Document:

ex-10_7.htm

MOODY NATIONAL REIT I, INC. 8-K

EXHIBIT 10.7

 

THIS INSTRUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:

 

Michael Hickman, Esq.

Polsinelli Shughart PC

700 W. 47th St., Ste. 1000

Kansas City, MO  64112

 

TO BE RECORDED IN THE

REAL PROPERTY RECORDS OF

MONTGOMERY COUNTY, TEXAS

NOTICE OF CONFIDENTIALITY RIGHTS. IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

 

ASSIGNMENT OF LEASES AND RENTS

 

THIS ASSIGNMENT OF LEASES AND RENTS (this “Assignment”) executed on the date indicated on the acknowledgment attached to this Assignment, but to be effective as of November 7, 2012, by MOODY NATIONAL WOOD-HOU MT, LLC, a Delaware limited liability company (“Assignor”), whose address is 6363 Woodway, Suite 110, Houston, Texas 77057, to and in favor of U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, N.A., AS TRUSTEE, SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2006-LDP9, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-LDP9 (“Assignee”), whose address is c/o Midland Loan Services, 10851 Mastin, Suite 300, Overland Park, Kansas 66210.

 

W I T N E S S E T H:

 

THAT, WHEREAS, Lender is the owner and holder of a loan to Woodlands Terrapin Investors I, LLC, Woodlands Terrapin Investors II, LLC, Woodlands Terrapin Investors III, LLC, 537 Houston, LLC, Maven Houston, LLC, Marc Hotel Houston, LLC, and Miriam Hotel Houston, LLC, each a Texas limited liability company, jointly and severally as tenants in common (collectively, “Original Borrower”) in the original principal amount of $7,500,000.00 (the “Loan”), evidenced by that certain Promissory Note (the “Note) dated as of November 17, 2006 (the “Original Closing Date”), made by Original Borrower for the benefit of ARCS Commercial Mortgage Co., L.P., a California limited partnership (“Original Lender”).  The Note is secured by, among other things, that certain Deed of Trust and Security Agreement dated as of the Original Closing Date (the “Mortgage”), made by Original Borrower in favor of Original Lender, encumbering Original Borrower’s interest in and to certain real property more particularly described on Exhibit A attached hereto and incorporated herein by this reference together with all buildings and other improvements now or hereafter located thereon (collectively, the “Improvements”) (said real property and the Improvements are hereinafter sometimes collectively referred to as the “Property”), and by other documents and instruments (the Note, the Mortgage and such other documents and instruments, as the same may from time to time be amended, consolidated, renewed or replaced, being collectively referred to herein as the “Original Loan Documents”); and

 

  

  

  

WHEREAS, Lender has agreed to consent to a transfer of the Property from Original Borrower to Moody National Wood-Hou Holding, LLC, a Delaware limited liability company (the “Borrower”), the assumption of the Loan by Borrower, the transfer of certain personal property related to the operation of the Property, and Borrower’s lease of the Property to Assignor (collectively, the “Transfer”) under the terms of certain consent documents, instruments and agreements, including but not limited to, that certain Consent, Modification and Assumption Agreement with Release dated the date hereof by and among Lender, Original Borrower, and others (collectively, the “Assumption Documents”).  Assignor acknowledges that the Transfer is in the best interest of and provides a direct benefit to Assignor.

 

WHEREAS, Assignor is desirous of further securing to Assignee the performance of the terms, covenants and agreements hereof and of the Note, the Mortgage and each other document and agreement evidencing, securing, guaranteeing or otherwise relating to the indebtedness evidenced by the Note (the Original Loan Documents, the Assumption Documents and any other documents, instruments and agreements given by Borrower, Original Borrower or others and accepted by Lender or Original Lender for the purposes of the Transfer or of evidencing, securing, or guaranteeing the Loan, as each of the foregoing may from time to time be amended, consolidated, renewed or replaced, being collectively referred to herein as the “Loan Documents).

 

NOW, THEREFORE, in consideration of Lender’s consent to the Transfer, which is of direct benefit to Assignor, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby irrevocably, absolutely and unconditionally transfer, sell, assign, grant, pledge and convey to Assignee, its successors and assigns, all of the right, title and interest of Assignor in and to:

 

(a)           any and all leases, licenses, rental agreements and occupancy agreements of whatever form now or hereafter affecting all or any part of the Property and any and all guarantees, extensions, renewals, replacements and modifications thereof (collectively, the “Leases”); and

 

(b)           all deposits (whether for security or otherwise), rents, issues, profits, revenues, royalties, accounts, rights, benefits, room rentals, credit card receipts and income of every nature of and from the Property, including, without limitation, minimum rents, additional rents, termination payments, forfeited security deposits, liquidated damages following default and all proceeds payable under any policy of insurance covering loss of rents resulting from untenantability due to destruction or damage to the Property, together with the immediate and continuing right to collect and receive the same, whether now due or hereafter becoming due, and together with all rights and claims of any kind that Assignor may have against any tenant, lessee or licensee under the Leases or against any other occupant of the Property (collectively, the “Rents”).

 

  

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TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns.

 

IT IS AGREED that, notwithstanding that this instrument is a present, absolute and executed assignment of the Rents and of the Leases and a present, absolute and executed grant of the powers herein granted to Assignee, Assignor is hereby permitted, at the sufferance of Assignee and at its discretion, and is hereby granted a license by Assignee, to retain possession of the Leases and to collect and retain the Rents unless and until there shall be an Event of Default (as defined in the Mortgage) under any of the Loan Documents. In the event of such an Event of Default, and during the continuance thereof, the aforementioned license granted to Assignor shall automatically terminate without notice to Assignor, and Assignee may thereafter, without taking possession of the Property, demand, collect (by suit or otherwise), receive and give valid and sufficient receipts for any and all of the Rents or take possession of the Leases, for which purpose Assignor does hereby irrevocably make, constitute and appoint Assignee its attorney-in-fact with full power to appoint substitutes or a trustee to accomplish such purpose (which power of attorney shall be irrevocable so long as any portion of the Loan is outstanding, shall be deemed to be coupled with an interest, shall survive the voluntary or involuntary dissolution of Assignor and shall not be affected by any disability or incapacity suffered by Assignor subsequent to the date hereof). Further, from and after such termination, Assignor shall be the agent of Assignee in collection of the Rents, and any Rents so collected by Assignor shall be held in trust by Assignor for the sole and exclusive benefit of Assignee, and Assignor shall, within one (1) business day after receipt of any Rents, pay the same to Assignee to be applied by Assignee as hereinafter set forth. Furthermore, from and after such Event of Default and termination of the aforementioned license, Assignee shall have the right and authority, without any notice whatsoever to Assignor and without regard to the adequacy of the security therefor, to: (a) manage and operate the Property, with full power to employ agents to manage the same; (b) demand, collect, receive and sue for the Rents, including those past due and unpaid; and (c) do all acts relating to such management of the Property, including, but not limited to, negotiation of new Leases, making adjustments of existing Leases, contracting and paying for repairs and replacements to the Improvements and to the fixtures, equipment and personal property located in the Improvements or used in any way in the operation, use and occupancy of the Property as in the sole subjective judgment and discretion of Assignee may be necessary to maintain the same in a tenantable condition, purchasing and paying for such additional furniture and equipment as in the sole subjective judgment of Assignee may be necessary to maintain a proper rental income from the Property, employing necessary managers and other employees, purchasing fuel, providing utilities and paying for all other expenses incurred in the operation of the Property, maintaining adequate insurance coverage over hazards customarily insured against and paying the premiums therefor. Assignee may apply the Rents received by Assignee from the Property, after deducting the costs of collection thereof, including, without limitation, attorneys’ fees and a management fee for any management agent so employed, against amounts expended for repairs, upkeep, maintenance, service, fuel, utilities, taxes, assessments, insurance premiums and such other expenses as Assignee incurs in connection with the operation of the Property and against interest, principal, required escrow deposits and other sums which have or which may become due, from time to time, under the terms of the Loan Documents, in such order or priority as to any of the items so mentioned as Assignee, in its sole subjective discretion, may determine. The exercise by Assignee of the rights granted Assignee in this paragraph, and the collection of the Rents and the application thereof as herein provided, shall not be considered a waiver by Assignee of any default or Event of Default under the Loan Documents or prevent foreclosure of any liens on the Property nor shall such exercise make Assignee liable under any of the Leases, Assignee hereby expressly reserving all of its rights and privileges under the Mortgage and the other Loan Documents as fully as though this Assignment had not been entered into.

 

  

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Without limiting the rights granted hereinabove, in the event Assignor shall fail to make any payment or to perform any act required under the terms hereof and such failure shall not be cured within any applicable grace or cure period, then Assignee may, but shall not be obligated to, without prior notice to or demand on Assignor, and without releasing Assignor from any obligation hereof, make or perform the same in such manner and to such extent as Assignee may deem necessary to protect the security hereof, including specifically, without limitation, appearing in and defending any action or proceeding purporting to affect the security hereof or the rights or powers of Assignee, performing or discharging any obligation, covenant or agreement of Assignor under any of the Leases, and, in exercising any of such powers, paying all necessary costs and expenses, employing counsel and incurring and paying attorneys’ fees. Any sum advanced or paid by Assignee for any such purpose, including, without limitation, attorneys’ fees, together with interest thereon at the Default Interest Rate (as defined in the Note) from the date paid or advanced by Assignee until repaid by Assignor, shall immediately be due and payable to Assignee by Assignor on demand and shall be secured by the Mortgage and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note.

 

IT IS FURTHER AGREED that this Assignment is made upon the following terms, covenants and conditions:

 

1.           This Assignment shall not operate to place responsibility for the control, care, management or repair of the Property upon Assignee, nor for the performance of any of the terms and conditions of any of the Leases, nor shall it operate to make Assignee responsible or liable for any waste committed on the Property by the tenants guests or any other party or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property. Assignee shall not be liable for any loss sustained by Assignor resulting from Assignee’s failure or inability to collect Rents, proceeds or other payments, or to let the Property or from any other act or omission of Assignee in managing the Property. ASSIGNOR SHALL AND DOES HEREBY INDEMNIFY AND HOLD ASSIGNEE HARMLESS FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, CLAIM, DEMAND OR DAMAGE WHICH MAY OR MIGHT BE INCURRED BY REASON OF THIS ASSIGNMENT, INCLUDING, WITHOUT LIMITATION, CLAIMS OR DEMANDS FOR SECURITY DEPOSITS FROM TENANTS OF SPACE IN THE IMPROVEMENTS DEPOSITED WITH ASSIGNOR, AND THEREAFTER HELD IN ESCROW BY ASSIGNEE, AND FROM AND AGAINST ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER WHICH MAY BE ASSERTED AGAINST ASSIGNEE BY REASON OF ANY ALLEGED OBLIGATIONS OR UNDERTAKINGS ON ITS PART TO PERFORM OR DISCHARGE ANY OF THE TERMS, COVENANTS OR AGREEMENTS CONTAINED IN ANY OF THE LEASES. SHOULD ASSIGNEE INCUR ANY LIABILITY BY REASON OF THIS ASSIGNMENT OR IN DEFENSE OF ANY CLAIM OR DEMAND FOR LOSS OR DAMAGE AS PROVIDED ABOVE, THE AMOUNT THEREOF, INCLUDING, WITHOUT LIMITATION, COSTS, EXPENSES AND ATTORNEYS’ FEES, TOGETHER WITH INTEREST THEREON AT THE DEFAULT INTEREST RATE FROM THE DATE PAID OR INCURRED BY ASSIGNEE UNTIL REPAID BY ASSIGNOR, SHALL BE IMMEDIATELY DUE AND PAYABLE TO ASSIGNEE BY ASSIGNOR UPON DEMAND AND SHALL BE SECURED BY THE MORTGAGE AND BY ALL OF THE OTHER LOAN DOCUMENTS SECURING ALL OR ANY PART OF THE INDEBTEDNESS EVIDENCED BY THE NOTE.

 

2.           This Assignment shall not be construed as making Assignee a mortgagee in possession.

 

3.           Assignee is obligated to account to Assignor only for such Rents as are actually collected or received by Assignee.

 

4.           Assignor hereby further presently and absolutely assigns to Assignee subject to the terms and provisions of this Assignment: (a) any award or other payment which Assignor may hereafter become entitled to receive with respect to any of the Leases as a result of or pursuant to any bankruptcy, insolvency or reorganization or similar proceedings involving the tenants under such Leases; and (b) any and all payments made by or on behalf of any tenant of any part of the Property in lieu of Rent. Assignor hereby irrevocably appoints Assignee as its attorney-in-fact to, from and after the occurrence of a default by Assignor hereunder which has not been cured within any applicable grace or cure period or an Event of Default under any of the other Loan Documents, appear in any such proceeding and to collect any such award or payment, which power of attorney is coupled with an interest by virtue of this Assignment and is irrevocable so long as any sums are outstanding under the loan evidenced by the Note.

 

5.           Assignor represents, warrants and covenants to and for the benefit of Assignee: (a) that Assignor now is (or with respect to any Leases not yet in existence, will be immediately upon the execution thereof) the absolute owner of the landlord’s interest in the Leases, with full right and title to assign the same and the Rents due or to become due thereunder; (b) that, other than this Assignment and those assignments, if any, specifically permitted in the Mortgage, there are no outstanding pledges or assignments of the Leases or Rents; (c) that no Rents have been anticipated, discounted, released, waived, compromised or otherwise discharged except for (i) prepayment of rent of not more than one (1) month prior to the accrual thereof, or (ii) such actions that may be taken in the normal operation of the Property with respect to hotel guests and in a manner that does not have a material adverse effect on the business, operations or financial condition of the Borrower, the Assignor or the Property; (d) that there are no material defaults now existing under any of the Leases by the landlord or tenant, and there exists no state of facts which, with the giving of notice or lapse of time or both, would constitute a default under any of the Leases by the landlord or tenant, except as disclosed in writing to Assignee, or except as would not have a material adverse effect on the business, operations or financial condition of the Borrower, the Assignor or the Property; (e) that Assignor has and shall duly and punctually observe and perform all covenants, conditions and agreements in the Leases on the part of the landlord to be observed and performed thereunder; to the extent necessary to avoid causing a material adverse effect on the business, operations or financial condition of the Borrower, the Assignor or the Property; and (f) the Leases are in full force and effect and are the valid and binding obligations of Assignor, and, to the knowledge of Assignor, are the valid and binding obligations of the tenants thereto.

 

  

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6.           Assignor covenants and agrees that Assignor shall comply with all covenants and agreements set forth in Section 1.12 of the Mortgage.

 

7.           Assignor covenants and agrees that Assignor shall, at its sole cost and expense, appear in and defend any action or proceeding arising under, growing out of, or in any manner connected with the Leases or the obligations, duties or liabilities of the landlord or tenant thereunder, and shall pay on demand all costs and expenses, including, without limitation, attorneys’ fees, which Assignee may incur in connection with Assignee’s appearance, voluntary or otherwise, in any such action or proceeding, together with interest thereon at the Default Interest Rate from the date incurred by Assignee until repaid by Assignor.

 

8.           At any time, Assignee may, at its option, notify any tenants or other parties of the existence of this Assignment. Assignor does hereby specifically authorize, instruct and direct each and every present and future tenant, lessee and licensee of the whole or any part of the Property to pay all unpaid and future Rents to Assignee upon receipt of demand from Assignee to so pay the same and Assignor hereby agrees that each such present and future tenant, lessee and licensee may rely upon such written demand from Assignee to so pay said Rents without any inquiry into whether there exists a default hereunder or an Event of Default under the other Loan Documents or whether Assignee is otherwise entitled to said Rents. Assignor hereby waives any right, claim or demand which Assignor may now or hereafter have against any present or future tenant, lessee or licensee by reason of such payment of Rents to Assignee, and any such payment shall discharge such tenant’s, lessee’s or licensee’s obligation to make such payment to Assignor.

 

9.           Assignee may take or release any security for the indebtedness evidenced by the Note, may release any party primarily or secondarily liable for the indebtedness evidenced by the Note, may grant extensions, renewals or indulgences with respect to the indebtedness evidenced by the Note and may apply any other security therefor held by it to the satisfaction of any indebtedness evidenced by the Note without prejudice to any of its rights hereunder or under any of the Loan Documents.

 

10.           The acceptance of this Assignment and the collection of the Rents in the event Assignor’s license is terminated, as referred to above, shall be without prejudice to Assignee. The rights of Assignee hereunder are cumulative and concurrent, may be pursued separately, successively or together and may be exercised as often as occasion therefor shall arise, it being agreed by Assignor that the exercise of any one or more of the rights provided for herein shall not be construed as a waiver of any of the other rights or remedies of Assignee, at law or in equity or otherwise, so long as any obligation under the Loan Documents remains unsatisfied.

 

  

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11.           All rights of Assignee hereunder shall inure to the benefit of its successors and assigns, and all obligations of Assignor shall bind its successors and assigns and any subsequent owner of the Property. All rights of Assignee in, to and under this Assignment shall pass to and may be exercised by any assignee of such rights of Assignee. Assignor hereby agrees that if Assignee gives notice to Assignor of an assignment of said rights, upon such notice the liability of Assignor to the assignee of the Assignee shall be immediate and absolute. Assignor will not set up any claim against Assignee or any intervening assignee as a defense, counterclaim or set-off to any action brought by Assignee or any intervening assignee for any amounts due hereunder or for possession of or the exercise of rights with respect to the Leases or the Rents.

 

12.           It shall be a default hereunder (a) if any representation or warranty made herein by Assignor is determined by Assignee to have been false or misleading in any material respect at the time made, or (b) upon any failure by Assignor to comply with the provisions of Section 6 above or (c) upon any failure by Assignor in the performance or observance of any other covenant or condition hereof and, to the extent such failure described in this subsection (c) is susceptible of being cured, the continuance of such failure for thirty (30) days after written notice thereof from Assignee to Assignor; provided, however, that if such default is susceptible of cure but such cure cannot be accomplished with reasonable diligence within said period of time, and if Assignor commences to cure such default promptly after receipt of notice thereof from Assignee, and thereafter prosecutes the curing of such default with reasonable diligence, such period of time shall be extended for such period of time as may be necessary to cure such default with reasonable diligence, but not to exceed an additional sixty (60) days. Any such default not so cured shall be an Event of Default, entitling Assignee to exercise any or all rights and remedies available to Assignee under the terms hereof or of any or all of the other Loan Documents, and any default under any other Loan Document which is not cured within any applicable grace or cure period shall be deemed a default hereunder subject to no grace or cure period, entitling Assignee to exercise any or all rights provided for herein.

 

13.           Failure by Assignee to exercise any right which it may have hereunder shall not be deemed a waiver thereof unless so agreed in writing by Assignee, and the waiver by Assignee of any default hereunder shall not constitute a continuing waiver or a waiver of any other default or of the same default on any future occasion. No collection by Assignee of any Rents pursuant to this Assignment shall constitute or result in a waiver of any default then existing hereunder or an Event of Default under any of the other Loan Documents.

 

14.           If any provision under this Assignment or the application thereof to any entity, person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Assignment and the application of the provisions hereof to other entities, persons or circumstances shall not be affected thereby and shall be enforced to the fullest extent permitted by law.

 

15.           This Assignment may not be amended, modified or otherwise changed except by a written instrument duly executed by Assignor and Assignee.

 

16.           This Assignment shall be in full force and effect continuously from the date hereof to and until the Mortgage shall be released of record, and the release of the Mortgage shall, for all purposes, automatically terminate this Assignment and render this Assignment null and void and of no effect whatsoever.

 

  

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17.           All notices, demands, requests or other communications to be sent by one party to the other hereunder or required by law shall be given and become effective as provided in the Mortgage.

 

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

 

19.           This Assignment may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Assignment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall constitute a single instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Assignment identical in form hereto but having attached to it one or more additional signature pages. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

 

20.           in addition to, but not in lieu of, any other rights hereunder, Assignee shall have the right to institute suit and obtain a protective or mandatory injunction against Assignor to prevent a breach or default, or to enforce the observance, of the agreements, covenants, terms and conditions contained herein, as well as the right to damages occasioned by any breach or default hereunder by Assignor.

 

21.           This Assignment shall continue and remain in full force and effect during any period of foreclosure with respect to the Property.

 

22.           Assignor hereby covenants and agrees that Assignee shall be entitled to all of the rights, remedies and benefits available by statute, at law, in equity or as a matter of practice for the enforcement and perfection of the intents and purposes hereof. Assignee shall, as a matter of absolute right, be entitled, upon application to a court of applicable jurisdiction, to the appointment of a receiver to obtain and secure the rights of Assignee hereunder and the benefits intended to be provided to Assignee hereunder.

 

23.           Notwithstanding anything to the contrary contained in this Assignment, the liability of Assignor and its general partners for the indebtedness secured hereby and for the performance of the other agreements, covenants and obligations contained herein and in the Loan Documents shall be limited as set forth in Section 1.05 of the Note; provided, however, that nothing herein shall be deemed to be a waiver of any right which Assignor may have under Sections 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured hereby or to require that all collateral shall continue to secure all indebtedness owing to Assignee in accordance with the Note, this Assignment and the other Loan Documents.

 

24.           IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT THIS ASSIGNMENT INCLUDES INDEMNIFICATION PROVISIONS (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION PROVISIONS CONTAINED IN SECTION 1) WHICH, IN CERTAIN CIRCUMSTANCES, COULD INCLUDE AN INDEMNIFICATION BY ASSIGNOR OF ASSIGNEE FROM CLAIMS OR LOSSES ARISING AS A RESULT OF ASSIGNEE’S OWN NEGLIGENCE.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

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IN WITNESS WHEREOF, Assignor, intending to be legally bound hereby, has duly executed this Assignment to be effective as of the date set forth in the first paragraph hereof.

 

	  	
ASSIGNOR:

	  	
MOODY NATIONAL WOOD-HOU MT, LLC

	  	
a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Brett C. Moody_____________________

	  	
     Brett C. Moody,

	  	
     Authorized Signatory

  

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EXHIBIT A

 

LEGAL DESCRIPTION

 

Reserve A, Block 1, Final Plat of HOMEWOOD SUITES-SHENANDOAH, a subdivision in Montgomery County, Texas, according to map or plat thereof recorded in Volume N, Page 154 of the Map Records of Montgomery County, Texas.

 

Tax Parcel No.:  0389-00-02822

 

9ex-10_8.htm

MOODY NATIONAL REIT I, INC. 8-K

EXHIBIT 10.8

 

ASSIGNMENT AND SUBORDINATION OF MANAGEMENT AGREEMENT

 

THIS ASSIGNMENT AND SUBORDINATION OF MANAGEMENT AGREEMENT (this “Assignment”), is made as of November 7, 2012, by MOODY NATIONAL WOOD-HOU MT, LLC, a Delaware limited liability company (“Lessee”), having an address at 6363 Woodway, Suite 110, Houston, Texas 77057, and MOODY NATIONAL HOSPITALITY MANAGEMENT, LLC, a Texas limited liability company, having an address at 6363 Woodway, Suite 110, Houston, Texas 77057 (“Agent”), and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, N.A., AS TRUSTEE, SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2006-LDP9, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-LDP9, whose address is c/o Midland Loan Services, 10851 Mastin, Suite 300, Overland Park, Kansas 66210 (including its successors, transferees and assigns, “Lender”).

 

RECITALS:

 

A.           Lender is the owner and holder of a loan to Woodlands Terrapin Investors I, LLC, Woodlands Terrapin Investors II, LLC, Woodlands Terrapin Investors III, LLC, 537 Houston, LLC, Maven Houston, LLC, Marc Hotel Houston, LLC, and Miriam Hotel Houston, LLC, each a Texas limited liability company, jointly and severally as tenants in common (collectively, “Original Borrower”) in the original principal amount of $7,500,000.00 (the “Loan”), evidenced by that certain Promissory Note (the “Note) dated as of November 17, 2006 (the “Original Closing Date”), made by Original Borrower for the benefit of ARCS Commercial Mortgage Co., L.P., a California limited partnership (“Original Lender”).  The Note is secured, in part, by that certain Deed of Trust and Security Agreement dated as of the Original Closing Date (the “Mortgage”), encumbering Original Borrower’s interest in and to certain real property more particularly described therein (the “Property”) (the Note, the Mortgage and the other documents and instruments executed and/or delivered in connection with the Loan are collectively referred to as the “Original Loan Documents”);

 

B.           Lender has agreed to consent to a transfer of the Property from Original Borrower to Moody National Wood-Hou Holding, LLC, a Delaware limited liability company (the “Borrower”), the assumption of the Loan by Borrower, the transfer of certain personal property related to the operation of the Property and Borrower’s lease of the Property to the Lessee (collectively, the “Transfer”) under the terms of certain consent documents, instruments and agreements, including but not limited to, that certain Consent, Modification and Assumption Agreement with Release dated the date hereof by and among Lender, Original Borrower, Borrower, and others (collectively, the “Assumption Documents”).  As used herein, the term “Loan Documents” shall mean the Original Loan Documents, the Assumption Documents and any other documents, instruments and agreements given by Borrower, Original Borrower or others and accepted by Lender or Original Lender for the purposes of the Transfer or of evidencing, securing, or guaranteeing the Loan;

 

  

  

  

C.           Borrower has entered into that certain operating lease agreement with Lessee wherein Lessee is granted certain authority to operate the Property;

 

D.           Pursuant to a certain [Management Agreement] between Lessee and Agent (the “Management Agreement”), Lessee employed Agent exclusively to rent, lease, operate and manage the Property; and

 

E.           Lender requires as a condition to consenting to the Transfer, that Lessee assign the Management Agreement as set forth below and Lessee and Agent agree to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the above and the mutual promises contained in this Assignment, the receipt and sufficiency of which are acknowledged, the parties hereto agree as follows:

 

1.           Assignment of Management Agreement. As additional security for the Loan, Lessee hereby conditionally transfers, sets over and assigns to Lender all of Lessee’s right, title and interest in and to the Management Agreement, said transfer and assignment to automatically become a present, unconditional assignment, at Lender’s option, in the event of an Event of Default by Borrower under the Loan Documents.

 

2.           Termination. At such time as the Loan is paid in full and the Mortgage is released of record, this Assignment and all of Lender’s right, title and interest hereunder with respect to the Management Agreement shall terminate.

 

3.           Lessee’s Covenants. Lessee hereby covenants with Lender that during the term of this Assignment: (a) Lessee shall not transfer the responsibility for the management of the Property from Agent to any other person or entity without the prior written consent of Lender, which consent may be withheld by Lender in Lender’s sole discretion; (b) Lessee shall not terminate or amend any of the terms or provisions of the Management Agreement without the prior written consent of Lender, which consent may be withheld by Lender in Lender’s sole discretion; and (c) Lessee shall, in the manner provided for in this Assignment, give notice to Lender of any notice or information that Lessee receives which indicates that the Agent is terminating the Management Agreement or that the Agent is otherwise discontinuing its management of the Property.

 

  

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4.           Agent’s Representations. Agent warrants and represents to Lender as of the date hereof that: (a) a true, correct and complete copy of the Management Agreement is attached hereto as Exhibit A, that the Management Agreement has not been modified or amended, that the entire agreement between Agent and Lessee is evidenced by the Management Agreement; (b) Agent has agreed to act as manager of the Property pursuant to the Management Agreement, (c) the entire agreement between Agent and Lessee for the management of the Property is evidenced by the Management Agreement, (d) the Management Agreement constitutes the valid and binding agreement of Agent, enforceable in accordance with its terms, and Agent has full authority under all state and local laws and regulations, to perform all of its obligations under the Management Agreement, (e) Lessee is not in default in the performance of any of its obligations under the Management Agreement and all payments and fees required to be paid by Lessee to Agent thereunder have been paid to the date hereof, (f) it has reviewed the Operations and Maintenance Agreement (the “O&M Agreement”) dated as of the Original Closing Date, if any, and agrees to comply with all of the terms and conditions thereof, and further, agrees that, in the event that Borrower is required to maintain an operations and maintenance program for the management of asbestos, lead-based paint, radon or any other Hazardous Substances (as defined in the Mortgage) at the Property, then the Agent shall review same and comply with all of the terms and conditions thereof, (g) Agent has adequate leasing .and operational authority to effectively manage and lease the Property on behalf of Lessee, and (h) Agent acknowledges and agrees that Lender is a third party beneficiary under the Management Agreement.

 

5.           Agreement by Lessee and Agent. Lessee and Agent hereby agree that in the event of an Event of Default by Borrower under any of the Loan Documents during the term of this Assignment or in the event of a default by Agent (beyond any applicable grace period) under the Management Agreement, at the option of Lender exercised by written notice to Lessee and Agent: (a) all rents, security deposits, issues, proceeds and profits of the Property collected by Agent, after payment of all costs and expenses of operating the Property (including, without limitation, operating expenses, real estate taxes, insurance premiums, repairs and maintenance and the fees and commissions payable under the Management Agreement), shall be applied in accordance with Lender’s written directions to Agent; (b) Lender may exercise its rights under this Assignment and may immediately terminate the Management Agreement and, subject to the terms of the Franchise Agreement, require Agent to transfer its responsibility for the management of the Property to a management company selected by Lender in Lender’s sole and absolute discretion; and (c) Agent shall, if requested by Lender, continue performance, on behalf of Lender of all of Agent’s obligations under the terms of the Management Agreement with respect to the Property, provided Lender sends to Agent the notice set forth in Paragraph 12 hereof and performs or causes to be performed the obligations of Lessee to Agent under the Management Agreement accruing or arising from and after, and with respect to the period commencing upon, the effective date of such notice.

 

6.           Subordination of Management Agreement and Fees. The Management Agreement does not create an interest in real property or constitute a covenant running with the Property, Lessee and Agent hereby agree that the Management Agreement and any and all liens, rights (including the right to receive management fees) and interests (whether choate or inchoate) owed, claimed or held by Agent in and to the Property and the rent and revenue generated therefrom, are and shall be in all respects subordinate and inferior to the liens and security interests created or to be created for the benefit of Lender, its successors and assigns, and securing the repayment of the Note including, without limitation, those created under the Mortgage covering, among other things, the Property, and filed or to be filed of record in the public records maintained for the recording of mortgages in the jurisdiction where the Property is located, and all renewals, extensions, increases, supplements, amendments, modifications and replacements thereof.

 

7.           Consent and Agreement by Agent. Agent hereby acknowledges and consents to this Assignment and agrees that Agent will act in conformity with the provisions of this Assignment and Lender’s rights hereunder or otherwise related to the Management Agreement. In the event that the responsibility for the management of the Property is transferred from Agent in accordance with the provisions hereof, Agent shall, and hereby agrees to, fully cooperate in transferring its responsibility to a new management company and use commercially reasonable efforts to effectuate such transfer no later than thirty (30) days from the date the Management Agreement is terminated. Further, Agent hereby agrees (a) not to contest or impede the rightful exercise by Lender of any right it has under or in connection with this Assignment; and (b) that it shall, in the manner provided for in this Assignment, give at least thirty (30) days prior written notice to Lender of its intention to terminate the Management Agreement or otherwise discontinue its management of the Property.

 

  

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8.           Lender’s Agreement. So long as no Event of Default exists under any of the Loan Documents, Lender agrees to permit any sums due to Lessee under the Management Agreement to be paid directly to Lessee.

 

9.           No Joint Venture. Lender has no obligation to Agent with respect to the Mortgage or Loan Documents and Agent shall not be a third party beneficiary with respect to any of Lender’s obligations to Borrower set forth in the Loan Documents. The relationship of Lender to Borrower, is one of a creditor to a debtor, and Lender is not a joint venturer or partner of Borrower.

 

10.           Lender’s Reliance on Representations.  Agent has executed this Agreement in order to induce Lender to consent to the Transfer and with full knowledge that Lender shall rely upon the representations, warranties and agreements herein contained, and that but for this Assignment and the representations, warranties and agreements herein contained, Lender would not take such actions.

 

11.           Agent’s Compensation. Agent agrees that, notwithstanding anything to the contrary contained in the Management Agreement, Agent shall not be entitled to receive compensation for its services conducted in connection with the Property in excess of 4% of gross rent collected from the Property.

 

12.           Notice. All notices given hereunder shall be in writing and shall be either hand delivered or mailed, by registered U.S. mail, Return Receipt Requested, first class postage prepaid, to the parties at their respective addresses below or at such other address for any party as such party may designate by notice to the other parties hereto:

 

To Lessee:

 

Moody National Wood-Hou MT, LLC

6363 Woodway, Suite 110

Houston, Texas  77057

Attention: Brett C. Moody

 

  

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To Lender:

 

U.S. Bank National Association, as Trustee, Successor-in-Interest to Bank of America, NA, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2006-LDP9,Commercial Mortgage Pass-Through Certificates, Series 2006-LDP9

c/o Midland Loan Services

10851 Mastin

Suite 300

Overland Park, Kansas

Attention: Asset Management

To Agent:

Moody National Hospitality Management, LLC

6363 Woodway, Suite 110

Houston, Texas 77057

Attention: Brett C. Moody

13.           Binding Nature of Assignment. This Assignment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

14.           Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State where the Property is located, and applicable federal law.

 

15.           Duplicate Originals; Counterparts. This Assignment may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Assignment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall constitute a single instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Assignment identical in form hereto but having attached to it one or more additional signature pages. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

 

  

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IN WITNESS WHEREOF, the undersigned have executed this Assignment to be effective as of the date set forth in the first paragraph hereof.

 

	  	
LESSEE:

	  	  
	  	
MOODY NATIONAL WOOD-HOU MT, LLC

	  	
a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Brett C. Moody___________________

	  	
          Brett C. Moody,

	  	
          Authorized Signatory

 

  

  

  

	  	  
	  	
LENDER:

	  	  
	  	
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, N.A., AS TRUSTEE, SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2006-LDP9, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-LDP9

	  	  
	  	
By:       Midland Loan Services, a Division of

	  	
   PNC Bank, National Association,

	  	
              its Attorney-in-Fact

	  	  
	  	  
	  	
              By: /s/ Gregory L. McFarland_________

	  	
                     Gregory L. McFarland,

	  	
                     Senior Vice President

 

  

  

  

	  	  
	  	
AGENT:

	  	  
	  	
MOODY NATIONAL HOSPITALITY MANAGEMENT, LLC,

	  	
a Texas limited liability company

	  	  
	  	  
	  	
By:_____________________________________

	  	
Name: __________________________________ 

Title: ____________________________________

	  	  
	  	  

  

  

  

EXHIBIT A

MANAGEMENT AGREEMENT

 

The Management Agreement follows this cover page.

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