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EXHIBIT 10.4
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GUARANTY OF LEASE OBLIGATIONS
This Guaranty of Lease Obligations (this "Guaranty") is made and
entered into as of the 15th day of September, 1998 by and among Promus Hotels,
Inc., a Delaware corporation (" Parent "), Red Lion Hotels, Inc., a Delaware
corporation ("RLI "), and RLH Partnership, L. P., a Delaware limited partnership
("RLH Partnership").
RECITALS
WHEREAS, pursuant to the RLH Partnership, L.P. Contribution Agreement
dated August 1, 1995 between Red Lion, a California Limited Partnership (the
"Partnership") and RLH Partnership, the Partnership transferred to RLH
Partnership certain interests in the hotels described in Exhibit A hereto (the
"Retained Hotels");
WHEREAS, pursuant to the Lease dated August 1, 1995 between RLH
Partnership and RLI, as further amended from time to time (collectively, the
"Master Lease"), RLH Partnership has leased the Retained Hotels to RLI;
WHEREAS, RLH Partnership is willing to pay to RLI, the sum (the
"Extension Payment") of One Million Five Hundred Thousand Dollars
($1,500,000.00) to induce RLI to extend the term of the Master Lease and enter
into a certain Second Amendment to Lease amending the Master Lease ("Second
Amendment");
WHEREAS, RLI is a direct or indirect subsidiary of Parent;
WHEREAS, Parent will derive financial and other benefits from the
Extension Payment and the Second Amendment;
WHEREAS, Parent desires to execute and deliver the Guaranty to induce
RLH Partnership to pay the Extension Payment and execute the Second Amendment;
and
WHEREAS, the parties desire to set forth the Parent's guaranty
obligations with respect to the Master Lease in this Guaranty.
AGREEMENT
NOW, THEREFORE, in acknowledgment of the foregoing recitals and in
consideration of the mutual agreements expressed herein and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
1. Guaranty of Lease Obligations
Parent agrees to guaranty the punctual payment and performance of any
and all liabilities and obligations of RLI owed to RLH Partnership and its
partners and affiliates, and all of such person's officers, directors,
employees, shareholders and agents, and any of the foregoing's
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successors and assigns (collectively, the "Indemnified Parties") under the
Master Lease (the "Obligations"). Parent hereby waives diligence, presentment,
demand of payment, notice of dishonor or nonpayment, protest and notice of
protest of any such Obligation, suit or taking other action by the Indemnified
Parties against, and giving any notice of default or other notice to, or making
any demand on, RLI or its subsidiaries with respect to the Obligations. Parent's
guaranty is a guarantee of payment and not of collection only, is a primary
obligation and is an absolute, unconditional, continuing and irrevocable
guaranty of performance and payment. To the extent enforceable by law, Parent
will not assert, plead or enforce against the Indemnified Parties any defense of
waiver, release, discharge or disallowance in bankruptcy, anti-deficiency
statute, or unenforceability which may be available to Parent. The liability of
Parent under this Guaranty shall not be affected or impaired by any voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy (including any rejection of the Master
Lease in such bankruptcy), assignment for the benefit of creditors,
reorganization arrangement, composition or readjustment of, or other similar
event or proceeding affecting RLI or any of its subsidiaries of any of their
respective assets including, without limitation, any foreclosure by any
mortgagees of the tenant under the Master Lease of the tenant's interest, if
any, in any of the Retained Hotels, as tenant under the Master Lease. If any
payment by Parent to any Indemnified Party on account of the Obligations is
rescinded, invalidated, set aside or must otherwise be returned to Parent, RLI,
the estate or trustee of either, or to any other person, for any reason
whatsoever, Parent shall remain liable hereunder for the Obligations as if such
payment had not been made.
2. Anti-Deficiency Waivers
Parent hereby waives the rights set forth in Section 16 (or analogous
section) in any "Non-Disturbance Agreement" (as defined in Section 4 of that
certain First Amendment to Lease dated as of November 8, 1996 between RLH
Partnership and RLI, as amended by the Second Amendment) to the same extent as
RLI waives such rights including, without limitation, any Non-Disturbance
Agreement entered into with Greenwich Capital Financial Products Inc., a
Delaware corporation ("GCFP").
3. Consents, Waivers, and Renewals
At any time and from time to time, without notice to, or further
consent of, Parent, an Indemnified Party may extend the time of payment of, or
renew, any of the Obligations, and may also make any agreement with RLI or with
any other individual or entity liable on any of the Obligations, or interested
therein, for the extension, renewal, payment, compromise, discharge, or release
thereof, in whole or in part, or for any modification of the terms thereof or of
any agreement between such Indemnified Party and RLI or any such other
individual or entity, without impairing or affecting the obligations of Parent
under this Guaranty. An Indemnified Party may seek payment of any of the
Obligations from Parent whether or not such Indemnified Party shall have
proceeded against the RLI or any other obligor principally or secondarily
obligated for any of the Obligations.
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4. Termination
This Guaranty shall remain in full force and effect until all of the
Obligations shall have been paid, satisfied and performed in full except that
this Guaranty shall continue to be effective or be reinstated, as the case may
be, if any payment or property or part thereof must be returned to RLI, any
other tenant under the Master Lease, or the Parent upon the insolvency,
bankruptcy or reorganization of RLI, any other tenant of the Master Lease or any
other guarantor, or otherwise.
5. Successors and Assigns
This Guaranty shall be binding upon and inure to the benefit of the
Successors and assigns of the parties, including, without limitation, GCFP and
any other lender to Landlord and their respective successors and assigns.
6. Amendment
This Guaranty may be amended only by a written agreement signed by the
parties and, if any obligations remain outstanding under any "Mortgage" (as
defined in the Master Lease) of Landlord's interest in the Master Lease and/or
the Retained Hotels, consented to by the Landlord's "Mortgagee" (as defined in
the Master Lease).
7. Governing Law
This Guaranty shall be governed by and construed by the governing laws
determined in accordance with Section 22.11 of the Master Lease.
8. Specific Performance
RLH Partnership, RLI and Parent agree that monetary damages would not
be adequate compensation for any loss incurred by the Indemnified Parties by
reason of a breach of the provisions of this Guaranty by RLI or Parent.
Therefore, the Indemnified Parties shall be entitled to specific performance of
the provisions of this Guaranty and RLI and Parent each hereby waives the claim
or defense that there exists an adequate remedy at law to redress the
nonperformance or other breach of this Guaranty.
9. Agreement to Perform Necessary Acts
Each party agrees to perform any further acts and to execute and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Guaranty.
10. Invalid Provision
The invalidity or unenforceability of any particular provision of this
Guaranty shall not affect the other provisions, and this Guaranty shall be
construed in all respects as if the invalid or unenforceable provision were
omitted.
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11. No Waiver of Breach
No failure by any Indemnified Party to insist upon the strict
performance of any covenant, agreement, term or provision of this Guaranty, or
to exercise any right or remedy consequent upon a breach thereof, shall
constitute a waiver of any such breach or subsequent breach of such covenant,
agreement, term or provision. No waiver of any breach shall affect or alter this
Guaranty, and this guaranty shall remain in full force and effect.
12. Entire Agreement
This Guaranty evidences the entire agreement of the parties with
respect to the matters covered herein and supersedes all prior oral or written
agreements or other understandings.
13. Counterparts
This Guaranty may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Guaranty as of the
date first written above.
"PARENT":
PROMUS HOTELS, INC.
By: /s/ William L. Perocchi
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Name: William L. Perocchi
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Its: Executive Vice President
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"RLI":
RED LION HOTELS, INC., a Delaware
corporation
By: /s/ William L. Perocchi
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Name: William L. Perocchi
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Its: Executive Vice President
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"RLH PARTNERSHIP":
RLH PARTNERSHIP, L.P., a Delaware
limited partnership
By: Red Lion G.P., Inc., a Delaware
corporation, its general partner
By: /s/
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Name:
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Its:
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