Exhibit 10.37

 

Loan No.: 50-2827820  

Jacksonville, Florida

Residence Inn II [Pool 2]

 

ASSIGNMENT OF

CONTRACTS AND PERMITS

 

THIS ASSIGNMENT OF CONTRACTS AND PERMITS (this “Assignment”), is made as of
November 10, 2004, from MARRIOTT RESIDENCE INN II LIMITED PARTNERSHIP, a
Delaware limited partnership (“Assignor”), having an office at 814 E. Main
Street, Richmond, Virginia 23219, to WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (“Assignee”), having an office at 301 South Tryon
Street, PMB 35-123, Charlotte, North Carolina 28282.

 

W I T N E S S E T H:

 

WHEREAS, Assignor owns in fee simple that certain parcel of land more
particularly described in Exhibit A annexed hereto and incorporated herein,
including without limitation, the easements, rights, privileges, tenements,
hereditaments and appurtenances (including air rights) in anyway pertaining
thereto (the “Premises”) and all buildings and other improvements and additions
thereto (whether now erected or hereafter constructed or placed upon the
Premises or any part thereof, the “Improvements” and, together with the
Premises, collectively, the “Property”);

 

WHEREAS, in connection with a loan (the “Loan”) being made concurrently herewith
by Assignee to Assignor in the principal amount of Four Million Eight Hundred
Seventy-Five Thousand and No/100 Dollars ($4,875,000.00), Assignor has executed
and delivered to Assignee its Promissory Note of even date herewith in the
original principal amount of the Loan (the “Note”);

 

WHEREAS, concurrently herewith, Assignor is delivering that certain Mortgage and
Security Agreement, dated of even date herewith, for the benefit of Assignee
(the “Mortgage”), encumbering the Property and securing the Loan;

 

WHEREAS, Assignee requires that this Assignment be executed and delivered as a
condition to making the Loan,

 

NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and other
good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged and intending to be legally bound hereby, in order to secure
the payment of the Loan, together with all interest thereon, as evidenced by the
Note, any other payments due to Assignee under this Assignment, the Note, the
Mortgage or any other Loan Document (as defined in the Mortgage), all costs of
collection in connection with the Loan, and all other sums, charges, obligations
and liabilities of Assignor due or to become due at any time to Assignee under
this Assignment, the Note, or any other Loan Document; and to secure the
performance

 

--------------------------------------------------------------------------------

and observance of all the provisions hereof, of the Note, of the Mortgage, and
of the other Loan Documents, including, without limitation, the payment to
Assignee of the Loan and any other sums advanced by Assignee hereunder or under
any other Loan Document, Assignor hereby presently, absolutely and irrevocably
grants, transfers, bargains, sells, assigns, conveys, and sets over unto
Assignee, its successors and assigns, all right, title and interest of Assignor
in, to and under all of the following, to the extent assignable:

 

(i) all contract rights and benefits, documents, insurance policies, contracts
and other instruments relating to the Property or any part thereof and all other
contractual arrangements creating a right in Assignor as a result of its
ownership, operation, maintenance, repair, replacement, or improvement of or to
all or any part of the Property, whether written or verbal, now or hereafter in
existence or arising, including, without limitation, all union contracts,
employment agreements, service contracts, management agreement, leasing, rental
and brokerage agreements, operating agreements, equipment leasing agreements,
warranties and guaranties covering any equipment, appliances or fixtures now or
hereafter located on or placed upon the Property (collectively, the
“Contracts”); and

 

(ii) all building permits, surveys, architectural plans and specifications,
governmental approvals, certificates of occupancy, licenses, authorizations,
including, without limitation, hotel/motel licenses, health permits, restaurant
licenses, liquor licenses, agreements with any utility companies, all deposits
associated with the foregoing and any other consents and approvals which
Assignor may now or hereafter own and now or hereafter in existence or arising,
with respect to or in connection with the Property (collectively, the
“Permits”).

 

1. This Assignment is intended by Assignor and Assignee to create, and shall be
construed to create, an absolute assignment to Assignee, subject only to the
terms and provisions hereof. This Assignment is effective immediately.
Notwithstanding the foregoing, Assignee hereby grants to Assignor and its
successors and any lessee or other person operating and/or managing the Property
for Assignor, a revocable license to perform under the Contracts and Permits,
and to retain, use and enjoy the same. Such license shall be revoked
automatically upon the occurrence and during the continuance of any Event of
Default as set forth in the Loan Documents.

 

2. Subject to the license granted pursuant to paragraph 1 above and to the
extent of Assignor’s rights in the Contracts and Permits, Assignor does hereby
authorize and empower Assignee, its successors and assigns, to collect or
enforce the Contracts and Permits and does hereby direct each and all of the
contractual obligors of Assignor to pay any income directly to Assignee, its
successors and assigns, or as it or they shall direct, and to perform any
obligations on its or their part to be performed, upon demand for payment or
performance thereof by Assignee, its successors and assigns, and upon the
occurrence and during the continuance of an Event of Default (as defined in the
Mortgage) beyond any applicable grace period as set forth in the Loan Documents
such purchasers and obligors of Assignor shall pay the sums due or perform the
obligations owing to Assignee upon such demand without further inquiry. No such
obligor

 

2

--------------------------------------------------------------------------------

shall be obligated to account to Assignor for any amounts paid to Assignee by
reason of any payment made to Assignee pursuant to such demand or to inquire as
to the existence of any default or whether Assignee is otherwise entitled to
such amounts, and Assignor agrees to look exclusively to Assignee for such
amounts in the event Assignor shall claim that such demand was not properly
made. Until the revocation of the license described in paragraph 1 above,
Assignor is authorized to collect or enforce or continue collecting or enforcing
the Contracts and Permits; but such privilege shall not operate to permit the
collection or demand for performance by Assignor, its successors or assigns, of
any obligation more than one (1) month in advance of the date prescribed in the
instrument providing therefor.

 

The sole signature of Assignee shall be sufficient for the exercise of any
rights under this Assignment. Assignor hereby irrevocably constitutes and
appoints Assignee the attorney-in-fact and agent of Assignor, which appointment
shall be coupled with an interest, for the purpose of executing and delivering
any notice in connection with this Assignment.

 

3. Assignor hereby covenants and warrants that, other than the Mortgage and the
other Loan Documents, it has not executed any prior assignment or pledge of its
interest in any of the Contracts or Permits, nor performed any act or executed
any other instrument which might prevent Assignee from operating under any of
the terms and conditions of this Assignment, or which would limit Assignee in
such operation.

 

4. Assignor hereby agrees that so long as the Debt (as defined in the Mortgage),
or any part thereof, shall remain unpaid, without the prior written consent and
approval of Assignee in each instance, Assignor will not further assign, pledge,
hypothecate or otherwise encumber any of its rights under the Contracts or the
Permits.

 

5. Assignor agrees that at its sole expense it (i) will duly and punctually
perform and comply with any and all representations, warranties, covenants,
terms and provisions to be performed or complied with by it in any of the
Contracts and Permits; (ii) will not terminate, accept a voluntary surrender of,
cancel, abridge or otherwise modify in any materially adverse respect or waive
its rights or the obligations of any other party under any of the Permits in any
materially adverse respect, without the express written consent of Assignee;
(iii) will maintain the Permits in full force and effect in all material
respects; (iv) will enforce its rights under the Permits in all material
respects in accordance with their terms; (v) will not terminate, accept a
voluntary surrender of, cancel, abridge in any materially adverse respect,
otherwise modify or waive its rights or the obligations of any other party under
any of the Contracts in any materially adverse respect, except in the ordinary
course of Assignor’s business; provided, however, in no event shall Assignor
fail to perform such covenant with respect to any Major Contracts (hereinafter
defined), without Assignee’s prior express written consent; (vi) will maintain
the Contracts in full force and effect in all material respects, except in the
ordinary course of Assignor’s business; provided, however, in no event shall
Assignor fail to perform such covenant with respect to any Major Contracts to
which Assignor is a party, without Assignee’s prior express written consent;
(vii) will enforce its rights under the Contracts in all material respects in
accordance with their terms, except in the ordinary course of Assignor’s
business; provided, however, in no event shall Assignor fail to perform such
covenant with respect to any Major Contracts to which Assignor is a party,
without Assignee’s prior express written consent;

 

3

--------------------------------------------------------------------------------

(viii) will appear in and defend any action or proceeding arising under or in
any manner connected with any of the Contracts or Permits or the
representations, warranties, covenants and agreements of it or the other party
or parties thereto to the extent necessary to preserve Assignor’s material
rights under the Contracts and Permits; (ix) will furnish Assignee, upon demand,
with original executed counterparts of all Major Contracts and material Permits
now or hereafter created relating to the Property; and (x) will take all
additional action to these ends as from time to time may be reasonably requested
in writing by Assignee. For purposes of this paragraph, a “Major Contract” shall
mean a Contract the remaining aggregate payments under which exceed $10,000.00.
Any such action in violation of this paragraph shall be voidable at the option
of Assignee.

 

6. Assignee shall not be obligated to perform or discharge any obligation of
Assignor as a result of the assignment hereby effected, and Assignor agrees to
indemnify, defend and hold Assignee harmless against any and all liability, loss
or damage which it may incur by reason of any act of Assignee under this
Assignment, except only for liability arising out of the gross negligence or
willful misconduct of Assignee. Should Assignee incur any such liability, loss
or damage by reason of this Assignment, or in defense against any such claims or
demands, the amount thereof, including costs, expenses and reasonable attorney’s
fees and disbursements, together with interest thereon at the Default Interest
Rate (as defined in the Note) shall be included in the Debt and Assignor shall
reimburse Assignee therefor immediately upon demand.

 

7. Assignor agrees from time to time to execute, acknowledge and deliver all
such instruments and to take all such action for the purpose of further
effectuating this Assignment and the carrying out of the terms hereof as may be
reasonably requested by Assignee.

 

8. Nothing herein contained shall be construed as making Assignee or its
successors and assigns a mortgagee-in-possession; nor shall Assignee or its
successors and assigns be liable for laches or failure to collect or enforce the
Contracts or Permits.

 

9. Neither the execution of this Assignment nor any action or inaction on the
part of Assignee under this Assignment shall release Assignor from any of its
obligations under any or all of the Contracts or Permits or constitute an
assumption of any such obligations on the part of the Assignee. No action or
failure to act on the part of Assignor shall adversely affect or limit, in any
way, the rights of Assignee under this Assignment or, through this Assignment,
under any and all of the Contracts or Permits. Neither the existence of this
Assignment nor the exercise of its privilege to collect or enforce Assignor’s
rights and interest in the Contracts and Permits hereunder shall be construed as
a waiver by Assignee or its successors and assigns of the right to enforce
payment of the Debt in strict accordance with the terms and provisions of the
Note and other Loan Documents.

 

10. This Assignment shall be released as, when and to the extent the Mortgage is
released without the need to execute any further instruments.

 

11. This Assignment shall be of no force or effect with respect to any Contracts
or Permits with respect to which an assignment would cause a termination thereof
without the consent of any party thereto other than Assignor (but only to the
extent such consent has not

 

4

--------------------------------------------------------------------------------

been given), and this Assignment shall be construed so as not to assign such
Contracts or Permits. Upon reasonable request of Assignee, Assignor shall use
reasonable efforts to obtain the consent of such other party to a Major Contract
or a material Permit to the assignment of such Contract or Permit to Assignee
pursuant to this Assignment.

 

12. The terms and provisions hereof shall be binding upon and inure to the
benefit of Assignor and Assignee and their respective heirs, executors, legal
representatives, successors, successors-in-title and assigns, whether by
voluntary action of the parties or by operation of law. All personal pronouns
used herein, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and vice versa.
Titles of articles and sections are for convenience only and in no way define,
limit, amplify or describe the scope or intent of any provisions hereof. Time is
of the essence with respect to all provisions of this Assignment. This
Assignment and the other Loan Documents contain the entire agreements between
the parties hereto relating to the subject matter hereof and thereof and all
prior agreements relative hereto and thereto which are not contained herein or
therein are terminated.

 

13. This Assignment may be executed in any number of counterparts, each of which
shall only be effective upon delivery and thereafter shall be deemed an
original, and all of which shall be taken to be one and the same instrument. All
signature pages of this Assignment may be detached from any counterpart of this
Assignment without impairing the legal effect of any signatures thereon and may
be attached to another counterpart of this Assignment identical in form hereto
but having attached to it one or more additional signature pages.

 

14. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS SITUATED, EXCEPT TO THE EXTENT THAT
ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH CASE
SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING.

 

15. Notwithstanding anything to the contrary contained in this Assignment, the
liability of Assignor and its officers, directors, general partners, managers,
members and principals for the indebtedness secured hereby and for the
performance of the other agreements, covenants and obligations contained herein
and in the Loan Documents shall be limited as set forth in Section 2.6 of the
Note.

 

[THE BALANCE OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]

 

5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Assignor has executed this Assignment as of the day and year
first above written.

 

ASSIGNOR:

MARRIOTT RESIDENCE INN II LIMITED PARTNERSHIP,

a Delaware limited partnership

By:  

AHT Res II GP, Inc.,

a Virginia corporation

Its:

 

General Partner

   

By:

 

/s/ David S. McKenney

   

Name:

 

David S. McKenney

   

Title:

 

Vice President

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Legal Description