EXHIBIT 10.31
FORM OF COOPERATION AGREEMENT
THIS COOPERATION AGREEMENT (this "AGREEMENT") is made as of the
_____ day of June, 2004, by and between the Mortgage Borrowers listed on the
signature page hereof (collectively, the "MORTGAGE BORROWERS"), LODGIAN
MEZZANINE FLOATING, LLC (the "MEZZANINE BORROWER"), and MERRILL LYNCH MORTGAGE
LENDING, INC., in its capacity as both mortgage lender and mezzanine lender
("LENDER").
RECITALS:
A. The Mortgage Borrowers, by those certain Promissory Notes of even
date herewith given to Lender (the "MORTGAGE NOTE"), are indebted to Lender in
the original principal sum of __________________ (the "MORTGAGE LOAN") as
governed by that certain Loan and Security Agreement of even date herewith
between the Mortgage Borrowers and Lender (together with all extensions,
renewals, modifications, substitutions and amendments thereof, the "MORTGAGE
LOAN AGREEMENT").
B. The Mezzanine Borrower, by that certain Mezzanine Note of even
date herewith given to Lender (the "MEZZANINE NOTE"), is indebted to Lender in
the aggregate principal sum of ___________________ (the "MEZZANINE LOAN") as
governed by that certain Mezzanine Loan Agreement of even date herewith between
the Mezzanine Borrower and Lender (together with all extensions, renewals,
modifications, substitutions and amendments thereof, the "MEZZANINE LOAN
AGREEMENT").
C. Lender has required as a condition to making the Mortgage Loan
and the Mezzanine Loan that the Mortgage Borrowers and the Mezzanine Borrower
enter into this Agreement with Lender.
AGREEMENT
For ten ($10) dollars and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
Section 1. Adjustment of Mortgage Loan and Mezzanine Loan/Loan
Modification. Lender shall have the right in its sole discretion, at any time
prior to the final Securitization of the Mortgage Loan, to separately adjust the
principal amount and applicable interest rates of the Mortgage Loan and the
Mezzanine Loan (each, a "LOAN MODIFICATION") provided that: (i) the aggregate
principal amount of the Mortgage Loan and the Mezzanine Loan immediately after
such adjustment shall equal the aggregate outstanding principal balance of the
Mortgage Loan and the Mezzanine Loan immediately prior to such adjustment, (ii)
the weighted average spread used in calculating the interest rate of the
Mortgage Loan and the Mezzanine Loan immediately after such adjustment shall
equal the weighted average spread used in calculating the interest rate which
was applicable to the Mortgage Loan and the Mezzanine Loan
immediately prior to such adjustment, (iii) the aggregate debt service payments
on the Mortgage Loan and the Mezzanine Loan immediately after such adjustment
shall equal the aggregate debt service payments which were due under the
Mortgage Loan and the Mezzanine Loan immediately prior to such adjustment, and
(iv) the other material terms and provisions of each of the Mortgage Loan and
the Mezzanine Loan shall remain unchanged and none of the foregoing adjustments
shall increase the obligations or reduce the rights of the Mortgage Borrowers,
the Mezzanine Borrower or Guarantor in any material respect. Any Loan
Modification shall be subject to the following:
(a) If Lender elects to increase the principal amount of the
Mezzanine Loan, the Mezzanine Borrower shall contribute to the Mortgage
Borrowers such additional loan proceeds to be applied to repay, dollar for
dollar, the Mortgage Note (in an amount and as designated by Lender), and the
Lender under the Mortgage Note will accept such prepayment without penalty,
premium or additional costs to the Mortgage Borrowers (except as provided
herein). If Lender elects to increase the principal amount of the Mortgage Loan
and reduce the principal amount of the Mezzanine Loan, the Mortgage Borrowers
shall distribute to the Mezzanine Borrower such additional loan proceeds to be
applied to repay, dollar for dollar, the Mezzanine Note (in an amount and as
designated by Lender), and the Lender under the Mezzanine Note will accept such
prepayment without penalty, premium or additional costs to the Mezzanine
Borrower (except as provided herein);
(b) The Mortgage Borrowers and the Mezzanine Borrower shall
cooperate, and shall cause Guarantor and any Affiliates thereof (the "LODGIAN
PARTIES") to cooperate, with all reasonable requests of Lender in connection
with any Loan Modification including, without limitation (x) execution and
delivery of such documents as shall reasonably be required by Lender in
connection therewith (including amended and restated notes, amended and restated
loan agreements, replacement Mortgages, replacement Assignments of Leases, and
ratifications by Guarantor of any of its obligations under any guaranties or
indemnities provided under the Mortgage Loan or the Mezzanine Loan), and (y)
adjustment of each Cap (as such term is defined in the Mortgage Loan Agreement
and the Mezzanine Loan Agreement) such that, following adjustment of the
principal amount of the Mortgage Loan and the Mezzanine Loan pursuant to the
terms hereof, (i) the Cap delivered in connection with the Mortgage Loan shall
have a notional amount equal to the then outstanding principal balance of the
Mortgage Loan, and (ii) the Cap delivered (or, if none is required by Lender at
Closing, to be delivered) in connection with the Mezzanine Loan shall have a
notional amount equal to the then outstanding principal balance of the Mezzanine
Loan;
(c) The Mortgage Borrowers and the Mezzanine Borrower hereby
absolutely and irrevocably appoint Lender their true and lawful attorney coupled
with an interest, in their name and stead to make and execute all documents
necessary to effect the Loan Modification, provided, however, that Lender shall
not make or execute any such documents under such power until ten (10) days
after notice by Lender to Mortgage Borrowers and Mezzanine Borrower of such
intent to exercise its right under such power;
(d) At Lender's request, in connection with any Loan Modification
the Mortgage Borrowers and the Mezzanine Borrower shall deliver to Lender, at
the Mortgage Borrowers' and the Mezzanine Borrower's expense, replacement
opinion letters in form and
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substance similar to the opinion letters delivered on the Closing Date addressed
to any subsequent holders of the Mortgage Loan or the Mezzanine Loan or any
interest therein (including, without limitation, each trustee holding the
Mortgage Loan or the Mezzanine Loan) with respect to any opinion letter
delivered in connection with the Mortgage Loan and the Mezzanine Loan;
(e) Lender shall pay all reasonable out-of-pocket costs and expenses
incurred by the Mortgage Borrowers and the Mezzanine Borrower in connection with
a Loan Modification (other than the Mortgage Borrowers', Mezzanine Borrower's
and Guarantor's internal costs and expenses, and the costs and expenses of their
respective counsel, mortgage recording fees and taxes, required endorsements, if
any, to the Title Policies (as such term is defined in the Mortgage Loan
Agreement and the Mezzanine Loan Agreement), and costs incurred in adjusting
each Cap).
Section 2. Capitalized Terms; Notices. Capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Mortgage Loan Agreement. Any notices, requests, demands or other communications
required or permitted hereunder shall be delivered as specified in the Mortgage
Loan Agreement and the Mezzanine Loan Agreement.
Section 3. Event of Default. It shall be an Event of Default under
the Mortgage Loan and the Mezzanine Loan if any of the Mortgage Borrowers, the
Mezzanine Borrower, or the Lodgian Parties fail to comply with any of the terms,
covenants or conditions of this Agreement within ten (10) Business Days after
receipt of written request from Lender.
Section 4. Governing Law. This Agreement shall be governed,
construed, applied and enforced in accordance with the laws of the State of New
York and the applicable laws of the United States of America.
Section 5. No Oral Change. This Agreement, and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of the Mortgage
Borrowers, the Mezzanine Borrower, Guarantor, or Lender, but only by an
agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
Section 6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Mortgage Borrowers, the Mezzanine Borrower,
Guarantor, and Lender and their respective successors and assigns forever.
Section 7. Inapplicable Provisions. If any term, covenant or
condition of this Agreement is held to be invalid, illegal or unenforceable in
any respect, this Agreement shall be construed without such provision.
Section 8. Headings, etc. The headings and captions of various
paragraphs of this Agreement are for convenience of reference only and are not
to be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
Section 9. Duplicate Originals, Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be
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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.
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IN WITNESS WHEREOF the undersigned have executed this Cooperation
Agreement as of the date and year first written above.
LENDER:
MERRILL LYNCH MORTGAGE
LENDING, INC.
By: ____________________________________
Name:
Title:
[signatures continue on next page]
MEZZANINE BORROWER:
[LODGIAN MEZZANINE ENTITY, LLC]
By: ____________________________
Name:
Title:
MORTGAGE BORROWERS:
[LODGIAN ENTITIES]
By: _____________________________
Name: Daniel E. Ellis
Title: Vice President and Secretary,
or Authorized Signatory for
each of the entities listed
above
GUARANTOR:
LODGIAN, INC.
By: ____________________________
Name:
Title: