the premises to be
described and the easterly line now or formerly of Newark Milk and Cream Company
intersects said sideline of Route 10 and running; thence
(1) South 60 Degrees 59 Minutes 12 Seconds East and along the side of Route
10,774.32 feet to the corner of lands now or formerly of ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇, his wife; thence
(2) South 29 Degrees 00 Minutes 48 Seconds West 178.12 feet; thence
(3) Still along lands South 60 Degrees 59 Minutes 12 Seconds East 211.0
feet to line of Lands of Iron Investment Corp., et. als., lands along the same;
thence
(4) The same South 12 Degrees 09 Minutes 55 Seconds West 432.86 feet to a
point; thence
(5) North 81 Degrees 54 Minutes 29 Seconds West 181.92 feet to a point;
thence;
(6) North 61 Degrees 11 Minutes 56 Seconds West 760.78 feet to a point in
line of Lands of Newark Milk and Cream Company; thence
(7) Along the same North 13 Degrees 45 Minutes 24 Seconds East 684.30 feet
to the point and place of BEGINNING.
TOGETHER with access to and egress from said premises by way of 50
foot wide easement as set forth on filed map no. 3826 and further described as
follows:
Beginning at an angle point in the northerly line of Tax ▇▇▇ ▇, ▇▇▇▇▇
▇▇▇▇ as shown on the tax map of the Township of Hanover, ▇▇▇▇▇▇ County, New
Jersey, said point being further described as being South 61 Degrees 11 Minutes
56 Seconds East, 436.92 feet from the Northwest Corner of said Lot 4 as shown on
a map entitled "Map of Hanover Park for Industry", dated November 30, 1978 by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ of Montville, New Jersey and filed in the ▇▇▇▇▇▇ County
Clerk's Office as filed map number 3826, and running thence
1. Through said ▇▇▇ ▇, ▇▇▇▇▇ ▇▇ Degrees 44 Minutes 34 Seconds West,
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33.54 Feet to a Point on the Northerly End of Wing Drive, 50 Feet Wide as shown
on said filed map, thence,
2. Along the end of Wing Drive, North 86 Degrees 11 Minutes 36
Seconds West, 34.73 feet to a point of curvature; thence
3. Continuing along Wing Drive on a curve to the left with a radius
of 60.00 feet, an arc length of 16.44 feet, said curve having a chord of South
85 Degrees 57 Minutes 30 Seconds West, 16.39 feet; thence
4. Through ▇▇▇ ▇, ▇▇ ▇▇▇▇ ▇▇▇▇ of and parallel to the first course
above, North 12 Degrees 44 Minutes 34 Seconds East, 58.06 feet to a point on the
Southerly Line of ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇ as shown on said Tax Map; thence
5. Along said line, South 61 Degrees 11 Minutes 56 Seconds East,
52.03 feet to the point and place of BEGINNING.
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EXHIBIT B
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1. All contracts with architects, engineers and surveyors with respect to
the Improvements.
2. All construction contracts with respect to the Improvements.
3. All certificates of occupancy with respect to the Improvements.
4. All agreements concerning public and private utilities with respect to
the Improvements.
5. All franchise agreements, service agreements, licenses and permits
with respect to the construction, operation and utilization of the Improvements.
6. All plans and specifications with respect to the Improvements.
7. All insurance policies with respect to the Improvements and the
Property.
8. All rights of the Assignor with respect to private restrictions
affecting the Property.
9. All bonds and similar agreements with respect to the Improvements and
the Property.
10. All feasibility and marketing studies, percolation tests, soil
borings, surveys, topographical studies and the like with respect to the
Property and the uses thereof.
11. All marketing reports and other writings with respect to the
Improvements.
12. All books and records with respect to the Improvements and the
Property.
13. All contracts with any managing agent for the Improvements, including,
but not limited to that certain Management Agreement by and among Assignor, as
"Owner", and Marriott Hotel Services, Inc. dated as of even date herewith.
14. All contracts of sale with respect to the Improvements.
15. All contracts with advertisers, including the yellow pages.
16. All operating and service contracts relating to the operation of the
Improvements.
17. All vested, concurrency and development rights with respect to the
Improvements and/or the Property.
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