Exhibit 10.3.2
GUARANTY AND INDEMNITY AGREEMENT
THIS GUARANTY AND INDEMNITY AGREEMENT (this "Agreement"), made effective
as of the 8th day of December 1998, by LODGIAN AMI, INC., a Maryland corporation
("AMI"), PENMOCO, INC., a Michigan corporation ("PI"), and ISLAND MOTEL
ENTERPRISES, INC., a Georgia corporation ("IME"), each with a principal place of
business at Two Live Oak Center, 0000 Xxxxxxxxx Xxxx, XX, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000 (AMI, PI and IME are sometimes hereinafter collectively referred
to as "Guarantor"), to and for the benefit of BANC ONE CAPITAL FUNDING
CORPORATION, an Ohio corporation, having an office at 000 Xxxx Xxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxx, Xxxx 00000 ("Lender").
RECITALS:
A. Lender and Servico Concord, Inc., a California corporation
("Borrower"), have entered into a Loan Agreement of even date herewith (as the
same may be amended from time to time, the "Loan Agreement") pursuant to which
Lender has agreed to make a loan to Borrower in the amount of up to $8,449,183
(the "Loan"), which Loan is evidenced by that certain Promissory Note of even
date herewith in the principal amount of $7,435,281 (the "Primary Note" and that
certain Promissory Note of even date herewith in the principal amount of
$1,013,902 (the "Additional Note" and, together with the Primary Note, the
"Note"). The Loan is secured by, inter alia, that certain Leasehold Deed of
Trust, Security Agreement and Fixture Filing of even date herewith from Borrower
to Lender encumbering Borrower's property commonly known as Sheraton Hotel
Concord, located at 00 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the
"Mortgage") (the Note, the Loan Agreement, the Mortgage and every other
document, instrument and agreement evidencing or securing the Loan are
hereinafter sometimes collectively referred to as the "Loan Documents");
B. Borrower is an affiliate of PI, AMI and IME;
C. Lender is extending financial accommodations to PI, AMI and IME
concurrently with the Loan and, in order to induce Lender to extend such
financial accommodations, PI, AMI and IME are willing to execute this Agreement;
D. Lender is unwilling to make the Loan without the execution and delivery
of this Agreement by PI, AMI and IME;
NOW, THEREFORE, to induce Lender to make the Loan and in consideration of
One Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor, intending to be legally
bound hereby, jointly and severally, agree as follows:
1. Liabilities.
(a) Notwithstanding any provision contained in the Note, the Loan
Agreement, the Mortgage or any other Loan Document to the contrary, Guarantor
hereby absolutely, primarily, unconditionally and irrevocably guarantees to
Lender, its successors and assigns, the full prompt and complete payment and
performance of all obligations and liabilities of Borrower arising under the
Loan Documents (all of which obligations and liabilities are collectively
hereinafter referred to as the "Liabilities"). All terms used and not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.
(b) The validity of this Agreement and the obligations of Guarantor
hereunder shall in no way be terminated, abated, affected or impaired by the
happening from time to time of any event or condition, including, without
limitation, any of the following: (i) the assertion or non-assertion by Lender
of any of the rights or remedies available to Lender pursuant to the provisions
of the Loan Documents or pursuant to any applicable statutes; (ii) the waiver by
Lender of, or the failure of Lender to enforce, or the lack of diligence by
Lender in connection with, the enforcement of any of its rights or remedies
under the Loan Documents; (iii) the granting by Lender of any indulgence or
extension of time; (iv) the exercise by Lender of any so-called self-help
remedies; (v) any other act, omission or conditions which might in any manner or
to any extent vary the risk to Guarantor or might otherwise operate as a
discharge or release of the Guarantor under applicable law; (vi) the invalidity
or unenforceability of all or any portion or provision of the Note; (vii) any
release or discharge of or accord and satisfaction with Borrower or any other
person or entity, by variation of the terms of the Note or otherwise; (viii) the
impairment, modification, change, release, discharge or limitation of the
liability of Borrower or the Guarantor or any of their estates in bankruptcy,
resulting from or pursuant to the application of the bankruptcy or insolvency
laws of or any decision of any court of the United States or any state thereof;
(ix) any present or future law or order of any government (de jure or de facto)
or of any agency thereof purporting to reduce, amend or otherwise affect the
Liabilities or to vary any terms of payment, satisfaction or discharge thereof;
(x) the waiver, compromise, settlement, release, extension, amendment, change,
modification or termination of the terms of the Liabilities or any or all of the
obligations, covenants or agreements of Borrower under the Loan Documents
(except by satisfaction in full of all Liabilities) or of the Guarantor under
this Agreement; (xi) the extension of the time for satisfaction, discharge or
payment of the Liabilities or any part thereof owing or payable by Borrower
under the Loan Documents or of the time for performance of any other
obligations, covenants or agreements under or arising out of this Agreement or
the extension or renewal of any thereof; (xii) the existence of any other
guaranty of the Liabilities in favor of Lender, or the enforcement or attempted
enforcement of such other guaranty; and (xiii) any event or action that would in
the absence of this paragraph result in the release or discharge of the
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in this Agreement or any other agreement.
2. Waivers. The Guarantor hereby waives all notice of any default in the
payment of or non-performance of any Liabilities, all protest, demands, notices
or presentments of any kind, notice of any acceptance of this Agreement and all
matters and rights which may be raised in avoidance of, or in defense against,
any action to enforce the obligations of the Guarantor hereunder; provided,
however, that nothing herein shall waive the Guarantor's right to assert payment
or performance of any Liabilities as a defense to a claim relating to such
Liabilities under this Agreement, to the extent of such payment or performance.
The Guarantor hereby waives any and all suretyship defenses or defenses in the
nature thereof without in any manner limiting any other provisions of this
Agreement. Notwithstanding anything to the contrary contained herein, the
Guarantor hereby irrevocably waives all rights the Guarantor may have at law or
in equity, including, without limitation, any law subrogating the Guarantor to
the rights of Lender, to seek contribution, indemnification or any other form of
reimbursement from Borrower and any other person now or hereafter primarily or
secondarily liable for any obligations of Borrower to Lender, including without
limitation, the Liabilities, for any payment or performance made by the
Guarantor under or in connection with this Agreement, unless and until
irrevocable payment in full of the Note has been received by Lender.
3. Primary Liability.
(a) The Guarantor's liability under this Agreement shall be primary,
and with respect to any right of action which shall accrue to Lender relating to
any Liabilities, Lender may at its sole option and without notice or demand,
proceed directly against the Guarantor without having proceeded against Borrower
or any other person or entity liable to any extent for any of the Liabilities or
against the collateral under the Loan Documents. The Guarantor's liability
hereunder shall continue without regard to whether or not Lender may have
instituted or prosecuted or obtained or realized any judgment in any suit,
action or proceeding or shall have exhausted any of its remedies or taken any
steps to enforce any of its rights under or pursuant to the Loan Documents or at
law or in equity, or otherwise, and without regard to any other condition or
contingency, so long as any of the Liabilities remains unsatisfied to any
extent. This Agreement is an agreement of payment and performance and not merely
of collection.
(b) Each default on any of the Liabilities shall give rise to a
separate cause of action and separate suits may be brought hereunder as each
cause of action arises or, at Lender's option, any or all causes of action which
arise prior to or after any suit is commenced hereunder may be included in such
suit.
4. Representations. The Guarantor further represents to Lender, as an
inducement to making the Loan, that there is not pending or threatened any
litigation, arbitration, administrative or governmental proceeding against the
Guarantor which would in any way prohibit or impede the adoption, execution, or
performance of this Agreement by the Guarantor or which would affect any of the
undertakings herein; that compliance by the Guarantor with the Guarantor's
obligations under this Agreement has not resulted and will not result in the
violation of this Agreement or any agreement or other instrument to which the
Guarantor is a party or by which the Guarantor or any of the Guarantor's assets
are bound; that this Agreement and all actions contemplated to be taken by the
Guarantor hereunder have been duly authorized; and that this Agreement and such
actions and undertakings are valid and binding upon the Guarantor and
enforceable against the Guarantor in accordance with their terms.
5. Borrower's Actions. No encumbrance, assignment, leasing, subletting,
sale or other transfer by Borrower of any of Borrower's assets shall operate to
extinguish or diminish the liability of the Guarantor under this Agreement.
6. Bankruptcy. If Borrower files a petition for reorganization,
arrangement, composition or similar relief under any present or future provision
of the Federal Bankruptcy Code, or if such a petition is filed against Borrower
by any member or partner of Borrower, by Guarantor or by any person or entity
affiliated with, related to or in which a beneficial interest is owned by such
member or partner or Guarantor (each, a "Bankruptcy Event"), Guarantor shall,
from and after the date of such filing, absolutely, primarily, unconditionally
and irrevocably guarantee to Lender, its successors and assigns, the full,
prompt and absolute payment, performance, observance and discharge of all of
Borrower's obligations and liabilities arising under the Loan Documents,
including the repayment of all principal and interest under the Note and the
payment of all other sums payable by Borrower under the Loan Documents.
7. No Reliance. The Guarantor assumes the responsibility for being and
keeping itself informed of the financial condition of Borrower and of all other
circumstances bearing upon the risk of failure to pay, perform or discharge any
of the obligations and liabilities of Borrower which diligent inquiry would
reveal, and Lender shall have no duty to advise the Guarantor of information
known to Lender regarding such condition or any such circumstance.
8. Payment of Expenses. The Guarantor shall be responsible to Lender for
all expenses (including reasonable attorneys' fees), incurred by Lender in
enforcing any obligations of the Guarantor under this Agreement.
9. Successors and Assigns. All references to Lender and Guarantor shall be
deemed to include references to the successors and assigns of Lender and
Guarantor.
10. Governing Law. In all respects, including without limitation, matters
of construction and performance of this Agreement and the obligations arising
hereunder, this Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of Ohio applicable to contracts and
obligations made and performed in such state and any applicable laws of the
United States of America. Interpretation and construction of this Agreement
shall be according to the contents hereof and without presumption or standard of
construction in favor of or against Guarantor or Lender.
11. Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law; provided, however, all rights, powers and remedies
provided herein may be exercised only to the extent that the exercise thereof
does not violate any applicable law, and are intended to be limited to the
extent necessary so that they will not render this Agreement invalid or
unenforceable under any applicable law.
12. No Waiver. The waiver of any provision of this Agreement by Lender
shall constitute a waiver of that provision on that occasion only, and shall not
constitute a waiver of any other provision of this Agreement, or that provision
with respect to any other occasion.
13. Commercial Transaction.
(a) TO INDUCE LENDER TO ENTER INTO THE COMMERCIAL LOAN TRANSACTION
EVIDENCED BY AND SECURED BY THE LOAN DOCUMENTS, GUARANTOR AGREES THAT THE SAID
TRANSACTION IS COMMERCIAL AND NOT A CONSUMER TRANSACTION.
(b) Each of the waivers set forth in this Agreement is made with
knowledge of its significance and consequences, and under the circumstances the
waivers are reasonable. If any of said waivers is determined to be contrary to
any applicable law or public policy, such waiver shall be effective only to the
maximum extent permitted by law.
14. Jury Trial. LENDER AND GUARANTOR HEREBY WAIVE THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER
OF THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE
BY LENDER AND GUARANTOR, AND LENDER AND GUARANTOR ACKNOWLEDGE THAT NO PERSON
ACTING ON BEHALF OF ANOTHER PARTY TO THIS AGREEMENT HAS MADE ANY REPRESENTATIONS
OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR
NULLIFY ITS EFFECT. LENDER AND GUARANTOR FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF ALL WAIVERS CONTAINED HEREIN BY INDEPENDENT
LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT LENDER AND GUARANTOR
HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
15. Consent to Jurisdiction. GUARANTOR HEREBY SUBMITS TO PERSONAL
JURISDICTION IN THE STATE OF OHIO FOR THE ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO OBJECT TO SUCH
JURISDICTION FOR THE PURPOSES OF LITIGATION TO ENFORCE ANY PROVISION OF THIS
AGREEMENT. GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF AND AGREES THAT ANY
ACTION, SUIT OR PROCEEDING TO ENFORCE THIS AGREEMENT MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT IN THE STATE OF OHIO. GUARANTOR HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY HAVE TO THE LAYING OF THE VENUE OF ANY SUCH ACTION, SUIT,
OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM
THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH GUARANTOR HEREBY APPOINTS CT CORPORATION
AS THEIR AGENT FOR SERVICE OF PROCESS. GUARANTOR HEREBY CONSENTS THAT SERVICE OF
PROCESS IN ANY ACTION, SUIT OR PROCEEDING MAY BE MADE BY SERVICE UPON THE
AFORESAID AGENT FOR SERVICE OF PROCESS, BY PERSONAL SERVICE UPON THE PARTY BEING
SERVED, OR BY DELIVERY IN ACCORDANCE WITH THE NOTICE REQUIREMENTS OF SECTION 16
OF THIS AGREEMENT.
16. Notices. Any notice which any party hereto may be required or may
desire to give hereunder shall be delivered personally, or by overnight express
courier, addressed in the case of Guarantor to:
Penmoco, Inc., Lodgian AMI, Inc. and
Island Motel Enterprises, Inc.
Two Live Oak Center
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
with a copy to:
Stearns, Weaver, Miller, Weissler,
Xxxxxxxx & Xxxxxxxxx, P.A.
Museum Tower
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
in the case of Lender to:
Banc One Capital Funding Corporation
000 Xxxx Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Loan Servicing
with a copy to:
Banc One Capital Markets, Inc.
000 Xxxx Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Legal Department and Real Estate Group
or at such other addresses or to the attention of such other persons as may from
time to time be designated by the party to be addressed by written notice to the
other in the manner herein provided. Notices, demands and requests given in the
manner aforesaid shall be deemed sufficiently served or given for all purposes
hereunder when received or when delivery is refused or when the same are
returned to sender for failure to be called for.
17. Miscellaneous.
(a) This Agreement may not be modified, altered or amended nor may
any provision hereof or rights hereunder be waived, except by an instrument in
writing signed by the person or entity against which such modification,
alteration, amendment or waiver is sought to be enforced.
(b) Except as provided in Section 6 above, this Agreement shall
terminate upon the irrevocable payment by Borrower to Lender of all amounts
evidenced by the Note and the other Loan Documents.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly
executed as of the date first written above.
GUARANTOR:
LODGIAN AMI, INC.
a Maryland corporation
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Vice President
ISLAND MOTEL ENTERPRISES, INC.
a Georgia corporation
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Vice President
PENMOCO, INC.
a Michigan corporation
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Vice President
