EXHIBIT 10.24
ASSUMPTION AND RELEASE AGREEMENT
THIS ASSUMPTION AND RELEASE AGREEMENT is made and entered into as of
November 1, 1996, by and among SUNNYVALE RESIDENCE ASSOCIATES, L.P., a Kansas
limited partnership ("Borrower"), INNKEEPERS RESIDENCE SILI II, L.P., a Virginia
limited partnership ("Buyer"), JF HOTEL III, INC. a Virginia corporation
("Tenant") and MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts
corporation ("Lender").
R E C I T A L S:
A. Lender has heretofore made to Borrower a loan in the original principal
amount of $15,140,000 ("Loan"), as evidenced by a Promissory Note dated as of
May 31, 1995 ("Note"), and secured by, among other things, a Deed of Trust and
Security Agreement and Fixture Filing dated as of May 31, 1995, and recorded
June 2, 1995, in Book N870, Page 0957, as Instrument Xx. 00000000, Xxxxx Xxxxx
Xxxxxx Records ("Deed of Trust"), and encumbering that certain real property
more particularly described therein ("Property"). By his separate execution of
the Deed of Trust, a general partner in Borrower, Xxxx X. XxXxxx ("General
Partner"), confirmed his joint and general liability for the covenants,
agreements and obligations of Borrower thereunder. In connection with the Loan,
Borrower and General Partner have executed in favor of Lender a Certificate of
Borrower dated as of May 31, 1995 ("Certificate"), and Borrower has executed in
favor of Lender UCC-1 Financing Statements in order to perfect the security
interest granted under the Deed of Trust ("Financing Statements"). In addition,
in connection with the Loan, Borrower and Lender have entered into an FF&E
Escrow Agreement dated as of May 31, 1995 ("Escrow Agreement") as consented to
by Residence Inn by Marriott, Inc. ("RIBM"), and Borrower, Lender, RIBM and
Marriott International, Inc. ("Marriott") have entered into a Subordination,
Attornment and Non-Disturbance Agreement dated as of May 31, 1995 ("Marriott
Subordination"). The Note, Deed of Trust, Certificate, Financing Statements,
Escrow Agreement, Marriott Subordination, this Agreement and all other documents
and instruments executed pursuant to this Agreement or in connection herewith
are sometimes hereinafter referred to collectively as the "Loan Documents."
B. Borrower is operating the Property as an extended-stay suites hotel. In
connection therewith, Borrower has entered into a Management Agreement dated
March 1, 1984, as amended by an Agreement and Amendment to Management Agreement
dated May 31, 1995 ("Management Agreement"), with RIBM, pursuant to which RIBM
provides to Borrower certain management services in connection with the
operation of the Property. In addition, Borrower and Marriott have entered into
a Residence Inn by Marriott Franchise
Agreement dated as of May 31, 1995 ("Franchise Agreement"), pursuant to which
Marriott has granted to Borrower a franchise to use a hotel system and concept
for the Property.
C. Pursuant to the Contribution Agreement dated as of September 16, 1996,
among Borrower, Innkeepers USA Limited Partnership and Innkeepers USA Trust
("Contribution Agreement"), Buyer has agreed to acquire all of Borrower's right,
title and interest in and to the Property.
D. Concurrently with Buyer's acquisition of the Property, Buyer proposes to
enter into an Operating Lease Agreement ("Lease") with Tenant, pursuant to which
Buyer will lease the Property to Tenant. In addition, pursuant to an Assignment
and Assumption of Agreements ("Marriott Assignment"), concurrently with Buyer's
acquisition of the Property, Borrower proposes to assign its right, title and
interest under the Management Agreement and the Franchise Agreement to Tenant
with the consent of RIBM and Marriott, and Buyer, Tenant, RIBM and Marriott
propose to enter into a letter agreement amending the Management Agreement and
the Franchise Agreement ("Marriott Agreements Amendment").
E. Borrower has requested that Lender consent to Borrower's transfer of
title to the Property to Buyer pursuant to the Contribution Agreement, Buyer's
assumption of Borrower's obligations under and with respect to the Loan and
certain other matters. Lender is willing so to consent, but only on the terms
and conditions contained in this Agreement. Unless otherwise defined herein,
capitalized terms used in this Agreement shall have the meanings attributed to
such terms in the Loan Documents.
NOW, THEREFORE, the parties hereto agree as follows:
1. Conditions Precedent. Lender's obligations under this Agreement are
subject to the satisfaction of the following conditions precedent on or before
November 8, 1996:
(a) Lender's receipt of either (i) such endorsements to ALTA Loan
Title Insurance Policy No. 748177-LM dated as of June 2, 1995, and issued by
Chicago Title Insurance Company in favor of Lender, as Lender shall require,
insuring Lender that the Deed of Trust, as amended and assumed pursuant to this
Agreement, constitutes a first priority lien on the Property, subject to no
subordinate liens and subject only to such other exceptions thereto as shall
have been approved by Lender in writing; such endorsements shall include,
without limitation, CLTA 110.5 and 111.4 (modified) endorsements, or (ii) an
ALTA Loan Title Insurance Policy (1970 form) issued by Commonwealth Land Title
Insurance Company in favor of Lender, dated as of the date of recordation of the
Short Form Assumption (as hereinafter defined), in a form acceptable to Lender
in its sole discretion;
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(b) Lender's receipt of immediately available funds in the amount
of (i) a transfer fee of one percent (1%) of the outstanding principal balance
of the Loan as of the Effective Date (as hereinafter defined), which fee, after
giving effect to the monthly payment under the Note to be made by Borrower on
October 1, 1996, is in the amount of $149,500, and which fee is to be paid to
Lender by wire transfer to Lender's account at Chase Manhattan Bank, ABA# 021
0000 21, for credit to the account of Massachusetts Mutual Life Insurance
Company, Account No. 000-000-000, with reference to MMLIC Loan #95704, and (ii)
all accrued and unpaid installments of principal and interest on the Loan as of
the Effective Date;
(c) Lender's receipt of the executed original of this Agreement,
and any and all other documents, instruments and agreements which are required
pursuant to this Agreement, or which Lender shall otherwise require as a
condition precedent to Lender's obligations under this Agreement, in a form and
content acceptable to Lender in its sole discretion, including, without
limitation, (i) a short form of this Agreement executed by Borrower and Buyer in
recordable form ("Short Form Assumption"); (ii) an Assignment of Leases and
Rents executed by Buyer in recordable form ("Lease Assignment"); (iii) a
Subordination Agreement executed by Buyer and Tenant in recordable form ("Lease
Subordination"); (iv) UCC-1 Financing Statements executed by Buyer and Tenant in
a proper form for filing with the California Secretary of State and the
appropriate office in the State of Florida; (v) a Consent and Reaffirmation
Agreement with respect to the Marriott Subordination executed by Borrower,
Buyer, Tenant, RIBM and Marriott ("Amended Marriott Subordination"); (vi) a Loan
Guaranty with respect to certain obligations of Buyer under the Loan Documents
executed by Innkeepers USA Trust; (vii) true, correct and complete copies of the
Contribution Agreement, the Lease, the Marriott Assignment and the Marriott
Agreements Amendment; and (viii) opinions of legal counsel to Buyer and Tenant
as to the due organization of Buyer and Tenant, the due authorization of the
subject transaction by Buyer and Tenant, the qualification of Buyer and Tenant
to transact business in the State of California, the enforceability of the Loan
assumption documents against Buyer, and such other matters as Lender shall
require, in a form and substance acceptable to Lender's counsel;
(d) Recordation in the Santa Xxxxx County Records of the Short
Form Assumption and the Lease Assignment, together with such other documents and
instruments, if any, as Lender shall require to be recorded;
(e) Borrower's reimbursement to Lender of Lender's costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, title insurance costs,
recording fees and attorneys' fees and disbursements, whether services are
furnished by Lender's employees or agents or by independent contractors;
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(f) No default, event of default, breach or failure of condition
shall have occurred or exist, or would occur or exist with notice or lapse of
time, or both, under any of the Loan Documents; and the representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct; and
(g) Lender's receipt of certified copies of, or certificates of
insurance evidencing (as Lender shall require), Buyer's casualty insurance
policy (including rental interruption insurance) and comprehensive liability
insurance policy with respect to the Property, each in a form and amount
satisfactory to Lender, and each naming Lender as an additional insured or loss
payee, as the case may be, under such policy.
2. Effective Date. The effective date of this Agreement ("Effective
Date") shall be the date on which all of the conditions precedent set forth in
Section 1 above have been satisfied as determined by Lender or waived by Lender.
3. Consent of Lender. Subject to the terms and conditions contained in
this Agreement, effective as of the Effective Date, Lender hereby consents to
Buyer's acquisition of the Property from Borrower pursuant to the Contribution
Agreement ("Transfer") and agrees not to accelerate the maturity date of the
Loan set forth in the Loan Documents by reason of the consummation of the
Transfer. Lender's consent shall apply only to the Transfer and shall not extend
to any other sale, conveyance, transfer or assignment of the Property or any
interest therein, whether voluntary, involuntary or by operation of law. In
addition, subject to the terms and conditions contained in this Agreement,
effective as of the Effective Date, Lender hereby consents to (i) Buyer's
entering into the Lease with Tenant; and (ii) Borrower's assignment of the
Management Agreement and the Franchise Agreement to Tenant, and Buyer's and
Tenant's entering into the Marriott Agreements Amendment.
4. Assumption of Obligations. Effective as of the Effective Date,
Buyer hereby assumes and agrees in favor of Lender timely to perform all of the
covenants, agreements and obligations of Borrower under the Loan Documents and
with respect to the Loan as if Buyer had originally executed the Loan Documents
in its own name.
5. Release of Borrower. Effective as of the Effective Date, Lender
hereby releases Borrower from Borrower's liabilities and obligations under the
Loan Documents and with respect to the Loan, and Lender hereby releases General
Partner from General Partner's liabilities and obligations under the Deed of
Trust; provided, however, that the foregoing release shall not apply to any such
liabilities or obligations that shall have accrued prior to the Effective Date.
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6. Transfer of Property. Borrower and Buyer each hereby represent and
warrant to Lender that, effective as of the Effective Date, Borrower has
irrevocably and unconditionally conveyed, transferred and assigned to Buyer all
of Borrower's right, title and interest in and to all real and personal property
security for the Loan, including, without limitation, the following:
(a) the Property;
(b) the Loan Documents;
(c) all tangible and intangible personal property owned by
Borrower and used in connection with the use, management or operation of the
Property, including all operating accounts and bank accounts;
(d) the Escrow Account (as defined in the Escrow Agreement);
(e) all service contracts, maintenance agreements and other,
similar agreements relating to Borrower's use, maintenance or operation of the
Property, to the extent not terminated pursuant to the Contribution Agreement;
(f) all reciprocal easement agreements, operating agreements and
declarations of covenants, conditions and restrictions relating to the Property;
and
(g) all deposits held by Borrower in connection with the
provision of utility services to the Property.
Borrower further hereby represents and warrants to Lender that Borrower has
obtained all consents to such conveyances, transfers and assignments which are
required by any agreement relating to any of the above.
7. Knowledge of Loan Documents. Buyer and Tenant each acknowledges and
agrees that Buyer and Tenant each has personal knowledge of all of the terms and
provisions of the Loan Documents, and that Lender has no duty or obligation to
provide any information to Buyer or Tenant regarding the terms and provisions of
the Loan Documents. Buyer and Tenant each further acknowledges and agrees that,
except as expressly provided in this Agreement, Lender has not waived any right
of Lender or obligation of Borrower or Buyer under the Loan Documents, and
Lender has not agreed to any modification of any provision of the Loan
Documents, including any extension of the maturity date of the Loan.
8. Borrower's Representations and Warranties. Borrower hereby
represents and warrants to Lender that (a) no default, event of default, breach
or failure of condition has occurred or exists as of the date of this Agreement,
or would
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occur or exist as of the date of this Agreement with notice or lapse of time, or
both, under any of the Loan Documents; (b) to the best of Borrower's knowledge,
all representations and warranties of Borrower in, under, in connection with or
pursuant to the Loan Documents, including, without limitation, the
representations and warranties contained in the Certificate are true and correct
in all material respects as of the date of this Agreement and shall survive the
execution and delivery of this Agreement; (c) Borrower has the requisite legal
power and authority to execute, deliver and perform its obligations under this
Agreement; and (d) this Agreement has been duly and validly authorized by
Borrower, duly executed and delivered by Borrower, and constitutes the legal,
valid and binding obligation of Borrower, enforceable in accordance with its
terms. Borrower's representations and warranties are subject to the non-recourse
provisions contained in the Loan Documents.
9. Buyer's Representations and Warranties. Buyer hereby represents and
warrants to Lender as follows:
(a) Buyer is a limited partnership duly organized and validly
existing under the laws of the State of Virginia, whose sole general partner is
Innkeepers Residence Sili II, Inc., a Virginia corporation ("General Partner").
Buyer is entitled to conduct business in, and is in good standing of the laws
of, the State of California. Buyer has all requisite legal power and authority
to own and operate the Property, to carry on its business as presently conducted
and to enter into and perform its obligations under the Loan Documents. General
Partner has the legal right, power and authority to be a general partner in
Buyer, and to perform on behalf of Buyer the obligations of Buyer under the Loan
Documents.
(b) The execution, delivery and performance of the Loan Documents
have been duly authorized by all requisite partnership action by Buyer, and the
Loan Documents, when executed and delivered to Lender, will constitute the
legal, valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms.
(c) The execution and delivery of the Loan Documents by Buyer,
the performance by Buyer of its obligations thereunder and the consummation of
the transactions contemplated thereby will not conflict with, result in a breach
of, constitute a default under, or require any approval or consent under, or
(other than the lien of the Deed of Trust on the Property and the security
interest of the Deed of Trust on the personal property covered thereby) result
in the creation or imposition of any lien upon the Property or any of the other
property or assets of Buyer under the provisions of any indenture, mortgage,
deed of trust, agreement, or other instrument to which Buyer is a party or by
which it is bound or any of its properties or assets are subject, and will not
contravene any provision of Applicable Law.
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(d) There are no suits, actions, or proceedings pending or, to
the best of Buyer's knowledge, threatened against Buyer or General Partner in
any court or before any arbitrator or governmental authority which, if
determined adversely, might have a material adverse effect on the Property or
the business, operations, other properties, assets, or financial condition of
Buyer or General Partner, the consummation of the transactions contemplated by
the Loan Documents or the full performance of the obligations of Buyer
thereunder.
(e) Buyer is not in default or under any indenture, mortgage,
deed of trust, agreement or other instrument to which Buyer is a party or by
which it is bound or any of its properties or assets are subject, and no event
has occurred and is continuing which, under the provisions of any such
indenture, mortgage, deed of trust, agreement or other instrument, with the
giving of notice or the passage of time, or both, would constitute a default
thereunder.
10. Amendment of Deed of Trust. The Deed of Trust is hereby amended as
follows:
(a) All references in the Deed of Trust to the RIBM Management
Agreement and the RIBM Franchise Agreement shall mean and refer to the
Management Agreement and the Franchise Agreement, each as assigned to Tenant and
amended by the Marriott Agreements Amendment, as defined in this Agreement.
(b) Paragraph 8 of the Rider to the Deed of Trust (which refers
to Section 2.03 of the Deed of Trust) is hereby amended to delete the words
"Annual Budget" and substitute the words "Repairs and Equipment Estimate"
therefor.
(c) Paragraph 10 of the Rider to the Deed of Trust (which refers
to Section 2.04(e) of the Deed of Trust) is hereby amended to provide that the
first three lines of subparagraph (viii) as set forth therein are to read as
follows:
"(viii) Residence Inn by Marriott, Inc. ("RIBM") shall not
have terminated the RIBM Management Agreement, or Marriott
International, Inc. ("Marriott") shall not have terminated the RIBM
Franchise Agreement, by reason of such damage, destruction . . . ."
(d) Paragraph 12 of the Rider to the Deed of Trust (which refers
to Section 2.16 of the Deed of Trust) is hereby amended as follows:
"The following is added to the end of Section 2.16: 'In addition,
Trustor shall cause JF Hotel III, Inc. ("Tenant") to comply with the
foregoing obligations of Trustor."
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(e) Paragraph 16 of the Rider to the Deed of Trust (which refers
to Section 2.23 of the Deed of Trust) is hereby amended as follows:
(i) Section 2.23(a) of the Deed of Trust shall be amended to
include the following provisions, in addition to all of the other
provisions thereof:
"Trustor shall cause Tenant to perform in a timely manner all
obligations of Tenant under the RIBM Management Agreement, and not to
take or omit to take any action which would impair Tenant's or
Trustor's rights thereunder or to cause the RIBM Management Agreement
to be terminated prior to the date of expiration of its term. Trustor
shall cause Tenant to give to Beneficiary prompt written notice of any
default under the RIBM Management Agreement, whether by Trustor,
Tenant or RIBM. Trustor shall cause Tenant not to modify or amend the
RIBM Management Agreement, terminate or surrender the RIBM Management
Agreement or release or discharge RIBM from any of its obligations
thereunder."
(ii) Section 2.23(b) of the Deed of Trust shall be amended
to include the following provisions, in addition to all of the other
provisions thereof:
"Trustor shall cause Tenant to perform in a timely manner all
obligations of Tenant under the RIBM Franchise Agreement, and not to
take or omit to take any action which would impair Tenant's or
Trustor's rights thereunder or to cause the RIBM Franchise Agreement
to be terminated prior to the date of expiration of its term. Trustor
shall cause Tenant to give to Beneficiary prompt written notice of any
default under the RIBM Franchise Agreement, whether by Trustor, Tenant
or Marriott. Trustor shall cause Tenant not to modify or amend the
RIBM Franchise Agreement, terminate or surrender the RIBM Franchise
Agreement or release or discharge Marriott from any of its obligations
thereunder."
(f) A new Section 2.24 is hereby added to the Deed of Trust as
follows:
"Section 2.24 Tenant's Obligations. Without limiting any other
provision of this Deed of Trust, Trustor shall cause Tenant to
perform, observe and comply with all covenants, agreements and
obligations of Trustor under this Deed of Trust relating to the use,
operation, management, repair, maintenance and/or replacement of the
Mortgaged Property, or any portion thereof, and
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including, without limitations, the obligations of Trustor under the
FF&E Agreement."
(g) Paragraph 17 of the Rider to the Deed of Trust (which refers
to Section 3.04 of the Deed of Trust) is hereby amended to add a new second
paragraph thereto as follows:
"Section 3.05. Assignment of Agreements. In addition to, and without
limiting any of the provisions of, Section 3.01 above, Trustor hereby
assigns to Beneficiary all of Trustor's rights and interests under the
RIBM Management Agreement and the RIBM Franchise Agreement, as the
same may hereafter be amended or modified in accordance with the
provisions hereof, and the proceeds and products thereof. The
foregoing assignment constitutes a present and absolute assignment to
Beneficiary as of the date of this Deed of Trust; provided, however,
that Beneficiary hereby confers upon Trustor a license to enforce the
terms and provisions of the RIBM Management Agreement and/or the RIBM
Franchise Agreement so long as no Event of Default has occurred. Upon
the occurrence of an Event of Default, Beneficiary shall have the
right, in its sole discretion, to give notice to RIBM and/or Marriott,
as applicable, of Beneficiary's intent to enforce the rights of
Trustor under the RIBM Management Agreement and/or the RIBM Franchise
Agreement, as applicable, and may initiate or participate in any legal
proceedings respecting the enforcement of such rights. Trustor
acknowledges that by accepting the foregoing assignment, Beneficiary
shall not assume any of Trustor's obligations under the RIBM
Management Agreement or the RIBM Franchise Agreement. Trustor agrees
not to further assign, for security purposes or otherwise, Trustor's
rights under the RIBM Management Agreement or the RIBM Franchise
Agreement without Beneficiary's prior written consent. The foregoing
assignment shall secure the payment and performance of all covenants,
agreements and obligations of Trustor under the Loan Documents."
(h) Paragraph 19 of the Rider of the Deed of Trust (which refers
to Section 4.01 of the Deed of Trust), is hereby amended and restated in its
entirety to read as follows:
"(q) The occurrence of a default, event of default or breach by
Trustor, Tenant, RIBM or Marriott under the RIBM Management Agreement
or the RIBM Franchise Agreement, or Trustor shall, for any reason,
cease to operate or to cause to be operated the Mortgaged Property
under the franchise granted under the RIBM Franchise Agreement.
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"(r) The occurrence of a default, event of default or breach by
Trustor or Tenant under the Operating Lease Agreement dated as of
November 1, 1996, or the occurrence of any of the events or conditions
described in subparagraphs (h) through (m) above by or with respect to
Tenant."
11. Amendment of Escrow Agreement. The Escrow Agreement is hereby
amended to provide that all references in the Escrow Agreement to the Management
Agreement shall mean and refer to the Management Agreement as amended by the
Marriott Agreements Amendment.
12. Amendment of Marriott Subordination. Borrower and Buyer
acknowledge and agree that the Marriott Subordination shall be amended as more
particularly provided in the Amended Marriott Subordination executed and
delivered by Borrower, Buyer, Lender, Tenant, RIBM and Marriott currently
herewith.
13. Tenant Agreements. in consideration for Lender's entering into
this Agreement, Tenant hereby agrees in favor of Lender as follows:
(a) This Agreement, as to Tenant, constitutes a security
agreement under the California Uniform Commercial Code, and Tenant hereby grants
to Lender a security interest in and to all tangible and intangible personal
property owned by Tenant or in which Tenant has any right, title or interest and
used by Buyer or Tenant in connection with the Mortgaged Property, including,
without limitation, (i) all equipment, fittings, furniture, furnishings,
appliances, apparatus, and machinery now or hereafter installed in the Mortgaged
Property, and all building materials, supplies and equipment now or hereafter
delivered to the Mortgaged Property and intended to be installed therein; all
fixtures, other goods and personal property of whatever kind and nature now
contained on or in or hereafter placed on or in the Mortgaged Property and used
or to be used in connection with the letting or operation thereof, including,
without limitation, all inventories of items provided to or for the use of, or
held by Tenant for sale to, hotel guests, facilities users, restaurant patrons
or members of the public, including, without limitation, linens, tableware,
glassware, utensils, toiletries, food items, beverages, and gift, sundry and/or
newspaper shop items and inventories; (ii) all room rents and charges,
reservation charges, forfeited room reservation deposits, food and beverage
revenues, parking revenues, revenues from telephones, copying, telecopying or
television usage, and all other fees, charges, accounts and other payments for
the use or occupancy of rooms and other public facilities or areas in the
Mortgaged Property; (iii) all accounts, escrows, documents, instruments and
general intangibles, and all contract rights, franchises, books, records, plans,
specifications, permits, licenses, approvals, actions and causes of action which
now or hereafter relate to, derive from or are used in connection with
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the Mortgaged Property or the use or operation thereof or the conduct of any
business or activities thereon, including, without limitation, all right, title
and interest of Tenant in and under the Escrow Account established under the
Escrow Agreement, and the Management Agreement, as amended by the Marriott
Agreements Amendment; and (iv) all proceeds and products of any of the
foregoing. Tenant grants to Beneficiary such security interest as security for
the payment or performance by Buyer of all of Buyer's covenants, agreements and
obligations under the Loan Documents. In connection with such security interest,
Lender shall have all the rights and remedies of a secured creditor under
Division 9 of the California Uniform Commercial Code, as amended or rectified
from time to time. Tenant shall execute, acknowledge and deliver to Lender
and/or shall cause RIBM to execute, acknowledge and deliver to Lender such UCC-1
financing statements, notices to escrow holders and custodians, and other
documents and instruments as Lender shall require in order to perfect and
preserve such security interest.
(b) In addition to, and without limiting any of the provisions of
subparagraph (a) above, Tenant hereby assigns to Lender all of Tenant's rights
and interests under the Management Agreement and the Franchise Agreement, each
as amended by the Marriott Agreements Amendment, and as the same may hereafter
be amended or modified in accordance with the provisions hereof, and the
proceeds and products thereof. The foregoing assignment constitutes a present
and absolute assignment to Lender as of the date of this Agreement; provided,
however, that Lender hereby confers upon Tenant a license to enforce the terms
and provisions of the Management Agreement and/or the Franchise Agreement, each
as amended, so long as no Event Default has occurred. Upon the occurrence of an
Event of Default, Lender shall have the right, in its sole discretion, to give
notice to RIBM and/or Marriott, as applicable, of Lender's intent to enforce the
rights of Tenant under the Management Agreement or the Franchise Agreement, as
amended, and may initiate or participate in any legal proceedings respecting the
enforcement of such rights. Tenant acknowledges that by accepting the foregoing
assignment, Lender shall not assume any of Tenant's obligations under the
Management Agreement or the Franchise Agreement, as amended. Tenant agrees not
to further assign, for security purposes or otherwise, Tenant's rights under the
Management Agreement or the Franchise Agreement, as amended, without Lender's
prior written consent. The foregoing assignment shall secure the payment and
performance of all covenants, agreements and obligations of Buyer under the Loan
Documents.
(c) Tenant shall perform, observe and comply with all covenants,
agreements and obligations of Buyer under the Deed of Trust and the other Loan
Documents relating to the use, operation, management, repair, maintenance and/or
replacement of the Property, or any portion thereof, and including, without
limitation, the obligations of Buyer under the Escrow Agreement. In addition,
Tenant shall timely perform all obligations of
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Tenant under the Management Agreement or the Franchise Agreement, as amended,
and shall not take any action or omit to take any action which would impair
Tenant's rights thereunder or to cause the Management Agreement or the Franchise
Agreement, as amended, to be terminated prior to the date of expiration of its
term. Tenant shall give to Lender prompt written notice of any default under the
Management Agreement or the Franchise Agreement, as amended, whether by Tenant,
Buyer, RIBM or Marriott. Except with the prior written consent of Lender, Tenant
shall not modify or amend the Management Agreement or the Franchise Agreement,
as amended, terminate or surrender the Management Agreement or the Franchise
Agreement, as amended, or release or discharge RIBM from any of its obligations
thereunder.
(d) Tenant hereby authorizes Lender, without giving notice to
Tenant or obtaining Tenant's consent or without affecting Tenant's obligations
under this Agreement, from time to time to: (i) renew or extend all or any
portion of Buyer's obligations under the Note or any of the other Loan
Documents; (ii) declare all sums owing to Lender under the Note or the other
Loan Documents due and payable upon the occurrence of an Event of Default under
the Loan Documents; (iii) make changes in the dates specified for payment of any
amounts payable in periodic installments under the Note or any of the other Loan
Documents; (iv) otherwise modify the terms of any of the Loan Documents; (v)
take and hold security for the performance of Buyer's obligations under the Note
or the other Loan Documents, and exchange, enforce, waive and release any such
security; (vi) apply such security and direct the order or manner of sale
thereof as Lender in its discretion may determine; (vii) release, substitute or
add any one or more endorsers of the Note or guarantors of Buyer's obligations
under the Note or the other Loan Documents; (viii) apply payments received by
Lender from Buyer to any obligations of Buyer to Lender in such order as Lender
shall determine in its sole discretion; and (ix) assign Buyer's obligations
under the Loan Documents in whole or in part.
(e) Tenant hereby waives: (i) any defense based upon any legal
disability of Buyer to enter into this Agreement or any of the other Loan
Documents or any other defense of Buyer; (ii) any defense based upon any lack of
authority of the officers, directors, partners or agents acting or purporting to
act on behalf of Buyer or any principal of Buyer or any defect in the formation
of Buyer or any principal of Buyer; (iii) any defense based upon the application
of the proceeds of the loan evidenced by the Note by Buyer for purposes other
than the purposes represented by Buyer to Lender or intended or understood by
Lender or such parties; (iv) any and all rights and defenses arising out of an
election of remedies by Lender, even though that election of remedies, such as
nonjudicial foreclosure, may have destroyed Tenant's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
California Code of Civil Procedure or otherwise; (v) any defense based upon
Lender's failure to disclose to such party any
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information concerning Borrower's or Buyer's financial condition or any other
circumstances bearing on Borrower's or Buyer's ability to perform its
obligations under the Note of any of the other Loan Documents; (vi) any defense
based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in any other respects more
burdensome than that of a principal; (vii) any defense based upon Lender's
election, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code or any
successor statute; (viii) any defense based upon any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code; (ix) any
right of subrogation, any right to enforce any remedy which Lender may have
against Buyer and any right to participate in, or benefit from, any security for
the Note or the Loan Documents now or hereafter held by Lender; (x) presentment,
demand, protest and notice of any kind; and (xi) the benefit of any statute of
limitations affecting the liability of Buyer hereunder or the enforcement
hereof. Without limiting the generality of the foregoing or any other provision
hereof, Tenant expressly waives to the extent permitted by law any and all
rights and defenses which might otherwise be available to Tenant under
California Civil Code Sections 2787 to 2855, inclusive, 2899 and 3433 or under
California Code of Civil Procedures Section 580a, 580b, 580d and 726, or any of
such sections, as amended or recodified from time to time.
14. Waivers. In further consideration for Lender entering into this
Agreement, Buyer hereby waives, with respect to the Loan, any and all rights
under Sections 580a, 580b, 580d and 726 of the California Code of Civil
Procedure, as amended or recodified from time to time, and any other
antideficiency or similar laws which, except for this waiver, would otherwise
limit, qualify or reduce the obligations of Buyer under the Loan Documents.
15. No Impairment. Nothing contained herein shall affect or be
construed to affect any liens, charges, security interests or encumbrances
created by the Deed of Trust or the other Loan Documents or the priority of any
such liens, charges, security interests or encumbrances over any other liens,
charges, security interests or encumbrances. All assignments and transfers by
Borrower to Buyer are subject to the liens, charges, security interests and
encumbrances held by Lender.
16. References. Each reference in the Loan Documents to the "Loan
Documents", or to the "Deed of Trust" or any of the other documents constituting
the "Loan Documents," shall be deemed to mean any such term as defined in and/or
amended pursuant to this Agreement, as the context requires.
17. Limitation on Amendment. Except as modified by this Agreement, all
of the terms, conditions and provisions of
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the Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed by the parties.
18. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.
19. Attorneys' Fees. If any attorney is engaged by Lender to enforce
or construe any provision of this Agreement, or as a consequence of any default
under this Agreement, with or without the filing of any legal action or
proceeding, Buyer shall pay to Lender, immediately upon demand, all reasonable
attorneys' fees and costs incurred by Lender in connection therewith, together
with interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance of the Note as specified therein.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when executed and delivered to Lender will be deemed
to be an original, but all of which, taken together, shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
BORROWER: SUNNYVALE RESIDENCE ASSOCIATES,
a Kansas limited partnership
By: /s/ Xxxx X. XxXxxx
-----------------------------------------
Xxxx X. XxXxxx,
General Partner
BUYER: INNKEEPERS RESIDENCE SILI II, L.P.,
a Virginia limited partnership
By: Innkeepers Residence Sili II, Inc.,
a Virginia corporation, General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: President
--------------------------------------
TENANT: JF HOTEL III, INC., a Virginia corporation
By: /s/ Xxxxxxxx X. Xxxx
-----------------------------------------
Title: President
--------------------------------------
LENDER: MASSACHUSETTS MUTUAL LIFE INSURANCE
CORPORATION, a Massachusetts corporation
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
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