EXHIBIT 10.25
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Second Amendment to Amended and Restated Loan and Security
Agreement (this "Second Amendment") is dated as of April 30, 2004, by and
between ARLINGTON HOSPITALITY, INC., a Delaware corporation ("Borrower") and
LASALLE BANK NATIONAL ASSOCIATION, a national banking association ("Bank").
RECITALS
WHEREAS, the Borrower and the Bank are parties to that certain Amended
and Restated Loan and Security Agreement dated as of April 30, 2003 (as the same
has previously been amended, as the same is amended hereby and as the same may
be further amended, modified or restated from time to time, the "Loan
Agreement"), evidencing, among other things, the making of a certain revolving
loan by the Bank to the Borrower;
WHEREAS, the Borrower has informed the Bank that it was in violation of
(i) the Tangible Net Worth covenant contained in Section 10.1 [Tangible Net
Worth] of the Loan Agreement for the period ending December 31, 2003 and (ii)
the Annual Income covenant contained in Section 10.6 [Annual Income] of the Loan
Agreement for the period ending December 31, 2003;
WHEREAS, the Borrower has now requested that the Bank (i) waive the
violations of the Tangible Net Worth and the Annual Income covenants of the Loan
Agreement for the period ending December 31, 2003; (ii) amend the Tangible Net
Worth covenant contained in Section 10.1 [Tangible Net Worth] of the Loan
Agreement pursuant to the terms and conditions contained herein; (iii) amend the
Total Liabilities to Worth covenant contained in Section 10.2 [Total Liabilities
to Worth] of the Loan Agreement pursuant to the terms and conditions contained
herein; and (iv) renew the Revolving Loan for a period of one year to April 30,
2005, among other things; and
WHEREAS, the Bank has agreed to (i) waive the violations of the
Tangible Net Worth and the Annual Income covenants of the Loan Agreement for the
period ending December 31, 2003; (ii) revise the Loan Agreement covenants
referenced above pursuant to the terms and conditions contained herein; and
(iii) renew the Revolving Loan for a period of one year to April 30, 2005, among
other things.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other good and valuable consideration (the receipt,
sufficiency and adequacy of which are hereby acknowledged), the parties hereto
hereby agree as follows:
1. Definitions. Terms capitalized herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement, as
amended from time to time.
2. Amendments to Loan Agreement.
The Loan Agreement is hereby modified in the following manner:
a. The definition of the term "Maturity Date" in Article 1
[DEFINTIONS] of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"Maturity Date" shall be April 30, 2005, unless extended by
the Bank pursuant to any modification, extension, substitution
or renewal note executed by the Borrower and accepted by the
Bank in its sole and absolute discretion.
b. The definition of the term "Revolving Interest Rate" in
Article 1 [DEFINTIONS] of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:
"Revolving Interest Rate" shall mean a fixed interest rate of
ten percent (10%) per annum.
c. The definition of the term "Revolving Loan Commitment" in
Article 1 [DEFINTIONS] of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:
"Revolving Loan Commitment" shall mean (a) Four Million and
00/100 Dollars ($4,000,000.00) until February 27, 2005 and (b)
Three Million Five Hundred Thousand and 00/100 Dollars
($3,500,000.00) from and after February 28, 2005; in each
case, as may be further reduced by (i) an amount equal to the
net proceeds to Borrower or any Subsidiary from the sale of
any Mortgaged Premises, after payment of the Senior Mortgage
Indebtedness thereon and costs of sale of such Mortgaged
Premises (except to the extent the Bank, in its sole
discretion, agrees to accept a Mortgage on a Substitute
Mortgaged Premises in lieu of a further reduction of its
commitment hereunder) or (ii) such other reserves as the Bank
determines in its sole discretion.
d. The definition of the term "Tangible Assets" in Article 1
[DEFINTIONS] of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"Tangible Assets" shall mean the total of all assets appearing
on a consolidated balance sheet of the Borrower prepared in
accordance with GAAP (with inventory being valued at the lower
of cost or market), after deducting all proper reserves
(including reserves for Depreciation, obsolescence and
amortization but excluding non-cash impairment charges arising
out of the listing or marketing specific hotel properties for
sale until the date of the sale of such property, when any
loss on the sale shall be recognized) less the sum of (i)
goodwill, patents, trademarks, prepaid expenses, deposits, the
cash value of any life insurance policies owned by the
Borrower, deferred charges and other personal property which
is classified as intangible property in accordance with GAAP
and (ii) any amounts due from shareholders, affiliates,
officers or employees of the Borrower.
e. The following affirmative covenant is hereby added to the Loan
Agreement as Section 9.16 [Collateral Assignment of Proceeds
Agreement]:
2
The Borrower covenants and agrees that it will execute a
Collateral Assignment of Proceeds Agreement (in the form of
Exhibit B attached hereto) and cause any applicable Subsidiary
to execute to execute such Collateral Assignment of Proceeds
Agreement with respect to any existing or future contracts for
the sale of real property of Borrower or any Subsidiary of
Borrower contemporaneous with the execution of this Second
Amendment or any such contract, as applicable.
f. Section 10.1 [Tangible Net Worth] of the Loan Agreement is
hereby deleted in its entirety and replaced with the
following:
Tangible Net Worth. As at June 30, 2004 and as at the end of
each of its fiscal quarters thereafter, the Borrower and its
Subsidiaries shall maintain consolidated Tangible Net Worth in
an amount not less than Eight Million Five Hundred Thousand
and 00/100 Dollars ($8,500,000.00).
g. Section 10.2 [Total Liabilities to Worth] of the Loan
Agreement is hereby deleted in its entirety and replaced with
the following:
Total Liabilities to Worth. As of the end of each of its
fiscal quarters, the Borrower and its Subsidiaries shall
maintain a Total Liabilities to Worth Ratio of not greater
than 3.50 to 1.00.
3. Conditions Precedent. The amendments contained in Section 2 herein
are subject to, and contingent upon, the Bank receiving each of the following
items, each in form and substance acceptable to the Bank, dated of even date
herewith:
a. Amendment. Four duly executed counterparts of this Second
Amendment signed by the Borrower;
b. Substitution Revolving Note. A duly executed Substitution
Promissory Note) in the form of Exhibit A attached hereto);
c. Collateral Assignment of Proceeds Agreement. Duly executed
counterparts of Collateral Assignment of Proceeds Agreements
(in the form of Exhibit B attached hereto) in connection with
the sale of the following real properties: 2820 Hotel Ave.,
Huntington, Indiana, 2245 Hadley Rd., Plainfield, Indiana and
1314 12th Street SW, LeMars, Iowa, executed by Borrower and
the appropriate Subsidiary of Borrower;
d. Fees. A commitment fee in the amount of $25,000.00 and a
covenant waiver fee in the amount of $10,000.00;
e. Secretary's Certificate. A secretary's Certificate issued by
the Secretary of Borrower consisting of the following items:
(i) Articles of Incorporation, (ii) By-laws, (iii) a
resolution of the directors of Borrower (A) authorizing the
execution and delivery of this Second Amendment and the
documents contemplated hereby, and (B) consenting to the
actions taken by Borrower in connection herewith and (iv) a
statement of incumbency; and
3
f. Other items. Such other documents, certificates, schedules,
exhibits, instruments and agreements as the Bank shall
reasonably request
4. Waiver and Forbearance. The Bank hereby waives (i) the violations
created by the Borrower's failure to be in compliance with the Tangible Net
Worth covenant contained in Section 10.1 [Tangible Net Worth] of the Loan
Agreement as of December 31, 2003 and for any period prior thereto and any Event
of Default created thereby, and (ii) the violation created by the Borrower's
failure to be in compliance with the Annual Income covenant contained in Section
10.6 [Annual Income] of the Loan Agreement as of December 31, 2003 and for any
period prior thereto and any Event of Default created thereby. This waiver shall
be a limited waiver for the time period stated herein and shall not constitute a
course of conduct or dealing. Additionally, except as expressly provided herein,
this Second Amendment shall not constitute a waiver of any existing defaults of
the Borrower, and the Bank expressly reserves and retains all of their rights
and remedies under the Loan Agreement with respect to this or any other
violations or breaches of the Loan Agreement. Moreover, the Bank hereby agrees
to forbear from pursuing any of its rights and remedies under the Loan Agreement
as a result of the Events of Default created by the Borrower's violation of the
Tangible Net Worth covenant contained in Section 10.1 [Tangible Net Worth] of
the Loan Agreement as of December 31, 2003 and Borrower's violation of the
Annual Income covenant contained in Section 10.6 [Annual Income] of the Loan
Agreement as of December 31, 2003, all subject to the terms and provisions
hereof.
5. Representations and Warranties. The Borrower hereby represents and
warrants to the Bank that on and as of the date hereof and after giving effect
to this Second Amendment:
a. The Borrower has the power and authority to execute, deliver
and perform its obligations under this Second Amendment. This
Second Amendment has been duly authorized by all necessary
corporate action of the Borrower. This Second Amendment
constitutes the legal, valid and binding obligation of the
Borrower, enforceable against each Borrower in accordance with
its terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar law affecting creditor's
rights generally and general principles of equity;
b. The execution and delivery of this Second Amendment and the
performance by the Borrower of its obligations under the Loan
Agreement, as amended hereby, do not and will not conflict
with any provision of law or of the charter or bylaws of the
Borrower or of any agreement binding upon the Borrower;
c. As of the date hereof, no Event of Default under the Loan
Agreement or event or condition which, with the giving of
notice or the passage of time, shall constitute an Event of
Default, has occurred or is continuing; and
d. As of the date hereof, the representations and warranties of
the Borrower in the Loan Agreement are true and correct as
though made of even date herewith, except to the extent that
such representations and warranties expressly relate to an
earlier date.
6. Intentionally Omitted.
4
7. Reference to Loan Agreement; No Waiver.
a. References. Upon the effectiveness of this Second Amendment,
each reference in the Loan Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the Loan Agreement, as amended
hereby.
b. No Waiver. The Bank's failure, at any time or times hereafter,
to require strict performance by the Borrower of any provision
or term of the Loan Agreement or this Second Amendment shall
not waive, affect or diminish any right of the Bank hereafter
to demand strict compliance and performance herewith or
therewith. Any suspension or waiver by the Bank of a breach of
this Second Amendment or any Event of Default under the Loan
Agreement shall not suspend, waive or affect any other breach
of this Second Amendment or any Event of Default under the
Loan Agreement or other Loan Documents, whether the same is
prior or subsequent thereto and whether of the same or of a
different kind or character. None of the undertakings,
agreements, warranties, covenants and representations of the
Borrower contained in this Second Amendment, shall be deemed
to have been suspended or waived by the Bank unless such
suspension or waiver is (i) in writing and signed by the Bank,
and (ii) delivered to the Borrower. In no event shall the
Bank's execution and delivery of this Second Amendment
establish a course of dealing among the Bank, the Borrower or
other obligor, or in any other way obligate the Bank to hereby
provide any amendments or waivers with respect to the Loan
Agreement. The terms and provisions of this Second Amendment
shall be limited precisely as written and, except as provided
in Section 4 hereof, shall not be deemed (i) to be a consent
to or a modification or waiver of any other term or condition
of the Loan Agreement or other Loan Documents or (ii) to
prejudice any right or remedy which the Bank may now have
under or in connection with the Loan Agreement.
c. Full Force and Effect. The Loan Agreement and other Loan
Documents shall remain in full force and effect and are hereby
ratified and confirmed.
8. Successors and Assigns. This Second Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, the Borrower may not assign any of its rights or
obligations under this Second Amendment without the prior written consent of
Bank.
9. Severability. Wherever possible, each provision of this Second
Amendment shall be interpreted in such a manner so as to be effective and valid
under applicable law, but if any provision of this Second Amendment is held to
be prohibited by or invalid under applicable law, such provision or provisions
shall be ineffective only to the extent of such provision or invalidity, without
invalidating the remainder of this Second Amendment.
10. Governing Law. This Second Amendment shall be deemed to be a
contract made under the laws of the State of Illinois, and the rights and
obligations of the parties hereunder shall
5
be construed in accordance with and be enforced and governed by the internal
laws of the State of Illinois, without regard to choice of law or conflicts of
law principles.
11. Release by the Borrower. In further consideration of Bank's
execution of this Second Amendment, the Borrower hereby forever remises,
releases, acquits, satisfies and forever discharges the Bank and their
successors, assigns, affiliates, officers, employees, directors, agents and
attorneys (collectively, the "Releasees") from any and all claims, demands,
liabilities, disputes, damages, suits, controversies, penalties, fees, costs,
expenses, actions and causes of action (whether at law or in equity) and
obligations of every nature whatsoever whether liquidated or unliquidated, known
or unknown, matured or unmatured, fixed or contingent, that the Borrower ever
had, now have, or may have against or seek from any or all of the Releasees,
which arise from or relate to any actions which any or all of the Releasees may
have taken or omitted to take prior to the date this Second Amendment was
executed, including, without limitation, with respect to the Loan Agreement and
other Loan Documents, other than for the Bank's gross negligence or willful
misconduct. The Borrower acknowledges that the Bank is specifically relying upon
the representations, warranties and agreements contained herein and that such
representations, warranties and agreements constitute a material inducement to
the Bank in entering into this Second Amendment.
12. Counterparts. This Second Amendment may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument, admissible into evidence
13. Recitals. The Recitals set forth above are hereby incorporated
herein and made a part hereof.
14. No Impairment. The Borrower and the Bank intend that this Second
Amendment shall not in any manner constitute a novation and shall in no way
adversely affect, diminish or impair the Loan Agreement, the Loan Documents or
the liens created thereby securing the payment of the Obligations and that such
liens are and shall be and remain prior liens and shall not in any manner be
waived or subordinated, the purpose of this Second Amendment being to carry
forward all liens security the Obligations, which are acknowledged by the
parties hereto to be valid and subsisting.
15. Further Modifications. The Borrower acknowledges and agrees that by
the granting of this Second Amendment, the Bank shall not be in any way
obligated to further modify, extend, or amend the Loan Agreement or the Loan
Documents, or to forebear or forestall any collection efforts or other remedies
it may have under the Loan Agreement or the Loan Documents or at law.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the undersigned have caused this Second Amendment
to Loan Agreement to be duly executed and delivered as of the date first above
written.
BORROWER:
ARLINGTON HOSPITALITY, INC., a Delaware
corporation
By: /s/ Jerry H. Herman
----------------------------------------------
Name: Jerry H. Herman
---------------------------------------
Title: Chief Executive Officer
---------------------------------------
By: /s/ James B. Dale
----------------------------------------------
Name: James B. Dale
---------------------------------------
Title: Senior V.P. and Chief Financial Officer
---------------------------------------
Attest:
By: /s/ Leon Vainikos
----------------------------------------------
Name: Leon Vainikos
---------------------------------------
Title: General Counsel
---------------------------------------
BANK:
LASALLE BANK NATIONAL ASSOCIATION, a national
banking association
By: /s/ Alan L. Clark
----------------------------------------------
Name: Alan L. Clark
---------------------------------------
Title: Senior Vice President
---------------------------------------
7
EXHIBIT A
FORM OF
SECOND AMENDED AND RESTATED
REVOLVING NOTE
Chicago, Illinois
$4,000,000.00 Dated: April 30, 2004
Due: April 30, 2005
FOR VALUE RECEIVED, ARLINGTON HOSPITALITY, INC., a Delaware
corporation (together with its respective successors and assigns, individually
and collectively, the "Borrower"), promises to pay to the order of LASALLE BANK
NATIONAL ASSOCIATION, a national banking association (the "Bank"), the principal
sum of FOUR MILLION AND 00/100 DOLLARS ($4,000,000.00), or, if less, the
aggregate unpaid principal amount of all advances made by the Bank to the
Borrower hereunder, on April 30, 2005.
This Note constitutes the Second Amended and Restated
Revolving Note issued pursuant to an Amended and Restated Loan and Security
Agreement dated as of April 30, 2003 as amended by that certain First Amendment
to Amended and Restated Loan and Security Agreement dated July 14, 2003 and that
certain Second Amendment to Amended and Restated Loan and Security Agreement of
even date herewith, all of which amended and restated a certain original Loan
and Security Agreement dated as of February 1, 2002, which had also been amended
by a certain First Amendment to Loan and Security Agreement dated as of August
9, 2002 and a certain Second Amendment to Loan and Security Agreement dated as
of December 10, 2002 (collectively all of the foregoing are hereinafter referred
to as the "Loan Agreement") by and between the Borrower and the Bank, to which
Loan Agreement reference is hereby made for a statement of the terms and
conditions under which the Revolving Loans evidenced hereby may be made and a
description of the terms and conditions upon which this Note may be prepaid in
whole or in part, but shall not constitute payment of that certain Revolving
Note dated February 1, 2002, as replaced by that certain Substitute Revolving
Note dated December 10, 2002, as replaced by that certain Amended and Restated
Revolving Note dated April 30, 2003 or constitute a novation thereof. In case an
Event of Default, as defined in the Loan Agreement, shall occur, the entire
unpaid principal and accrued interest may be automatically due and payable or
may be declared due and payable as provided in the Loan Agreement.
The unpaid principal shall bear interest from the date hereof
until paid as set forth in the Loan Agreement. Interest shall be payable in
accordance with the terms of the Loan Agreement.
This Note is subject to optional and mandatory prepayment in
certain circumstances, all as set forth in the Loan Agreement.
In the event that any installment of the principal of, or
interest on, this Note, is not paid when due (whether at stated maturity, by
acceleration or otherwise), the entire principal amount outstanding shall bear
interest at an annual rate equal to the Revolving Loan Interest
8
Rate (as defined in the Loan Agreement) plus five percent (5%) per annum, from
the due date until all overdue amounts have been paid in full.
Payments of both principal and interest are to be made in
lawful money of the United States of America at the offices of the Bank at 135
South LaSalle Street, Chicago, Illinois 60603, or at such other place as the
holder shall designate in writing to the maker.
This Note is secured by a security interest in the Collateral
(as defined in the Loan Agreement) and by those certain Mortgages (as defined in
the Loan Agreement) dated of even date herewith, each made by a Subsidiary (as
defined in the Loan Agreement) for the benefit of the Bank.
The maker and all endorsers hereby severally waive presentment
for payment, protest and demand, notice of protest, demand and of dishonor and
nonpayment of this Note. Borrower hereby agrees to pay all reasonable fees and
expenses incurred by the Bank or any subsequent holder, including the reasonable
fees of counsel, in connection with protection and enforcement of the rights of
the Bank or any subsequent holder under this Note, including without limitation
the collection of any amounts due under this Note and the protection and
enforcement of such rights in any bankruptcy, reorganization or insolvency
proceeding involving the Borrower.
This Note is binding upon Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns. This Note is made under and governed by the laws of the State of
Illinois, without regard to conflicts of laws principles.
[SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, Borrower has executed this Amended and
Restated Revolving Note as of the day and year first above written.
ARLINGTON HOSPITALITY, INC.
a Delaware corporation
By:
--------------------------------------
Its:
-------------------------------------
Name:
------------------------------------
Attest:
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
10
EXHIBIT B
FORM OF
COLLATERAL ASSIGNMENT OF PROCEEDS AGREEMENT
THIS COLLATERAL ASSIGNMENT OF PROCEEDS AGREEMENT (this "ASSIGNMENT") is
made as of April 30, 2004 between ARLINGTON HOSPITALITY, INC., a Delaware
corporation whose address is 2355 South Arlington Heights Road, Arlington
Heights, Illinois 60005 and AP HOTELS OF MISSISSIPPI, INC., a [_________]
corporation (collectively, the "ASSIGNOR"), and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, whose address is 135 South LaSalle
Street, Chicago, Illinois 60603 (the "BANK").
BACKGROUND
A. The Bank and the Assignor have entered into a financing arrangement
evidenced by (i) that certain Amended and Restated Loan and Security Agreement
dated as of April 30, 2003 as amended by that certain First Amendment to Amended
and Restated Loan and Security Agreement dated as of July 14, 2003 and that
certain Second Amendment to Amended and Restated Loan and Security Agreement
dated April 30, 2004 (collectively, the "LOAN AGREEMENT"), pursuant to which the
Bank may extend loans and other financial accommodations to the Assignor, and
(ii) the other documents referred to, related to, or contemplated in said Loan
Agreement (the foregoing agreements and documents, along with the Loan
Agreement, as amended, modified and supplemented from time to time are
collectively referred to as the "LOAN DOCUMENTS").
B. As a condition to entering into the Second Amendment, and as
additional security for the repayment of all of the Obligations (as defined in
the Loan Agreement), the Bank has required that Assignor assign to the Bank all
the rights of Assignor in and to the net proceeds due Assignor under that
certain [______________________] dated as of [___________] by and between
Assignor and [____________] (the "Real Estate Contract") for the sale of the
real and personal property located at [________________], [_________],
Mississippi (the "Property").
NOW THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, and to secure the payment and performance of the
Obligations, Assignor agrees as follows:
1. Assignment of Proceeds. Subject to the terms and provisions of this
Assignment, and as collateral security for the payment and performance of the
Obligations, Assignor hereby assigns, transfers and sets over to the Bank all of
Assignor's right, title and interest in all of the net proceeds due Assignor
under the Real Estate Contract after payment of (i) the Senior Mortgage
Indebtedness with regard to the Property, if any (as defined in the Loan
Agreement), (ii) reasonable and customary costs of sale of the Property and
(iii) deduction of the amount of Seller financing of the purchase price of the
Property, not to exceed fifteen percent (15%) of the gross purchase price as set
forth in the Real Estate Contract, pursuant to the terms and conditions of the
Real Estate Contract.
11
2. Representations, Warranties and Promises. To the best of Assignor's
knowledge, after due inquiry, Assignor represents, warrants and agrees:
(a) The Real Estate Contract is valid and enforceable and has
not been altered, modified or amended in any manner whatsoever;
(b) Assignor is not in default under any of the terms,
covenants or conditions of the Real Estate Contract; and
(c) Assignor shall not, without the Bank's prior written
consent, assign or transfer all or any portion of the Real Estate Contract on
the proceeds due Assignor thereunder to any other party.
3. Events of Default. Assignor shall be in default under this
Assignment upon the occurrence of any one or more of the following events or
conditions:
(a) Any failure of Assignor to comply with any of the terms
and conditions hereof or the Real Estate Contract, which failure remains uncured
after any applicable notice or grace period;
(b) the occurrence of any Event of Default under the Loan
Agreement which remains uncured after any applicable notice or grace period;
(c) the occurrence of a default or an event of default under
any of the other Loan Documents which remains uncured after any applicable
notice or grace period; and
(d) breach of any warranty, representation or promise in any
material respect made by Assignor under this Assignment.
4. Right of the Bank Upon Default. After the occurrence of an Event of
Default Assignor agrees that, at the option of the Bank and in addition to such
other rights and remedies as may be afforded to the Bank under the Loan
Document, by law or in equity, the Bank shall have the right, without giving
notice to or obtaining the consent of Assignor, to exercise, enforce or avail
itself of any of the rights, powers, privileges, authorizations or benefits
assigned and transferred to the Bank pursuant to this Assignment.
5. Appointment of the Bank. Assignor does hereby irrevocably appoint
the Bank as Assignor's true and lawful attorney, with full power (in the name of
Assignor or otherwise) to, after an Event of Default, enforce compliance by any
other party with any term or provision of the Real Estate Contract, to endorse
each and every check or other instrument or order in connection therewith, and
to file any claim, take any action, or institute any proceeding which the Bank
may deem to be necessary or advisable.
6. Non-Assumption. This Assignment shall not be construed in any manner
whatsoever as an assumption by the Bank of any of the obligations of Assignor
under the Real Estate Contract or otherwise.
12
7. Indemnification. Assignor shall and does hereby agree to indemnify
the Bank for, and to hold the Bank harmless from any and all liability, loss or
damage which may or might be incurred under the Real Estate Contract or under or
by reason of this Assignment and for any and all claims and demands whatsoever
which may be asserted against the Bank by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants, or
agreements contained in the Real Estate Contract, except to the extent any such
loss is due to the Bank's gross negligence or willful misconduct.
8. Law Governing. This Assignment and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the laws
of the State of Illinois applicable to agreements made and to be wholly
performed in such state.
9. Assigns. This Assignment and all rights and liabilities hereunder
shall inure to the benefit of the Bank and its successors and assigns, and shall
be binding on the Assignor and Assignor's administrators, successors and
assigns.
10. Miscellaneous. All terms used in this Assignment which are not
defined herein but are defined in the Loan Agreement shall have the meanings
ascribed to them therein. It is further clarified that the bank's rights under
paragraphs 4 and 5 hereof may be exercised only after the occurrence of an Event
of Default.
Assignor acknowledges that this Assignment is and shall be effective
upon execution by the Assignor and delivery to and acceptance hereof by the
Bank, and it shall not be necessary for the Bank to execute any acceptance
hereof or otherwise to signify or express its acceptance hereof to Assignor.
[SIGNATURE PAGE FOLLOWS]
13
IN WITNESS WHEREOF, the Assignor and the Bank have executed this
Collateral Assignment of Proceeds Agreement as of the date first above written.
ASSIGNOR:
ARLINGTON HOSPITALITY, INC.,
a Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Attest:
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
AP HOTELS OF MISSISSIPPI, INC., a
[_________] corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Agreed and accepted:
BANK:
LASALLE BANK NATIONAL ASSOCIATION,
a national banking association
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
14