EXHIBIT 10.23.3
FORM OF GUARANTY OF RECOURSE OBLIGATIONS
This GUARANTY OF RECOURSE OBLIGATIONS (this "GUARANTY"), dated as of
June __, 2004, made by LODGIAN, INC., a Delaware corporation ("GUARANTOR"),
having an address at 3445 Peachtree Road, NE, Suite 700, Atlanta, Georgia 30326,
in favor of MERRILL LYNCH MORTGAGE LENDING, INC., a Delaware corporation, having
an office at 4 World Financial Center, New York, New York 10080 (together with
its successors, transferees and assigns, "MEZZANINE LENDER").
R E C I T A L S:
A. Pursuant to that certain Mezzanine Loan Agreement, dated as of
the date hereof (as the same may be amended, modified, supplemented or restated
from time to time, the "MEZZANINE LOAN AGREEMENT"), between the Borrower named
therein ("MEZZANINE BORROWER"), and Mezzanine Lender, Mezzanine Lender has
agreed to make a loan to Mezzanine Borrower in the aggregate original principal
amount of up to $______ (the "LOAN"), subject to the terms and conditions of the
Mezzanine Loan Agreement;
B. As a condition to Mezzanine Lender's making the Loan, Mezzanine
Lender is requiring that Guarantor execute and deliver to Mezzanine Lender this
Guaranty; and
C. Guarantor hereby acknowledges that Guarantor holds a direct
and/or indirect ownership interest in Mezzanine Borrower and that Guarantor will
materially benefit from Mezzanine Lender's agreeing to make the Loan.
NOW, THEREFORE, in consideration of the premises set forth herein
and as an inducement for and in consideration of the agreement of Mezzanine
Lender to make the Loan pursuant to the Mezzanine Loan Agreement and the other
Loan Documents, Guarantor hereby agrees, covenants, represents and warrants to
Mezzanine Lender as follows:
SECTION 1. DEFINITIONS. All capitalized terms used and not defined
herein shall have the respective meanings given such terms in the Mezzanine Loan
Agreement.
SECTION 2. GUARANTY.
(a) Guarantor (but not its members, partners, employees,
shareholders, agents, directors or officers) hereby irrevocably, absolutely and
unconditionally assumes liability for, guarantees payment to Mezzanine Lender
of, and agrees to pay, protect, defend, indemnify and save harmless Mezzanine
Lender from and against any and all Guaranteed Recourse Obligations of Mezzanine
Borrower (as hereinafter defined).
The obligations which are the subject of the guaranty referred to in this
Section 2 are hereinafter collectively referred to as the "GUARANTEED
OBLIGATIONS".
(b) The term "GUARANTEED RECOURSE OBLIGATIONS OF MEZZANINE BORROWER"
as used in this Guaranty shall mean all obligations and liabilities for which
Mezzanine Borrower shall be personally liable under the provisions of Section
12.2 of the Mezzanine Loan Agreement.
(c) All sums payable to Mezzanine Lender under this Guaranty shall
be payable on demand and without reduction for any offset, claim, counterclaim
or defense.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Guarantor hereby
represents and warrants to Mezzanine Lender as follows (which representations
and warranties shall be given as of the date hereof and shall survive the
execution and delivery of this Guaranty):
(a) DUE EXECUTION. This Guaranty has been duly executed and
delivered by Guarantor.
(b) ENFORCEABILITY. This Guaranty constitutes a legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, or application of general principles
of equity in any legal proceeding.
(c) NO VIOLATION. The execution, delivery and performance by
Guarantor of its obligations under this Guaranty do not violate any law,
regulation, order, writ, injunction or decree of any court or governmental body,
agency or other instrumentality applicable to Guarantor, or result in a breach
of any of the terms, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the assets of Guarantor
pursuant to the terms of any mortgage, indenture, agreement or instrument to
which Guarantor is a party or by which it or any of its properties is bound.
Guarantor is not in default under any other guaranty which it has provided to
Mezzanine Lender.
(d) NO LITIGATION. Except as disclosed on Schedule 4.16 to the
Mezzanine Loan Agreement, there are no actions, suits or proceedings at law or
at equity, pending or, to Guarantor's knowledge, threatened against or affecting
Guarantor or which involve or could reasonably be expected to involve the
validity or enforceability of this Guaranty or which might materially adversely
affect the financial condition of Guarantor or the ability of Guarantor to
perform any of its obligations under this Guaranty. Guarantor is not in default
beyond any applicable grace or cure period with respect to any order, writ,
injunction, decree or demand of any Governmental Authority which might
materially adversely affect the financial condition of Guarantor or the ability
of Guarantor to perform any of its obligations under this Guaranty.
(e) CONSENTS. All consents, approvals, orders or authorizations of,
or registrations, declarations or filings with, all Governmental Authorities
(collectively, the "CONSENTS") that are required in connection with the valid
execution, delivery and performance by Guarantor of this Guaranty have been
obtained and Guarantor agrees that all Consents required in connection with the
carrying out or performance of any of Guarantor's obligations under this
Guaranty will be obtained when required.
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(f) FINANCIAL STATEMENTS AND OTHER INFORMATION. All financial
statements of Guarantor heretofore delivered to Mezzanine Lender fairly present
the financial condition of Guarantor as of the respective dates thereof, and no
materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof. None of the aforesaid financial
statements or any certificate or statement furnished to Mezzanine Lender by or
on behalf of Guarantor in connection with the transactions contemplated hereby,
and none of the representations and warranties in this Guaranty contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein or herein not materially
misleading. Guarantor is not insolvent within the meaning of the Bankruptcy Code
or any other applicable law, code or regulation and the execution, delivery and
performance of this Guaranty will not render Guarantor insolvent.
SECTION 4. FINANCIAL STATEMENTS. Guarantor hereby agrees for the
benefit of Mezzanine Lender that Guarantor will deliver to Mezzanine Lender each
of the financial statements required to be delivered pursuant to Section 5.1 of
the Mezzanine Loan Agreement.
SECTION 5. INTENTIONALLY DELETED.
SECTION 6. UNCONDITIONAL CHARACTER OF OBLIGATIONS OF GUARANTOR.
(a) The obligations of Guarantor hereunder shall be irrevocable,
absolute and unconditional, irrespective of the validity, regularity or
enforceability, in whole or in part, of the Note, the Mezzanine Loan Agreement,
the Pledge Agreement or the other Loan Documents or any provision thereof, or
the absence of any action to enforce the same, any waiver or consent with
respect to any provision thereof, the recovery of any judgment against Mezzanine
Borrower, Guarantor or any other Person or any action to enforce the same, any
failure or delay in the enforcement of the obligations of Mezzanine Borrower
under the Note, the Mezzanine Loan Agreement, the Pledge Agreement or any other
Loan Document or Guarantor under this Guaranty, or any setoff, counterclaim, and
irrespective of any other circumstances which might otherwise limit recourse
against Guarantor by Mezzanine Lender or constitute a legal or equitable
discharge or defense of a guarantor or surety. Mezzanine Lender may enforce the
obligations of Guarantor under this Guaranty by a proceeding at law, in equity
or otherwise, independent of any loan foreclosure or similar proceeding or any
deficiency action against Mezzanine Borrower or any other Person at any time,
either before or after an action against the Properties or any of them or any
part thereof, Mezzanine Borrower or any other Person. THIS GUARANTY IS A
GUARANTY OF PAYMENT AND PERFORMANCE AND NOT MERELY A GUARANTY OF COLLECTION.
Guarantor waives diligence, notice of acceptance of this Guaranty, filing of
claims with any court, any proceeding to enforce any provision of the Note, the
Mezzanine Loan Agreement, the Pledge Agreement or any other Loan Document,
against Guarantor, Mezzanine Borrower or any other Person, any right to require
a proceeding first against Mezzanine Borrower or any other Person, or to exhaust
any security (including, without limitation, the Collateral or Properties or any
of them or any part thereof) for the performance of the Guaranteed Obligations
or any other obligations of Mezzanine Borrower or any other Person, or any
protest, presentment, notice of default (except as may be expressly required
under the Loan Documents) or other notice or demand whatsoever, and Guarantor
hereby covenants and agrees that Guarantor shall not be discharged of its
obligations hereunder.
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(b) The obligations of Guarantor under this Guaranty, and the rights
of Mezzanine Lender to enforce the same by proceedings, whether by action at
law, suit in equity or otherwise, shall not be in any way affected by any of the
following:
(i) any insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship,
winding up or other similar proceeding involving or affecting Mezzanine
Borrower, any Property or any part thereof, Guarantor or any other Person;
(ii) any failure by Mezzanine Lender or any other Person,
whether or not without fault on its part, to perform or comply with any of
the terms of the Mezzanine Loan Agreement, or any other Loan Documents, or
any document or instrument relating thereto;
(iii) except (A) with respect to activities occurring after
the date of a Permitted Assumption or, (B) activities relating to a
Collateral Release after the date thereof, the sale, transfer or
conveyance of any Collateral or Property or any interest therein to any
Person, whether now or hereafter having or acquiring an interest in any
Collateral or Property or any interest therein and whether or not pursuant
to any foreclosure, trustee sale or similar proceeding against Mezzanine
Borrower or any Collateral or Property or any interest therein;
(iv) the conveyance to Mezzanine Lender, any Affiliate of
Mezzanine Lender or Mezzanine Lender's nominee of any Property or any
interest therein by a deed-in-lieu of foreclosure;
(v) the release of Mezzanine Borrower or any other Person from
the performance or observance of any of the agreements, covenants, terms
or conditions contained in any of the Loan Documents by operation of law
or otherwise;
(vi) the release in whole or in part of any collateral for any
or all Guaranteed Obligations or for the Loan or any portion thereof; or
(vii) the exercise by Mortgage Lender of any remedies made
available to any Mortgage Lender pursuant to the terms of its Mortgage
Loan Documents, including, without limitation, foreclosure or similar
remedies under any Mortgages encumbering an applicable Mortgage Borrower's
interest in any Property except with respect to actions taken by such
Mortgage Lender following the Mortgage Lender succeeding to the interests
of the Mortgage Borrowers in and to the applicable Properties.
(c) Except as otherwise specifically provided in this Guaranty,
Guarantor hereby expressly and irrevocably waives all defenses in an action
brought by Mezzanine Lender to enforce this Guaranty based on claims of waiver,
release, surrender, alteration or compromise and all setoffs, reductions, or
impairments, whether arising hereunder or otherwise.
(d) Mezzanine Lender may deal with Mezzanine Borrower and Affiliates
of Mezzanine Borrower in the same manner and as freely as if this Guaranty did
not exist and shall be entitled, among other things, to grant Mezzanine Borrower
or any other Person such extension
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or extensions of time to perform any act or acts as may be deemed advisable by
Mezzanine Lender, at any time and from time to time, without terminating,
affecting or impairing the validity of this Guaranty or the obligations of
Guarantor hereunder.
(e) No compromise, alteration, amendment, modification, extension,
renewal, release or other change of, or waiver, consent, delay, omission,
failure to act or other action with respect to, any liability or obligation
under or with respect to, or of any of the terms, covenants or conditions of,
the Note, the Mezzanine Loan Agreement, the Pledge Agreement or the other Loan
Documents or any amendment, modification or other change of any legal
requirement shall in any way alter, impair or affect any of the obligations of
Guarantor hereunder, and Guarantor agrees that if any Loan Documents are
modified with Mezzanine Lender's consent, the Guaranteed Obligations shall
automatically be deemed modified to include such modifications.
(f) Mezzanine Lender may proceed to protect and enforce any or all
of its rights under this Guaranty by suit in equity or action at law, whether
for the specific performance of any covenants or agreements contained in this
Guaranty or otherwise, or to take any action authorized or permitted under
applicable law, and shall be entitled to require and enforce the performance of
all acts and things required to be performed hereunder by Guarantor. Each and
every remedy of Mezzanine Lender shall, to the extent permitted by law, be
cumulative and shall be in addition to any other remedy given hereunder or now
or hereafter existing at law or in equity.
(g) No waiver shall be deemed to have been made by Mezzanine Lender
of any rights hereunder unless the same shall be in writing and signed by
Mezzanine Lender, and any such waiver shall be a waiver only with respect to the
specific matter involved and shall in no way impair the rights of Mezzanine
Lender or the obligations of Guarantor to Mezzanine Lender in any other respect
or at any other time.
(h) At the option of Mezzanine Lender, Guarantor may be joined in
any action or proceeding commenced by Mezzanine Lender against Mezzanine
Borrower in connection with or based upon the Note, the Mezzanine Loan
Agreement, the Pledge Agreement or any other Loan Documents and recovery may be
had against Guarantor in such action or proceeding or in any independent action
or proceeding against Guarantor to the extent of Guarantor's liability
hereunder, without any requirement that Mezzanine Lender first assert, prosecute
or exhaust any remedy or claim against Mezzanine Borrower or any other Person,
or any security for the obligations of Mezzanine Borrower or any other Person.
(i) Guarantor agrees that this Guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
is made by Mezzanine Borrower or Guarantor to Mezzanine Lender and such payment
is rescinded or must otherwise be returned by Mezzanine Lender (as determined by
Mezzanine Lender in its sole and absolute discretion) upon insolvency,
bankruptcy, liquidation, reorganization, readjustment, composition, dissolution,
receivership, conservatorship, winding up or other similar proceeding involving
or affecting Mezzanine Borrower or Guarantor, all as though such payment had not
been made.
(j) In the event that Guarantor shall advance or become obligated to
pay any sums under this Guaranty or in connection with the Guaranteed
Obligations or in the event that for
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any reason whatsoever Mezzanine Borrower or any subsequent owner of any Property
or Collateral or any part thereof is now, or shall hereafter become, indebted to
Guarantor, Guarantor agrees that (i) the amount of such sums and of such
indebtedness and all interest thereon shall at all times be subordinate as to
the lien, the time of payment and in all other respects to all sums, including
principal and interest and other amounts, at any time owed to Mezzanine Lender
under the Loan Documents, and (ii) Guarantor shall not be entitled to enforce or
receive payment thereof until all principal, interest and other sums due
pursuant to the Loan Documents have been paid in full. Nothing herein contained
is intended or shall be construed to give Guarantor any right of subrogation in
or under the Loan Documents or any right to participate in any way therein, or
in the right, title or interest of Mezzanine Lender in or to any collateral for
the Loan, notwithstanding any payments made by Guarantor under this Guaranty,
until the actual and irrevocable receipt by Mezzanine Lender of payment in full
of all principal, interest and other sums due with respect to the Loan or
otherwise payable under the Loan Documents. If any amount shall be paid to
Guarantor on account of such subrogation rights at any time when any such sums
due and owing to Mezzanine Lender shall not have been fully paid, such amount
shall be paid by Guarantor to Mezzanine Lender for credit and application
against such sums due and owing to Mezzanine Lender. The foregoing shall not
prohibit Mezzanine Borrower from using the proceeds of the Loan for any
permitted use under the Mezzanine Loan Agreement, including, without limitation,
the making of distributions to Guarantor.
(k) Guarantor's obligations hereunder shall survive a foreclosure,
delivery of a deed-in-lieu of foreclosure, the exercise of any power of sale or
similar proceeding involving any Collateral or any part thereof and the exercise
by Mezzanine Lender of any or all of its remedies pursuant to the Loan
Documents. Notwithstanding the foregoing to the contrary, the obligations and
liabilities of Guarantor under this Guaranty shall survive for a period of two
(2) years following payment in full of the Obligations in accordance with the
terms of the Loan Documents, provided, however, in the event that any Guaranteed
Obligations or liabilities of the Guarantor under this Guaranty shall have
arisen prior to the expiration of such period, then in any such event the
foregoing survival period shall not apply and the obligations and liabilities of
Guarantor hereunder shall survive.
SECTION 7. ENTIRE AGREEMENT/AMENDMENTS. This instrument represents
the entire agreement between the parties with respect to the subject matter
hereof. The terms of this Guaranty shall not be waived, altered, modified,
amended, supplemented or terminated in any manner whatsoever except by written
instrument signed by Mezzanine Lender and Guarantor.
SECTION 8. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding
upon Guarantor, and its successors and assigns, may not be assigned or delegated
by Guarantor and shall inure to the benefit of Mezzanine Lender and its
successors and assigns. Mezzanine Lender shall have the right to assign this
Guaranty and the obligations hereunder in connection with any assignment or
transfer of all or any portion of the Loan or any interest therein. All
references to "Mezzanine Lender" hereunder shall be deemed to include the
successors and assigns of Mezzanine Lender and the parties hereto acknowledge
that actions taken by Mezzanine Lender hereunder may be taken by Mezzanine
Lender's agents and by the agents of the successors and assigns of Mezzanine
Lender.
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SECTION 9. APPLICABLE LAW AND CONSENT TO JURISDICTION. This Guaranty
shall be governed by, and construed in accordance with, the substantive laws of
the State of New York. Guarantor irrevocably (a) agrees that any suit, action or
other legal proceeding arising out of or relating to this Guaranty may be
brought in a court of record in the City and County of New York or in the Courts
of the United States of America located in the Southern District of New York,
(b) consents to the jurisdiction of each such court in any such suit, action or
proceeding and (c) waives any objection which it may have to the laying of venue
of any such suit, action or proceeding in any of such courts and any claim that
any such suit, action or proceeding has been brought in an inconvenient forum.
Guarantor irrevocably consents to the service of any and all process in any such
suit, action or proceeding by service of copies of such process to Guarantor at
its address set forth on the first page hereof. Nothing in this Section 9,
however, shall affect the right of Mezzanine Lender to serve legal process in
any other manner permitted by law or affect the right of Mezzanine Lender to
bring any suit, action or proceeding against Guarantor or its property in the
courts of any other jurisdictions.
SECTION 10. SECTION HEADINGS. The headings of the sections and
paragraphs of this Guaranty have been inserted for convenience of reference only
and shall in no way define, modify, limit or amplify any of the terms or
provisions hereof.
SECTION 11. SEVERABILITY. Any provision of this Guaranty which may
be determined by any competent authority to be prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, Guarantor hereby
waives any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
SECTION 12. WAIVER OF TRIAL BY JURY. EACH OF GUARANTOR AND MEZZANINE
LENDER HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN ANY LITIGATION, ACTION OR
PROCEEDING ARISING HEREUNDER OR IN CONNECTION THEREWITH.
SECTION 13. OTHER GUARANTIES; SINGULAR AND PLURAL; JOINT AND SEVERAL
LIABILITY.
(a) The obligations of Guarantor hereunder are separate and distinct
from, and in addition to, the obligations of Guarantor now or hereafter arising
under the other guaranties pursuant to which Guarantor has guaranteed the
payment and performance of certain other obligations of Mezzanine Borrower
described therein.
(b) If there is more than one entity comprising Guarantor, all
references to Guarantor herein shall be to Guarantor (but not its members,
partners, employees, shareholders, agents, directors or officers) or any one or
more of them. All obligations and liabilities of Guarantor hereunder are in
addition to, not in lieu of and are independent of: (i) all obligations of
Mezzanine Borrower under any other Loan Document, including the Note and the
Mezzanine Loan Agreement; and (ii) any obligation of Guarantor under any other
Loan Document to which Guarantor is a party.
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(c) If there is more than one entity comprising Guarantor, all
obligations of Guarantor hereunder shall be joint and several.
SECTION 14. NOTICES. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder to
Mezzanine Lender or Guarantor or which are given to Mezzanine Lender or
Guarantor with respect to this Guaranty shall be in writing and shall be
delivered to Mezzanine Lender at the address set forth in Section 14.5 of the
Mezzanine Loan Agreement and to Guarantor at the address set forth on the first
page hereof, each in the manner provided in Section 14.5 of the Mezzanine Loan
Agreement. Guarantor agrees to give Mezzanine Lender not less than ten (10)
days' prior written notice of any change in the location of Guarantor's
principal place of business.
SECTION 15. GUARANTOR'S RECEIPT OF LOAN DOCUMENTS. Guarantor by its
execution hereof acknowledges receipt of true copies of all of the Loan
Documents, the terms and conditions of which are hereby incorporated herein by
reference.
SECTION 16. INTEREST; EXPENSES.
(a) If Guarantor fails to pay all or any sums due hereunder within
ten (10) days of demand by Mezzanine Lender, the amount of such sums payable by
Guarantor to Mezzanine Lender shall bear interest from the date of demand until
paid at the Default Rate in effect from time to time.
(b) Guarantor hereby agrees to pay all reasonable out of pocket
costs, charges and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, that may be incurred by Mezzanine Lender in
enforcing the covenants, agreements, obligations and liabilities of Guarantor
under this Guaranty.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
date first above written.
GUARANTOR:
LODGIAN, INC., a Delaware
corporation
By: _______________________________
Name: Daniel E. Ellis
Title: Senior Vice President