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EXHIBIT 10.5
LIMITED GUARANTY AGREEMENT
THIS LIMITED GUARANTY AGREEMENT (this "Agreement") is made and given
as of this 8 day of January, 1997, by WYNDHAM HOTEL CORPORATION, a Delaware
corporation (the "Guarantor"), for the benefit of HPTSLC CORPORATION, a
Delaware corporation, and HOSPITALITY PROPERTIES TRUST, a Maryland real estate
investment trust (collectively, together with their successors and assigns,
"HPT").
W I T N E S S E T H :
WHEREAS, pursuant to a Lease Agreement, dated as of the date hereof
(the "Lease"), HPTSLC Corporation has agreed to lease to WHC Salt Lake City
Corporation, a Delaware corporation (the "Tenant"), certain real property, the
related improvements and personal property, located in Salt Lake City, Utah, as
more particularly described in the Lease; and
WHEREAS, it is a condition precedent to HPTSLC Corporation's entering
into the Lease that the Guarantor guarantee all of the payment and performance
obligations of the Tenant with respect to the Lease; and
WHEREAS, the transactions contemplated by the Lease are of direct
material benefit to the Guarantor;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the mutual receipt and legal sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Terms. Capitalized terms used and not otherwise
defined in this Agreement shall have the meanings ascribed to such terms in the
Lease. The Lease and the Incidental Documents are herein referred collectively
referred to as the "Transaction Documents."
2. Guaranteed Obligations. For purposes of this Agreement, the
term "Guaranteed Obligations" shall mean the payment and performance of each
and every obligation of the Tenant to HPT, whether under the Transaction
Documents, or otherwise, whether now existing or hereafter arising, and
including, without limitation, the payment of the full amount of the Rent
payable under the Lease.
3. Representations and Covenants. The Guarantor represents,
warrants, covenants and agrees that:
3.1 Performance of Covenants and Agreements. The
Guarantor will cause the Tenant duly and punctually to perform all of the
covenants and agreements set forth in the Transaction Documents.
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3.2 Validity of Agreement. The Guarantor has duly and
validly executed and delivered this Agreement; this Agreement constitutes the
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms; and the execution, delivery and
performance of this Agreement have been duly authorized by all requisite action
of the Guarantor and such execution, delivery and performance by the Guarantor
will not result in any breach of the terms, conditions or provisions of, or
conflict with or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon any of the property or assets of the Guarantor
pursuant to the terms of, any indenture, mortgage, deed of trust, note, other
evidence of indebtedness, agreement or other instrument to which the Guarantor
may be a party or by which the Guarantor or any property or assets of the
Guarantor may be bound, or violate any provision of law, or any applicable
order, writ, injunction, judgement or decree of any court or any order or other
public regulation of any governmental commission, bureau or administrative
agency.
3.3 Payment of Expenses. The Guarantor agrees, as
principal obligor and not as Guarantor only, to pay to HPT forthwith, upon
demand, in immediately available Federal funds, all costs and expenses
(including court costs and reasonable legal expenses) incurred or expended by
HPT in connection with the enforcement of this Agreement, together with
interest on amounts recoverable under this Agreement from the time such amounts
become due until payment at the Disbursement Rate, but recourse therefor shall
be limited as provided in Section 20.
3.4 Reports. The Guarantor shall promptly provide to HPT
each of the financial reports, certificates and other documents required of the
Guarantor under the Transaction Documents.
3.5 Legal Existence. The Guarantor shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence.
4. Guarantee. The Guarantor hereby unconditionally guarantees
that the Guaranteed Obligations which are monetary obligations shall be paid in
full when due and payable, whether upon demand, at the stated or accelerated
maturity thereof or upon any mandatory or voluntary prepayment pursuant to any
Transaction Document, or otherwise, and that the Guaranteed Obligations which
are performance obligations shall be fully performed at the times and in the
manner such performance is required by the Transaction Documents. With respect
to the Guaranteed Obligations which are monetary obligations, this guarantee is
a guarantee of payment and not of collectibility and is absolute and in no way
conditional or contingent. In case any part of the Guaranteed obligations shall
not have been paid when due and payable or performed at the time performance is
required, the Guarantor shall, within five (5) days after receipt of notice
from HPT, pay or cause to be paid to HPT the amount thereof as is then due and
payable and unpaid (including interest and other charges, if any, due thereon
through the date of payment in accordance with the applicable provisions of the
Transaction
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Documents) or perform or cause to be performed such obligations in accordance
with the Transaction Documents.
5. Unenforceability of Guaranteed Obligations, Etc. If the Tenant
is for any reason under no legal obligation to discharge any of the Guaranteed
Obligations, or if any other moneys included in the Guaranteed Obligations have
become unrecoverable from the Tenant by operation of law or for any other
reason, including, without limitation, the invalidity or irregularity in whole
or in part of any Guaranteed Obligation or of any Transaction Document or any
limitation on the liability of the Tenant thereunder or any limitation on the
method or terms of payment thereunder which may now or hereafter be caused or
imposed in any manner whatsoever, the guarantees contained in this Agreement
shall nevertheless remain in full force and effect and shall be binding upon
the Guarantor to the same extent as if the Guarantor at all times had been the
principal debtor on all such Guaranteed Obligations.
6. Additional Guarantees. This Agreement shall be in addition to
any other guarantee or other security for the Guaranteed Obligations and it
shall not be prejudiced or rendered unenforceable by the invalidity of any such
other guarantee or security or by any waiver, amendment, release or
modification thereof.
7. Consents and Waivers, Etc. The Guarantor hereby acknowledges
receipt of correct and complete copies of each of the Transaction Documents and
consents to all of the terms and provisions thereof, as the same may be from
time to time hereafter amended or changed in accordance therewith, and waives
(a) presentment, demand for payment, and protest of nonpayment, of any
principal of or interest on any of the Guaranteed Obligations, (b) notice of
acceptance of this Agreement and of diligence, presentment, demand and protest,
(c) notice of any default hereunder and any default, breach or nonperformance
or Event of Default under any of the Guaranteed Obligations or the Transaction
Documents, except as expressly provided in Section 4, (d) notice of the terms,
time and place of any private or public sale of collateral held as security for
the Guaranteed Obligations, (e) demand for performance or observance of, and
any enforcement of any provision of, or any pursuit or exhaustion of rights or
remedies against the Tenant or any other guarantor of the Guaranteed
Obligations, under or pursuant to the Transaction Documents, or any agreement
directly or indirectly relating thereto and any requirements of diligence or
promptness on the part of the holders of the Guaranteed Obligations in
connection therewith, and (f) to the extent the Guarantor lawfully may do so,
any and all demands and notices of every kind and description with respect to
the foregoing or which may be required to be given by any statute or rule of
law and any defense of any kind which it may now or hereafter have with respect
to this Agreement or any of the Transaction Documents or the Guaranteed
Obligations.
8. No Impairment, Etc. The obligations, covenants, agreements and
duties of the Guarantor under this Agreement shall not be affected or impaired
by any assignment or transfer in
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whole or in part of any of the Guaranteed Obligations without notice to the
Guarantor, or any waiver by HPT or any holder of any of the Guaranteed
Obligations or by the holders of all of the Guaranteed Obligations of the
performance or observance by the Tenant or any other guarantor of any of the
agreements, covenants, terms or conditions contained in the Guaranteed
Obligations or the Transaction Documents or any indulgence in or the extension
of the time for payment by the Tenant or any other guarantor of any amounts
payable under or in connection with the Guaranteed Obligations or the
Transaction Documents or any other instrument or agreement relating to the
Guaranteed Obligations or of the time for performance by the Tenant or any
other guarantor of any other obligations under or arising out of any of the
foregoing or the extension or renewal thereof, or the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the
Tenant or any other guarantor set forth in any of the foregoing, or the
voluntary or involuntary sale or other disposition of all or substantially all
the assets of the Tenant or any other guarantor or insolvency, bankruptcy, or
other similar proceedings affecting the Tenant or any other guarantor or any
assets of the Tenant or any such other guarantor, or the release or discharge
of the Tenant or any such other guarantor from the performance or observance of
any agreement, covenant, term or condition contained in any of the foregoing
without the consent of the holders of the Guaranteed Obligations by operation
of law, or any other cause, whether similar or dissimilar to the foregoing.
9. Reimbursement, Subrogation, Etc. The Guarantor hereby
covenants and agrees that the Guarantor will not enforce or otherwise exercise
any rights of reimbursement, subrogation, contribution or other similar rights
against the Tenant or any other person with respect to the Guaranteed
Obligations prior to the payment in full of all amounts owing with respect to
the Lease, and until all indebtedness of the Tenant to HPT shall have been paid
in full, the Guarantor shall not have any right of subrogation, and the
Guarantor waives any defense it may have based upon any election of remedies by
HPT which destroys the Guarantor's subrogation rights or the Guarantor's rights
to proceed against the Tenant for reimbursement, including, without limitation,
any loss of rights the Guarantor may suffer by reason of any rights, powers or
remedies of the Tenant in connection with any anti-deficiency laws or any other
laws limiting, qualifying or discharging the indebtedness to HPT. Until all
obligations of the Tenant pursuant to the Transaction Documents shall have been
paid and satisfied in full, the Guarantor further waives any right to enforce
any remedy which HPT now has or may in the future have against the Tenant, any
other guarantor or any other person and any benefit of, or any right to
participate in, any security whatsoever now or in the future held by HPT.
10. Defeasance. (a) Except as expressly provided in paragraph (b)
below, this Agreement shall terminate at such time as the Guaranteed
Obligations have been paid and performed in full and all other obligations of
the Guarantor to HPT under this Agreement have been satisfied in full;
provided, however, if at any time, all or any part of any payment applied on
account of the Guaranteed Obligations is or must be rescinded or returned
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for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of the Tenant), this Agreement, to the extent such
payment is or must be rescinded or returned, shall be deemed to have continued
in existence notwithstanding any such termination.
(b) Provided that (x) no monetary Default, Default as to which
Notice thereof has been previously given to Tenant or Event of Default shall
have occurred and be continuing under the Lease, (y) Cash Flow (as defined
below) for a period of twelve (12) consecutive months commencing on or after
January 1, 1998 equals or exceeds 1.4 times the aggregate Minimum Rent payable
with respect to such period, and (z) HPT shall receive a supplemental schedule
included with the audited financial statements evidencing the foregoing, in
form and substance reasonably satisfactory to HPT prepared by a, so-called,
"Big-Six" accounting firm or such other certified public accountants as are
reasonably satisfactory to HPT, this Agreement shall terminate ten (10)
Business Days after delivery to HPT of the financial statements described in
clause (z) preceding, and HPT shall, within thirty (30) days after the written
request of the Guarantor, confirm such termination by executing a release of
the Guarantor from all obligations and liabilities arising under this Agreement
subsequent to the release date and returning any unapplied balance of the
Guaranty Deposit (as hereinafter defined) to the Guarantor, together with any
accrued and unpaid interest thereon. In the event that the foregoing conditions
shall be satisfied except that HPT shall have previously given Notice of
Default pursuant to the Lease, provided that HPT shall determine that the
applicable Default can be cured by payment of a liquidated sum, HPT shall
refund, in accordance with the foregoing provisions, that portion of the
Guaranty Deposit, if any, in excess of such liquidated sum and HPT shall
thereafter hold such retained portion of the Guaranty Deposit in accordance
with this Agreement and pay the same to the Guarantor upon the curing of the
applicable Default.
As used herein, "Cash Flow" shall mean the net income (or loss) of
Tenant in connection with the operation of the Hotel before income taxes,
calculated in accordance with GAAP, plus (a) all extraordinary expense items,
(b) depreciation and amortization, (c) interest expense on Indebtedness
permitted under the Lease, (d) base management fees, incentive management fees,
trade name fees and central marketing fees paid to the Manager to the extent
subordinate to payment of rent pursuant to the Lease from and after the
occurrence of an Event of Default minus (e) required contributions to the FF&E
Reserve and (f) all extraordinary income items; provided, however, that in the
event HPT shall exercise its option described in Section 23.15 of the Lease,
Cash Flow and Minimum Rent for purposes of clause (y) above shall be calculated
on an aggregate basis for all the Hotels subject to the Lease and the GHALP
Leases.
11. Notices. (a) Any and all notices, demands, consents,
approvals, offers, elections and other communications required or permitted
under this Agreement shall be deemed adequately given if in writing and the
same shall be delivered either in hand, by telecopier with written
acknowledgment of receipt, or by mail or
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Federal Express or similar expedited commercial carrier, addressed to the
recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the date
of acknowledged receipt, in the case of a notice by telecopier, and, in all
other cases, upon the date of receipt or refusal, except that whenever under
this Agreement a notice is either received on a day which is not a Business Day
or is required to be delivered on or before a specific day which is not a
Business Day, the day of receipt or required delivery shall automatically be
extended to the next Business Day.
(c) All such notices shall be addressed,
if to HPT to:
c/o Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02158
Attn: Mr. John G. Murray
[Telecopier No. (617) 969-5730]
with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attn: Jennifer B. Clark, Esq.
[Telecopier No. (617) 338-2880]
if to the Guarantor to:
Wyndham Hotel Corporation
2001 Bryan Street, Suite 2300
Dallas, Texas 75201
Attn: Ms. Anne L. Raymond
[Telecopier No. (214) 863-1262]
with a copy to:
Locke, Purnell, Rain, Harrell
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attn: J. Mitchell Bell, Esq.
[Telecopier No. (214) 740-8800]
(d) By notice given as herein provided, the parties hereto and
their respective successor and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses effective upon receipt by the other parties of such notice and each
shall have the right to specify as its address any other address within the
United States of America.
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12. Successors and Assigns. Whenever in this Agreement, any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party, including without limitation the holders,
from time to time, of the Guaranteed Obligations; and all representations,
warranties, covenants and agreements by or on behalf of the Guarantor which are
contained in this Agreement shall inure to the benefit of HPT's successors and
assigns, including without limitation said holders, whether so expressed or
not.
13. Applicable Law. Except as to matters regarding the internal
affairs of HPT and issues of or limitations on any personal liability of the
shareholders and trustees of HPT for obligations of HPT, as to which the laws
of the State of Maryland shall govern, this Agreement, the Transaction
Documents and any other instruments executed and delivered to evidence,
complete or perfect the transactions contemplated hereby and thereby shall be
interpreted, construed, applied and enforced in accordance with the laws of the
State applicable to contracts between residents of the State which are to be
performed entirely within the State, regardless of (i) where any such
instrument is executed or delivered; or (ii) where any payment or other
performance required by any such instrument is made or required to be made; or
(iii) where any breach of any provision of any such instrument occurs, or any
cause of action otherwise accrues; or (iv) where any action or other proceeding
is instituted or pending; or (v) the nationality, citizenship, domicile,
principal place of business, or jurisdiction of organization or domestication
of any party; or (vi) whether the laws of the forum jurisdiction otherwise
would apply the laws of a jurisdiction other than the State; or (vii) any
combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State as may be provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State and to service of
process by registered mail, return receipt requested, or by any other manner
provided by law.
14. Modification of Agreement. No modification or waiver of any
provision of this Agreement, nor any consent to any departure by the Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by HPT, and such modification, waiver or consent shall be effective
only in the specific instances and for the purpose for which given. No notice
to or demand on the Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in the same, similar or other circumstances.
15. Waiver of Rights by HPT. Neither any failure nor any delay on
HPT's part in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other
right, power or privilege.
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16. Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby, but this
Agreement shall be reformed and construed and enforced to the maximum extent
permitted by applicable law.
17. Entire Contract. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede and take the place of any other instruments purporting to
be an agreement of the parties hereto relating to the subject matter hereof.
18. Headings; Counterparts. Headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument, and in pleading or proving any provision of this Agreement, it
shall not be necessary to produce more than one of such counterparts.
19. Remedies Cumulative. No remedy herein conferred upon HPT is
intended to be exclusive of any other remedy, and each and every remedy shall
be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise.
20. Limitation on Guarantor's Liability. Notwithstanding anything
to the contrary contained herein, the liability of the Guarantor hereunder, and
HPT's recourse to the assets of the Guarantor hereunder, shall be limited to
the sum (the "Guaranty Deposit") of Five Million Two Hundred Seventy-Five
Thousand Dollars ($5,275,000), which amount has been deposited with HPT on the
date hereof. HPT shall have no obligation to hold the Guaranty Deposit in a
segregated account and may commingle the same with its general funds. Provided
that no Event of Default shall have occurred and be continuing, HPT shall
credit the Guarantor or its assigns with interest on any unapplied balance of
the Guaranty Deposit at a rate of 11.11% per annum. Such interest shall be
credited in arrears and pro rated with respect to any partial month. Upon the
termination of this Agreement in accordance with paragraph 10, HPT shall refund
any unapplied balance of the Guaranty Deposit, together with any accrued and
unpaid interest with respect thereto, to the Guarantor. In the event HPT shall
fail to refund any unapplied balance of the Guaranty Deposit and accrued
interest to the Guarantor on the date due, HPT shall thereafter pay the
Guarantor interest thereon at the Overdue Rate until paid. HPT shall credit
accrued interest on the Guaranty Deposit against the monthly Minimum Rent.
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WITNESS the execution hereof under seal as of the date above first written.
WYNDHAM HOTEL CORPORATION
By: /s/ ILLEGIBLE
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Its (Vice) President
ACKNOWLEDGED AND AGREED:
HPTSLC CORPORATION
By: /s/ JOHN G. MURRAY
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Its President
HOSPITALITY PROPERTIES TRUST
By: /s/ JOHN G. MURRAY
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Its President