Exhibit 10.24.11.1
Loan No. 20059246002(Pool 2)
CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT
     THIS CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT (this “Agreement”)
is made as of the 13th day of October, 2005, by and between the Borrowers listed
on the signature page hereof (collectively, the “Pool 2 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 2”), are indebted to Lender in the original principal sum
of $77,555,000 (“Loan 2”) 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
2”).
     B. The Borrowers identified on Schedule 1 as the “Pool 1 Borrowers”
(collectively, the “Pool 1 Borrowers”), under that certain Amended and Restated
Promissory Note of even date herewith given to Lender (“Note 1”), are indebted
to Lender in the original principal sum of $160,490,000 (“Loan 1”) as governed
by that certain Amended and Restated Loan Agreement of even date herewith
between, inter alia, 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 3 Borrowers”
(collectively, the “Pool 3 Borrowers”), under that certain Amended and Restated
Promissory Note of even date herewith given to Lender (“Note 3”), are indebted
to Lender in the original principal sum of $95,905,000 (“Loan 3”) as governed by
that certain Amended and Restated Loan Agreement of even date herewith between,
inter alia, the Pool 3 Borrowers and Lender (together with all extensions,
renewals, modifications, substitutions and amendments thereof, “Loan Agreement
3”).
     D. The Borrowers identified on Schedule 1 as the “Pool 7 Borrowers”
(collectively, the “Pool 7 Borrowers”, and together with Pool 1 Borrowers, Pool
2 Borrowers and Pool 3 Borrowers, collectively, the “Borrowers”), under that
certain Amended and Restated Promissory Note of even date herewith given to
Lender (“Note 7”, and together with Note 1, Note 2 and Note 3, collectively, the
“Notes”), are indebted to Lender in the original principal sum of $83,075,000
(“Loan 7”, and together with Loan 1, Loan 2 and Loan 3, collectively, the
“Loans”) as governed by that certain Amended and Restated Loan Agreement of even
date herewith between, inter alia, the Pool 7 Borrowers and Lender (together
with all extensions, renewals, modifications, substitutions and amendments
thereof, “Loan Agreement 7”, and together with Loan Agreement 1, Loan Agreement
2 and Loan Agreement 3, collectively, the “Loan Agreements”).

 

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     E. Loan 1, Loan 2, Loan 3 and Loan 7 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” and “Pools 7 Properties”.
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 2 Borrower acknowledges that Lender is making Loan 2 to
the Pool 2 Borrowers upon the security of its collective interest in the Pool 2
Properties and in reliance upon the aggregate of the Pool 2 Properties taken
together being of greater value as collateral security than the sum of each Pool
2 Property taken separately. Each Pool 2 Borrower agrees that each Mortgage of a
Pool 2 Property is and will be cross-collateralized and cross-defaulted with
each other Mortgage of a Pool 2 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 2 Properties as security for Note 2; 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 2 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 2 Property and
all Collateral as defined in Loan Agreement 2 shall be security for the
performance of all each Pool 2 Borrower’s obligations hereunder and under each
of the other Loan Documents.

 

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          (c) As a result of the transactions contemplated by this Agreement,
each Pool 2 Borrower will benefit, directly and indirectly, from the obligation
of each other Pool 2 Borrower to pay the related Indebtedness and perform its
obligations hereunder and under the other related Loan Documents and in
consideration therefore each Pool 2 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 2 Borrower in the event any
payment is made by any individual Pool 2 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 2 Borrower and application of proceeds of such
Collateral in satisfaction of such Borrower’s obligations, to Lender under the
Loan Documents).
          (i) Each Pool 2 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 1 Borrowers in the event that any Contribution is made by an individual
Pool 2 Borrower (a “Funding Borrower”), such Funding Borrower shall be entitled
to a reimbursement Contribution (“Reimbursement Contribution”) from all other
Pool 2 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
2 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 2 Borrowers under the related Loan Documents.
          (iv) Each Pool 2 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 2 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 2
Borrowers by each such Funding Borrower pursuant to the Applicable Contribution.
In the event that at any time any Pool 2 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

 

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Contribution from the other Pool 2 Borrowers in accordance with the provisions
of this Section.
          (vi) Each Pool 2 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 2
Borrower pursuant to the terms of this Section 1 shall be paid until all amounts
then due and payable by all Pool 2 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 2
Borrower to Lender under the Note or any other Loan Documents.
          (viii) Each Pool 1 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;

 

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               (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

 

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               (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 2 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 2 Properties shall secure not only Loan 2 but also all
of the other Loans, and that the Liens of the related Loan Documents shall
constitute Liens securing not only Loan 2 but also all of the other Loans; and
(ii) that Lender would not make the Loans to the Pool 2 Borrowers unless the
Pool 2 Borrowers granted liens on the Pool 2 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 2 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 2 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 2 Borrower have the right, notwithstanding
the foregoing, to exercise its subrogation rights, each Pool 2 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 2
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 2 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

 

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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 2 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 2 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 2 Borrower agrees that until the Loans
have been paid in full (in cash) and satisfied, no Pool 2 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 2 or other assets of the Borrowers
other than the Pool 2 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

 

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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
2 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 2 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:
          (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

 

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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.
          (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

 

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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 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

 

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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 2 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.
          (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 any of the Pools:
          (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

 

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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;
     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.

 

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     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 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 or
Amended and Restated Cross-Collateralization and Cooperation Agreements, as
applicable, dated as of even date

 

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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 2 Borrowers herein.
[Balance of page left blank/Signatures follow]

 

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     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
 
      Name: Michael Brody
 
      Title:

[Signatures continue on next page]

 

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  ORIGINAL BORROWERS:    
 
       
 
  /S/ DAVID A. BROOKS    
 
       
 
  David A. Brooks    
 
       
 
  Chief Legal Officer    
 
       
 
  BORROWERS:    
 
       
 
  /S/ DAVID A. BROOKS    
 
       
 
  David A. Brooks    
 
       
 
  Chief Legal Officer    

 

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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
KEY WEST FLORIDA HOTEL LIMITED PARTNERSHIP
MINNETONKA MINNESOTA HOTEL LIMITED PARTNERSHIP
ANNAPOLIS MARYLAND HOTEL LIMITED PARTNERSHIP
ASHFORD OVERLAND PARK LIMITED PARTNERSHIP
ASHFORD RALEIGH LIMITED PARTNERSHIP
Pool 2 Borrowers
NEW INDIANAPOLIS DOWNTOWN HOTEL LIMITED PARTNERSHIP
NEW CLEAR LAKE HOTEL LIMITED PARTNERSHIP
ASHFORD CRYSTAL CITY LIMITED PARTNERSHIP
Pool 3 Borrowers
ASHFORD CENTERVILLE LIMITED PARTNERSHIP
ASHFORD FT. LAUDERDALE WESTON I LLC
ASHFORD FT. LAUDERDALE WESTON II LLC
ASHFORD FT. LAUDERDALE WESTON III LLC
ASHFORD GAITHERSBURG LIMITED PARTNERSHIP
NEW FORT TOWER I HOTEL LIMITED PARTNERSHIP
NEW FORT TOWER II HOTEL LIMITED PARTNERSHIP
NEW BEVERLY HILLS HOTEL LIMITED PARTNERSHIP
Pool 7 Borrowers
RUBY IRVINE SPECTRUM FOOTHILL RANCH LIMITED PARTNERSHIP
ASHFORD MIRA MESA SAN DIEGO LIMITED PARTNERSHIP
ASHFORD FALLS CHURCH LIMITED PARTNERSHIP
ASHFORD ALPHARETTA LIMITED PARTNERSHIP
NEW HOUSTON HOTEL LIMITED PARTNERSHIP

 

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SCHEDULE 2
PROPERTIES
Pool 1

      Property Name   Location
Courtyard
  Palm Desert, CA
Residence Inn
  Palm Desert, CA
Crowne Plaza
  Key West, FL
Residence Inn
  Orlando, FL
Courtyard
  Overland Park, KS
Historic Inns
  Annapolis, MD
Sheraton
  Minneapolis, MN
Springhill Suites
  Durham, NC
Springhill Suites
  Charlotte, NC
Residence Inn
  Salt Lake City (Holladay), UT

Pool 2

      Property Name   Location
Radisson
  Indianapolis, IN
Hilton Nassau
  Houston, TX
Courtyard
  Crystal City, VA

Pool 3

      Property Name   Location
Crowne Plaza
  Los Angeles
Courtyard
  Ft. Lauderdale, FL
Springhill Suites
  Gaithersburg, MD
Radisson
  Ft. Worth, TX
Springhill Suites
  Centerville, VA

 

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Pool 7

      Property Name   Location
Courtyard
  Foothill Ranch, CA
Residence Inn
  San Diego, CA
Residence Inn
  Falls Church, VA
Courtyard
  Alpharetta, GA
Embassy Suites
  Houston, TX
Townplace Suites – Ft. Worth River Plaza
  Ft. Worth, TX