EX-10.4.8 40 g90366exv10w4w8.txt EX-10.4.8 COOPERATION AGREEMENT DATED JUNE 25, 2004 EXHIBIT 10.4.8 COOPERATION AGREEMENT THIS COOPERATION AGREEMENT (this "AGREEMENT") is made as of the 25 day of June, 2004, by and between the Mortgage Borrowers listed on the signature page hereof (collectively, the "MORTGAGE BORROWERS"), Lodgian Mezzanine Fixed, 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 identified on Schedule 1 as the "Pool 1 Borrowers" (collectively, the "POOL 1 BORROWERS"), by that certain Promissory Note of even date herewith given to Lender ("MORTGAGE NOTE 1"), are indebted to Lender in the original principal sum of $63,801,000 ("MORTGAGE LOAN 1") as governed by that certain Loan and Security Agreement of even date herewith between the Pool 1 Borrowers and Lender (together with all extensions, renewals, modifications, substitutions and amendments thereof, "MORTGAGE LOAN AGREEMENT 1"). B. The Mortgage Borrowers identified on Schedule 1 as the "Pool 2 Borrowers" (collectively, the "POOL 2 BORROWERS"), by that certain Promissory Note of even date herewith given to Lender ("MORTGAGE NOTE 2"), are indebted to Lender in the original principal sum of $67,864,000 ("MORTGAGE LOAN 2") as governed by that certain Loan and Security Agreement of even date herewith between the Pool 2 Borrowers and Lender (together with all extensions, renewals, modifications, substitutions and amendments thereof, "MORTGAGE LOAN AGREEMENT 2"). C. The Mortgage Borrowers identified on Schedule 1 as the "Pool 3 Borrowers" (collectively, the "POOL 3 BORROWERS") by that certain Promissory Note of even date herewith given to Lender ("MORTGAGE NOTE 3"), are indebted to Lender in the original principal sum of $66,818,500 ("MORTGAGE LOAN 3") as governed by that certain Loan and Security Agreement of even date herewith between the Pool 3 Borrowers and Lender (together with all extensions, renewals, modifications, substitutions and amendments thereof, "MORTGAGE LOAN AGREEMENT 3"). D. The Mortgage Borrowers identified on Schedule 1 as the "Pool 4 Borrowers" (collectively, the "POOL 4 BORROWERS"), by that certain Promissory Note of even date herewith given to Lender ("MORTGAGE NOTE 4", and together with Mortgage Note 1, Mortgage Note 2, and Mortgage Note 3, collectively, the "MORTGAGE NOTES"), are indebted to Lender in the original principal sum of $61,516,500 ("MORTGAGE LOAN 4", and together with Mortgage Loan 1, Mortgage Loan 2, and Mortgage Loan 3, collectively, the "MORTGAGE LOANS") as governed by that certain Loan and Security Agreement of even date herewith between the Pool 4 Borrowers and Lender (together with all extensions, renewals, modifications, substitutions and amendments thereof, "MORTGAGE LOAN AGREEMENT 4", and together with Mortgage Loan Agreement 1, Mortgage Loan Agreement 2, and Mortgage Loan Agreement 3, collectively, the "MORTGAGE LOAN AGREEMENTS"). [Fixed Loan] E. Mortgage Loan 1, Mortgage Loan 2, Mortgage Loan 3, and Mortgage Loan 4 are secured, in part, by Mortgages on the respective pools of Properties identified on Schedule 2 (each, a "POOL", and collectively, the "POOLS"). F. 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 One Hundred and No/100 ($100.00) (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"). G. Lender has required as a condition to making the Mortgage Loans 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 Loans and Mezzanine Loan/Loan Modification. Lender shall have the right in its sole discretion, at any time prior to the final Securitization of the last of the Mortgage Loans to be securitized, to cause any of the following to occur (each, a "LOAN MODIFICATION"): (1) separately adjust the principal amount and applicable interest rates of any of the Mortgage Loans and the Mezzanine Loan, provided that (i) the aggregate principal amount of the Mortgage Loans and the Mezzanine Loan immediately after such adjustment shall equal the aggregate outstanding principal balance of the Mortgage Loans and the Mezzanine Loan immediately prior to such adjustment, (ii) the weighted average interest rate of the Mortgage Loans and the Mezzanine Loan immediately after such adjustment shall equal the weighted average interest rate which was applicable to the Mortgage Loans and the Mezzanine Loan immediately prior to such adjustment, (iii) the aggregate debt service payments on the Mortgage Loans and the Mezzanine Loan immediately after such adjustment shall equal the aggregate debt service payments which were due under the Mortgage Loans and the Mezzanine Loan immediately prior to such adjustment, and (iv) the other material terms and provisions of each of the Mortgage Loans 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; and/or (2) cause any of the Properties in any one or more of the Pools to become Collateral for any other Pool. Any Loan Modification shall be subject to the following: 2 (a) (i) 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 Notes (in an amount and as designated by Lender), and the Lender under the Mortgage Notes will accept such prepayment without penalty, premium or additional costs (except as provided herein) to the Mortgage Borrowers; (ii) If Lender elects to increase the principal amount of the Mortgage Loans, or any of them, 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, 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); and (iii) If Lender elects to increase the principal amount of any of the Mortgage Loans and decrease the amount of any of the other Mortgage Loans, the applicable Mortgage Borrowers shall distribute to the Mezzanine Borrower such additional loan proceeds and the Mezzanine Borrower shall contribute to the applicable Mortgage Borrowers (whose Mortgage Loans are to be decreased) such additional loan proceeds to be applied to repay, dollar for dollar, the applicable Mortgage Notes, and the Lender under the applicable Mortgage Notes will accept such prepayment without penalty, premium or additional costs to the Mortgage Borrowers (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) transfers of one or more Properties among the Mortgage Borrowers, to the extent required to comply with the terms of Article IX of the Mortgage Loan Agreements; (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 any 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' expense, replacement opinion letters in form and substance similar to the opinion letters delivered on the Closing Date addressed to any subsequent holders of any of the Mortgage Loans or the Mezzanine Loan or any interest therein (including, without limitation, each trustee holding any of the Mortgage Loans or the Mezzanine Loan) with respect to any opinion letter delivered in connection with the Mortgage Loans and the Mezzanine Loan; 3 (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 Property transfer costs). Section 2. Capitalized Terms; Notices. Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Mortgage Loan Agreements. Any notices, requests, demands or other communications required or permitted hereunder shall be delivered as specified in the Mortgage Loan Agreements and the Mezzanine Loan Agreement. Section 3. Event of Default. It shall be an Event of Default under the Mortgage Loans 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 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. [NO FURTHER TEXT ON THIS PAGE] 4 IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date and year first written above. LENDER: MERRILL LYNCH MORTGAGE LENDING, INC. By: /s/ Robert Spinna --------------------------- Name: Robert Spinna Title: Vice President [signatures continue on next page] [Fixed Loan]] MEZZANINE BORROWER: LODGIAN MEZZANINE FIXED, LLC By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary MORTGAGE BORROWERS: IMPAC HOTELS I, L.L.C. LODGIAN DENVER LLC LODGIAN HOTELS FIXED I, LLC MACON HOTEL ASSOCIATES, L.L.C. SERVICO NORTHWOODS, INC. By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory for each of the entities listed above ALBANY HOTEL, INC. APICO INNS OF GREEN TREE, INC. LODGIAN AUGUSTA LLC LODGIAN HOTELS FIXED II, INC. LODGIAN LAFAYETTE LLC LODGIAN TULSA LLC By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory for each of the entities listed above AMI OPERATING PARTNERS, L.P. By: AMIOP ACQUISITION GENERAL PARTNER SPE CORP., a Delaware corporation, its general partner By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory DEDHAM LODGING ASSOCIATES I, LIMITED PARTNERSHIP By: DEDHAM LODGING SPE, INC., a Delaware corporation, its general partner By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory LODGIAN AMI, INC. LODGIAN HOTELS FIXED III, LLC MINNEAPOLIS MOTEL ENTERPRISES, INC. By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory for each of the entities listed above SERVICO CENTRE ASSOCIATES, LTD. By: SERVICO PALM BEACH GENERAL PARTNER SPE, INC., a Delaware corporation, its general partner By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory LODGIAN FAIRMONT LLC NH MOTEL ENTERPRISES, INC. SERVICO COLUMBIA, INC. SERVICO HOUSTON, INC. By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory for each of the entities listed above LITTLE ROCK LODGING ASSOCIATES I, LIMITED PARTNERSHIP By: LODGIAN LITTLE ROCK SPE, INC., a Delaware corporation, its general partner By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory LODGIAN HOTELS FIXED IV, L.P. By: LODGIAN HOTELS FIXED IV GP, INC., a Delaware corporation, its general partner By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary, or Authorized Signatory GUARANTOR: LODGIAN, INC. By: /s/ Daniel E. Ellis --------------------------- Name: Daniel E. Ellis Title: Senior Vice President SCHEDULE 1 MORTGAGE BORROWERS Pool 1 Borrowers Lodgian Hotels Fixed I, LLC Macon Hotel Associates, L.L.C. Servico Northwoods, Inc. Impac Hotels I, L.L.C. Lodgian Denver LLC Pool 2 Borrowers AMI Operating Partners, L.P. Albany Hotel, Inc. Apico Inns of Green Tree, Inc. Lodgian Tulsa LLC Lodgian Augusta LLC Lodgian Lafayette LLC Dedham Lodging Associates I, Limited Partnership Lodgian Hotels Fixed II, Inc. Pool 3 Borrowers Minneapolis Motel Enterprises, Inc. Servico Centre Associates, Ltd. Lodgian Hotels Fixed III, LLC - Lodgian AMI, Inc. Pool 4 Borrowers NH Motel Enterprises, Inc. Servico Columbia, Inc. Lodgian Fairmont LLC Little Rock Lodging Associates I, Limited Partnership Lodgian Hotels Fixed IV, L.P. Servico Houston, Inc. [Fixed Loan] SCHEDULE 2 PROPERTIES Pool 1 Marriott - Aurora Courtyard by Marriott - Atlanta Doubletree Club - Philadelphia Holiday Inn Select - Strongsville Crowne Plaza - Macon Holiday Inn - Marietta Holiday Inn - Lancaster Clarion - North Charleston Pool 2 Crowne Plaza - Albany Holiday Inn - Linthicum Residence Inn - Dedham Courtyard by Marriott - Tulsa Courtyard by Marriott - Lafayette Holiday Inn - Pittsburgh Marriott Fairfield Inn - Augusta Holiday Inn - York Holiday Inn - E. Hartford Pool 3 Holiday Inn - Baltimore Crowne Plaza - West Palm Beach Holiday Inn - Glen Burnie Courtyard by Marriott - Bentonville Holiday Inn - Towson Holiday Inn - St. Paul Courtyard by Marriott - Florence Holiday Inn SunSpree - Surfside Beach Marriott Fairfield Inn - Merrimack Pool 4 Crowne Plaza - Houston Hilton - Columbia Hilton - Troy Holiday Inn Select - Irving Residence Inn - Little Rock Holiday Inn - Frederick Courtyard by Marriott - Paducah Courtyard by Marriott - Abilene Holiday Inn - Fairmont