CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT

 

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                                                               EXHIBIT 10.24.2.1

 

                                                                          POOL 1

 

                CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT

 

      THIS CROSS-COLLATERALIZATION AND COOPERATION AGREEMENT (this "Agreement")

is made as of the 17th day of June, 2005, by and between the Borrowers listed on

the signature page hereof (collectively, the "Pool 1 Borrowers") and MERRILL

LYNCH MORTGAGE LENDING, INC., in its capacity as mortgage lender ("Lender").

 

                                    RECITALS

 

      A. The Borrowers, under that certain Promissory Note of even date herewith

given to Lender ("Note 1"), are indebted to Lender in the original principal sum

of $80,140,000 ("Loan 1") as governed by that certain Loan Agreement of even

date herewith between the Borrowers and Lender (together with all extensions,

renewals, modifications, substitutions and amendments thereof, "Loan Agreement

1").

 

      B. The Borrowers identified on Schedule 1 as the "Pool 2 Borrowers"

(collectively, the "Pool 2 Borrowers"), under that certain Promissory Note of

even date herewith given to Lender ("Note 2"), are indebted to Lender in the

original principal sum of $81,560,000 ("Loan 2") as governed by that certain

Loan Agreement of even date herewith between the Pool 2 Borrowers and Lender

(together with all extensions, renewals, modifications, substitutions and

amendments thereof, "Loan Agreement 2").

 

      C. The Borrowers identified on Schedule 1 as the "Pool 3 Borrowers"

(collectively, the "Pool 3 Borrowers") under that certain Promissory Note of

even date herewith given to Lender ("Note 3"), are indebted to Lender in the

original principal sum of $82,615,000 ("Loan 3") as governed by that certain

Loan Agreement of even date herewith between the Pool 3 Borrowers and Lender

(together with all extensions, renewals, modifications, substitutions and

amendments thereof, "Loan Agreement 3").

 

      D. The Borrowers identified on Schedule 1 as the "Pool 4 Borrowers"

(collectively, the "Pool 4 Borrowers"), under that certain Promissory Note of

even date herewith given to Lender ("Note 4"), are indebted to Lender in the

original principal sum of $50,200,000 ("Loan 4") as governed by that certain

Loan Agreement of even date herewith between the Pool 4 Borrowers and Lender

(together with all extensions, renewals, modifications, substitutions and

amendments thereof, "Loan Agreement 4").

 

      E. The Borrowers identified on Schedule 1 as the "Pool 5 Borrowers"

(collectively, the "Pool 5 Borrowers"), under that certain Promissory Note of

even date herewith given to Lender ("Note 5"), are indebted to Lender in the

original principal sum of $43,490,000 ("Loan 5") as governed by that certain

Loan Agreement of even date herewith between the Pool 5 Borrowers and Lender

(together with all extensions, renewals, modifications, substitutions and

amendments thereof, "Loan Agreement 5").

 

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      F. The Borrowers identified on Schedule 1 as the "Pool 6 Borrowers"

(collectively, the "Pool 6 Borrowers", and together with Pool 1 Borrowers, Pool

2 Borrowers, Pool 3 Borrowers, Pool 4 Borrowers and Pool 5 Borrowers,

collectively, the "Borrowers"), under that certain Promissory Note of even date

herewith given to Lender ("Note 6", and together with Note 1, Note 2, Note 3,

Note 4 and Note 5, collectively, the "Notes"), are indebted to Lender in the

original principal sum of $31,995,000 ("Loan 6", and together with Loan 1, Loan

2, Loan 3, Loan 4 and Loan 5, collectively, the "Loans") as governed by that

certain Loan Agreement of even date herewith between the Pool 6 Borrowers and

Lender (together with all extensions, renewals, modifications, substitutions and

amendments thereof, "Loan Agreement 6", and together with Loan Agreement 1, Loan

Agreement 2, Loan Agreement 3, Loan Agreement 4 and Loan Agreement 5,

collectively, the "Loan Agreements").

 

      G. Loan 1, Loan 2, Loan 3, Loan 4, Loan 5 and Loan 6 are secured, in part,

by Mortgages (as defined in the Loan Agreements) on the Properties in the

respective pools of Properties identified on Schedule 2 (each, a "Pool", and

collectively, the "Pools"). Each of such Properties is referred to herein as a

"Property" and, collectively, as the "Properties". The Properties in each Pool

are referred to, respectively, as the "Pool 1 Properties", "Pool 2 Properties",

"Pool 3 Properties", "Pool 4 Properties", "Pool 5 Properties" and "Pools 6

Properties".

 

      H. Lender has required as a condition to making the Loans that the

Borrowers enter into this Agreement with Lender.

 

                                    AGREEMENT

 

      For ten ($10) dollars and other good and valuable consideration, the

receipt and adequacy of which is hereby acknowledged, the parties hereto agree

as follows:

 

      Section 1. Cross Collateralization Within Pool; Contribution.

 

                  (a) Each Pool 1 Borrower acknowledges that Lender is making

Loan 1 to the Pool 1 Borrowers upon the security of its collective interest in

the Pool 1 Properties and in reliance upon the aggregate of the Pool 1

Properties taken together being of greater value as collateral security than the

sum of each Pool 1 Property taken separately. Each Pool 1 Borrower agrees that

each Mortgage of a Pool 1 Property is and will be cross-collateralized and

cross-defaulted with each other Mortgage of a Pool 1 Property so that (i) an

Event of Default which continues beyond the expiration of any applicable notice

and cure periods under any of such Mortgages shall constitute an Event of

Default under each of the other such Mortgages securing the related Note; (ii)

an Event of Default which continues beyond the expiration of any applicable

notice and cure periods under the related Loan Agreement or this Agreement shall

constitute an Event of Default under each such Mortgage; (iii) each such

Mortgage shall constitute security for the related Note as if a single blanket

lien were placed on all of the Pool 1 Properties as security

 

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for Note 1; and (iv) such cross-collateralization shall in no event be deemed to

constitute a fraudulent conveyance.

 

                  (b) Without limitation to any other right or remedy provided

to Lender in this Agreement or any of the other Loan Documents, each Pool 1

Borrower covenants and agrees that (i) Lender shall have the right to pursue all

of its rights and remedies in one proceeding, or separately and independently in

separate proceedings which it, as Lender, in its sole and absolute discretion,

shall determine from time to time, (ii) Lender is not required to either

marshall assets, sell any or all of the Collateral in any inverse order or

alienation, or be subjected to any "one action" or "election of remedies" law or

rule, (iii) the exercise by Lender of any remedies against any of the Collateral

will not impede Lender from subsequently or simultaneously exercising remedies

against any other Collateral, (iv) all Liens and other rights, remedies and

privileges provided to Lender in this Agreement and/or any other Loan Documents

otherwise shall remain in full force and effect until Lender has exhausted all

of its remedies against the Collateral and all the Collateral has been

foreclosed, sold and/or otherwise realized upon and (v) each Pool 1 Property and

all Collateral as defined in Loan Agreement 1 shall be security for the

performance of all each Pool 1 Borrower's obligations hereunder and under each

of the other Loan Documents.

 

                  (c) As a result of the transactions contemplated by this

Agreement, each Pool 1 Borrower will benefit, directly and indirectly, from the

obligation of each other Pool 1 Borrower to pay the related Indebtedness and

perform its obligations hereunder and under the other related Loan Documents and

in consideration therefore each Pool 1 Borrower desires to enter into an

allocation and contribution agreement among themselves as set forth in this

Section 1(c) to allocate such benefits among themselves and to provide a fair

and equitable agreement to make contributions among each Pool 1 Borrower in the

event any payment is made by any individual Pool 1 Borrower under the Loan

Documents to Lender (such payment being referred to herein as a "Contribution",

and for purposes of this Section, includes any exercise of recourse by Lender

against any Collateral of a Pool 1 Borrower and application of proceeds of such

Collateral in satisfaction of such Borrower's obligations, to Lender under the

Loan Documents).

 

                        (i) Each Pool 1 Borrower shall be liable under the

      related Loan Documents with respect to the related Indebtedness only for

      such total maximum amount (if any) that would not render its Indebtedness

      under the related Loan Agreement or under any of the Loan Documents

      subject to avoidance under Section 548 of the Federal Bankruptcy Code or

      any comparable provisions of any state law.

 

                        (ii) In order to provide for a fair and equitable

      contribution among Pool 1 Borrowers in the event that any Contribution is

      made by an individual Pool 1 Borrower (a "Funding Borrower"), such Funding

      Borrower shall be entitled to a reimbursement Contribution ("Reimbursement

      Contribution") from all other Pool 1 Borrowers for all payments, damages

      and expenses incurred by that Funding Borrower in discharging any of the

      Indebtedness, in the manner and to the extent set forth in this Section.

 

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                        (iii) For purposes hereof, the "Benefit Amount" of any

      individual Pool 1 Borrower as of any date of determination shall be the

      net value of the benefits to such Borrower from extensions of credit made

      by Lender to (A) such Borrower and (B) to the other Pool 1 Borrowers under

      the related Loan Documents.

 

                        (iv) Each Pool 1 Borrower shall be liable to a Funding

      Borrower in an amount equal to the (A) ratio of the Benefit Amount of such

      Borrower to the total amount of related Indebtedness, multiplied by (B)

      the amount of such Indebtedness paid by such Funding Borrower.

 

                        (v) In the event that at any time there exists more than

      one Funding Borrower with respect to any Contribution (in any such case,

      the "Applicable Contribution"), then Reimbursement Contributions from

      other Pool 1 Borrowers pursuant hereto shall be allocated among such

      Funding Borrowers in proportion to the total amount of the Contribution

      made for or on account of the other Pool 1 Borrowers by each such Funding

      Borrower pursuant to the Applicable Contribution. In the event that at any

      time any Pool 1 Borrower pays an amount hereunder in excess of the amount

      calculated pursuant to this Section 1 above, that Borrower shall be deemed

      to be a Funding Borrower to the extent of such excess and shall be

      entitled to a Reimbursement Contribution from the other Pool 1 Borrowers

      in accordance with the provisions of this Section.

 

                        (vi) Each Pool 1 Borrower acknowledges that the right to

      Reimbursement Contribution hereunder shall constitute an asset in favor of

      such Borrower to which such Reimbursement Contribution is owing.

 

                        (vii) No Reimbursement Contribution payments payable by

      a Pool 1 Borrower pursuant to the terms of this Section 1 shall be paid

      until all amounts then due and payable by all Pool 1 Borrowers to Lender,

      pursuant to the terms of the related Loan Documents, are paid in full in

      cash. Nothing contained in this Section 1 shall limit or affect in any way

      the Indebtedness of any Pool 1 Borrower to Lender under the Note or any

      other Loan Documents.

 

                        (viii) Each Pool 1 Borrower waives:

 

                        (A) any right to require Lender to proceed against any

other Borrower or any other person or to proceed against or exhaust any security

held by Lender at any time or to pursue any other remedy in Lender's power

before proceeding against Borrower;

 

                        (B) any defense based upon any legal disability or other

defense of any other Borrower, any guarantor of any other person or by reason of

the cessation or limitation of the liability of any other Borrower or any

guarantor from any cause other than full payment of all sums payable under the

Notes, this Agreement and any of the other Loan Documents;

 

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                        (C) any defense based upon any lack of authority of the

officers, directors, partners or agents acting or purporting to act on behalf of

any other Borrower or any principal of any other Borrower or any defect in the

formation of any other Borrower or any principal of any other Borrower;

 

                        (D) any defense based upon any statute or rule of law

which provides that the obligation of a surety must be neither larger in amount

nor in any other respects more burdensome than that of a principal;

 

                        (E) any defense based upon any failure by Lender to

obtain collateral for the Indebtedness or failure by Lender to perfect a lien on

any Collateral;

 

                        (F) presentment, demand, protest and notice of any kind;

 

                        (G) any defense based upon any failure of Lender to give

notice of sale or other disposition of any collateral to any other Borrower or

to any other person or entity or any defect in any notice that may be given in

connection with any sale or disposition of any Collateral;

 

                        (H) any defense based upon any failure of Lender to

comply with applicable laws in connection with the sale or other disposition of

any Collateral, including any failure of Lender to conduct a commercially

reasonable sale or other disposition of any Collateral;

 

                        (I) any defense based upon any use of cash collateral

under Section 363 of the Federal Bankruptcy Code;

 

                        (J) any defense based upon any agreement or stipulation

entered into by Lender with respect to the provision of adequate protection in

any bankruptcy proceeding;

 

                         (K) any defense based upon any borrowing or any grant of

a security interest under Section 364 of the Federal Bankruptcy Code;

 

                        (L) any defense based upon the avoidance of any security

interest in favor of Lender for any reason;

 

                        (M) any defense based upon any bankruptcy, insolvency,

reorganization, arrangement, readjustment of debt, liquidation or dissolution

proceeding, including any discharge of, or bar or stay against collecting, all

or any of the obligations evidenced by the Notes or owing under any of the Loan

Documents;

 

                        (N) any defense or benefit based upon such Borrower's,

or any other party's, resignation of the portion of any obligation secured by

the Mortgages to be satisfied by any payment from any other Borrower or any such

party;

 

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                        (O) all rights and defenses arising out of an election

of remedies by Lender even though the election of remedies, such as non-judicial

foreclosure with respect to security for the Loan or any other amounts owing

under the Loan Documents, has destroyed Borrower's rights of subrogation and

reimbursement against any other Borrower;

 

                        (P) all rights and defenses that such Borrower may have

because any Indebtedness is secured by real property. This means, among other

things: (1) Lender may collect from such Borrower without first foreclosing on

any real or personal property collateral pledged by any other Borrower, (2) if

Lender forecloses on any real property collateral pledged by any other Borrower,

(I) the amount of the Indebtedness may be reduced only by the price for which

that collateral is sold at the foreclosure sale, even if the collateral is worth

more than the sale price, (II) Lender may collect from such Borrower even if any

other Borrower, by foreclosing on the real property collateral, has destroyed

any right such Borrower may have to collect from any other Borrower. This is an

unconditional and irrevocable waiver of any rights and defenses such Borrower

may have because any of the Indebtedness is secured by real property; and

 

                        (Q) except as may be expressly and specifically

permitted herein, any claim or other right which such Borrower might now have or

hereafter acquire against any other Borrower or any other person that arises

from the existence or performance of any obligations under the Notes, this

Agreement or the other Loan Documents, including any of the following: (i) any

right of subrogation, reimbursement, exoneration, contribution, or

indemnification; or (ii) any right to participate in any claim or remedy of

Lender against any other Borrower or any collateral security therefore, whether

or not such claim, remedy or right arises in equity or under contract, statute

or common law.

 

      Section 2. Cross-Collateralization Across Pools; Contribution; Release of

Cross-Collateralization.

 

                  (a) Until repayment of the Indebtedness under each Loan

Agreement and satisfaction of all obligations under each Loan Agreement, each

Pool 1 Borrower acknowledges and agrees (subject to Lender's election(s) at

Lender's sole discretion from time to time or otherwise pursuant to Section 2(g)

below): (i) that each of the Pool 1 Properties shall secure not only Loan 1 but

also all of the other Loans, and that the Liens of the related Loan Documents

shall constitute Liens securing not only Loan 1 but also all of the other Loans;

and (ii) that Lender would not make the Loans to the Pool 1 Borrowers unless the

Pool 1 Borrowers granted liens on the Pool 1 Properties to secure the payment of

each of the Loans.

 

                  (b) Until the date that all of the Loans shall have been paid

and satisfied in full, the Pool 1 Borrowers (i) shall have no right of

subrogation with respect to the Loans and (ii) waive any right to enforce any

remedy which Lender now has or may hereafter have against the Borrowers, any

endorser or any guarantor of all or any part of the Loans or any other

individual or entity, and the Pool 1 Borrowers waive any benefit of, and any

right to participate in, any security or collateral given to Lender to secure

the payment or performance of all or any part of the Loans or any other

liability of any of the other Borrowers to Lender. Should

 

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any Pool 1 Borrower have the right, notwithstanding the foregoing, to exercise

its subrogation rights, each Pool 1 Borrower hereby expressly and irrevocably

(1) subordinates any and all rights at law or in equity to subrogation,

reimbursement, exoneration, contribution, indemnification or set off that such

Borrower may have to the payment in full in cash of the Loans and (2) waives any

and all defenses available to a surety, guarantor or accommodation co-obligor

until the Loans are paid in full in cash. Each Pool 1 Borrower acknowledges and

agrees that this subordination is intended to benefit