Cross-Collateralization and Cooperation Agreement - Merrill Lynch Mortgage Lending Inc.
POOL 6
CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT
THIS CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT (this "Agreement")
is made as of the 17th day of June, 2005, by and between the Borrowers listed on
the signature page hereof (collectively, the "Pool 6 Borrowers") and MERRILL
LYNCH MORTGAGE LENDING, INC., in its capacity as mortgage lender ("Lender").
RECITALS
A. The Borrowers, under that certain Promissory Note of even date herewith
given to Lender ("Note 6"), are indebted to Lender in the original principal sum
of $31,995,000 ("Loan 6") as governed by that certain Loan Agreement of even
date herewith between the Borrowers and Lender (together with all extensions,
renewals, modifications, substitutions and amendments thereof, "Loan Agreement
6").
B. The Borrowers identified on Schedule 1 as the "Pool 1 Borrowers"
(collectively, the "Pool 1 Borrowers"), under that certain Promissory Note of
even date herewith given to Lender ("Note 1"), are indebted to Lender in the
original principal sum of $80,140,000 ("Loan 1") as governed by that certain
Loan Agreement of even date herewith between the Pool 1 Borrowers and Lender
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, "Loan Agreement 1").
C. The Borrowers identified on Schedule 1 as the "Pool 2 Borrowers"
(collectively, the "Pool 2 Borrowers"), under that certain Promissory Note of
even date herewith given to Lender ("Note 2"), are indebted to Lender in the
original principal sum of $81,560,000 ("Loan 2") as governed by that certain
Loan Agreement of even date herewith between the Pool 2 Borrowers and Lender
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, "Loan Agreement 2").
D. The Borrowers identified on Schedule 1 as the "Pool 3 Borrowers"
(collectively, the "Pool 3 Borrowers") under that certain Promissory Note of
even date herewith given to Lender ("Note 3"), are indebted to Lender in the
original principal sum of $82,615,000 ("Loan 3") as governed by that certain
Loan Agreement of even date herewith between the Pool 3 Borrowers and Lender
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, "Loan Agreement 3").
E. The Borrowers identified on Schedule 1 as the "Pool 4 Borrowers"
(collectively, the "Pool 4 Borrowers"), under that certain Promissory Note of
even date herewith given to Lender ("Note 4"), are indebted to Lender in the
original principal sum of $50,200,000 ("Loan 4") as governed by that certain
Loan Agreement of even date herewith between the Pool 4 Borrowers and Lender
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, "Loan Agreement 4").
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F. The Borrowers identified on Schedule 1 as the "Pool 5 Borrowers"
(collectively, the "Pool 5 Borrowers", and together with Pool 1 Borrowers, Pool
2 Borrowers, Pool 3 Borrowers, Pool 4 Borrowers and Pool 5 Borrowers,
collectively, the "Borrowers"), under that certain Promissory Note of even date
herewith given to Lender ("Note 5", and together with Note 1, Note 2, Note 3,
Note 4 and Note 6, collectively, the "Notes"), are indebted to Lender in the
original principal sum of $50,200,000 ("Loan 5", and together with Loan 1, Loan
2, Loan 3, Loan 4 and Loan 6, collectively, the "Loans") as governed by that
certain Loan Agreement of even date herewith between the Pool 5 Borrowers and
Lender (together with all extensions, renewals, modifications, substitutions and
amendments thereof, "Loan Agreement 5", and together with Loan Agreement 1, Loan
Agreement 2, Loan Agreement 3, Loan Agreement 4 and Loan Agreement 6,
collectively, the "Loan Agreements").
G. Loan 1, Loan 2, Loan 3, Loan 4, Loan 5 and Loan 6 are secured, in part,
by Mortgages (as defined in the Loan Agreements) on the Properties in the
respective pools of Properties identified on Schedule 2 (each, a "Pool", and
collectively, the "Pools"). Each of such Properties is referred to herein as a
"Property" and, collectively, as the "Properties". The Properties in each Pool
are referred to, respectively, as the "Pool 1 Properties", "Pool 2 Properties",
"Pool 3 Properties", "Pool 4 Properties", "Pool 5 Properties" and "Pools 6
Properties".
H. Lender has required as a condition to making the Loans that the
Borrowers enter into this Agreement with Lender.
AGREEMENT
For ten ($10) dollars and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
Section 1. Cross Collateralization Within Pool; Contribution.
(a) Each Pool 6 Borrower acknowledges that Lender is making Loan 1
to the Pool 6 Borrowers upon the security of its collective interest in the Pool
6 Properties and in reliance upon the aggregate of the Pool 6 Properties taken
together being of greater value as collateral security than the sum of each Pool
6 Property taken separately. Each Pool 6 Borrower agrees that each Mortgage of a
Pool 6 Property is and will be cross-collateralized and cross-defaulted with
each other Mortgage of a Pool 6 Property so that (i) an Event of Default which
continues beyond the expiration of any applicable notice and cure periods under
any of such Mortgages shall constitute an Event of Default under each of the
other such Mortgages securing the related Note; (ii) an Event of Default which
continues beyond the expiration of any applicable notice and cure periods under
the related Loan Agreement or this Agreement shall constitute an Event of
Default under each such Mortgage; (iii) each such Mortgage shall constitute
security for the related Note as if a single blanket lien were placed on all of
the Pool 6 Properties as security
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for Note 1; and (iv) such cross-collateralization shall in no event be deemed to
constitute a fraudulent conveyance.
(b) Without limitation to any other right or remedy provided to
Lender in this Agreement or any of the other Loan Documents, each Pool 6
Borrower covenants and agrees that (i) Lender shall have the right to pursue all
of its rights and remedies in one proceeding, or separately and independently in
separate proceedings which it, as Lender, in its sole and absolute discretion,
shall determine from time to time, (ii) Lender is not required to either
marshall assets, sell any or all of the Collateral in any inverse order or
alienation, or be subjected to any "one action" or "election of remedies" law or
rule, (iii) the exercise by Lender of any remedies against any of the Collateral
will not impede Lender from subsequently or simultaneously exercising remedies
against any other Collateral, (iv) all Liens and other rights, remedies and
privileges provided to Lender in this Agreement and/or any other Loan Documents
otherwise shall remain in full force and effect until Lender has exhausted all
of its remedies against the Collateral and all the Collateral has been
foreclosed, sold and/or otherwise realized upon and (v) each Pool 6 Property and
all Collateral as defined in Loan Agreement 1 shall be security for the
performance of all each Pool 6 Borrower's obligations hereunder and under each
of the other Loan Documents.
(c) As a result of the transactions contemplated by this Agreement,
each Pool 6 Borrower will benefit, directly and indirectly, from the obligation
of each other Pool 6 Borrower to pay the related Indebtedness and perform its
obligations hereunder and under the other related Loan Documents and in
consideration therefore each Pool 6 Borrower desires to enter into an allocation
and contribution agreement among themselves as set forth in this Section 1(c) to
allocate such benefits among themselves and to provide a fair and equitable
agreement to make contributions among each Pool 6 Borrower in the event any
payment is made by any individual Pool 6 Borrower under the Loan Documents to
Lender (such payment being referred to herein as a "Contribution", and for
purposes of this Section, includes any exercise of recourse by Lender against
any Collateral of a Pool 6 Borrower and application of proceeds of such
Collateral in satisfaction of such Borrower's obligations, to Lender under the
Loan Documents).
(i) Each Pool 6 Borrower shall be liable under the related
Loan Documents with respect to the related Indebtedness only for such
total maximum amount (if any) that would not render its Indebtedness under
the related Loan Agreement or under any of the Loan Documents subject to
avoidance under Section 548 of the Federal Bankruptcy Code or any
comparable provisions of any state law.
(ii) In order to provide for a fair and equitable contribution
among Pool 6 Borrowers in the event that any Contribution is made by an
individual Pool 6 Borrower (a "Funding Borrower"), such Funding Borrower
shall be entitled to a reimbursement Contribution ("Reimbursement
Contribution") from all other Pool 6 Borrowers for all payments, damages
and expenses incurred by that Funding Borrower in discharging any of the
Indebtedness, in the manner and to the extent set forth in this Section.
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(iii) For purposes hereof, the "Benefit Amount" of any
individual Pool 6 Borrower as of any date of determination shall be the
net value of the benefits to such Borrower from extensions of credit made
by Lender to (A) such Borrower and (B) to the other Pool 6 Borrowers under
the related Loan Documents.
(iv) Each Pool 6 Borrower shall be liable to a Funding
Borrower in an amount equal to the (A) ratio of the Benefit Amount of such
Borrower to the total amount of related Indebtedness, multiplied by (B)
the amount of such Indebtedness paid by such Funding Borrower.
(v) In the event that at any time there exists more than one
Funding Borrower with respect to any Contribution (in any such case, the
"Applicable Contribution"), then Reimbursement Contributions from other
Pool 6 Borrowers pursuant hereto shall be allocated among such Funding
Borrowers in proportion to the total amount of the Contribution made for
or on account of the other Pool 6 Borrowers by each such Funding Borrower
pursuant to the Applicable Contribution. In the event that at any time any
Pool 6 Borrower pays an amount hereunder in excess of the amount
calculated pursuant to this Section 1 above, that Borrower shall be deemed
to be a Funding Borrower to the extent of such excess and shall be
entitled to a Reimbursement Contribution from the other Pool 6 Borrowers
in accordance with the provisions of this Section.
(vi) Each Pool 6 Borrower acknowledges that the right to
Reimbursement Contribution hereunder shall constitute an asset in favor of
such Borrower to which such Reimbursement Contribution is owing.
(vii) No Reimbursement Contribution payments payable by a Pool
6 Borrower pursuant to the terms of this Section 1 shall be paid until all
amounts then due and payable by all Pool 6 Borrowers to Lender, pursuant
to the terms of the related Loan Documents, are paid in full in cash.
Nothing contained in this Section 1 shall limit or affect in any way the
Indebtedness of any Pool 6 Borrower to Lender under the Note or any other
Loan Documents.
(viii) Each Pool 6 Borrower waives:
(A) any right to require Lender to proceed against any other
Borrower or any other person or to proceed against or exhaust any security held
by Lender at any time or to pursue any other remedy in Lender's power before
proceeding against Borrower;
(B) any defense based upon any legal disability or other
defense of any other Borrower, any guarantor of any other person or by reason of
the cessation or limitation of the liability of any other Borrower or any
guarantor from any cause other than full payment of all sums payable under the
Notes, this Agreement and any of the other Loan Documents;
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(C) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on behalf of
any other Borrower or any principal of any other Borrower or any defect in the
formation of any other Borrower or any principal of any other Borrower;
(D) 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;
(E) any defense based upon any failure by Lender to obtain
collateral for the Indebtedness or failure by Lender to perfect a lien on any
Collateral;
(F) presentment, demand, protest and notice of any kind;
(G) any defense based upon any failure of Lender to give
notice of sale or other disposition of any collateral to any other Borrower or
to any other person or entity or any defect in any notice that may be given in
connection with any sale or disposition of any Collateral;
(H) any defense based upon any failure of Lender to comply
with applicable laws in connection with the sale or other disposition of any
Collateral, including any failure of Lender to conduct a commercially reasonable
sale or other disposition of any Collateral;
(I) any defense based upon any use of cash collateral under
Section 363 of the Federal Bankruptcy Code;
(J) any defense based upon any agreement or stipulation
entered into by Lender with respect to the provision of adequate protection in
any bankruptcy proceeding;
(K) any defense based upon any borrowing or any grant of a
security interest under Section 364 of the Federal Bankruptcy Code;
(L) any defense based upon the avoidance of any security
interest in favor of Lender for any reason;
(M) any defense based upon any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding, including any discharge of, or bar or stay against collecting, all
or any of the obligations evidenced by the Notes or owing under any of the Loan
Documents;
(N) any defense or benefit based upon such Borrower's, or any
other party's, resignation of the portion of any obligation secured by the
Mortgages to be satisfied by any payment from any other Borrower or any such
party;
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(O) all rights and defenses arising out of an election of
remedies by Lender even though the election of remedies, such as non-judicial
foreclosure with respect to security for the Loan or any other amounts owing
under the Loan Documents, has destroyed Borrower's rights of subrogation and
reimbursement against any other Borrower;
(P) all rights and defenses that such Borrower may have
because any Indebtedness is secured by real property. This means, among other
things: (1) Lender may collect from such Borrower without first foreclosing on
any real or personal property collateral pledged by any other Borrower, (2) if
Lender forecloses on any real property collateral pledged by any other Borrower,
(I) the amount of the Indebtedness may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price, (II) Lender may collect from such Borrower even if any
other Borrower, by foreclosing on the real property collateral, has destroyed
any right such Borrower may have to collect from any other Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses such Borrower
may have because any of the Indebtedness is secured by real property; and
(Q) except as may be expressly and specifically permitted
herein, any claim or other right which such Borrower might now have or hereafter
acquire against any other Borrower or any other person that arises from the
existence or performance of any obligations under the Notes, this Agreement or
the other Loan Documents, including any of the following: (i) any right of
subrogation, reimbursement, exoneration, contribution, or indemnification; or
(ii) any right to participate in any claim or remedy of Lender against any other
Borrower or any collateral security therefore, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law.
Section 2. Cross-Collateralization Across Pools; Contribution; Release of
Cross-Collateralization.
(a) Until repayment of the Indebtedness under each Loan Agreement
and satisfaction of all obligations under each Loan Agreement, each Pool 6
Borrower acknowledges and agrees (subject to Lender's election(s) at Lender's
sole discretion from time to time or otherwise pursuant to Section 2(g) below):
(i) that each of the Pool 6 Properties shall secure not only Loan 1 but also all
of the other Loans, and that the Liens of the related Loan Documents shall
constitute Liens securing not only Loan 1 but also all of the other Loans; and
(ii) that Lender would not make the Loans to the Pool 6 Borrowers unless the
Pool 6 Borrowers granted liens on the Pool 6 Properties to secure the payment of
each of the Loans.
(b) Until the date that all of the Loans shall have been paid and
satisfied in full, the Pool 6 Borrowers (i) shall have no right of subrogation
with respect to the Loans and (ii) waive any right to enforce any remedy which
Lender now has or may hereafter have against the Borrowers, any endorser or any
guarantor of all or any part of the Loans or any other individual or entity, and
the Pool 6 Borrowers waive any benefit of, and any right to participate in, any
security or collateral given to Lender to secure the payment or performance of
all or any part of the Loans or any other liability of any of the other
Borrowers to Lender. Should
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any Pool 6 Borrower have the right, notwithstanding the foregoing, to exercise
its subrogation rights, each Pool 6 Borrower hereby expressly and irrevocably
(1) subordinates any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off that such
Borrower may have to the payment in full in cash of the Loans and (2) waives any
and all defenses available to a surety, guarantor or accommodation co-obligor
until the Loans are paid in full in cash. Each Pool 6 Borrower acknowledges and
agrees that this subordination is intended to benefit Lender and shall not limit
or otherwise affect any Borrower's liability hereunder or the enforceability of
any of the Loan Agreements or the Loan Documents.
(c) Each Pool 6 Borrower agrees that any and all claims of such
Borrower against any Borrowers in any of the other Pools or any endorser or any
guarantor of all or any part of the Loans (collectively, the "Crossed Obligors")
with respect to any obligations, liabilities or indebtedness now or hereafter
owing by the Crossed Obligors, or any of them, to such Borrower, or otherwise
existing or claimed to be owed or to exist on the part of any of the Crossed
Obligors, or against any of their respective properties (collectively, the
"Crossed Party Obligations") shall be subordinate and subject in right of
payment to the prior payment, in full and in cash, of all of the Loans.
Notwithstanding any right of any Borrower to ask, demand, sue for, take or
receive any payment from any of the Crossed Obligors, all rights, liens and
security interests of each Borrower, whether now or hereafter arising and
howsoever existing, in and to any assets of any of the Crossed Obligors shall be
and are subordinated to the rights of Lender in those assets under the Loan
Documents relating to each Loan or otherwise, and no Borrower shall, until the
date that all of the Loans shall have been paid and satisfied in full, (i)
assert, collect, sue upon, or enforce all or any part of the Crossed Party
Obligations; (ii) commence or join with any other creditors of any of the
Crossed Obligors in commencing any bankruptcy, reorganization, receivership or
insolvency proceeding against any of the Crossed Obligors; (iii) take, accept,
ask for, sue for, receive, set off or demand any payments upon the Crossed Party
Obligations; or (iv) take, accept, ask for, sue for, receive, demand or allow to
be created liens, security interests, mortgages, deeds of trust or pledges of or
with respect to any of the assets of any of the Crossed Obligors in favor of or
for the benefit of such Borrower.
(d) If all or any part of the assets of any of the Crossed Obligors,
or the proceeds thereof, are subject to any distribution, division or
application to the creditors of such Crossed Obligor, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding, or if the business of any such Crossed
Obligor is dissolved or if substantially all of the assets of any such Crossed
Obligor are sold, then, and in any such event (such events being herein referred
to as an "Crossed Obligor Insolvency Event"), any payment or distribution of any
kind or character, either in cash, securities or other property, which shall be
payable or deliverable to any Pool 6 Borrower upon or with respect to any
Crossed Party Obligations shall be paid or delivered directly to the Lender for
application on the Loans, due or to become due, until the Loans shall have been
fully paid and satisfied (in cash). Should any payment, distribution, security
or instrument or proceeds thereof be received by any Pool 6 Borrower upon or
with respect to the Crossed Party Obligations after any Crossed Obligor
Insolvency Event and prior to the payment in full and satisfaction of all of the
Loans, such
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Borrower shall receive and hold the same in trust, as trustee, for the benefit
of Lender and shall forthwith deliver the same to Lender in precisely the form
received (except for the endorsement or assignment of such Borrower where
necessary), for application to any of the Loans, due or not due, and, until so
delivered, the same shall be held in trust by such Borrower as the property of
Lender. If such Borrower fails to make any such endorsement or assignment to
Lender, Lender or any of its officers or employees is irrevocably authorized to
make the same. Each Pool 6 Borrower agrees that until the Loans have been paid
in full (in cash) and satisfied, no Pool 6 Borrower will assign or transfer to
any individual or entity (other than Lender) any claim such Borrower has or may
have against any Crossed Obligor.
(e) Subject to the provisions of Section 2(g), to the extent that
any collection upon any of the Loans is made by Lender from one of the Borrowers
or the Properties in a Pool other than Pool 6 or other assets of the Borrowers
other than the Pool 6 Borrowers (a "Crossed Loans Collection") which, taking
into account all other Crossed Loans Collections then previously or concurrently
made by such Borrower, exceeds the amount which otherwise would have been
collected from such Borrower if each Borrower had paid the portion of the Loans
satisfied by such Crossed Loans Collection in the same proportion as such
Borrower's Allocable Amount (as defined below) (as determined immediately prior
to such Crossed Loans Collection) bore to the aggregate Allocable Amounts of
each Borrower as determined immediately prior to the making of such Crossed
Loans Collection, then, following payment in full in cash of the Loans, such
Borrower shall be entitled to receive contribution and indemnification payments
from, and be reimbursed by, each other Borrower for the amount of such excess,
pro rata based upon their respective Allocable Amounts in effect immediately
prior to such Crossed Loans Collection. As of any date of determination, the
"Allocable Amount" of any Borrower shall be equal to the maximum amount of the
claim which could then be recovered from such Borrower under the related Loan
Documents without rendering such claim voidable or avoidable under Section 548
of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law. The foregoing provision shall be for the benefit of each of the
Borrowers and Lender, but shall be subject to modification as provided in
Section 2(g) below and to amendment by agreement of the Borrowers and Lender.
This Section 2(e) is intended only to define the relative rights of the
Borrowers, and nothing set forth in this Section 2(e) is intended to or shall
impair the liens and security interests of any of the Loan Agreements or the
related Loan Documents or the obligations of the Borrowers thereunder. Each Pool
6 Borrower acknowledges that the rights of contribution and indemnification
under this Section 2(e) constitute assets of the Borrowers to which such
contribution and indemnification is owing.
(f) Each Pool 6 Borrower hereby consents and agrees to each of the
following, and agrees that such Borrower's obligations under its Loan Agreement
and the other Loan Documents and the Liens created under its Loan Agreement and
the other Loan Documents securing the Loans shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
common law, equitable, statutory or other rights (including without limitation
rights to notice) that such Borrower might otherwise have as a result of or in
connection with any of the following:
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(ix) Any renewal, extension, increase, modification,
alteration or rearrangement of all or any part of the Loans, the Loan
Documents, or other document, instrument, contract or understanding
between the Borrowers and Lender, or any other parties, pertaining to the
Loans or any failure of Lender to notify such Borrower of any such action.
(x) Any adjustment, indulgence, forbearance or compromise that
might be granted or given by Lender to the Borrowers.
(xi) The insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of any
of the Borrowers or any other party at any time liable for the payment of
all or part of the Loans; or any dissolution of any of the Borrowers, or
any sale, lease or transfer of any or all of the assets of any of the
Borrowers, or any changes in the shareholders, partners or members of any
of the Borrowers; or any reorganization of any of the Borrowers.
(xii) The invalidity, illegality or unenforceability of all or
any part of the Loans, or any document or agreement executed in connection
therewith, for any reason whatsoever, including without limitation the
fact that (A) the Loans, or any part thereof, exceeds the amount permitted
by law, (B) the act of creating the Loans or any part thereof is ultra
vires, (C) the officers or representatives executing the Loan Documents or
otherwise creating the Loans acted in excess of their authority, (D) the
Loans violate applicable usury laws, (E) the Borrowers have valid
defenses, claims or offsets (whether at law, in equity or by agreement)
which render the Loans wholly or partially uncollectible from the
Borrowers, (F) the creation, performance or repayment of the Loans (or the
execution, delivery and performance of any document or instrument
representing part of the Loans or executed in connection with the Crossed
Loans, or given to secure the repayment of the Loans) is illegal,
uncollectible or unenforceable, or (G) any of the Loan Documents have been
forged or otherwise are irregular or not genuine or authentic, it being
agreed that each Borrower shall remain liable hereon regardless of whether
any other Borrower or any other person be found not liable on the Loans or
any part thereof for any reason.
(xiii) Any full or partial release of the liability of the
Borrowers on the Loans, or any part thereof, or of any co-guarantors, or
any other person or entity now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Loans, or any part thereof, it
being recognized, acknowledged and agreed by each Borrower that such
Borrower has not been induced to enter into its Loan Agreement, this
Agreement or the other Loan Documents on the basis of a contemplation,
belief, understanding or agreement that other parties will be liable to
pay or perform the Loan or such Borrower's obligations under its Loan
Agreement, this Agreement or the other Loan Documents, or that Lender will
look to other parties to pay or perform the Loans.
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(xiv) The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part
of the Loans.
(xv) Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security, at any time existing in connection with,
or assuring or securing payment of, all or any part of the Loans.
(xvi) The failure of or refusal of Lender or any other party
acting on behalf of Lender to exercise diligence or reasonable care in the
preservation, protection, enforcement, sale or other handling or treatment
of all or any part of such collateral, property or security, including but
not limited to any neglect, delay, omission, failure or refusal of Lender
(A) to take or prosecute any action for the collection of any of the
Loans, (B) to foreclose, or initiate any action to foreclose, or, once
commenced, prosecute to completion any action to foreclose upon any
security therefor, or (C) to take or prosecute any action in connection
with any instrument or agreement evidencing or securing all or any part of
the Loans.
(xvii) The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted
as security for the repayment of the Loans, or any part thereof, shall not
be properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized
and agreed by each Borrower that it is not entering into this Loan
Agreement in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectibility or value of any of the collateral
for the Loans.
(xviii) Any payment by any of the Borrowers to Lender is held
to constitute a preference under bankruptcy laws, or for any reason Lender
is required to refund such payment or pay such amount to any of the
Borrowers or someone else.
(xix) Any other action taken or omitted to be taken with
respect to any of the Loan Documents, the Loans, or the security and
collateral therefor.
(g) Notwithstanding anything to the contrary set forth in this
Agreement or in any of the Loan Agreements, (i) upon Lender's delivery to
Borrowers of written notice, sent at Lender's sole option and in its sole
discretion, from time to time (one or more times) stating that any Loan
Agreement, the related Mortgages and the other related Loan Documents shall no
longer secure one or more (at Lender's sole election) of the other Loans (each a
"Cross Release Notice"), or (ii) upon Lender's sale of one or more Pools in a
Secondary Market Transaction (including a securitization), or (iii) upon a sale
by Borrowers of one or more Pools pursuant to and in accordance with the terms
of the related Loan Agreement(s), (x) the applicable Loan Agreement (as
specified in the Cross Release Notice or, in the case of a Secondary Market
Transaction or a sale of one or more Pools by the applicable Borrowers, relating
to the Pool or Pools being sold) and the other Loan Documents relating thereto
shall, automatically and without
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any further notice or other action by Lender or Borrowers, no longer secure any
of the Loans made pursuant to the other Loan Agreements (any such Loan, an
"Excluded Loan", and, collectively, the "Excluded Loan(s)"; each Borrower which
is the borrower with respect to an Excluded Loan is herein referred to as an
"Excluded Borrower", and the Loan Agreements, Mortgages and other Loan Documents
executed and delivered by the Excluded Borrowers with respect to any Excluded
Loan are herein referred to as the "Excluded Loan Agreements", "Excluded
Mortgages" and "Excluded Loan Documents", respectively, and each Property
encumbered by the Excluded Loan Documents is herein referred to as an "Excluded
Property"), and the Excluded Loan Agreements and the other Loan Documents
relating thereto shall, automatically and without any further notice or other
action by Lender or Borrowers, no longer secure the Loan made pursuant to the
Loan Agreement specified in the Cross Release Notice or, in the case of a
Secondary Market Transaction or a sale of one or more Pools by the applicable
Borrowers, relating to a Pool or Pools being sold, (y) with respect to such Loan
Agreement and the related Borrowers, the provisions of Section 2(e) of this
Agreement shall not apply to any Crossed Loans Collection from any Excluded
Borrower or its Excluded Property and such Borrowers shall have no obligation or
liability on account thereof, and (z) with respect to such Loan Agreement and
the related Borrowers, such Borrowers shall no longer be beneficiaries of the
covenants and agreements set forth in Section 2(e) with respect to any Excluded
Loan Agreement, and such Borrowers shall have no rights or claims on account of
any contribution or indemnification obligations of any Excluded Borrower under
Section 2(e) with respect to Excluded Loan Agreement. In addition to and without
limiting the foregoing, the Pool 6 Borrowers hereby agree to fully cooperate
with Lender, if Lender is considering the termination of the cross
collateralization and cross default of any Loan and Loan Documents with any of
the other Loans, including, but not limited to (I) amending this Agreement, any
Loan Agreement and any other Loan Documents as may be reasonably required by
Lender, and reasonably approved by the applicable Borrowers, to effectuate such
termination of the cross collateralization and cross default provisions thereof,
and (II) updating and/or endorsing the title insurance policies (at Lender's
cost as to additional premium charges, if any) to reflect the continuation of
the first priority lien of any Loan Agreement.
(h) In the event any Loan is repaid or defeased in full in
accordance with the provisions of the related Loan Agreement and the other Loan
Documents, then provided no Event of Default then exists under the related Loan
Agreement, and no "Event of Default" exists under any of the other Loan
Agreements (other than Excluded Loan Agreements) or the Loan Documents relating
thereto, the cross-collateralization and cross-default of such repaid or
defeased Loan and the Loan Documents relating thereto with the other Loans, and
vice versa, shall terminate and all of such other Loans shall be deemed Excluded
Loans with respect to the repaid or defeased Loan and the provisions of Section
2(g) above shall become automatically applicable with respect thereto.
Section 3. Adjustment of Loans; Loan Modification.
<PAGE>
(a) Lender shall have the right in its sole discretion, at any time
prior to the final Start-Up Day of the last of the Loans to be securitized, to
cause any of the following to occur (each, a "Loan Modification") with respect
to Pool 1, Pool 2 and Pool 3:
(i) separately adjust the principal amount and applicable
interest rates of any of the Loans, provided that (A) the aggregate
principal amount of the Loans immediately after such adjustment shall
equal the aggregate outstanding principal balance of the Loans immediately
prior to such adjustment, (B) the weighted average interest rate of the
Loans immediately after such adjustment shall equal the weighted average
interest rate which was applicable to the Loans immediately prior to such
adjustment, (C) the aggregate debt service payments on the Loans
immediately after such adjustment shall equal the aggregate debt service
payments which were due under the Loans immediately prior to such
adjustment, and (D) the other material terms and provisions of each of the
Loans shall remain unchanged and none of the foregoing adjustments shall
increase the obligations or reduce the rights of the Borrowers in any
material respect; and/or
(ii) cause any of the Properties in any one or more of the
Pools to become Collateral for any other Pool.
(b) Any Loan Modification shall be subject to the following:
(i) If Lender elects to increase the principal amount of any
of the Loans and decrease the amount of any of the other Loans, the
applicable Borrowers (whose Loans are to be increased) shall distribute to
the applicable Borrowers (whose Loans are to be decreased) such additional
loan proceeds to be applied to repay, dollar for dollar, the applicable
Notes, and the Lender under the applicable Notes will accept such
prepayment without penalty, premium or additional costs to the Borrowers
(except as provided herein).
(ii) The Borrowers shall cooperate with all reasonable
requests of Lender in connection with any Loan Modification including,
without limitation (x) execution and delivery of such documents as shall
reasonably be required by Lender and reasonably approved by Borrower in
connection therewith (including amended and restated notes, amended and
restated loan agreements, replacement Mortgages, replacement Assignments
of Leases), and (y) transfers of one or more Properties among the
Borrowers, to the extent required to comply with the terms of this
Section.
(c) At Lender's request, in connection with any Loan Modification
the Borrowers shall deliver to Lender replacement opinion letters in form and
substance similar to the opinion letters delivered on the Closing Date addressed
to any subsequent holders of any of the Loans or any interest therein
(including, without limitation, each trustee holding any of the Loans ) with
respect to any opinion letter delivered in connection with the Loans;
<PAGE>
Section 4. Capitalized Terms; Notices. Capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Loan
Agreements. Any notices, requests, demands or other communications required or
permitted hereunder shall be delivered as specified in the Loan Agreements.
Section 5. Event of Default. It shall be an Event of Default under the
Loans if any of the Borrowers fail to comply with any of the terms, covenants or
conditions of this Agreement within ten (10) Business Days after receipt of
written request from Lender.
Section 6. Governing Law. This Agreement shall be governed, construed,
applied and enforced in accordance with the laws of the State of New York and
the applicable laws of the United States of America.
Section 7. No Oral Change. This Agreement, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of the Borrowers or Lender,
but only by an agreement in writing signed by the party against whom enforcement
of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
Section 8. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Borrowers and Lender and their respective
successors and assigns forever.
Section 9. Inapplicable Provisions. If any term, covenant or condition of
this Agreement is held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such provision.
Section 10. Headings, etc. The headings and captions of various paragraphs
of this Agreement are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
Section 11. Duplicate Originals, Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
Section 12. Costs and Expenses. Notwithstanding anything herein, in any
Loan Agreement or in any other Loan Document to the contrary, in connection with
any "uncrossing" of Loans pursuant to Section 2(g) of this Agreement, any Loan
Modification (as defined herein), and any transaction described in Section 2.13
of the Loan Agreement or any of the other Loan Agreements, Lender shall be
responsible for all reasonable out of pocket costs and expenses incurred by the
Borrowers (in the aggregate under this Agreement, each of the other similar
agreements referenced in Section 13, and each of the other Loan Agreements) in
connection with complying with their obligations set forth in this Agreement and
Section 2.13 of the Loan
<PAGE>
Agreement and the other Loan Agreements (including, costs and expenses for
outside counsel fees, mortgage recording fees and taxes, required endorsements,
if any, to the Title Policies, any costs and expenses of the Title Company, and
any transfer costs in connection with the Properties, but excluding internal
costs and expenses of any Borrower), except that Borrowers shall be responsible
for such costs and expenses in connection with any of the foregoing up to an
amount equal to $25,000 in the aggregate during the term of the Loan and the
other Loans, and Lender shall be responsible and pay and/or reimburse Borrower
for any such costs and expenses in excess of $25,000 in the aggregate during the
term of the Loan and the other Loans.
Section 13. Similar Agreements by other Borrowers. The Borrowers in each
Pool have entered into Cross-Collateralization and Cooperation Agreements dated
as of even date herewith with Lender, which agreements are identical in form and
substance to this Agreement, and under which the Borrowers in each Pool have
agreed to be bound by terms and provisions identical in substance to the
agreements made by the Pool 6 Borrowers herein.
[Balance of page left blank/Signatures follow]
<PAGE>
IN WITNESS WHEREOF the undersigned have executed this Agreement as
of the date and year first written above.
LENDER:
MERRILL LYNCH MORTGAGE
LENDING, INC.
By: /s/ Michael Brody
[Signatures continue on next page]
<PAGE>
BORROWERS:
/s/ David A. Brooks, Chief Legal Officer
<PAGE>
SCHEDULE 1
BORROWERS
Pool 1 Borrowers
ASHFORD ORLANDO SEA WORLD LIMITED PARTNERSHIP
ASHFORD SALT LAKE LIMITED PARTNERSHIP
ASHFORD RUBY PALM DESERT I LIMITED PARTNERSHIP
ASHFORD CHARLOTTE LIMITED PARTNERSHIP
Pool 2 Borrowers
ASHFORD FALLS CHURCH LIMITED PARTNERSHIP
ASHFORD GAITHERSBURG LIMITED PARTNERSHIP
ASHFORD MIRA MESA SAN DIEGO LIMITED PARTNERSHIP
ASHFORD IRVINE SPECTRUM FOOTHILL RANCH LIMITED PARTNERSHIP
ASHFORD RALEIGH LIMITED PARTNERSHIP
Pool 3 Borrowers
ASHFORD CENTERVILLE LIMITED PARTNERSHIP
ASHFORD CRYSTAL CITY LIMITED PARTNERSHIP
ASHFORD OVERLAND PARK LIMITED PARTNERSHIP
ASHFORD ALPHARETTA LIMITED PARTNERSHIP
ASHFORD FT. LAUDERDALE WESTON I LLC
ASHFORD FT. LAUDERDALE WESTON II LLC
ASHFORD FT. LAUDERDALE WESTON III LLC
Pool 4 Borrowers
RUBY FISHKILL LIMITED PARTNERSHIP
RUBY ORLANDO INTERNATIONAL LIMITED PARTNERSHIP
RUBY FT. WORTH RIVER PLAZA LIMITED PARTNERSHIP
RUBY TYLER HOTEL LIMITED PARTNERSHIP
Pool 5 Borrowers
RUBY SACRAMENTO CAL EXPO LIMITED PARTNERSHIP
RUBY WILMINGTON NEWARK LIMITED PARTNERSHIP
RUBY PROVIDENCE WARWICK LIMITED PARTNERSHIP
RUBY ANN ARBOR LIMITED PARTNERSHIP
<PAGE>
Pool 6 Borrowers
RUBY MIAMI AIRPORT LIMITED PARTNERSHIP
RUBY MIAMI LAKES LIMITED PARTNERSHIP
RUBY MT. LAUREL LIMITED PARTNERSHIP
RUBY FT. WORTH SOUTHWEST LIMITED PARTNERSHIP
RUBY NEWARK LIMITED PARTNERSHIP
RUBY BOSTON TEWKSBURY LIMITED PARTNERSHIP
<PAGE>
SCHEDULE 2
PROPERTIES
Pool 1
Property Name Location
------------- --------
Courtyard Palm Desert, CA
Residence Inn Orlando, FL
Springhill Suites Charlotte, NC
Residence Inn Salt Lake City (Holladay), UT
Pool 2
Property Name Location
------------- --------
Courtyard Lake Forest, CA
Residence Inn - Sorrento Mesa San Diego, CA
Springhill Suites Gaithersburg, MD
Springhill Suites Raleigh-Durham, NC
Residence Inn Fairfax Merrifield Falls Church, VA
Pool 3
Property Name Location
------------- --------
Courtyard Ft. Lauderdale, FL
Courtyard Alpharetta, GA
Courtyard Overland Park, KS
Courtyard Arlington (Crystal City), VA
Springhill Suites Centerville, VA
<PAGE>
Pool 4
Property Name Location
------------- --------
Residence Inn - Orlando Orlando, FL
Residence Inn - Sea World Fishkill, NY
Townplace Suites - Ft. Worth River Ft. Worth, TX
Plaza
Residence Inn Tyler, TX
Pool 5
Property Name Location
------------- --------
Residence Inn Sacramento, CA
Residence Inn Wilmington, DE
Residence Inn Ann Arbor, MI
Residence Inn Warwick, RI
Pool 6
Property Name Location
------------- --------
Townplace Suites Newark, CA
Townplace Suites Doral City, FL
Townplace Suites Miami Lakes, FL
Townplace Suites Scarborough, ME
Townplace Suites Tewksbury, MA
Townplace Suites Mt. Laurel, NJ
Residence Inn-Ft. Worth Southwest Ft. Worth, TX