Document:

ex-10_6.htm

Moody 10-Q

 

Exhibit 10.6

 

ENVIRONMENTAL INDEMNITY AGREEMENT

 

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”) made as of the 27th day of May, 2010 by MOODY NATIONAL RI PERIMETER HOLDING, LLC, a Delaware limited liability company, having its principal place of business at c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 (“Holdco”) and MOODY NATIONAL RI PERIMETER MASTER TENANT, LLC, a Delaware limited liability company, having its principal place of business at c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 (“Tenantco”; Holdco and Tenantco, individually and collectively, as the context may require, being referred to herein as “Borrower”), BRETT MOODY, having an address at 5 Derham Parc, Houston, Texas 77024 (“Moody”), MOODY NATIONAL OPERATING PARTNERSHIP I, L.P., a Delaware limited partnership, having an address at c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 (“OP”) and MOODY NATIONAL REIT I, INC., a Maryland corporation, having an address at c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 (“REIT”; Moody, OP and REIT are collectively referred to herein as “Principal”) (“Principal”; Borrower and Principal are collectively herein referred to as “Indemnitor”), in favor of CITICORP NORTH AMERICA, INC., a Delaware corporation, having an address at 388 Greenwich Street, 11th Floor, New York, New York 10013 (together with its successors and/or assigns, “Indemnitee”) and other Indemnified Parties (defined below).

 

RECITALS:

 

A.           Indemnitee is prepared to make a loan (the “Loan”) to Borrower pursuant to a Loan Agreement of even date herewith between Borrower and Indemnitee (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”).  Capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement.

 

B.           Each Principal is the owner of a direct and/or indirect equity interest in Borrower and will receive substantial benefit from Indemnitee’s making of the Loan to Borrower.

 

C.           Indemnitee is unwilling to make the Loan unless Indemnitor agrees to provide the indemnification, representations, warranties, covenants and other matters described in this Agreement for the benefit of the Indemnified Parties.

 

D.           Indemnitor is entering into this Agreement to induce Indemnitee to make the Loan.

 

  

  

  

AGREEMENT

 

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby represents, warrants, covenants and agrees for the benefit of the Indemnified Parties as follows:

 

1.           ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.  Except as otherwise disclosed by that certain Phase I environmental report (or Phase II environmental report, if required) in respect of the Property delivered to Indemnitee (referred to below as the “Environmental Report”), a copy of which has been provided to Indemnitee, (a) there are no Hazardous Substances (defined below) or underground storage tanks in, on, or under the Property, except those that are both (i) in compliance with all Environmental Laws (defined below) and with permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in writing pursuant to the Environmental Report; (b) there are no past, present or threatened Releases (defined below) of Hazardous Substances in, on, under or from the Property which have not been fully remediated in accordance with Environmental Law; (c) there is no threat of any Release of Hazardous Substances migrating to the Property; (d) there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property which has not been fully remediated in accordance with Environmental Law; (e) Indemnitor does not know of, and has not received, any written or oral notice or other communication from any Person (including but not limited to a governmental entity) relating to Hazardous Substances or Remediation (defined below) thereof, of possible liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; (f) Indemnitor has truthfully and fully provided to Indemnitee, in writing, any and all information relating to conditions in, on, under or from the Property that is known to Indemnitor and that is contained in files and records of Indemnitor, including but not limited to any reports relating to Hazardous Substances in, on, under or from the Property and/or to the environmental condition of the Property; (g) the Property currently displays no evidence of water infiltration or water damage (h) there are no prior or current complaints by tenants at the Property regarding water infiltration or water damage or leaks or odors related thereto, and (i) the Property currently displays no conspicuous evidence of the growth of Microbial Matter.

 

2.           ENVIRONMENTAL COVENANTS.  Indemnitor covenants and agrees that: (a) all uses and operations on or of the Property, whether by Indemnitor or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances in, on, under or from the Property; (c) there shall be no Hazardous Substances in, on, or under the Property, except those that are both (i) in compliance with all Environmental Laws and with permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in writing; (d) Indemnitor shall keep the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Indemnitor or any other Person (the “Environmental Liens”); (e) Indemnitor shall, at its sole cost and expense, fully and expeditiously cooperate in all activities pursuant to Paragraph 3 of this Agreement, including but not limited to providing all relevant 

  

  

  

information and making knowledgeable Persons available for interviews; (f) Indemnitor shall, at its sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with the Property, pursuant to any reasonable written request of Indemnitee (including but not limited to sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), and share with Indemnitee the reports and other results thereof, and Indemnitee and the other Indemnified Parties shall be entitled to rely on such reports and other results thereof; (g) Indemnitor shall, at its sole cost and expense, comply with all reasonable written requests of Indemnitee to (i)  effectuate Remediation of any condition (including but not limited to a Release of a Hazardous Substance) in, on, under or from the Property; (ii) comply with any Environmental Law; (iii) comply with any directive from any governmental authority; and (iv) take any other reasonable action necessary or appropriate for protection of human health or the environment; (h) Indemnitor shall not do or allow any tenant or other user of the Property to do any act that materially increases the dangers to human health or the environment, poses an unreasonable risk of harm to any Person (whether on or off the Property), impairs or may impair the value of the Property, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant, condition, agreement or easement applicable to the Property; (i) Indemnitor shall immediately notify Indemnitee in writing of (A) any presence or Releases or threatened Releases of Hazardous Substances in, on, under, from or migrating towards the Property; (B) any non-compliance with any Environmental Laws related in any way to the Property; (C) any actual or potential Environmental Lien; (D) any required or proposed Remediation of environmental conditions relating to the Property; and (E) any written or oral notice or other communication of which any Indemnitor becomes aware from any source whatsoever (including but not limited to a governmental entity) relating in any way to Hazardous Substances or Remediation thereof, possible liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with anything referred to in this Agreement; (j) Borrower shall engage an engineering consultant reasonably acceptable to Lender each calendar year during the term of the Loan to conduct (and such consultant shall conduct) a yearly inspection for water damage; (k) Borrower shall engage an environmental consultant reasonably acceptable to Lender each calendar year during the term of the Loan to conduct (and such consultant shall conduct) a yearly inspection for evidence of the growth of Microbial Matter; (l) Borrower shall immediately adopt a remediation plan reasonably acceptable to Lender with respect to any water damage or Microbial Matter identified as a result of such yearly environmental and engineering inspections; (m) Borrower shall undertake any course of action recommended by the Environmental Protection Agency to prevent the growth of Microbial Matter; and (n) Borrower shall comply with any and all local, state or federal laws, legislation, guidelines or statutes at any time in effect with respect to Microbial Matter.

 

3.           INDEMNIFIED RIGHTS/COOPERATION AND ACCESS.  In the event the Indemnified Parties have reason to believe that an environmental hazard exists on the Property that does not, in the sole discretion of the Indemnified Parties, endanger any tenants or other occupants of the Property or their guests or the general public or materially and adversely affects the value of the Property, upon reasonable notice from the Indemnitee, Indemnitor shall, at Indemnitor’s expense, promptly cause an engineer or consultant satisfactory to the Indemnified Parties to conduct any environmental assessment or audit (the scope of which shall be determined in the sole and absolute discretion of the Indemnified Parties) and take any samples of soil, groundwater or 

  

  

  

other water, air, or building materials or any other invasive testing requested by Indemnitee and promptly deliver the results of any such assessment, audit, sampling or other testing; provided, however, if such results are not delivered to the Indemnified Parties within a reasonable period or if the Indemnified Parties have reason to believe that an environmental hazard exists on the Property that, in the sole judgment of the Indemnified Parties, endangers any tenant or other occupant of the Property or their guests or the general public or may materially and adversely affect the value of the Property, upon reasonable notice to Indemnitor, the Indemnified Parties and any other Person designated by the Indemnified Parties, including but not limited to any receiver, any representative of a governmental entity, and any environmental consultant, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including but not limited to conducting any environmental assessment or audit (the scope of which shall be determined in the sole and absolute discretion of the Indemnified Parties) and taking samples of soil, groundwater or other water, air, or building materials, and reasonably conducting other invasive testing.  Indemnitor shall cooperate with and provide the Indemnified Parties and any such Person designated by the Indemnified Parties with access to the Property.

 

4.           INDEMNIFICATION.  Indemnitor covenants and agrees, at its sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses (defined below) imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any presence of any Hazardous Substances in, on, above, or under the Property; (b) any past, present or threatened Release of Hazardous Substances in, on, above, under or from the Property; (c) any activity by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Substances at any time located in, under, on or above the Property; (d) any activity by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property in connection with any actual or proposed Remediation of any Hazardous Substances at any time located in, under, on or above the Property, whether or not such Remediation is voluntary or pursuant to court or administrative order, including but not limited to any removal, remedial or corrective action; (e) any past, present or threatened non-compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon, including but not limited to any failure by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property to comply with any order of any governmental authority in connection with any Environmental Laws; (f) the imposition, recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering the Property; (g) any administrative processes or proceedings or judicial proceedings in any way connected with any matter addressed in this Agreement; (h) any past, present or threatened injury to, destruction of or loss of natural resources in any way connected with the Property, including but not limited to costs to investigate and assess such injury, destruction or loss; (i) any acts of Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property in arranging for disposal or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous Substances at any facility or incineration vessel containing such or similar Hazardous Substances; (j) any acts of Indemnitor, any Person affiliated with any Indemnitor, and any 

 

  

  

  

tenant or other user of the Property in accepting any Hazardous Substances for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release, or a threatened Release of any Hazardous Substance which causes the incurrence of costs for Remediation; (k) any personal injury, wrongful death, or property or other damage arising under any statutory or common law or tort law theory, including but not limited to damages assessed for private or public nuisance or for the conducting of an abnormally dangerous activity on or near the Property; and (l) any misrepresentation or inaccuracy in any representation or warranty or material breach or failure to perform any covenants or other obligations pursuant to this Agreement, the Loan Agreement or the Security Instrument.

 

5.           DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES.  Upon written request by any Indemnified Party, Indemnitor shall defend same (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by the Indemnified Parties.  Notwithstanding the foregoing, any Indemnified Parties may, in their sole and absolute discretion, engage their own attorneys and other professionals to defend or assist them, and, at the option of Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding, providing that no compromise or settlement shall be entered without Indemnitor’s consent, which consent shall not be unreasonably withheld.  Upon demand, Indemnitor shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

 

6.           DEFINITIONS.  As used in this Agreement, the following terms shall have the following meanings:  The term “Environmental Law” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances, relating to liability for or costs of other actual or threatened danger to human health or the environment.  The term “Environmental Law” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act.  The term “Environmental Law” also includes, but is not limited to, any present and future federal, state and local laws, statutes ordinances, rules, regulations and the like, as well as common law: conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the Property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of the Property to any Governmental Authority or other Person, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the Property; and relating to wrongful death, personal injury, or property or other damage in connection with any physical condition or use of the Property.

 

  

  

  

 

The term “Hazardous Substances” includes but is not limited to any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including but not limited to Microbial Matter, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives, but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purposes of cleaning or other maintenance or operations and otherwise in compliance with all Environmental Laws.

 

The term “Indemnified Parties” includes Indemnitee, any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been involved with the servicing of the Loan, any Person in whose name the encumbrance created by the Security Instrument is or will have been recorded, Persons who may hold or acquire or will have held a full or partial interest in the Loan (including, but not limited to, any Investor (as defined in the Loan Agreement) or any prospective Investor in the Securities (as defined in the Loan Agreement), as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including but not limited to any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan or the Property, whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Indemnitee’s assets and business).

 

The term “Legal Action” means any claim, suit or proceeding, whether administrative or judicial in nature.

 

The term “Losses” includes any losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including but not limited to strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation costs (including but not limited to costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.

 

The term “Microbial Matter” means fungi or bacterial matter which reproduces through the release of spores or the splitting of cells, including, but not limited to, mold, mildew, and viruses, whether or not such Microbial Matter is living.

 

  

  

  

The term “Release” with respect to any Hazardous Substance includes but is not limited to any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.

 

The term “Remediation” includes but is not limited to any response, remedial, removal, or corrective action; any activity to clean up, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance; any actions to prevent, cure or mitigate any Release of any Hazardous Substance; any action to comply with any Environmental Laws or with any permits issued pursuant thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances or to anything referred to herein.

 

7.           UNIMPAIRED LIABILITY.  The liability of Indemnitor under this Agreement shall in no way be limited or impaired by, and Indemnitor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Note, the Loan Agreement, the Security Instrument or any other Loan Document to or with Indemnitee by Indemnitor or any Person who succeeds Indemnitor or any Person as owner of the Property.  In addition, the liability of Indemnitor under this Agreement shall in no way be limited or impaired by (i) any extensions of time for performance required by the Note, the Loan Agreement,  the Security Instrument or any of the other Loan Documents, (ii) any sale or transfer of all or part of the Property, (iii) except as provided herein, any exculpatory provision in the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents limiting Indemnitee’s recourse to the Property or to any other security for the Note, or limiting Indemnitee’s rights to a deficiency judgment against Indemnitor, (iv) the accuracy or inaccuracy of the representations and warranties made by Indemnitor under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents or herein, (v) the release of Indemnitor or any other Person from performance or observance of any of the agreements, covenants, terms or condition contained in any of the other Loan Documents by operation of law, Indemnitee’s voluntary act, or otherwise, (vi) the release or substitution in whole or in part of any security for the Note, or (vii) Indemnitee’s failure to record the Security Instrument or file any UCC financing statements (or Indemnitee’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Note; and, in any such case, whether with or without notice to Indemnitor and with or without consideration.

 

8.           ENFORCEMENT.  Indemnified Parties may enforce the obligations of Indemnitor without first resorting to or exhausting any security or collateral or without first having recourse to the Note, the Loan Agreement, the Security Instrument, or any other Loan Documents or any of the Property, through foreclosure proceedings or otherwise, provided, however, that nothing herein shall inhibit or prevent Indemnitee from suing on the Note, foreclosing, or exercising any power of sale under, the Security Instrument, or exercising any other rights and remedies thereunder.  This Agreement is not collateral or security for the debt of Indemnitor pursuant to the Loan, unless Indemnitee expressly elects in writing to make this Agreement additional collateral or security for the debt of Indemnitor pursuant to the Loan, which Indemnitee is entitled to do in its sole and absolute discretion.  It is not necessary for an Event of Default to have occurred pursuant to and as defined in the Security Instrument or the

 

  

  

  

Loan Agreement for Indemnified Parties to exercise their rights pursuant to this Agreement.  Notwithstanding any provision of the Loan Agreement, the obligations pursuant to this Agreement are exceptions to any non-recourse or exculpation provision of the Loan Agreement; Indemnitor is fully and personally liable for such obligations, and such liability is not limited to the original or amortized principal balance of the Loan or the value of the Property.

 

9.           SURVIVAL.  The obligations and liabilities of Indemnitor under this Agreement shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Security Instrument.

 

10.           INTEREST.  Any amounts payable to any Indemnified Parties under this Agreement shall become immediately due and payable on demand and, if not paid within five (5) days of such demand therefor, shall bear interest at the Default Rate.

 

11.           WAIVERS.

 

(a)           Indemnitor hereby waives (i) any right or claim of right to cause a marshaling of Indemnitor’s assets or to cause Indemnitee or other Indemnified Parties to proceed against any of the security for the Loan before proceeding under this Agreement against Indemnitor; (ii) and relinquishes all rights and remedies accorded by applicable law to indemnitors or guarantors, except any rights of subrogation which Indemnitor may have, provided that the indemnity provided for hereunder shall neither be contingent upon the existence of any such rights of subrogation nor subject to any claims or defenses whatsoever which may be asserted in connection with the enforcement or attempted enforcement of such subrogation rights including, without limitation, any claim that such subrogation rights were abrogated by any acts of Indemnitee or other Indemnified Parties; (iii) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (v) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice or demand; and (vi) all homestead exemption rights against the obligations hereunder and the benefits of any statutes of limitations or repose.  All other waivers and provisions of similar import contained in the Guaranty are hereby incorporated by reference as if fully set forth herein.  Notwithstanding anything to the contrary contained herein, Indemnitor hereby agrees to postpone the exercise of any rights of subrogation with respect to any collateral securing the Loan until the Loan shall have been paid in full.

 

(b)           INDEMNITOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THE SECURITY INSTRUMENT, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN CONNECTION THEREWITH.

 

  

  

  

12.           SUBROGATION.  Indemnitor shall take any and all reasonable actions, including institution of legal action against third parties, necessary or appropriate to obtain reimbursement, payment or compensation from such Persons responsible for the presence of any Hazardous Substances at, in, on, under or near the Property or otherwise obligated by law to bear the cost.  Indemnified Parties shall be and hereby are subrogated to all of Indemnitor’s rights now or hereafter in such claims.

 

13.           INDEMNITOR’S REPRESENTATIONS AND WARRANTIES.  Indemnitor represents and warrants that:

 

(a)           it has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; the execution, delivery and performance of this Agreement by Indemnitor has been duly and validly authorized; and all requisite action has been taken by Indemnitor to make this Agreement valid and binding upon Indemnitor, enforceable in accordance with its terms;

 

(b)           its execution of, and compliance with, this Agreement is in the ordinary course of business of Indemnitor and will not result in the breach of any term or provision of the charter, by-laws, partnership or trust agreement, or other governing instrument of Indemnitor or result in the breach of any term or provision of, or conflict with or constitute a default under, or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which Indemnitor or the Property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which Indemnitor or the Property is subject;

 

(c)           to the best of Indemnitor’s knowledge, there is no action, suit, proceeding or investigation pending or threatened against it which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of Indemnitor, or in any material impairment of the right or ability of Indemnitor to carry on its business substantially as now conducted, or in any material liability on the part of Indemnitor, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of Indemnitor contemplated herein, or which would be likely to impair materially the ability of Indemnitor to perform under the terms of this Agreement;

 

(d)           it does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

 

(e)           to the best of Indemnitor’s knowledge, no approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or other person, and no approval, authorization or consent of any other party is required in connection with this Agreement; and

 

  

  

  

(f)           this Agreement constitutes a valid, legal and binding obligation of Indemnitor, enforceable against it in accordance with the terms hereof.

 

14.           NO WAIVER.  No delay by any Indemnified Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of any such privilege, power or right.

 

15.           NOTICE OF LEGAL ACTIONS.  Each party hereto shall, within five (5) business days of receipt thereof, give written notice to the other party hereto of (i) any notice, advice or other communication from any governmental entity or any source whatsoever with respect to Hazardous Substances on, from or affecting the Property, and (ii) any legal action brought against such party or related to the Property, with respect to which Indemnitor may have liability under this Agreement.  Such notice shall comply with the provisions of Section 19 hereof.

 

16.           EXAMINATION OF BOOKS AND RECORDS.  Indemnified Parties and their accountants shall have the right to examine the records, books, management and other papers of Indemnitor which reflect upon its financial condition, at the Property or at the office regularly maintained by Indemnitor where the books and records are located.  Indemnified Parties and their accountants shall have the right to make copies and extracts from the foregoing records and other papers.  In addition, at reasonable times and upon reasonable notice, Indemnified Parties and their accountants shall have the right to examine and audit the books and records of Indemnitor pertaining to the income, expenses and operation of the Property during reasonable business hours at the office of Indemnitor where the books and records are located.

 

17.           SECURITIZATION.  Article 11 of the Loan Agreement is hereby incorporated by reference as if fully set forth herein.  Indemnitor hereby agrees to cooperate in fulfilling any obligation of Borrower under Article 11 of the Loan Agreement.

 

18.           TAXES.  Indemnitor has filed all federal, state, county, municipal, and city income and other tax returns required to have been filed by it and has paid all taxes and related liabilities which have become due pursuant to such returns or pursuant to any assessments received by it.  Indemnitor has no knowledge of any basis for any additional assessment in respect of any such taxes and related liabilities for prior years.

 

19.           NOTICES.  All notices or other written communications hereunder shall be made in accordance with Article 14 of the Loan Agreement to the addresses noted above (or to such other addresses as may be specified in writing by any party hereto to the other parties hereto).

 

20.           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.

 

  

  

  

21.           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 Indemnitor or any Indemnified Party, 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.

 

22.           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.

 

23.           NUMBER AND GENDER/SUCCESSORS AND ASSIGNS.  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Person or Persons referred to may require.  Without limiting the effect of specific references in any provision of this Agreement, the term “Indemnitor” shall be deemed to refer to each and every Person comprising an Indemnitor from time to time, as the sense of a particular provision may require, and to include the heirs, executors, administrators, legal representatives, successors and assigns of Indemnitor, all of whom shall be bound by the provisions of this Agreement, provided that no obligation of Indemnitor may be assigned except with the written consent of Indemnitee.  Each reference herein to Indemnitee shall be deemed to include its successors and assigns.  This Agreement shall inure to the benefit of Indemnified Parties and their respective successors and assigns forever.  The term “Indemnitor” as used in this Agreement shall refer to all Indemnitors jointly and severally, and all promises, agreements, covenants, waivers, consents, representations, warranties and other provisions in this Agreement are made by and shall be binding upon each and every such undersigned Person, jointly and severally and Lender may pursue any Indemnitor hereunder without being required (i) to pursue any other Indemnitor hereunder or (ii) pursue rights and remedies under the Security Instrument and/or Applicable Law with respect to the Property or any other Loan Documents.

 

24.           RELEASE OF LIABILITY.  Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party not so released.

 

25.           RIGHTS CUMULATIVE.  The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies which Indemnitee has under the Note, the Security Instrument, the Loan Agreement or the other Loan Documents or would otherwise have at law or in equity.

 

26.           INAPPLICABLE PROVISIONS.  If any term, condition or covenant of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be construed without such provision.

 

27.           GOVERNING LAW.  This Agreement shall be governed, construed, applied and enforced in accordance with the Applicable Laws of the State and Applicable Laws of the United States of America.

 

  

  

  

28.           MISCELLANEOUS.  (a)  Wherever pursuant to this Agreement (i) Indemnitee exercises any right given to it approve or disapprove, (ii) any arrangement or term is to be satisfactory to Indemnitee, or (iii) any other decision or determination is to be made by Indemnitee, the decision of Indemnitee to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory and all other decisions and determinations made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee and shall be final and conclusive, except as may be otherwise expressly and specifically provided herein.

 

(b)           Wherever pursuant to this Agreement it is provided that Indemnitor pay any costs and expenses, such costs and expenses shall include, but not be limited to, legal fees and disbursements of Indemnitee, whether retained firms, the reimbursements for the expenses of the in-house staff or otherwise.

 

(c)           Joint and Several Liability.  If Indemnitor consists of more than one person or party, the obligations and liabilities of each such person or party hereunder shall be joint and several.

 

 

[NO FURTHER TEXT ON THIS PAGE]

  

  

  

IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor and is effective as of the day and year first above written.

	 	INDEMNITOR:	 
	 	 	 
	 	 	 
	  	
/s/ Brett C. Moody

	  
	  	
Brett C. Moody, individually 

	  
	  	  	  
	  	  	  
	  	
MOODY NATIONAL OPERATING PARTNERSHIP I, L.P.

	  
	  	  	  
	  	
By:

	
Moody National REIT I, Inc., its general partner

	  
	  	  	  	  
	  	  	
By:

	
/s/ Brett C. Moody

	  
	  	  	  	
Name:

	
Brett C. Moody

	  
	  	  	  	
Title:

	
CEO

	  

 

 

	  	  	  
	  	
MOODY NATIONAL REIT I, INC.

	  
	  	  	  	  
	  	
By:

	
/s/ Brett C. Moody

	  
	  	  	
Name:

	
Brett C. Moody

	  
	  	  	
Title:

	
CEOex-10_7.htm

Moody 10-Q

 

Exhibit 10.7

 

CLEARING ACCOUNT AGREEMENT

 

This CLEARING ACCOUNT AGREEMENT (the “Agreement”) is entered into this 27th day of May, 2010, by and among WELLS FARGO BANK, N.A., a national banking association, having its principal place of business at 1320 Willow Pass Road, Suite 300, Concord, California 94520 (the “Clearing Bank”), MOODY NATIONAL RI PERIMETER HOLDING, LLC, a Delaware limited liability company, having its principal place of business at c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 (“Holdco”) and MOODY NATIONAL RI PERIMETER MASTER TENANT, LLC, a Delaware limited liability company, having its principal place of business at c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 (“Tenantco”; Holdco and Tenantco, individually and collectively, as the context may require, being referred to herein as “Borrower”), RESIDENCE INN BY MARRIOTT, LLC, a Delaware limited liability company, having its principal place of business at 10400 Fernwood Road, Bethesda, Maryland 20817 (“Manager”), and CITICORP NORTH AMERICA, INC., a Delaware corporation, having an office at 388 Greenwich Street, 19th Floor, New York, New York 10013 (together with its successors and assigns, the “Lender”).

 

RECITALS

 

A.           Pursuant to that certain Loan Agreement dated as of the date hereof between Borrower and Lender (the “Loan Agreement”), Lender has provided financing (the “Loan”) to Borrower, which Loan is evidenced by a Promissory Note (“Note”) executed by Borrower and secured by, among other things, a Deed to Secure Debt and Security Agreement (the “Security Instrument”), encumbering Borrower’s interest in certain property (the “Property”) generally known as the Residence Inn Atlanta Perimeter Center with a street address of 6096 Barfield Road, Atlanta, Georgia 30328 and as more particularly described in the Security Instrument.

 

B.           Tenantco and Manager are the current parties to that certain Management Agreement dated as of January 30, 2004 (as amended and assigned, the “Management Agreement”), pursuant to which Manager manages the Property.

 

C.           Manager, Borrower and Lender have agreed that all Property Cash Flow (as defined below) or, for so long as the Management Agreement is in effect, all Operating Profit (as defined in the Management Agreement) Borrower is entitled to receive pursuant to the terms of the Management Agreement shall be deposited with a financial institution acceptable to Lender into an account designated by and established for the benefit of Lender, and Borrower, Manager and Lender desire to retain Clearing Bank to provide the services described herein.

 

NOW THEREFORE, in consideration of the mutual premises contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

  

  

  

 

1.           Defined Terms.  In addition to capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the respective meanings set forth below:

 

“Business Day” shall mean any day other than a Saturday, Sunday or any day on which commercial banks in New York, New York, or the city in which the Clearing Bank is located are required or permitted by law to be closed.

 

“Cash Management Account” shall have the meaning set forth in Section 3(b) hereof.

 

“Clearing Account Address” shall mean the address set forth in the form of Lessee Payment Direction Letter attached hereto as Exhibit B, to which address each commercial tenant of the Property shall pay directly all sums due under such tenant’s lease.

 

“Loan Documents” shall have the meaning ascribed to such term in the Loan Agreement.

 

“Minimum Balance” shall mean $2,000.00.

 

“Monthly Operating Expenses” shall have the meaning ascribed to such term in the Loan Agreement.

 

“Mortgage Satisfaction Event” shall mean the satisfaction in full of the Obligations as evidenced by a written notice from Lender to Clearing Bank.  For the avoidance of doubt, a Mortgage Satisfaction Event shall not occur unless and until the Loan has been paid in full (and notwithstanding the taking of title to the Property by Lender by foreclosure, deed-in-lieu of foreclosure or otherwise).

 

“Obligations” shall mean any and all debt, liabilities and obligations of Borrower to Lender pursuant to or in connection with the Loan, including, without limitation, the indebtedness evidenced by the Note and any and all debt, liabilities and obligations of Borrower under the Loan Documents.

 

“Property Cash Flow” shall mean all revenue generated by the Property less an amount equal to the Monthly Operating Expenses (as defined in that certain Loan Agreement dated as of the date hereof between Borrower and Lender (the “Loan Agreement”))

 

2.           Duties of the Clearing Bank.

 

(a)           Clearing Bank shall receive and process any deposits to the Clearing Account presented by Borrower, Manager or any of their respective agents at any of Clearing Bank’s branch offices.

 

(b)           Clearing Bank shall receive and process all mail sent to the Clearing Account Address (which Clearing Account Address shall be provided by Clearing Bank at the time any Lessee Payment Direction Letter is delivered) and deposit all receipts therein contained in the Clearing Account and receive and

  

  

  

 

process all wire transactions to the Clearing Account, in accordance with the terms hereof.

 

(c)           In order to further secure in favor of Lender the performance by Borrower of the Obligations and as a material inducement for Lender to make the Loan (but subject to the terms of this Agreement), (i) Clearing Bank has established and will maintain a collection account (the “Clearing Account,” Account Number 4122036510, ABA # 121 000 248), into which Clearing Bank shall deposit all receipts specified in Sections 2(a) and 2(b) received by it with respect to the Property, (ii) the Clearing Account shall be entitled “MOODY NATIONAL RI PERIMETER MASTER TENANT, LLC, DBA RESIDENCE INN-PERIMETER WEST FBO CITICORP NORTH AMERICA, INC. (RESTRICTED ACCT), for the benefit of Citicorp North America, Inc., as Secured Party,” provided, that Lender shall have the option to cause Clearing Bank to change the designation of such account; and (iii) Clearing Bank acknowledges that the Clearing Account is subject to a security interest in favor of Lender and shall designate the Clearing Account on its books as subject to a security interest in favor of Lender.  The Clearing Account shall be assigned the federal tax identification number of Borrower.

 

(d)           Upon request of Lender, Clearing Bank shall deliver to Lender copies of all statements and other information concerning the Clearing Account as Lender or its designee shall reasonably request.

 

(e)           Items deposited with Clearing Bank which are returned for insufficient or uncollected funds shall be re-deposited by Clearing Bank a second time.  Items returned unpaid the second time for whatever reason shall be debited to the Clearing Account or another account of Borrower, as provided in Section 6 below, under advice and returned to Borrower.

 

3.           Deposits into Clearing Account;  Transfer of Funds in Clearing Account.

 

(a)           From and after the date hereof, Borrower shall cause all Property Cash Flow to be transmitted within one (1) Business Day of its receipt thereof directly to the Clearing Account (or for so long as the Management Agreement is in effect, Manager shall cause all Operating Profit (as defined in the Management Agreement) due and payable to Borrower pursuant to the terms of the Management Agreement to be transmitted on the day Manager would have remitted such sum to Borrower) pursuant to the Management Agreement directly to the Clearing Account.  Upon request of Lender, Borrower shall take all actions reasonably required in order to cause the direct transmittal of credit card receipts to which Borrower is otherwise entitled to receive directly from the credit card companies (it is entitled to receive none while the Management Agreement is in effect) to the Clearing Account.  Such credit card receipts shall become a part of the Clearing Account and shall be subject to the terms hereof.

  

  

  

 

(b)           On each Business Day, Clearing Bank shall transfer, by wire transfer or via the ACH System, all funds in the Clearing Account in excess of the Minimum Balance to the account (the “Cash Management Account”), as described in Exhibit A attached hereto and, simultaneously with each transfer to the Cash Management Account, Clearing Bank shall make available to Lender, via online access, a wire transfer or ACH System advice setting forth the amount transferred.

 

4.           Termination.

 

(a)           Clearing Bank may resign from its obligations under this Agreement at any time after thirty (30) days’ prior written notice to the other parties hereto.  Borrower shall designate a successor to Clearing Bank promptly after receipt of notice of resignation by Clearing Bank, which successor shall be subject to the approval of Lender, and cause such designated successor promptly to assume the obligations of Clearing Bank hereunder.

 

(b)           Lender may terminate this Agreement for any reason or no reason whatsoever, at any time upon thirty (30) days’ prior written notice to the other parties hereto.

 

(c)           Borrower may not unilaterally terminate this Agreement or close the Clearing Account.  Except after the effective date of the Clearing Bank’s resignation or early termination as set forth in Sections 4(a) and 4(b) herein, Clearing Bank shall not cause or permit the Clearing Account to be closed unless it has received the prior written consent of Lender.

 

5.           Standard of Care; Indemnification.

 

(a)           Clearing Bank shall be responsible for the performance of only such duties as are set forth herein or contained in instructions given to the Clearing Bank which are not contrary to the provisions of this Agreement.  The Clearing Bank will use reasonable care with respect to the safekeeping of property in the Clearing Account and, except as otherwise expressly provided herein, in carrying out its obligations under this Agreement.  Clearing Bank’s responsibility hereunder is limited to any loss occasioned directly by the gross negligence or willful misconduct of an employee of Clearing Bank.  In no event, however, shall Clearing Bank have any responsibility for consequential, indirect, special or exemplary damages, whether or not it has notice thereof, nor shall it have any responsibility or liability for the validity or enforceability of any security interest or other interest of Lender in the Clearing Account or Borrower’s interest in the Clearing Account.

 

(b)           Except where Clearing Bank has been grossly negligent or has acted in bad faith, Borrower will release Clearing Bank from and indemnify and hold Clearing Bank harmless from and against any and all losses, claims, damages, liabilities, costs and expenses (including, without limitation, reasonable

  

  

  

 

counsel fees, whether arising in an action or proceeding among the parties hereto or otherwise) to which Clearing Bank may become subject, or which it may suffer or incur, arising out of or based upon this Agreement or the actions contemplated hereby.

 

6.           Set-off.  Clearing Bank, Borrower and Manager each acknowledge and agree that the Clearing Account is subject to the sole dominion, control and discretion of Lender and neither Borrower nor Manager shall have any right to close such account or right of withdrawal with respect to the Clearing Account.  Clearing Bank waives any right to offset any claim against Borrower which it might have against the Clearing Account; provided, however, that Clearing Bank retains the right to (a) charge the Clearing Account for any of Clearing Bank’s charges, fees and expenses related to the Clearing Account for which Borrower is responsible and (b) charge the Clearing Account for all items deposited in and credited to the Clearing Account and subsequently returned unpaid or with respect to which Clearing Bank fails to receive final settlement.

 

7.           Intentionally Omitted.

 

8.           Matters Concerning Borrower and Manager.

 

(a)           Borrower hereby pledges, transfers and assigns, and grants to Lender, as additional security for the payment and performance of the Note and the Obligations of Borrower, a first priority security interest in and to, and a general first lien upon, subject to Clearing Bank’s right to set-off with respect to the Clearing Bank’s fees and expenses as described in Section 6 above, Borrower’s right, title and interest in and to (i) the Clearing Account and all cash, property, instruments or rights transferred to or deposited in the Clearing Account from time to time by Borrower or on behalf of Borrower in accordance with the provisions of this Agreement, (ii) all earnings, investments and securities held in the Clearing Account in accordance with this Agreement and (iii) any and all proceeds of the foregoing.  This Agreement and the pledge, assignment and grant of security interest made hereby shall secure payment of all amounts payable by Borrower to Lender under the Note and the other Obligations of Borrower.  Borrower acknowledges and agrees that Clearing Bank is acting at the direction of, and as the agent of, Lender in connection with the subject matter of this Agreement.  Borrower further agrees to execute, acknowledge, deliver, file or do at its sole cost and expense, all other acts, assignments, notices, agreements or other instruments as Lender may reasonably require in order to effectuate, assure, convey, secure, assign, transfer and convey unto Lender and any of the rights granted by this Section 8(a).

 

(b)           Commencing with the first billing statement delivered after the date hereof and for each subsequent statement delivered until the occurrence of a Mortgage Satisfaction Event, Borrower shall instruct all Persons that maintain open accounts with Borrower or with whom Borrower does business on an “accounts receivable” basis to deliver all payments due under such accounts to

  

  

  

 

Clearing Bank at the Clearing Account Address in the form of cashier’s checks or equivalent instruments for the payment of money.  Borrower shall not direct any such Person to make payments due under such accounts in any other manner.  For so long as the Management Agreement is in effect, all accounts receivable arising from the operations of the Property shall continue to be paid directly to Manager.

 

(c)           In the event the Management Agreement is not in effect, pursuant to an instruction letter in the form of Exhibit B hereto (a “Lessee Payment Direction Letter”), Borrower shall immediately notify and advise each commercial tenant of the Property (collectively, the “Tenants”) under each lease with respect to the Property (whether such lease is presently effective or executed after the date hereof), to send directly to the Clearing Account Address promptly when due all payments, whether in the form of checks, cash, drafts, money orders or any other type of payment whatsoever of rent or any other item payable to Borrower as landlord under such leases.  Without the prior written consent of Lender, Borrower shall not (i) terminate, amend, revoke or modify any Lessee Payment Direction Letter in any manner or (ii) direct or cause any Tenant to pay any amount in any manner other than as provided specifically in the related Lessee Payment Direction Letter.

 

(d)           If notwithstanding the provisions of this Section 8, (i) Borrower or Manager (or any Affiliate thereof) receives any Property Cash Flow and the Management Agreement is not in effect, then (x) Borrower or Manager (or such Affiliate) shall be deemed to hold such Property Cash Flow in trust for Lender and (y) Borrower and Manager shall deposit with Clearing Bank within one Business Day of receipt all such Property Cash Flow received by Borrower or Manager (or such Affiliate) or (ii) Borrower (or any Affiliate thereof) receives any Operating Profit (as defined in the Management Agreement), then (x) Borrower (or such Affiliate) shall be deemed to hold such Operating Profit (as defined in the Management Agreement) in trust for Lender and (y) Borrower shall deposit with Clearing Bank within one Business Day of receipt all such Operating Profit (as defined in the Management Agreement) received by Borrower (or such Affiliate).

 

9.           Successors and Assigns; Assignments.  This Agreement shall bind and inure to the benefit of and be enforceable by Clearing Bank, Borrower, Manager and Lender and their respective successors and permitted assigns.  Lender shall have the right to assign or transfer its rights under this Agreement in connection with any assignment of the Loan and the Loan Documents. Borrower shall not have the right to assign or transfer its rights or obligations under this Agreement without the prior written consent of Lender.

 

10.           Amendment.  This Agreement may be amended from time to time only by a written agreement executed by all of the parties hereto.

  

  

  

 

11.           Notices.  Notices to Clearing Bank shall be sent to Wells Fargo Bank, N.A., 1320 Willow Pass Road, Suite 300, Concord, California 94520 or by telecopy to (866) 359-5354, Attention:  Cash Management; notices to Manager shall be sent to Residence Inn By Marriott, LLC, 10400 Fernwood Road, Bethesda, Maryland 20817, Attn:  Law Department 52-923 - Senior Operations Attorney or by telecopy to (301) 380-6727, Attention:  Law Department 52-923 - Senior Operations Attorney; notices to Borrower shall be sent to c/o Moody National Realty Company, L.P., 6363 Woodway, Suite 110, Houston, Texas 77057 or by telecopy to (713) 977-7505, Attention: Brett Moody; and notices to Lender shall be sent to Citicorp North America, Inc., 388 Greenwich Street, 19th Floor, New York, New York 10013 or by telecopy to (646) 328-2938, Attention: Ana Rosu; or, in each case, to such other address as shall be designated in writing by the respective party to the other parties hereto.  Unless otherwise expressly provided herein, all such notices, to be effective, shall be in writing (including by facsimile), and shall be deemed to have been duly given or made (a) when delivered by hand or by nationally recognized overnight carrier, (b) upon receipt after being deposited in the mail, certified mail and postage prepaid, or (c) in the case of facsimile notice, when sent and electronically confirmed, addressed as set forth above.

 

12.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE CLEARING ACCOUNT HAS BEEN OPENED AND IS MAINTAINED, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN SUCH STATE.

 

13.           Interpleader.  If at any time Clearing Bank, in good faith, is in doubt as to the action it should take under this Agreement, Clearing Bank shall have the right at Borrower’s expense to commence an interpleader action in any United States District Court in the state in which the Clearing Account has been opened and to take no further action except in accordance with joint instructions from Lender and Borrower or in accordance with the final order of the court in such action.

 

 [Signatures on Following Page]

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have executed this CLEARING ACCOUNT AGREEMENT in several counterparts (each of which shall be deemed an original) as from the date first above written.

 

 

	 	

BORROWER:

	 
	 	 	 
	 	

MOODY NATIONAL RI PERIMETER MASTER TENANT, LLC, a Delaware limited liability company

	 
	 	 	 	 
	
 

	
By: 

	/s/ Brett C. Moody	 
	 	 	

Brett C. Moody

	 
	 	 	President	 
	 	 	 	 

 

	  	

MOODY NATIONAL RI PERIMETER HOLDING, LLC, a Delaware limited liability company

	  
	  	  	  	  
	  	
By:

	
/s/ Brett C. Moody

	  
	  	  	
Brett C. Moody

	  
	  	  	
President

	  
	  	  	  	  

 

	  	
LENDER:

	  
	  	  	  
	  	

CITICORP NORTH AMERICA, INC., a Delaware corporation

	  
	  	  	  	  
	  	
By:

	
/s/ Ana E. Rosu

	  
	  	  	

Name:

	

Ana E. Rosu

	  
	  	  	Title:	

Authorized Signatory

	  
	  	  	  	  

 

  

  

  

	  	
CLEARING BANK:

	  
	  	  	  
	  	

WELLS FARGO BANK, N.A., a national banking association

	  
	  	  	  	  
	  	
By:

	
/s/ Perry J. Monroe

	  
	  	  	
Name:

	

Perry J. Monroe

	  
	  	  	
Title:

	
Assistant Vice President

	  
	  	  	  	  

 

 

	  	
MANAGER:

	  
	  	  	  
	  	

RESIDENCE INN BY MARRIOTT, LLC, a Delaware limited liability company

	  
	  	  	  	  
	  	
By:

	
/s/ Sara Capella

	  
	  	  	
Name:

	

Sara Capella

	  
	  	  	
Title:

	
Authorized Signatory

	  
	  	  	  	  

 

 

  

  

  

 

EXHIBIT A

 

Cash Management Account

	
·         Bank:

	
Wells Fargo Bank, N.A.

	  	  
	 	 

	
·         Cash Management Account:

	
ABA#:  [____________]

	 	 
	
Account of:

	
MOODY NATIONAL RI PERIMETER MASTER TENANT, LLC DBA RESIDENCE INN-PERIMETER WEST FBO Citicorp North America, Inc. (Cash Management Account)

	 	 
	
Account #

	
[__________]

  

  

  

 

EXHIBIT B

 

Form of Lessee Payment Direction Letter

___________, 201__

 

[TENANT]

 

Re:           [Describe Lease] (the “Lease”)

 

To Whom it May Concern:

 

A cash management system has been adopted in connection with our loan from [_________________], its successors and/or assigns (“Lender”).  Consequently, from and after the date of this letter, all payments due under the Lease should be delivered as follows:

 

(a)           If by check, money order, or its equivalent, please mail such items to:

 

	                               	  	  
	 	  	  
	 	  	  
	 	
Attention:

	  
	 	
Facsimile No.:

	  
	 	  	  

(b)           If by wire transfer to:

 

	                               	
Payee:

	  
	 	
ABA Routing #:

	  
	 	
For Account:

	  
	 	
Account #:

	  
	 	
Bank Contact:

	  
	 	  	  
	 	  	  

This payment direction may not be rescinded or altered, except by a written direction signed by the Lender or its agent.

 

We appreciate your cooperation.

 

	 	Very truly yours,	 
	 	 	 
	 	[BORROWER]

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