Cross-default language

Borrower Affiliate Language, Cross-Default and Cross-Collateralization

1. GoDocs has two categories that addresses this concept. GoDocs’ loan documentation platform offers an automated UI feature with many options to properly document cross-default and cross-collateralization provisions. More specifically, GoDocs' cross-default and cross-collateralization UI feature allows lenders to tailor either or both provisions for their specific needs and subject transactions and, thus, offers greater lender protections for enforcement over generic provisions.:
   1. Cross-Default Language: F.1 of the GoDocs Loan Agreement addresses the cross-default language in that an event of default under any other loans held by Borrower/Borrower Affiliate and with Lender triggers an event of default under the Lender Loan.
      1. “F.1(i) any event or condition occurs that results in any other indebtedness (i.e. indebtedness other than the Indebtedness secured by the Mortgage), whether now existing or hereafter arising, owing by Borrower or any Borrower Affiliate (as defined below) to Lender becoming due prior to its scheduled maturity or that enables or permits (after the lapse of any applicable cure period) Lender or any trustee or agent on its behalf to cause such indebtedness to become due prior to its scheduled maturity ("Borrower Affiliate" means (i) any entity owned or controlled by Borrower, (ii) any entity commonly owned or controlled by the members or owners of Borrower, (iii) any Guarantor and (iv) any entity owned or controlled by one or more Guarantors);”
      2. The definition of "Lender" includes "subsequent holder(s) of the Note" as seen here -> "Lender" means the Person or Persons identified as "Lender" in the first paragraph of this Loan Agreement, or any subsequent holder(s) of the Note.”
   2. Cross-Collateralization Language: Applies to all future loans, and, to the extent enforceable (e.g., some states require cross-collateralized indebtedness to be specifically identified and memorialized in writing), all current loans. The following can be added as section H.15 of the GoDocs Loan Agreement.
      1. “Cross-Collateralization. Any loans, obligations, liabilities or indebtedness of Borrower or any Borrower Affiliate to Lender, whether now existing or hereafter arising, shall, at Lender’s sole option, be cross-collateralized with this Loan, and to the extent such cross-collateralization requires amendments or modifications to the Loan Documents, Borrower agrees to cooperate in good faith with Lender to accomplish such amendments and/or modifications.”
      2. To best protect its interests, Lender should still utilize GoDoc's UI option to specifically identify any existing collateral being cross-collateralized/cross-defaulted at the time of closing. This will separately trigger any necessary references to cross-collateralized loans.

Specific Cross-Default / Cross-Collateralization Provisions 

The Specific cross-collateralize is not to be used for a first or second mortgage for the same property. Such loans are already collateralized by the same collateral.

General Cross-Default / Cross-Collateralization Provisions : general provision in tandem with the Specific Cross-Default Provision above. 

• • H.16. Cross-Default and Cross-Collateralization.
    • (a)   Borrower acknowledges and agrees that a default under the terms and conditions of any other loans, obligations, liabilities or indebtedness of Borrower, whether now existing or hereafter arising, with Lender or any other lender, including the other indebtedness described in section F.1(i) above, shall be deemed to be a default under the terms and conditions of the Note and this Loan Agreement, and the property or properties collateralizing the other loans, obligations, liabilities or indebtedness of Borrower shall act as collateral for the Loan, for as long as any one holder of the Note holds both the Note and the notes or other security instruments evidencing those other loans, obligations or indebtedness with Borrower
    • (b)    Any other loans, obligations, liabilities or indebtedness of Borrower to Lender, whether now existing or hereafter arising, shall, at Lender’s sole option, be cross-collateralized with the Loan, and to the extent such cross-collateralization requires amendments or modifications to the Loan Documents, Borrower agrees to cooperate in good faith with Lender to accomplish such amendments and/or modifications.