Exhibit 10.33
THIS GUARANTY AGREEMENT IS SUBJECT TO THE TERMS, COVENANTS AND CONDITIONS OF A
CERTAIN CONFIRMATION OF SUBORDINATION AGREEMENT OF EVEN OR NEAR DATE HEREWITH IN
FAVOR OF NOMURA ASSET CAPITAL CORPORATION.
GUARANTY AGREEMENT
THIS GUARANTY, dated as of October 31, 1997 by HUDSON HOTELS CORPORATION, a
New York corporation ("Hudson" or "Guarantor"), and EQUITY INNS PARTNERSHIP,
L.P., a Tennessee limited partnership ("Lender") recites and provides:
RECITALS.
HUDSON HOTELS PROPERTIES CORP., a New York corporation all of whose issued
and outstanding capital stock is wholly owned by Hudson ("Borrower"), has
simultaneously with the execution and delivery of this Agreement received a
$3,884,052.23 loan (the "Loan") from the Lender to finance the purchase by HH
Properties-II, Inc., a New York corporation all of whose issued and outstanding
capital stock is owned by the Borrower, from Lender of nine Hampton Inn Hotels
(collectively, the "Project"). The Loan is evidenced and secured by, among
other instruments and documents, (i) a note of even date herewith (the "Note"),
made by Borrower and payable to the order of Lender, (ii) a pledge agreement of
even date herewith (the "Pledge") whereby Borrower has pledged 2,000,000 newly
issued shares of the capital stock of Hudson. (The Note, the Pledge and all
other documents and instruments executed on behalf of Borrower or the Guarantor
in connection with the Loan are hereinafter collectively called the "Loan
Documents.")
Lender has agreed to make the Loan to Borrower on the condition, among
others, that Guarantor guarantee the payment of all amounts due, and the
performance of all obligations, under the Loan Documents. Because of the
benefits accruing to Guarantor by virtue of Lender making the Loan to Borrower,
Guarantor desire to guarantee such payment and performance, all on the following
terms and conditions.
GUARANTY.
For and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor hereby represent, warrant and agree as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF GUARANTOR
To induce Lender to make the Loan, Guarantor makes the following
representations and warranties, upon each of which Lender, its successors,
assigns and participants are entitled to rely and have relied, notwithstanding
any investigation heretofore or hereafter made by Lender and such successors,
assigns and participants. All such representations and warranties are true and
complete in all respects and do not omit any material fact necessary to make
such representations and warranties not misleading.
Section 1.1. NO CONFLICTS, DEFAULTS. The execution and delivery of
this Guaranty and the performance by the Guarantor of their obligations
hereunder and the consummation of the transactions contemplated herein are
within the corporate powers of the Guarantor and will not conflict with or
constitute a breach of the Guarantor's articles of incorporation or
by-laws. Neither the execution, acknowledgment and delivery of, nor the
performance of their obligations under this Guaranty will conflict with or
violate, or constitute a default or require any consent or waiver under,
any provision of any mortgage, deed of trust, evidence of indebtedness,
order, decree or agreement to which Guarantor are a party or by which they
or any substantial part of their property is bound, which consent or waiver
has not been obtained.
Section 1.2. ENFORCEABILITY. This Guaranty is a legal, valid and
binding instrument enforceable against Guarantor in accordance with its
terms.
Section 1.3. BORROWER'S REPRESENTATIONS AND WARRANTIES. Guarantor
have examined the representations and warranties made by Borrower in the
Loan Documents and, having complete access to the information necessary to
make such a determination, has determined that each of those
representations and warranties is true and complete and does not omit any
material fact necessary to make each such representation and warranty not
misleading. Guarantor have made their own independent investigation of the
financial condition and affairs of the Borrower prior to entering into this
Guaranty and will continue to make their appraisal of the creditworthiness
of the Borrower and in entering into this Guaranty they have not relied
upon any representation of the Lender as to the financial condition,
operation or creditworthiness of the Borrower. Guarantor agree that the
Lender shall have no duty or responsibility now or hereafter to make any
investigation or appraisal of the Borrower on behalf of the Guarantor or to
provide the Guarantor with any credit or other information which may come
to Lender's attention.
Section 1.4. LITIGATION, VIOLATIONS OF LAW. Except as disclosed in
reports filed with the Securities and Exchange Commission ("SEC"), there
are no actions, suits or proceedings of a material nature pending or
overtly threatened against or affecting Guarantor, and no event has
occurred (including, without limitation, the execution, acknowledgment and
delivery of this Guaranty and the consummation of the transactions
contemplated hereby) which will violate, be in conflict with, result in the
breach of or constitute (with or without notice or the passage of time, or
both) a default under any judicial decision, statute, ruling, direction,
rule, regulation, permit, certificate or ordinance of any governmental
authority in any way applicable to Guarantor. Guarantor are not in default
with respect to any judgment, order, writ, injunction, decree or demand of
any court, arbitrator, administrative agency or other governmental or
quasi-governmental authority.
Section 1.5. FINANCIAL INFORMATION. All financial information
furnished to Lender by Guarantor is true and complete in all respects and
fully and accurately presents the financial condition of the subjects
thereof as of the dates thereof, and no material adverse change has
occurred in the financial conditions reflected therein since the dates
thereof. Guarantor agree to submit to Lender, promptly after each request
therefor, updated financial statements of Guarantor, which statements shall
be (a) compiled by an accountant who is reasonably satisfactory to Lender
and is a member of the American Institute of Certified Public Accountants
and (b) reasonably satisfactory to Lender in form and substance.
Section 1.6. [Intentionally Deleted.]
Section 1.7. INSOLVENCY MATTERS. No bankruptcy, reorganization,
arrangement, readjustment of debt, insolvency or other proceeding has been
commenced or threatened by or against Guarantor or consented to or
acquiesced in by Guarantor, and no judgment has been entered against
Guarantor which has not been satisfied or otherwise discharged.
Section 1.8. CORPORATE STATUS. Guarantor is a corporation duly
organized, validly existing, and in good standing under the laws of New
York, and by proper corporate action has duly authorized the execution and
delivery of this Guaranty and the performance of its obligations hereunder.
Section 1.9. NO DEFAULT. The Guarantor is not in default in the
payment of the principal of or interest on any of its indebtedness for
borrowed money and is not in default under any instrument under and
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subject to which any indebtedness has been incurred, and no event has
occurred and is continuing under the provisions of any such agreement which
with the lapse of time or the giving of notice, or both, would constitute
an event of default thereunder.
Section 1.10. DISCLOSURES. Neither this Guaranty nor any written
statements furnished by or on behalf of the Guarantor in connection with
the issuance of the Note contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading. There is no fact that the Guarantor has not
disclosed in writing to the Lender that materially affects adversely the
properties, business, prospects, profits or condition (financial or
otherwise) of Guarantor and its consolidated subsidiaries, if any, taken as
a whole, or the ability of such Guarantor to perform Guarantor's
obligations under this Guaranty.
ARTICLE II.
COVENANTS OF GUARANTOR
Section 2.1. DEFINITION OF "INDEBTEDNESS," "OBLIGATIONS".
(a) The term "Indebtedness" shall include all amounts due and to become due
from Borrower to Lender under the Loan Documents, whether such amounts are
direct or indirect, fixed or contingent, or liquidated or unliquidated
obligations of Borrower regardless how such amounts may be evidenced including,
without limitation, principal, interest, service, finance and other charges,
Lender's fees and other charges, costs of collection, attorneys' fees and
expenses, other expenses of Lender due it under the Loan Documents and amounts
advanced by Lender to discharge obligations of Borrower, whether such amounts
are from time to time reduced, thereafter increased or entirely extinguished and
thereafter reincurred and whether such amounts may accrue or become due under a
Loan Document that may, by its terms, provide for exculpation from personal
liability for such amounts to any party.
(b) The term "Obligations" shall mean all obligations, agreements,
covenants, conditions and liabilities of Borrower set forth in the Loan
Documents.
Section 2.2. GUARANTY OF PAYMENT AND PERFORMANCE. Guarantor hereby
unconditionally guarantees payment of all Indebtedness and performance of
all Obligations of Borrower to Lender under and in accordance with the
terms and conditions hereof. The obligations of the Guarantor under this
Guaranty are subordinate to indebtedness in a principal amount not to
exceed $35,000,000, plus interest, default interest, yield maintenance
and/or all costs and expenses, including, without limitation, attorneys
fees from Nomura Asset Capital Corporation (or its successor or assign) to
Guarantor.
Section 2.3. NATURE OF GUARANTY. This is a guaranty of payment and
not merely of collection.
Section 2.4. ENFORCEMENT OF GUARANTY IN FIRST INSTANCE. Lender may
collect the Indebtedness, or any part thereof, from Guarantor without first
exercising its rights against Borrower, any other guarantor or any
collateral that Lender may hold or have access to, and Guarantor hereby
waives any right to require Lender to attempt to collect the Indebtedness
or any part thereof from Borrower or any other guarantor or to attempt to
realize upon any collateral that Lender may hold or have access to before
enforcing the obligations of Guarantor hereunder.
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Section 2.5. LENDER'S ELECTION TO PERFORM OBLIGATIONS. After a
default by Borrower in the performance of one or more of the Obligations
and the expiration of any notice and cure period expressly provided for in
the Loan Documents, Lender, at its option, may elect to perform or cause to
be performed any or all of the Obligations without first exercising its
rights against Borrower, any other guarantor or any collateral that Lender
may hold or have access to, and Guarantor hereby waives any right to
require Lender to attempt to collect the Indebtedness or any part thereof
from Borrower or any other guarantor or to attempt to realize upon any
collateral that Lender may hold or have access to before performing or
causing the performance of any of the Obligations or enforcing the
obligations of Guarantor hereunder.
Section 2.6. NO SUBROGATION OR CONTRIBUTION. Until all of the
Indebtedness has been paid in full and all of the Obligations have been
duly and punctually performed to the satisfaction of Lender, Guarantor
shall not be subrogated to any right of Lender against the Borrower, any
other guarantor or any collateral, and any moneys, property or other
consideration received at any time by Guarantor from Borrower prior to
payment in full of the Indebtedness and prior to the performance by
Borrower of all of the Obligations shall be held in trust for Lender and
shall be paid or transferred to Lender upon demand therefor. Guarantor
agrees that they will not assert any right of contribution against any
other Guarantor of the Indebtedness, whether the obligations of such other
Guarantor are evidenced by this Guaranty or other agreement, until such
time as all of the Indebtedness has been paid in full to the Lender and all
of the Obligations have been performed.
Section 2.7. WAIVER OF DEFENSES. Guarantor hereby: (a) waives
notice of acceptance of this Guaranty; (b) waives presentment, demand,
notice of dishonor, protest and notice of protest; (c) agrees that the
Indebtedness or any part thereof may be renewed, extended, accelerated,
modified or compromised and the Obligations may be modified or delegated
and that any collateral or other security held for the payment of the
Indebtedness or the performance of the Obligations may be released,
exchanged, sold, applied or otherwise dealt with by Lender without notice
to the Guarantor and without thereby releasing the Guarantor from any
obligation under this Guaranty; (d) waives notice of the financial
condition or other status of Borrower and any other party obligated for the
payment of the Indebtedness or the performance of the Obligations; and (e)
waives the benefit of the homestead exemption as to its obligations set
forth herein. This Guaranty is intended to be a full, complete and perfect
guaranty and indemnity to the Lender to the extent of and for any
Indebtedness and to be valid and enforceable without other or further
notice to the Guarantor. The liability of the Guarantor is absolute and
unconditional and is not conditioned or contingent upon any other party
signing this Guaranty or the obtaining of any security upon any of the
Indebtedness or the obtaining of the guaranty of any other party upon any
of the Indebtedness or any other matter.
Section 2.8. RELEASES. Lender shall have the right to waive its
rights against and to release any guarantor or other person or entity that
is liable for payment of the Indebtedness or performance of the Obligations
without affecting (a) the enforceability of this Guaranty against the
Guarantor or (b) any other right or remedy that Lender may have against
Guarantor.
Section 2.9. COSTS AND EXPENSES. Guarantor hereby agrees to pay to
Lender all costs and expenses, including court costs and reasonable
attorneys' fees and expenses, incurred by Lender in seeking advice with
regard to, or in seeking to enforce, any of the obligations of Guarantor
hereunder.
Section 2.10. BANKRUPTCY. In the event that any part of the
Indebtedness is collected by Lender and because of bankruptcy or other laws
relating to debtors' relief Lender is required to repay all or any
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portion of the amount so collected to Borrower or to any trustee, receiver
or otherwise, then the amount or amounts so repaid shall become part of the
Indebtedness.
Section 2.11. MAINTENANCE OF EXISTENCE. The Guarantor shall maintain
its corporate existence and shall not, without the prior consent of the
Lender, voluntarily reduce its net worth below its net worth as shown on
the last annual financial report of the Guarantor issued prior to the date
of the Note, or dissolve or otherwise dispose of all or substantially all
of its business and assets, or consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it.
Section 2.12. RESTRICTED PAYMENTS. At any time while an "Event of
Default" (as defined in the Note) shall have occurred and be continuing,
the Guarantor shall not (a) pay or declare, or set aside any sum for the
payment of, any dividends or make any other distribution (except dividends
payable in shares of its common stock) upon any shares of its capital stock
of any class or (b) purchase, redeem or otherwise acquire for value, or set
aside any sum therefor, or permit any subsidiary to purchase or acquire for
value, or set aside any sum therefor, any shares of its capital stock of
any class.
Section 2.13. INSOLVENCY. The Guarantor agrees that in the event of
(i) dissolution or insolvency of the Borrower; (ii) the inability of the
Borrower to pay debts as they mature; (iii) an assignment by the Borrower
or the Guarantor for the benefit of creditors; (iv) the institution of any
proceeding by or against the Borrower or the Guarantor in bankruptcy or a
reorganization or an arrangement with creditors; or (v) the appointment of
a receiver, trustee or custodian for the Borrower or any of its property or
for the Guarantor or any of its property, and if any such event shall occur
at a time when any of the Indebtedness may not then be due and payable, all
indebtedness shall, for the purpose of this Guaranty, be deemed, at the
Lender's election, to have become immediately due and payable.
Section 2.14. APPLICATION OF PROCEEDS. All payments, whether
voluntary or involuntary, received from the Borrower or on account of the
Indebtedness from any other source, including income from and amounts
realized on security and appropriated bank balances, may be applied by the
Lender toward the payment of the Indebtedness and in such order of
application as the Lender may from time to time elect. All payments shall
be conclusively presumed to have been made by the Borrower and no payments
shall operate to reduce the liability of the Guarantor hereunder, unless at
the time such payments are made, express written notice is served upon the
Lender that such payments are made by the Guarantor in reduction of the
liability hereunder.
ARTICLE III.
MISCELLANEOUS PROVISIONS
Section 3.1. GOVERNING LAW. This Guaranty, the rights of Lender and
the obligations of Guarantor shall be governed by and construed in
accordance with the laws of the State of New York (excluding, however,
those dealing with conflicts of law) except to the extent that such laws
are preempted by United States federal law, in which case such federal law
shall govern.
Section 3.2. SUCCESSORS AND ASSIGNS. The representations,
warranties, covenants and conditions set forth herein shall be binding upon
the heirs, executors, administrators, representatives,
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successors and assigns of Guarantor and shall inure to the benefit of
Lender, its successors, assigns, endorsees, transferees and participants.
Section 3.3. NOTICES. All notices, requests, demands and other
communications with respect hereto shall be in writing and shall be
delivered by hand, sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by United States mail, certified,
postage prepaid, return receipt requested, at the following addresses:
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If to Lender, to -
Equity Inns Partnership, L.P.
4735 Spottswood, Suite 102
Memphis, Tennessee 38117
Attn: Mr. Phillip H. McNeill, Sr.
With a copy to -
Hunton & Williams
1751 Pinnacle Drive, Suite 1700
McLean, Virginia 22102
Attn: Gerald R. Best, Esquire
If to Guarantor, to -
Hudson Hotels Corporation
One Airport Way, Suite 200
Rochester, New York 14624
Attn: Mr. E. Anthony Wilson
Any notice, request, demand or other communication delivered or sent in the
manner aforesaid shall be deemed given or made, as the case may be, upon the
earlier of the date it is actually received or (a) on the business day after the
day on which it is delivered by hand, (b) on the business day after the day on
which it is properly delivered to Federal Express (or a comparable overnight
delivery service) or (c) on the third business day after the day on which it is
deposited in the United States mail. Any addressee may change its address by
notifying the other addressees of the new address in any manner permitted by
this Section.
Section 3.4. CAPTIONS; GENDER; NUMBER. The captions hereof are for
convenience of reference only and shall neither limit nor enlarge the
provisions hereof. All pronouns used herein, whether used in the
masculine, feminine or neuter gender, shall include all other genders. The
singular shall include the plural and vice versa unless the context
requires otherwise.
Section 3.5. SEVERABILITY. If any provision of this Guaranty, or
the application thereof to any person or circumstance, shall to any extent
be invalid or unenforceable, the remainder of the provisions hereof, or the
application thereof to other persons or circumstances, shall not be
affected thereby, and each provision hereof shall be valid and enforceable
to the fullest extent permitted by law.
Section 3.6. AMENDMENTS. No provision of this Guaranty may be
amended, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the amendment,
waiver, discharge or termination is sought. No subsequent guaranty by the
Guarantor or any other person with respect to the Indebtedness or the
Obligations shall be deemed in lieu of or to supersede this Guaranty, but
such guaranty shall be construed as an additional or supplementary guaranty
unless otherwise expressly provided for in such subsequent guaranty.
Furthermore, this Guaranty shall be construed to be an additional or
supplementary guaranty to any guaranty previously executed by the Guarantor
or any other
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guarantor of the Indebtedness or the Obligations and shall not terminate
any prior guaranty unless such termination is expressly provided for
herein. The Guarantor's obligation hereunder shall be in addition to any
obligation of the Guarantor as endorsers of any obligation of the Borrower.
Section 3.7. ASSIGNMENTS. Guarantor shall neither assign nor
delegate to any other person or entity its rights or obligations hereunder
without the prior written consent of Lender, which consent Lender may
withhold in its absolute discretion. Any such attempted assignment or
delegation without such prior written consent shall be void.
WITNESS the following signatures.
[SIGNATURES ON FOLLOWING PAGES]
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GUARANTOR:
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HUDSON HOTELS CORPORATION,
a New York corporation
By: /s/ E. Anthony Wilson
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Title: President
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STATE OF NEW YORK
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CITY/COUNTY OF NEW YORK, to-wit:
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The foregoing instrument was duly acknowledged before me this 30th day of
October, 1997, in the forgoing jurisdiction by E. Anthony Wilson
as President of Hudson Hotels Corporation, a New York
Corporation, on behalf of the corporation, by E. Anthony Wilson, President.
My commission expires: 12/31/97.
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/s/ Alan S. Lockwood
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Notary Public
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