AMENDED AND RESTATED GUARANTY
EXHIBIT
10.3
AMENDED AND RESTATED GUARANTY
| CITICORP USA, INC. | ||
| NEW YORK | June 6, 2008 |
Xxxxx Xxxxxxxxxxxx, an individual (the “Undersigned”), entered into a Guaranty dated
June 29, 2007 (the “Original Guaranty”) in favor of Citicorp USA, Inc. (“Citicorp”
or “you”) in connection with the Loan Agreement dated June 29, 2007 (the “2007 Loan
Agreement”) between PGRT ESH, Inc., a Delaware corporation (the “Borrower”), and
Citicorp. The Borrower and Citicorp have amended and restated in its entirety the 2007 Loan
Agreement pursuant to an Amended and Restated Loan Agreement of even date herewith (as so amended
and restated and as further amended, restated, replaced, supplemented or otherwise modified from
time to time, the “Loan Agreement”), and it is a condition precedent to the effectiveness
of the Loan Agreement that the Undersigned shall have amended the Original Guaranty. In
furtherance thereof, the Undersigned is entering into this Amended and Restated Guaranty (as so
amended and restated and as further amended, restated, replaced, supplemented or otherwise modified
from time to time, this “Guaranty”).
I. For and in consideration of the obligations to Citicorp of the Borrower under (i) the
Amended and Restated Promissory Note of even date herewith in the principal amount of $110,000,000
(as so amended and restated and as further amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Note”) by the Borrower in favor of Citicorp, and (ii) the
Loan Agreement, the Undersigned does hereby unconditionally and irrevocably GUARANTEE the punctual
payment to you of the Obligations (as defined in the Loan Agreement), as and when payable, together
with interest thereon, fees related thereto and any and all costs and expenses which may be
incurred by you in collecting all or any of the Obligations or in enforcing any rights hereunder.
II. As implementing the foregoing, it is understood and agreed that the Undersigned
unconditionally and irrevocably guarantees that the Obligations will be paid to you strictly in
accordance with the terms and provisions of the Note, the Loan Agreement, the other Loan Documents
or any other agreement, express or implied, which has been or may hereafter be made or entered into
by the Borrower in reference thereto, regardless of any law, regulation or decree, now or hereafter
in effect, which might in any manner affect any of the terms or provisions of the Note, the Loan
Agreement, the other Loan Documents, or any such other agreement or your rights with respect
thereto as against the Borrower, or cause or permit to be invoked any alteration in the time,
amount or manner of payment by the Borrower of any of the Obligations.
III. To induce you to make the Loan (as defined in the Loan Agreement) under the Note and the
Loan Agreement, the Undersigned represents and warrants as follows as of the date hereof: (a) no
authorization or approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and performance of this
Guaranty by the Undersigned, and the execution, delivery and performance of this Guaranty by the
Undersigned do not and will not violate or otherwise contravene law or any material agreement by
which the Undersigned or his property is bound; (b) this Guaranty is the legal, valid and binding
obligation of the Undersigned, enforceable against the Undersigned in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally and general principles of equity; (c) the balance sheet and
other financial statements of the Undersigned most recently furnished to you by or on behalf of the
Undersigned are true, correct and complete, and fairly present the financial condition of the
Undersigned as of the date thereof for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied, and since such date, there has been
no material adverse change in such financial condition of the Undersigned or in the ability of the
Undersigned to perform the Undersigned’s obligations hereunder;
(d) all tax returns with respect to the Undersigned and the Undersigned’s property which are
required to be filed have been duly filed, all taxes and assessments shown thereon to be due and
payable by the Undersigned have been paid, and no taxing authority has asserted any claim for
unpaid taxes or assessments against the Undersigned; (e) there is no action or proceeding
affecting the Undersigned pending before any court, governmental agency or arbitrator or, to the
knowledge of the Undersigned, threatened, and there is no other action or proceeding affecting the
Undersigned pending before any court, governmental agency or arbitrator or, to the knowledge of the
Undersigned, threatened, which may materially adversely affect the financial condition, affairs or
prospects of the Undersigned, or which purports to affect the legality, validity or enforceability
of this Guaranty or any document executed or delivered in connection herewith by the Undersigned
(including, without limitation, any other Loan Document); (f) no Event of Default (as defined in
the Loan Agreement) has occurred and is continuing nor has any event occurred which, with the
giving of notice or the passage of time, or both, would constitute an Event of Default; (g) neither
the Undersigned nor any of his affiliates (as defined below) has incurred any Contingent Liability
(as defined in the Loan Agreement) since June 11, 2007, other than guaranties or other such
obligations disclosed in their financial statements dated as of and for the period ended December
31, 2007 and previously delivered to you; and (h) except as specified in Schedule 4.1.28 to the
Loan Agreement, neither the Undersigned nor any of his affiliates is in default under any loan
agreement, mortgage or other instrument or agreement relating, directly or indirectly, to any of
the Collateral Entity Properties (as defined in the Loan Agreement).
IV. So long as any of the Obligations shall remain unpaid, the Undersigned will, unless you
shall otherwise consent in writing: (a) comply in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation, paying before the
same become delinquent all taxes, assessments and governmental charges imposed upon the Undersigned
or the Undersigned’s property, except to the extent contested in good faith and by appropriate
proceedings; (b) upon reasonable notice to the Undersigned and at reasonable times prior to an
Event of Default and at any time thereafter, provide you access to the books and financial records
of the Undersigned from time to time to inspect and make copies (at the Undersigned’s expense) of
such books and records and provide you with copies (photostatic or electronic, as the case may be)
of all financial statements, reports, books, records and accounts furnished to the Undersigned in
respect of the Collateral Entity Properties not later than three (3) Business Days (as defined in
the Loan Agreement) after receipt thereof by the Undersigned; (c) (i) maintain at all times for the
Undersigned and Lightstone Holdings LLC, a Delaware limited liability company
(“Lightstone”), on a combined basis, but without duplication, Unencumbered Liquid Assets
(as defined below) in an amount not less than (A) $40,000,000 commencing on the date hereof and at
all times thereafter until September 30, 2008 and (B) $50,000,000 commencing September 30, 2008 and
at all times thereafter and (ii) maintain at all times commencing September 30, 2008 for the
Undersigned and Lightstone on a combined basis, but without duplication, at least $10,000,000 of
Unencumbered Liquid Assets with you, Citibank, N.A. or another affiliate thereof in one or more
accounts owned solely by the Undersigned and/or Lightstone; (d) maintain at all times for the
Undersigned and Lightstone, on a combined basis, but without duplication, a net worth, consisting
of total assets less total liabilities of the Undersigned and Lightstone, determined in accordance
with generally accepted accounting principles consistently applied (“Net Worth”), of not
less than $900,000,000; (e) furnish to you as soon as available and in any event by April 10, 2009,
the balance sheet (showing, among other things, the Undersigned’s and Lightstone’s Net Worth and
Unencumbered Liquid Assets, each on a combined basis, but without duplication) and statement of
income and other regularly prepared financial statements of the Undersigned and each other Loan
Party (as defined in the Loan Agreement) for calendar year 2008, certified as true and complete by
the Undersigned; (f) promptly (and in any event within thirty (30) days) after the filing thereof,
furnish, or cause to be furnished, to you all annual Federal income tax returns of the Undersigned
and each other Loan Party, including all schedules thereto; (g) furnish, or cause to be furnished,
to you on or before December 31, 2008, a projection of income, expenses and cash flow, in form and
substance satisfactory to you, in respect of the Collateral Entity Properties and the Collateral
(as defined in the Loan Agreement) for calendar year 2009; (h) furnish, or cause to be furnished,
to you, no later than forty-five (45) days after the end of each calendar quarter, operating
statements and rent rolls with respect to the Collateral Entity Properties and on a combined basis
with respect to the Collateral, together with evidence, in form and substance satisfactory to you,
of the Collateral Value (as defined in the Loan Agreement) as of the end of such calendar quarter,
in each case certified by the Undersigned, together with a compliance certificate in form and
substance satisfactory to you as to the Undersigned’s compliance with the covenants set out in
clauses (c) and (d) of this paragraph IV;
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(i) furnish, or cause to be furnished, to you within forty-five (45) days after the end of calendar
year 2008, a statement of the operating results of the Collateral Entity Properties for such year;
(j) furnish, or cause to be furnished, to you, within thirty (30) days after the end of each month,
financial statements of Extended Stay of America Hotels (as defined in the Loan Agreement) as of
the end of or for such month, including, without limitation, income statements and cash flow
statements reflecting, among other things, a calculation of the EBITDA and revenue per average room
of Extended Stay of America Hotels for such month and for the twelve-month period ending on the
last day of such month, together with a comparison of such financial statements to the projected
financial statements of Extended Stay of America Hotels previously provided by the Undersigned to
you for such month, in a form consistent with the form of financial statements of Extended Stay of
America Hotels previously furnished to you, certified by the Undersigned; (k) furnish, or cause to
be furnished, to you a compliance certificate, in form and substance satisfactory to you, within
fifteen (15) days after the end of each month, demonstrating the Undersigned’s compliance with the
Unencumbered Liquid Assets covenant set out in clause (c) of this paragraph IV as of the end of
such month, accompanied by (i) copies of the Undersigned’s relevant monthly bank and brokerage
statements sent to the Undersigned, (ii) a year-to-date statement of the sources and uses of the
Undersigned’s cash, (iii) a statement of the projected sources and uses of the Undersigned’s cash
for the three-month period commencing as of such month-end and (iv) a comparison of the actual
sources and uses of the Undersigned’s cash and the projected sources and uses of the Undersigned’s
cash for the three-month period ending at such month-end; (l) furnish, or cause to be furnished, to
you a compliance certificate, in form and substance satisfactory to you, within fifteen (15) days
after the end of each calendar quarter, demonstrating the Undersigned’s compliance with the Net
Worth covenant set out in clause (d) of this paragraph IV as of the end of such calendar quarter;
(m) permit, and cause the other Loan Parties to permit, you and your authorized agents to make
periodic inspections of the Collateral Entity Properties and/or the Collateral; (n) notify you of
the occurrence of any default under any loan agreement, mortgage or other material instrument or
agreement to which the Undersigned or any of his affiliates is a party relating, directly or
indirectly, to any of the Collateral Entity Properties; and (o) if Prime Group Realty Trust sells
any or all of its right, title or interest in, or refinances any Indebtedness (as defined in the
Loan Agreement) secured by, the real property known as 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx,
the Undersigned shall cause the Borrower to prepay the Loan by an amount equal to the Net Cash
Proceeds (as defined in the Loan Agreement) of such sale or refinancing (but after the aggregate
outstanding principal amount of the Loan is equal to or less than $60,000,000, if such a sale or
refinancing occurs, the Undersigned shall cause the Borrower to prepay the Loan by an amount equal
to 50% of the Net Cash Proceeds of such sale or refinancing), in accordance with and subject to the
terms of Section 2.3 of the Loan Agreement. So long as any of the Obligations shall remain unpaid,
the Undersigned will not, unless you shall otherwise consent in writing; (w) create or suffer to
exist at any time any Indebtedness or Contingent Liability of the Undersigned, any affiliate of the
Undersigned with a direct or indirect interest in the Collateral Entity Properties or any other
Loan Party other than Indebtedness and Contingent Liabilities owing to you or your affiliates,
Indebtedness and Contingent Liabilities as of March 31, 2008 disclosed to you in writing and
unsecured trade debt incurred in the ordinary course of business; (x) create, incur, assume or
suffer to exist, or permit any other Loan Party to create, incur, assume or suffer to exist, any
Lien (as defined in the Loan Agreement) on any portion of the Collateral or any other assets of the
Undersigned or any other Loan Party, other than Permitted Encumbrances (as defined in the Loan
Agreement) described in parts (a), (c) or (d) of the definition thereof; (y) permit or suffer to
exist a Sale or Pledge (as defined in the Loan Agreement) by the Borrower or any other Loan Party
of an interest in the Collateral or any other assets (collectively, a “Transfer”), other
than Permitted Encumbrances (notwithstanding the foregoing restriction, a transfer to a Restricted
Party (as defined in the Loan Agreement) or by devise or descent or by operation of law upon the
death of a grantor, trustee, beneficiary, member, partner or shareholder to a Restricted Party
shall not be deemed to be a Transfer, so long as such Transfer does not apply to Collateral and
does not impair or limit the Liens in your favor pursuant to any Pledge Agreement (as defined in
the Loan Agreement); or (z) pay, or permit any other Loan Party to, directly or indirectly, pay,
any dividends or distributions on, or purchase, redeem or retire any shares of any class of capital
stock or other equity interests or any warrants, options or rights to purchase any such capital
stock or other equity interests, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash or property, except
as and to the extent otherwise permitted in the case of dividends and distributions by the Borrower
pursuant to Section 5.2.7 of the Loan Agreement. As used herein, “affiliate” means, with
respect to a Person (as defined in the Loan Agreement), another Person, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common control with the
Person in question. The term “control” as used in the preceding sentence (and, with
correlative meaning, “controlled by” and “under common control with”) means actual
control or ownership or voting control, directly or indirectly, of 30% or more of the voting stock,
partnership interests, limited liability company interests or other beneficial ownership interests
of the Person in question.
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V. The Undersigned hereby consents and agrees that you may at any time, or from time to time,
in your sole discretion: (a) extend or change the time of payment, or the manner, place or terms
of payment of all or any of the Obligations; (b) exchange, release or surrender all or any of the
Collateral, or any part thereof, by whomsoever granted or deposited, or release, amend or waive or
consent to departure from any other guaranty, which is now or may hereafter be held by you in
connection with all or any of the Obligations; (c) sell or purchase all or any such Collateral at
public or private sale, or at any broker’s board, and after deducting all costs and expenses of
every kind for collection, sale or delivery, the net proceeds of any such sale may be applied by
you upon all or any of the Obligations; and (d) settle or compromise with the Borrower, or any
other Person liable thereon, any and all of the Obligations, or subordinate the payment of same, or
any part thereof to the payment of any other debts or claims, which may at any time be due or owing
to you or any other Person, all in such manner and upon such terms as you may deem proper, and
without notice to or further assent from the Undersigned, it being hereby agreed that the
Undersigned shall be and remain bound upon this Guaranty, irrespective of the existence, value or
condition of any Collateral, and notwithstanding any such change, exchange, settlement, compromise,
surrender, release, sale, application, renewal or extension. The Undersigned further agrees that
the liability of the Undersigned under this Guaranty shall be absolute and unconditional
irrespective of: (i) any lack of validity or enforceability of the Obligations, the Note, the Loan
Agreement, any other Loan Document or any other agreement or instrument relating thereto, (ii) any
amendment or waiver of, or any consent to departure from, the Note, the Loan Agreement, any other
Loan Document or any other agreement or instrument relating to the Obligations, (iii) any
non-perfection of any Collateral, or (iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a surety or a guarantor.
VI. The Undersigned hereby waives notice of acceptance of this Guaranty, and also presentment,
demand, protests and notice of dishonor of any and all of the Obligations, and promptness in
commencing suit against any party thereto or liable thereon, and/or in giving any notice to or of
making any claim or demand hereunder upon the Undersigned. No act or omission of any kind on your
part shall in any event affect or impair this Guaranty, nor shall same be affected by any change
which may arise by reason of the death, disability or incompetency of the Undersigned. The
Undersigned further agrees that this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time payment, or any part thereof, of the Obligations is rescinded or
must otherwise be restored or returned by you upon the insolvency, bankruptcy or reorganization of
the Borrower, or otherwise, all as though such payment had not been made. The Undersigned further
agrees not to exercise any rights which the Undersigned may acquire by way of subrogation under
this Guaranty, by any payment made hereunder or otherwise, until all the Obligations shall have
been indefeasibly paid in full in cash. If any amount shall be paid to the Undersigned on account
of such subrogation rights at any time when all the Obligations shall not have been paid in full,
such amount shall be held in trust for your benefit and shall forthwith be paid to you to be held
as cash collateral or credited and applied upon the Obligations, whether matured or unmatured.
VII. This Guaranty shall not be revoked or impaired as to the Undersigned by the death,
disability or incompetency or by the revocation or release of any liabilities hereunder of the
Undersigned.
VIII. In case any provision in or obligation under this Guaranty or any other document related
to this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
IX. This Guaranty and the other documents related to this Guaranty constitute the entire
understanding between the parties hereto with respect to the subject matter hereof and supersede
any prior or contemporaneous agreements, written or oral, with respect thereto.
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X. Without limiting your right to bring any action or proceeding against the Undersigned or
against property of the Undersigned arising out of or relating to this Guaranty (an
“Action”) in the courts of other jurisdictions, the Undersigned hereby irrevocably submits,
with respect to any Action (and, exclusively, with respect to any other proceeding involving the
Undersigned and you), to the jurisdiction of any New York State or Federal court sitting in New
York County, and the Undersigned hereby irrevocably agrees that any Action may be heard and
determined in such New York State court or in such Federal court. The Undersigned hereby
irrevocably waives, to the fullest extent the Undersigned may effectively do so, the defense of an
inconvenient forum to the maintenance of any Action in any jurisdiction. The Undersigned hereby
irrevocably agrees that the summons and complaint or any other process in any Action in any
jurisdiction may be served by mailing to either of the addresses set forth below or by hand
delivery to a person of suitable age and discretion at either of the addresses set forth below.
Such service will be complete on the date such process is so mailed or delivered. The Undersigned
may also be served in any other manner permitted by law, in which event the Undersigned’s time to
respond shall be the time provided by law.
XI. This is a continuing guaranty and shall (a) remain in full force and effect until all the
Obligations shall have been indefeasibly paid in full in cash; (b) be binding upon the Undersigned
and the heirs, executors, administrators, successors and assigns of the Undersigned, and shall
inure to the benefit of, and be enforceable by you and your successors, transferees and assigns;
and (c) be deemed to have been made under and shall be governed by the laws of the State of New
York in all respects, including matters of construction, validity and performance, and it is
understood and agreed that none of its terms or provisions may be waived, altered, modified or
amended except in writing duly signed for and on your behalf.
XII. “Unencumbered Liquid Assets,” as used herein, means the following, as determined
by you in your reasonable discretion, at any time and from time to time (in each case, owned by the
Undersigned, Lightstone or their respective affiliates and limited to the fractional interests
therein of the Undersigned, Lightstone or their respective affiliates, as applicable, and as set
forth on their respective balance sheets): (a) cash and cash equivalents, and (b) marketable
securities (i) acquired for investment or with a view to achieving trading profits (and which may
be liquidated without restrictions within five (5) Business Days or less), (ii) owned of record and
beneficially by the Undersigned and/or Lightstone or by Persons (A) whose entire ownership interest
is owned of record and beneficially by the Undersigned or Lightstone and (B) that are otherwise
controlled by the Undersigned or Lightstone, in each case without restriction, and (iii) freely
tradeable without any restriction on the New York Stock Exchange or the American Stock Exchange or
through NASDAQ.
XIII. All notices and other communications provided for hereunder shall be sent to the
Undersigned at their respective addresses set forth below in the manner set forth in Section 8.6 of
the Loan Agreement.
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XIV. BOTH THE UNDERSIGNED AND YOU HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING UNDER OR RELATING TO ANY OBLIGATION OR THIS GUARANTY.
| /s/ Xxxxx Xxxxxxxxxxxx | ||||
| Xxxxx Xxxxxxxxxxxx | ||||
Address:
|
0 Xxxxx Xxxx Xxxxx Xxxxxx, Xxx Xxxx 00000 |
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