Preview of our top selling Cross Collateral Agreement
Ashford Hospitality Trust - Cross-collateralization And Cooperation Agreement
EXHIBIT 10.24.7.1
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").
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
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.
(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;
(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;
(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
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
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 Do...
View agreement details