Exhibit 10.4
May 9, 2002
GUARANTY AND ASSUMPTION OF MASTER LICENSEE'S OBLIGATIONS
THIS Guaranty and Assumption of Master Licensee's Obligations (the
"Guaranty") is made as of May 9, 2002 by HOSP-ITALIA INDUSTRIES, INC., a Nevada
corporation, with its registered office at the address set forth below
("Guarantor"), in favor of CENDANT GLOBAL SERVICES B.V., a private company with
limited liability organized under the laws of the Netherlands ("Company").
WHEREAS, Company and Team Piemmesse, S.A., ("Former Master Licensee")
entered into that certain Days Inn System Master License Agreement for the
Territory of Italy, dated as of June 1, 2000 (the "Master Agreement") pursuant
to which Company granted to Master Licensee certain Days Inns System hotel
development and franchising rights in such Territory; and
WHEREAS, Team BMP, S.A. executed and delivered to Company a Guaranty
and Assumption of Master Licensee's Obligations with regard to Former Master
Licensee's obligations under the Master Agreement; and
WHEREAS, Former Master Licensee has assigned its interest in the Master
Agreement to Days Master Italia, S.p.A., a company limited by stock organized
and existing under the laws of Italy ("Master Licensee"); and
WHEREAS, Company requires that the Guarantor execute and deliver this
Guaranty of the Master Agreement by Former Master Licensee to Master Licensee;
and
WHEREAS, Guarantor shall succeed to and become the Guarantor under the
Master Agreement in all respects.
NOW, THEREFORE, in consideration of and as an inducement to the consent
by Company to assignment of the Master Agreement, the Guarantor hereby
unconditionally and irrevocably states as follows:
Section 1. Interpretation
In this Guaranty, unless the context requires otherwise:
(a) terms and expressions defined in the Master Agreement have the same meanings
when used in this Guaranty:
(b) "Indebtedness" means all and any sums (whether fees, royalties, interest or
otherwise) which are or at any time may become payable by Master Licensee under
the Master Agreement and all other monies hereby secured, including without
limitation all amounts accrued prior to the effective date of the assignment to
Master Licensee that remain unpaid; and
(c) "Obligations" means all and any obligations, undertakings, covenants,
agreements and guaranties which are to be entered into, delivered or performed
or by Master Licensee under the Master Agreement, other than payment of
indebtedness.
Section 2. Guaranty
2.1 Guarantor irrevocably and unconditionally guarantees to Company and its
successors and assigns, as primary obligor and not merely as surety to Company,
jointly and severally for the Term and thereafter as provided in the Master
Agreement (i) the due and punctual payment of Indebtedness when and as the same
shall become due and payable, whether at stated maturity, upon acceleration,
extension or otherwise, according to the terms of the Master Agreement; and (ii)
for so long as Master Licensee is a majority owned subsidiary of Guarantor, the
punctual performance of Obligations when and as the same should be performed,
whether as expressly stated in the Master Agreement, upon acceleration,
extension or otherwise.
2.2 Guarantor agrees to pay to Company any amount of Indebtedness in the
currency in which the same is payable under the terms of the Master Agreement,
or render performance of any Obligation required under the Master Agreement, at
any time on demand against Company's certificate stating that Master Licensee
has failed to pay or perform punctually, or refuses to do so, the same pursuant
to the Master Agreement. The certificate in respect of amounts owned shall be
final and conclusive as to the amount owned absent manifest error.
2.3 This Guaranty shall be a continuing guaranty and shall remain in full force
and effect until the Indebtedness has been paid in full and all Obligations have
been performed in full.
Section 3. Indemnity
Without prejudice to the guaranty contained in Section 2, Guarantor
unconditionally and irrevocably undertakes as separate, additional and
continuing obligation and as a primary obligor, to indemnify Company from time
to time on demand against all losses, liabilities, damages, costs and expenses
whatsoever arising out of any failure by Master Licensee to make due and
punctual payment of Indebtedness or due and punctual performance and observance
of Obligations. This indemnity shall remain in effect notwithstanding that the
guaranty under Section 2 ceases to be valid or enforceable against Guarantor for
any reason whatsoever.
Section 4. Preservation of Rights
4.1 The obligations of Guarantor herein contained shall be in addition to and
not in substitution for any other guaranty or security which Company may now or
hereafter hold in respect of Indebtedness or Obligations. Company may change or
release any such guaranty or security and such change or release shall have no
effect whatsoever on the Guaranty.
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4.2 Neither the obligations of the Guarantor hereunder nor the rights, powers
and remedies conferred upon Company by this Guaranty or by any Legal Requirement
shall be discharged, impaired or otherwise affected by:
(a) the winding up, dissolution, administration or reorganization of
Master Licensee or any change in its status, function, control or ownership
subject to Section 10.3 hereof;
(b) any part or all of any Indebtedness or Obligation being or becoming
illegal, invalid or unenforceable in any respect;
(c) any variation or amendment to the terms of the Master Agreement or
any other document referred to therein;
(d) the granting of any time or indulgence to Master Licensee or any
other person;
(e) any invalidity or irregularity in the procedures used by Guarantor
in the execution of the Master Agreement or this Guaranty;
(f) any deficiency in the powers of Master Licensee to enter into or
perform any Indebtedness or Obligation or any irregularity in the exercise
thereof or any lack of authority by any person purporting to act on behalf of
the Master Licensee;
(g) any other guarantee or security which Company may now or hereafter
hold in respect of Indebtedness or Obligations being or becoming wholly or
partly void, voidable or unenforceable;
(h) any waiver, exercise, omission to exercise, compromise, renewal or
release of any rights against Master Licensee or any other person or any
compromise, arrangement or settlement with any of the same; or
(i) any act, omission, event or circumstance which would or may but for
this provision operate to prejudice, affect or discharge this Guaranty or the
obligations of the Guarantor hereunder.
4.3 Company shall not be obliged before exercising any of the rights, powers or
remedies conferred upon it under this Guaranty or by law;
(a) to make any demand of Master Licensee, except as specifically
provided in the Master Agreement;
(b) to take any action or obtain judgment in any court against Master
Licensee;
(c) to make or file any claim or proof in a winding-up or dissolution
of Master Licensee; or
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(d) to enforce or seek to enforce any such security taken in respect of
Indebtedness or Obligations.
4.4 Guarantor represents to and undertakes with Company that it has not taken
and will not take any security in respect of its liability under this Guaranty
whether from Master Licensee or any other person that is not expressly
subordinated to Master Licensee's obligations to Company, except for first
priority debt secured by Units owned by Master Licensee. So long as any
Indebtedness remains owing or any Obligation remains to be performed, Guarantor
shall not exercise any right of subrogation or any other rights of a surety or
enforce any security or other right or claim against Master Licensee (whether in
respect of its liability under this Guaranty or otherwise) or any other person
who has guaranteed or given any security in respect of Indebtedness or
Obligations or claim in the insolvency or liquidation of Master Licensee or any
such other person in competition with Company. If Guarantor receives any payment
or benefit in breach of this section, it shall hold the same in trust for
Company as a continuing security for Indebtedness and Obligations.
Section 5. Costs, Charges and Expenses
Guarantor shall from time to time forthwith on demand pay to or reimburse
Company for all costs, charges, expenses (including reasonable legal and other
fees on a full indemnity basis) incurred by Company in exercising any of its
rights or powers hereunder or in suing for or seeking to recover any sums due
hereunder or otherwise preserving or enforcing its rights upon payment of the
remaining Indebtedness and performance of Obligations.
Section 6. Taxes and Other Deductions
6.1 All sums payable by Guarantor under this Guaranty shall be paid in full
without set-off or counterclaim or any restriction or condition and free and
clear of any tax or other deductions or withholdings of any nature.
6.2 If Guarantor or any other person is required by any law or regulation to
make any deduction or withholding (on account of taxes or otherwise) from any
payment for the account of Company, such Guarantor shall, together with such
payment, pay such additional amount as will ensure that Company receives (free
and clear of any tax of other deductions or withholdings) the full amount which
it would have received if no such deduction or withholding had been required.
Each Guarantor shall promptly forward to Company copies of official receipts or
other evidence showing that the full amount of any such deduction or withholding
has been paid over to the relevant taxation or other authority.
Section 7. Currency Indemnity
If any amount due to Company from the Guarantor in one currency (the "first
currency") is received by Company in another currency (the "second currency"),
the Guarantor's obligations in respect of such amount shall only be discharged
to the extent that Company may purchase the first currency with the second
currency in accordance with normal banking procedures. If the amount of the
first currency which may be so purchased (after deducting any costs of exchange
and any other related costs) is less than the amount so due, the Guarantor shall
immediately pay Company the shortfall.
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Section 8. Representations and Warranties of Guarantor
8.1 Guarantor represents and warrants to Company as follows:
(a) Guarantor is a corporation duly organized and validly existing in
good standing under the laws of the State of Nevada. Guarantor is qualified or
registered to do business in every jurisdiction where the failure to so qualify
or register could have a material adverse effect on Guarantor separately or
Guarantor and its Affiliates taken as a whole.
(b) Guarantor has full legal right, power and authority to carry on its
present business, to own its properties and assets, to incur the indebtedness
and other obligations provided for in this Guaranty, to execute and deliver this
Guaranty and all other documents hereunder and to perform and observe the terms
and conditions hereof and thereof.
(c) Guarantor has taken all appropriate and necessary corporate and
legal action to authorize the execution and delivery of this Guaranty and all
other documents hereunder and to authorize the performance and observance of the
terms and conditions hereof and thereof.
(d) Guarantor has obtained or effected all authorizations necessary for
the valid execution, delivery and performance of this Guaranty and such
authorizations are in full force and effect and there has been no default under
the conditions of any of the same.
(e) This Guaranty constitutes the legal, valid and binding obligation
of Guarantor enforceable in accordance with its terms. The execution, delivery
and performance of the terms of this Guaranty or the payment by the Guarantor of
all amounts due on the dates and in the currency provided for herein: (i) will
not violate or contravene any provision of law or regulation applicable to
guarantor; (ii)will not conflict with the Articles of Incorporation or By-Laws
(or comparable constituent documents) of Guarantor; (iii) will not conflict with
or result in the breach of any provision of, or in the imposition of any
encumbrance under, any agreement or instrument to which Guarantor is a party or
by which it or any of its properties or assets is bound; and (iv) will not
constitute a default or an event that, with the giving of notice or the passing
of time or both would constitute a default under any such agreement or
instrument.
(f) Guarantor is not in default under any agreement or obligation
applicable to it or its assets or revenues, the consequences of which default
could materially and adversely affect its business or financial condition or its
ability to perform its obligations under this Guaranty.
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(g) Guarantor and each of its Affiliates are in full compliance with
all applicable Legal Requirements, including without limitation, tax laws.
(h) All registrations, recordings or filings required as a condition to
the legality, validity or enforceability of this Guaranty or any other document
to be executed and delivered pursuant to the terms of this Guaranty have been
made by the Guarantor.
(i) No litigation, administrative proceeding or arbitration is
presently pending or threatened against Guarantor or any o f its Affiliates or
their assets or revenues which, if adversely determined, could have a material
effect on the ability of Guarantor to perform its obligations under this
Guaranty.
(j) Guarantor is generally subject to civil and commercial law and to
legal proceedings and none of the Guarantor nor any of its Affiliates or their
assets or revenues is entitled to claim immunity or privilege (sovereign or
otherwise) from any set-off, judgment, execution, attachment or other legal
process.
(k) Neither Guarantor nor any of its direct, indirect, beneficial or
nominal equity owners are identified as any of the following: (1) a Specifically
Designated Narcotics Trafficker under 21 U.S.C. ss.1901 et. seq. and 31 C.F.R.
Part 598; (2) a Specifically Designated National listed in 31 C.F.R., Part V,
Appendix A, or otherwise officially designated by the United States Department
of the Treasury under any classification or notice system that affects the
ability of any U.S. financial institution to transact business with such person;
or (3) a person who has been convicted of any criminal offense (other than minor
traffic violations), has been indicted, or has been the subject of formal
criminal charges brought by a governmental prosecutors, whether or not tried or
convicted, in any country.
Except as may otherwise be permitted hereunder, the representations and
warranties herein shall be deemed automatically renewed and restated on each
anniversary hereof.
Section 9. Covenants
Guarantor undertakes and agrees with company as follows:
(a) Guarantor shall at all times own beneficially and directly or
indirectly not less than fifty percent (50%) of all of the issued share capital
of Master Licensee, unless and until a transaction authorized under Article 14
of the Master License Agreement concludes with the consent of Company, if
required.
(b) Guarantor shall ensure that the representations and warranties it
has made in this Guaranty remain at all times true and accurate by reference to
the facts and circumstances from time to time existing.
(c) Guarantor undertakes to maintain in full force and effect all
governmental authorizations referred to in Section 8.1, and to obtain or effect
any new or additional governmental authorizations, as may be required or
advisable in respect of the performance by Guarantor of any of the terms and
conditions of this Guaranty.
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(d) Guarantor shall maintain and shall cause Master Licensee to
maintain their respective corporate existence in good standing and in compliance
with all applicable laws and regulations.
(e) As soon as possible but in any event within seven (7) days after it
has or should have had knowledge of same, the Guarantor shall give written
notice to Company of any event which would permit Company to immediately
terminate the Master Agreement, or any event that, with the giving of notice of
the passage of time, or both, would be a breach of this Guaranty or of the
Master Agreement, or any litigation, administrative, proceeding or arbitration
referred to in Section 8.1(i), and of any other matter which has resulted or
might result in a material adverse change in Guarantor's operations or financial
condition or affect any Guarantor's liability to pay, when due, any amounts due
under this Guaranty or to perform its obligations hereunder.
(f) Guarantor shall furnish Company with all such other documents and
instruments and do all such other acts and things as Company may reasonably
require to carry out the transactions contemplated herein or in the documents to
be delivered hereunder.
Section 10. Assignment
10.1 Guarantor shall not assign or transfer any of its rights or obligations
hereunder.
10.2 Company may at any time assign or transfer all or any part of the rights,
benefits and obligations under this Guaranty.
10.3 If the Master Licensee undergoes a change of controlling interest or
assigns the Master License Agreement, with the consent of Company and in
accordance with Article 14 of the Master License Agreement, to a third party
that is not an Affiliate of Guarantor, and a suitable replacement guarantor
acceptable to Company signs and delivers a replacement guaranty acceptable to
Company, then Company will release Guarantor under this instrument from any
further liability, except Obligations of Master Licensee accruing through the
date of transfer.
Section 11. Governing Law and Jurisdiction
11.1 This Guaranty shall be governed by and construed in accordance with the
laws of the State of New Jersey.
11.2 (a) Guarantor agrees that any legal action or proceeding arising out of or
relating to this Guaranty, except with respect to any payment due hereunder,
shall be resolved by arbitration in accordance with the provisions of Paragraph
17.9 of the Master Agreement.
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(b) Guarantor agrees that any legal action or proceeding arising out of
or relating to the payment of any amount due under this Guaranty may be brought
in any court of or in the State of New York and Guarantor irrevocably submits to
the non-exclusive personal jurisdiction of such courts. Guarantor irrevocably
and unconditionally waives any objection which it may now or hereafter have to
the choice of New York, New York as the venue of any legal action arising out of
or relating to payments due under this Guaranty.
11.3 In respect of proceedings under Section 11.2(b), Guarantor irrevocably
appoints CT Corporation System of New York, New York as its agent to receive and
acknowledge on their behalf service of any writ, summons, order, judgment or
other notice of legal process in the United States. If for any reason the agent
named above (or its successor) no longer serves as agent of the Guarantor, then
for this purpose, the Guarantor shall promptly appoint a successor agent
satisfactory to Company and notify Company thereof provided that until Company
receives such notification, it shall be entitled to treat the agent named above
(or its said successor) as the agent of the Guarantor for the purposes of this
Section. Guarantor agrees that any such legal process shall be sufficiently
served on them if delivered to such agent for service at its address for the
time being in the United States whether or not such agent gives notice thereof
to any of the Guarantor.
11.4 With respect to proceedings under Section 11.2(b), nothing herein shall
limit the right of Company to commence any legal action against Guarantor and/or
its property in any other jurisdiction or to serve process in any manner
permitted by law, and the taking of proceedings in any jurisdiction shall not
preclude the taking of proceedings in any jurisdiction whether concurrently or
not.
11.5 Guarantor irrevocably waives any immunity to which it or its property may
at any time be or become entitled, whether characterized as sovereign immunity
or otherwise, from any set-off or legal action in the United States or
elsewhere, including immunity from service of process, immunity from
jurisdiction of any court or tribunal, and immunity of any of its property from
attachment prior to judgment or from execution of a judgment.
Section 12. Notices
12.1 Each notice, demand or other communication to be given or made to the
Guarantor under this Guaranty shall be in writing and delivered at its address
or telex number or fax number set out below (or such other address or telex
number or fax number as the Guarantor has by five (5) days' prior written notice
specified to Company):
To Guarantor: Hosp-Italia Industries, Inc., 00 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxxx 00000, Attention, Xxxxx X. Xxxxxx, Executive Vice President; Fax:
000-000-0000; with a copy to Xxxxxxxx, XxXxxxx & Xxxxxxxx, P.C., The Xxxx Xxxxx,
Xxxxx 0000, 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX (XXX) 15219, Attn: Xxxxxxx X.
Xxxxxxx, Xx., Fax: 000-000-0000
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To Company: Cendant Global Services B.V., c/o Premier Trust N.V., Official, de
Xxxxxxxxx 0, 0000 XX Xxxxxxxx, Xxx Xxxxxxxxxxx, with a copy to: Days Inns
Worldwide, Inc.; 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx (XXX) 07054; Attn:
Executive Vice President and Deputy General Counsel; Fax 000-000-0000
12.2 Any notice, demand or other communication so addressed shall be deemed to
have been delivered (i) if given or made by letter, when actually delivered to
the relevant address, (ii) if given or made by telex, when dispatched with
confirmed answerback and (iii) if given or made by fax, when dispatched with a
simultaneous confirmation of transmission.
12.3 Any notice, demand or other communication from Guarantor to Company shall
be given or made in accordance with Paragraph 17.10 of the Master Agreement.
Section 13. Miscellaneous
13.1 The failure or delay of Company to require performance by Guarantor of any
provision of this Guaranty shall not affect its right to require performance of
such provision nor shall any single or partial exercise of the same preclude any
further exercise thereof or the exercise of any other right, power or remedy.
Each and every right, power and remedy granted to Company hereunder or by law
shall be cumulative and may be exercised in part or in whole from time to time.
13.2 If any one or more of the provisions contained in this Guaranty shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability o f the remaining provisions contained
herein shall not in any way be affected or impaired hereby.
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13.3 Any amendment or waiver of any provision of this Guaranty and any waiver of
any default under this guaranty shall only be effective if made in writing and
signed by Company.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its
duly authorized representative, as of the day and year first written above.
HOSP-ITALIA INDUSTRIES INC.
as Guarantor
By: /s/Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
Before me, the undersigned notary public personally appeared Xxxxx X.
Xxxxxx, to me known, who executed his instrument in the capacity stated above as
the free act and deed of HOSP-ITALIA INDUSTRIES, INC. at Hingham, Massachusetts,
United States of America.
/s/ Xxxxxx X. Xxxxxx
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(Notary Seal)
My Commission Expires: October 30, 2002
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