EXHIBIT 10.O
ASSIGNMENT OF HOTEL MANAGEMENT AGREEMENT
AND HOTEL RESERVE ACCOUNT
HANOVER MARRIOTT
HANOVER, NEW JERSEY
THIS ASSIGNMENT OF HOTEL MANAGEMENT AGREEMENT AND HOTEL RESERVE ACCOUNT is
entered into as of August 18, 1997 by HANOVER MARRIOTT LIMITED PARTNERSHIP, a
Delaware limited partnership (hereinafter referred to as "Assignor"), to and for
the benefit of CONNECTICUT GENERAL LIFE INSURANCE COMPANY, a Connecticut
corporation (hereinafter referred to as "Assignee"), as follows:
R E C I T A L S
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By virtue of that certain Management Agreement (the "Management Agreement")
dated as of even date herewith by and between Assignor and Marriott Hotel
Services, Inc., a Delaware corporation ("Operator"), Operator did contract with
Assignor to operate for Assignor the Marriott Hotel located on a parcel of land
more particularly described in EXHIBIT A attached hereto and incorporated herein
by reference (such property, together with the hotel facilities thereon, being
hereinafter called the "Property").
Pursuant to the terms of the Management Agreement, a Repairs and Equipment
Reserve is required to be maintained for making replacements, substitutions and
additions to Furnishings, Fixtures and Equipment, as such terms are defined in
the Management Agreement. Pursuant to Article VIII, Section 8.02 of the
Management Agreement, Operator is required to maintain the Repairs and Equipment
Reserve in a bank account (the "Reserve Account"). Operator currently maintains
the Reserve Account in Merrill Lynch Institutional Fund Number 258, Account
Number 3206121, in the name of "Hanover Marriott Hotel".
NOW THEREFORE, FOR VALUE RECEIVED, Assignor hereby grants, transfers, and
assigns to Assignee all of the right, title and interest of Assignor in and to
the Management Agreement and the Reserve Account; together with any and all
extensions and renewals thereof.
FOR THE PURPOSE OF SECURING:
ONE: Payment of all sums now or at any time hereafter due to the Assignee
from Assignor pursuant to that certain Promissory Note of even date herewith in
the original principal sum of $29,875,000.00 (the "Note") and secured by a
certain Mortgage and Security Agreement and that certain Assignment of Leases,
Rents and Revenues, each of even date herewith and made by Assignor to Assignee
(jointly, the "Mortgage"), to be recorded contemporaneously, or prior to, the
recording of this Agreement; and
TWO: Performance and discharge of each and every obligation, covenant and
agreement of Assignor contained herein or in the Mortgage or the Note or any
other instrument evidencing or securing payment of the debt evidenced by the
Note (the "Loan Documents").
A. TO PROTECT THE SECURITY OF THIS ASSIGNMENT, ASSIGNOR HEREBY MAKES THE
FOLLOWING COVENANTS AND AGREEMENTS WITH RESPECT TO THE MANAGEMENT AGREEMENT AND
THE RESERVE ACCOUNT:
1. Performance Under Management Agreement. To faithfully abide by,
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perform and discharge in all material respects each and every obligation,
covenant and agreement of Assignor under the Management Agreement by Assignor to
be performed; to give prompt, written notice to Assignee of any notice of
default on the part of Assignor with respect to the Management Agreement
received from Operator, together with an accurate and complete copy of any such
notice; at the sole cost and expense of Assignor, to enforce, short of
termination of the Management Agreement, or otherwise secure the performance of,
each and every material obligation, covenant, condition and agreement of
Management Agreement by the Operator to be performed; not to modify or in any
way alter the terms of the Management Agreement without Assignee's prior written
consent (said consent not to be unreasonably withheld or delayed); not to
terminate the term of the Management Agreement and not to accept a surrender
thereof unless required to do so by the terms of the Management Agreement; and
not to waive, excuse, condone or in any manner release or discharge Operator
thereunder of or from the material obligations, covenants, conditions and
agreement by Operator to be performed under the Management Agreement.
2. Obligations with Respect to Reserve Account. Assignor shall not
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transfer or permit the transfer by Operator of the Reserve Account without
Assignee's prior written consent. Additionally, Assignor shall deposit or cause
to be deposited into the Reserve Account any monies (to the extent in Assignor's
possession) which are to be deposited therein pursuant to the Management
Agreement.
3. Defense of Claims. At Assignor's sole cost and expense, and upon
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notice to Assignee, Assignor shall appear in and defend any action or proceeding
arising under, growing out of or in any manner connected with the Management
Agreement (including without limitation the Reserve Account), or the
obligations, duties or liabilities of Assignor or Operator thereunder, and shall
pay all reasonable costs and expenses of Assignee, including reasonable
attorney's fees, in any such action or proceeding in which Assignee may be
required to appear.
4. Remedies. If Assignor shall fail to make any payment (including
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without limitation, required payments to the Reserve Account), or to do any act
as in the Management Agreement or herein provided, then Assignee may, but
without obligation so to do and upon five (5) days' written notice to Assignor
and Operator, and without releasing Assignor from any obligation hereof, make or
do the same in such manner and to such extent as Assignee may deem necessary to
protect the security thereof, including specifically, without limiting its
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general powers, the right to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Assignee,
and also the right to perform and discharge each and every obligation, covenant
and agreement of Assignor in the Management Agreement contained; and in
exercising any such powers to pay necessary costs and expenses, employ counsel
and incur and pay reasonable attorney's fees. Assignor shall pay within five (5)
Business Days after demand all sums expended by Assignee under the authority
hereof, and the same shall be added to the said indebtedness and shall be
secured hereby and by the Mortgage, and if Assignor shall fail to pay such sums
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).
5. Warranties. Assignor hereby covenants and warrants to Assignee that
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(a) Assignor has not executed any assignment of the Management Agreement, the
Reserve Account, or any of its rights, title or interest therein which remains
in effect, other than in connection with any subordinate mortgage financing
permitted under the Mortgage, and any such other assignment shall be expressly
by its terms subordinate hereto; (b) Assignor has not performed any act or
executed any instrument which might prevent Assignee from operating under any of
the terms and conditions hereof, or which would limit Assignee in such
operation; (c) there is no default under the Management Agreement by Assignor
nor to the best of Assignor's knowledge is there a default under the Management
Agreement by Operator and Assignor has no knowledge of any event which with
notice or lapse of time or both would constitute a default under the Management
Agreement; and (d) Assignor has not executed or granted any modification or
amendment whatever of the Management Agreement either orally or in writing and
the Management Agreement is in full force and effect.
B. IT IS ALSO AGREED THAT:
1. Rights of Assignor. So long as there shall exist no default by
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Assignor in the payment of any indebtedness secured hereby or in the performance
of any obligation, covenant or agreement herein or in the Mortgage contained
which is not cured within an applicable grace period, if any, Assignor shall
have the right to enjoy and utilize the rights and privileges of the "Owner"
under the Management Agreement.
2. Remedies. Upon the occurrence and during the continuance of a default
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in the payment of any indebtedness secured hereby or in the performance of any
obligation, covenant or agreement herein or in the Mortgage which is not cured
within any applicable grace period, if any, Assignee may, upon notice to
Assignor and Operator, exercise all rights and remedies contained herein and in
the Mortgage and without regard for the adequacy of security for the
indebtedness hereby secured, either in person or by agent with or without
bringing any action or proceeding, or by a receiver to be appointed by a court,
enter upon, take possession of the Property and exercise all rights of "Owner"
under the Management Agreement and do any acts which Assignee deems proper to
protect the security hereof, and in such event Assignor shall not exercise any
further rights under the Management Agreement. Assignee may sue for or
otherwise collect all proceeds due and payable under the Management
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Agreement including those past due and unpaid and apply the same less costs and
expenses of Owner under the Management Agreement, including reasonable
attorneys' fees, upon any indebtedness secured by the Mortgage or hereby, and in
such order as Assignee may determine. The entering upon and taking possession of
the Property, the collection of and the application thereof as aforesaid, shall
not cure or waive any default or waive, modify or affect notice of default under
the Mortgage or invalidate any act done pursuant to such notice.
3. Termination of the Management Agreement. In the event of a default by
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Operator so that Assignor, with the consent of Assignee as required herein,
terminates the Management Agreement or upon any other termination thereof, all
funds held in the Reserve Accounts shall be paid to Assignee except as otherwise
set forth in the other Loan Documents.
4. Default and Acceleration of Indebtedness. The whole of the
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indebtedness shall become due upon the election by Assignee to accelerate the
maturity of the indebtedness pursuant to the provisions of the Note or of the
Mortgage, or any other instrument which may be held by Assignee as security for
the indebtedness or at the option of Assignee after Assignor terminates the
Management Agreement without Assignee's prior written consent. Additionally, in
the event of a default under any of the Loan Documents, Assignee shall be
entitled to all the remedies of a secured party under the New Jersey Uniform
Commercial Code with respect to the Reserve Account, including without
limitation, the right to apply any funds held in such Account to the payment of
any sums due under the Loan Documents or for such other purposes as Assignee may
reasonably deem desirable to protect its security in the Property, subject to
the Management Agreement and that certain Agreement Concerning Hotel Management
dated as of even date herewith between Assignee and Operator if the same shall
then be in effect.
5. No Obligation of Assignee. Assignee shall not be obligated to perform
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or discharge, nor does it hereby undertake to perform or discharge, any
obligation, duty or liability under the Management Agreement, including without
limitation, the obligation to make required payments into the Reserve Account,
or under or by reason of this assignment, and Assignor shall and does hereby
agree to indemnify Assignee against and hold it harmless from any and all
liability, loss or damage which it may or might incur under the Management
Agreement or under or by reason of this assignment and of and from any and all
claims and demands whatsoever which may be asserted against it by reason of any
alleged obligation or undertaking on its part to perform or discharge any of the
terms, covenants or agreements contained in the Management Agreement which arise
prior to such time as Assignee shall have succeeded to the interest of Assignor
under the Management Agreement; should Assignee incur any such liability, loss
or damage under the Management Agreement or under or by reason of this
assignment, or in the defense against any such claim or demands, the amount
thereof, including costs and expenses and reasonable attorneys' fees, shall be
secured hereby and by the Mortgage, and Assignor shall reimburse Assignee
therefor within five (5) Business Days after demand therefor, and upon the
failure of Assignor so to do, Assignee may declare all sums secured hereby
immediately due and payable, and if Assignor shall fail to pay such sums within
said five (5) Business Day period, interest shall accrue thereon from the date
of demand
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therefor until paid and be immediately payable to Assignee at the Default Rate
(as defined in the Note).
C. IT IS FURTHER AGREED THAT:
1. Release. Upon the payment of all indebtedness secured by, and the
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performance of all the terms and conditions of, the Loan Documents and this
Assignment, this Assignment 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.
2. Assigns. This assignment inures to the benefit of the named Assignee
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and its successors and assigns, and binds Assignor's heirs, legatees, devisees,
administrators, executors, successors and assigns. The term "Management
Agreement" as used herein means not only the Management Agreement hereby
assigned or any extension or renewal thereof, but also any Management Agreement
subsequently executed by Assignor covering the Property or any part thereof.
Similarly, the term "Reserve Account" as used herein means not only the Reserve
Account hereby assigned, but any successor or additional accounts opened or
created as a Reserve Account under the Management Agreement. In this
assignment, whenever the context so requires, the neuter gender includes the
masculine or feminine, and the singular number includes the plural, and
conversely. This instrument may be executed in separate counterparts, all of
which together shall be deemed one and the same instrument.
3. Notices. Any notice, request, demand, statement or consent made
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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 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 provision. 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:
To Assignor: Hanover Marriott Limited Partnership
Host Marriott Corporation
10400 Fernwood Road
Bethesda, Maryland 20817
Attention: Treasurer
with a copy to: Host Marriott Corporation
10400 Fernwood Road
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Bethesda, Maryland 20817
Attention: Law Department
To Assignee: Connecticut General Life Insurance Company
CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, CT 06152-2319
Attention: Investment Services, S-319
with a copy to: CIGNA Corporation
Investment Law Department
900 Cottage Grove Road
Hartford, CT 06152-2215
Attention: Real Estate Division, S-215A
4. Business Days. The terms "Business Day" and "Business Days" as used in
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this Assignment shall mean any calendar day other than a Saturday, a Sunday or a
Federal holiday on which the U.S. Postal Service offices are closed for business
in one or more of Bethesda, Maryland, Hanover, New Jersey or Hartford,
Connecticut.
5. Scope of Liability. The provisions of Section 15 of the Note and
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Section 40 of the Mortgage, copies of which are attached as Exhibit B thereto,
are incorporated by reference herein.
(SIGNATURES APPEAR ON NEXT PAGE)
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IN WITNESS WHEREOF, Assignor has executed this Assignment of Hotel
Management Agreement and Hotel Reserve Account as of the date first above
written.
ASSIGNOR:
HANOVER MARRIOTT LIMITED PARTNERSHIP, a Delaware
limited partnership
By: Marriott Hanover Hotel Corporation,
a Delaware corporation and its general partner
By Bruce D. Wardinski
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Bruce D. Wardinski
Marriott Hotel Services, Inc. (herein referred to as "Operator") joins in
executing the foregoing Assignment of Hotel Management Agreement and Hotel
Reserve Account solely to acknowledge and evidence its consent to the terms
thereof and to confirm to Assignee, and hereby represents and warrants to
Assignee, that (i) there is no default under the Management Agreement by
Operator or, to the best of Operator's knowledge, by Assignor and Operator has
no knowledge of any event which with notice or lapse of time or both would
constitute a default under the Management Agreement; and (ii) neither Operator
nor, to Operator's knowledge, Assignor have executed or granted any modification
or amendment whatsoever of the Management Agreement, either orally or in
writing, and the Management Agreement is in full force and effect.
MARRIOTT HOTEL SERVICES, INC.,
a Delaware corporation
By Kevin M. Kimball
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Name: Kevin M. Kimball
Title: Vice President
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STATE OF Maryland )
: ss:
COUNTY OF Montgomery )
On this 8th day of August, 1997, before me, Susan Levenson, a Notary Public
in and for the jurisdiction aforesaid, personally appeared in said jurisdiction
Bruce D. Wardinski, to me personally known, who being by me duly sworn did
acknowledge himself to be a Vice President of MARRIOTT HANOVER HOTEL
CORPORATION, a Delaware corporation, as sole general partner of Marriott Hanover
Limited Partnership, a Delaware limited partnership, and that he, as such Vice
President, being authorized so to do, did acknowledge the foregoing instrument
to be the act and deed of said corporation as sole general partner of said
limited partnership, as aforesaid, and that the same was executed for the
purposes therein contained, and delivered the same as such.
Suan Levenson
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STATE OF Maryland )
: ss:
COUNTY OF Montgomery )
On this 31st day of July, 1997, before me, Carol Bruff, a Notary Public
in and for the jurisdiction aforesaid, personally appeared in said jurisdiction
Kevin M. Kimball, to me personally known, who being by me duly sworn did
acknowledge himself to be a Vice President of MARRIOTT HOTEL SERVICES, INC., a
Delaware corporation, and that he, as such Vice President, being authorized so
to do, did acknowledge the foregoing instrument to be the act and deed of said
corporation, and that the same was executed for the purposes therein contained,
and delivered the same as such.
Carol Bruff
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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 Morris, State of New Jersey, being more
particularly described as follows:
BEGINNING at a point in the present southwesterly side of New Jersey State
Highway Route 10 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 Melvin and Irene
Wykoff, 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 Lot 4, Block
1101 as shown on the tax map of the Township of Hanover, Morris 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
Stephen A. Jarombek of Montville, New Jersey and filed in the Morris County
Clerk's Office as filed map number 3826, and running thence
1. Through said Lot 4, South 12 Degrees 44 Minutes 34 Seconds West,
33.54 Feet to a Point on the Northerly End of Wing Drive, 50 Feet Wide as shown
on said
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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 Lot 4, 50 feet West 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 Lot 13, Block 1002 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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NOTE
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15. Limitations on Recourse. Except as hereinafter in this Section and
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in Section 40 of the Mortgage specifically provided, Maker. Marriott Hanover
Hotel Corporation ("MHHC") and any other partners of the Maker shall not be
personally liable for the payment of any sums due hereunder or the performance
of any obligations of Maker hereunder or under any other Loan Document. No
judgment for the repayment of the Indebtedness and no action to foreclose the
Mortgage, or to collect any amount payable under the Loan Documents, or to
satisfy any other claim relating thereto will be enforced against Maker or MHHC
or any other partner of Maker personally or any property of Maker or MHHC or any
other partner of Maker other than the Security and any other security furnished
under the Loan Documents in any action to foreclose the Mortgage or to otherwise
realize upon any security furnished under the Loan Documents or to collect any
amount payable under the Loan Documents. Notwithstanding the foregoing:
(a) Nothing herein contained shall be construed as prohibiting
Holder from exercising any and all remedies which the Loan Documents
permit, including the right to bring actions or proceedings against Maker
and/or MHHC and/or any other general partner of Maker and to enter a
judgment against Maker and/or any other general partner in Maker, so long
as the exercise of any remedy does not extend to execution against or
recovery out of any property of Maker and/or MHHC and/or any other partner
other than the security furnished under the Loan Documents;
(b) Maker and MHHC and any other general partner of Maker, but not
any limited partner of Maker who is not also a general partner, shall be
fully and personally jointly and severally personally liable for (i)
misapplying any condemnation proceeds or insurance proceeds attributable to
the Real Property, to the full extent of such proceeds so misapplied, (ii)
misapplying any security deposits attributable to the Real Property, to the
full extent of such deposits so misapplied. (iii) collecting any Rents
(defined in the Mortgage), Revenues (defined in the Mortgage) and any other
revenues and income generated by the operation of the hotel on the Real
Property (defined in the Mortgage) in advance in violation of any covenant
contained in any of the Loan Documents (except for deposits to hold advance
room reservations which occur in the ordinary course of business), to the
full extent of such Rents, Revenues and other revenues and income collected
in advance, (iv) committing fraud, misrepresentation or waste in connection
with the operation of the Security or the making of the loan evidenced
hereby, to the full extent of any remedies available at law or in equity,
not to exceed Holder's actual damages, except that no such limit shall
apply or be imposed if Maker, or its general partner(s) intentionally
commit(s) s fraud, misrepresentation or waste, (v) Gross Revenues (as
defined in the Hotel Management Agreement, as defined in the Mortgage) from
the Real Property are sufficient to pay any portion of the indebtedness,
operating expenses, maintenance expenses, insurance premiums, reserve or
escrow account deposits, sales and occupancy taxes, wages, salaries, taxes
and benefits relating to hotel employees, employment and withholding taxes,
or other sums required to be paid pursuant to the terms of the Loan
Documents, and Mortgagor fails to make any or all such payments or deposits
when due, all to the extent of any funds diverted from such obligations,
payments and/or expenses during the twelve (12) months prior to Mortgagee's
notice of acceleration through the date Mortgagee takes title to the Real
Property; (vi) failing to pay all or any portion of the real estate taxes
and assessments which are a lien against the Real Property during the
period of Maker's ownership at a time when there were sufficient Gross
Revenues available to pay all or any portion of such real estate taxes and
assessments, to full extent of such unpaid real estate taxes and
assessments; and (vii) failing to maintain the coverages and levels of
insurance required under the Mortgage or any other of the Loan Documents,
to the extent that a casualty or other liability occurs or arises and
insurance proceeds would have been available had such insurance coverages
and levels been maintained, in the amount of the difference between the
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actual insurance proceeds and the insurance proceeds that would have been
available had such levels and coverages of insurance been maintained as
required by the terms of the Loan Documents;
(c) There shall be no limitation, in any event, of Maker's personal
liability under, and the exercise of any of any of Holder's rights under
any separate indemnity agreement from Maker to Holder which may be entered
into, including but not limited to, the Environmental Indemnification
Agreement of even date herewith from Maker and Marriott Hanover Hotel
Corporation to Holder with regard to the Security except as may be
expressly set forth therein;
(d) Nothing contained in this Section shall be deemed to prejudice
the rights of Holder to proceed against any entity or person whatsoever,
including the Maker, with respect to the enforcement of Agreement
Concerning Hotel Management Agreement and any guarantees, leases, master
leases, or similar rights of payment.
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MORTGAGE
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40. Limitations on Recourse. Except as hereinafter in this Section and in
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Section 15 of the Note specifically provided, Mortgagor, Marriott Hanover Hotel
Corporation ("MHHC") and any other partners of the Mortgagor shall not be
personally liable for the payment of any sums due hereunder or the performance
of any obligations of Mortgagor hereunder or under any other Loan Document. No
judgment for the repayment of the Indebtedness and no action to foreclose this
Mortgage, or to collect any amount payable under the Loan Documents, or to
satisfy any other claim relating thereto, will be enforced against Mortgagor or
MHHC or any other partner of Mortgagor personally or any property of Mortgagor
or MHHC or any other partner of Mortgagor other than the Security and any other
security furnished under the Loan Documents in any action to foreclose this
Mortgage or to otherwise realize upon any security furnished under the Loan
Documents or to collect any amount payable under the Loan Documents.
Notwithstanding the foregoing:
(a) Nothing herein contained shall be construed as prohibiting
Mortgagee from exercising any and all remedies which the Loan Documents
permit, including the right to bring actions or proceedings against
Mortgagor and/or MHHC and/or any other general partner of Mortgagor and to
enter a judgment against Mortgagor and/or MHHC and/or any other general
partner in Mortgagor, so long as the exercise of any remedy does not extend
to execution against or recovery out of any property of Mortgagor and/or
MHHC and/or any other general partner other than the security furnished
under the Loan Documents;
(b) Mortgagor and MHHC and any other general partner of Mortgagor, but
not any limited partner of Mortgagor who is not also a general partner,
shall be fully and personally jointly and severally personally liable for
(i) misapplying any condemnation proceeds or insurance proceeds
attributable to the Security, to the full extent of such proceeds so
misapplied, (ii) misapplying any security deposits attributable to the
Security, to the full extent of such deposits so misapplied, (iii)
collecting any Rents, Revenues and any other revenues and income generated
by the operation of the hotel on the Real Property in advance in violation
of any covenant contained in any of the Loan Documents (except for deposits
to hold advance room reservations which occur in the ordinary course of
business), to the full extent of such Rents, Revenues and other revenues
and income collected in advance, (iv) committing fraud, misrepresentation
or waste in connection with the operation of the Security or the making of
the loan evidenced hereby, to the full extent of any remedies available at
law
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or in equity not to exceed Mortgagee's actual damages, except that no such
limit shall apply or be imposed if Mortgagor, or its general partner(s)
intentionally commit(s) fraud, misrepresentation or waste, (v) Gross
Revenues (as defined in the Hotel Management Agreement) are sufficient to
pay any portion of the Indebtedness, operating expenses, maintenance
expenses, insurance premiums, reserve escrow account deposits, sales and
occupancy taxes, wages, salaries, taxes and benefits relating to hotel
employees, employment and withholding taxes, or other sums required to be
paid pursuant to the terms of the Loan Documents, and Mortgagor fails to
make any or all such payments or deposits when due, all to the extent of
any funds diverted from such obligations, payments and/or expenses during
the twelve (12) months prior to Mortgagee notice of acceleration through
the date Mortgagor takes title to the Security; (vi) failing to pay real
estate taxes and assessments which are a lien against the Real Property
during the period of Mortgagor's ownership at a time when there were
sufficient Gross Revenues available to pay all or any portion of such real
estate taxes and assessments, to the full extent of such unpaid taxes; and
(vii) failing to maintain the coverages and levels of insurance required
under the Mortgage or any other of the Loan Documents, to the extent that a
casualty or other liability occurs or arises and insurance proceeds would
have been available had such insurance coverages and levels been
maintained, in the amount of the difference between the actual insurance
proceeds and the insurance proceeds that would have been available had such
levels and coverages of insurance been maintained as required by the terms
of the Mortgage;
(c) There shall be no limitation, in any event, of Mortgagor's
personal liability under, and the exercise of any of Mortgagee's rights
under any separate indemnity agreement from Mortgagor to Mortgagee
including but not limited to, the Environmental Indemnification Agreement
of even date herewith from Mortgagor and Marriott Hanover Hotel Corporation
to Mortgagee with regard to the Security except as may be expressly set
forth therein;
(d) Nothing contained in this Section shall be deemed to prejudice
the rights of Mortgagee to proceed against any entity or person whatsoever,
including the Mortgagor, with respect to the enforcement of the Hotel
Management Agreement and any guarantees, leases, master leases, or similar
rights of payment.
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