EXHIBIT 10.25
AMENDED AND RESTATED GUARANTY AGREEMENT
THIS AMENDED AND RESTATED GUARANTY AGREEMENT (this "Agreement") is made
and given as of this 10th day of August, 2001, by CANDLEWOOD HOTEL COMPANY,
INC., a Delaware corporation (the "Guarantor"), for the benefit of HPT CW
PROPERTIES TRUST, a Maryland real estate investment trust (the "Landlord"), and
HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust and the
sole stockholder of Landlord (together with the Landlord and their respective
successors and assigns, "HPT").
W I T N E S S E T H :
WHEREAS, pursuant to an Agreement to Lease, dated November 19, 1997 (as
amended, the "Agreement to Lease"), the Landlord and Candlewood Leasing No. 1,
Inc., a Delaware corporation (the "Tenant"), are, on the date hereof, entering
into an Amended and Restated Lease Agreement (the "Amended and Restated Lease")
with respect to certain real property, the related improvements and personal
property, as more particularly described therein; and
WHEREAS, it is a condition precedent to the Landlord's entering into the
Amended and Restated Lease that the Guarantor guarantee all of the payment and
performance obligations of the Tenant with respect to the Amended and Restated
Lease; and
WHEREAS, the transactions contemplated by the Amended and Restated Lease
are of direct material benefit to the Guarantor;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN TERMS. Capitalized terms used and not otherwise defined in
this Agreement shall have the meanings ascribed to such terms in the Amended and
Restated Lease. The Amended and Restated Lease and the Incidental Documents are
herein collectively referred to as the "Transaction Documents."
2. GUARANTEED OBLIGATIONS. For purposes of this Agreement, the term
"Guaranteed Obligations" shall mean the payment and performance of each and
every obligation of the Tenant to HPT under the Transaction Documents, whether
now
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existing or hereafter arising, and including, without limitation, the payment of
the full amount of the Rent payable under the Amended and Restated Lease.
3. REPRESENTATIONS AND COVENANTS. The Guarantor represents, warrants,
covenants and agrees that:
3.1 PERFORMANCE OF COVENANTS AND AGREEMENTS. Subject to the
limitations set forth in Section 20, during the term of this Agreement, the
Guarantor will cause the Tenant duly and punctually to perform all of the
covenants and agreements of Tenant set forth in the Transaction Documents.
3.2 VALIDITY OF AGREEMENT. The Guarantor has duly and validly
executed and delivered this Agreement; this Agreement constitutes the legal,
valid and binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors; and the execution,
delivery and performance of this Agreement have been duly authorized by all
requisite action of the Guarantor and such execution, delivery and performance
by the Guarantor will not result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any of the property or assets
of the Guarantor pursuant to the terms of, any indenture, mortgage, deed of
trust, note, other evidence of indebtedness, agreement or other instrument to
which the Guarantor is a party or by which the Guarantor or any property or
assets of the Guarantor is bound, or violate any provision of law applicable to
the Guarantor, or any order, writ, injunction, judgement or decree of any court
applicable to the Guarantor or any order or other public regulation of any
governmental commission, bureau or administrative agency applicable to the
Guarantor.
3.3 PAYMENT OF EXPENSES. The Guarantor agrees, as principal
obligor and not as Guarantor only, to pay to HPT forthwith, upon demand, in
immediately available Federal funds, all costs and expenses (including court
costs and reasonable legal expenses) incurred or expended by HPT in connection
with the enforcement of this Agreement, together with interest on amounts
recoverable under this Agreement from the time such amounts become due until
payment at the Interest Rate.
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3.4 REPORTS. The Guarantor shall promptly provide to HPT each of
the financial reports, certificates and other documents required of the
Guarantor under the Transaction Documents.
3.5 LEGAL EXISTENCE. The Guarantor shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence.
4. GUARANTEE. The Guarantor hereby unconditionally guarantees that the
Guaranteed Obligations which are monetary obligations which become due and
payable during the term of this Agreement shall be paid in full when due and
payable, whether upon demand, at the stated or accelerated maturity thereof or
upon any mandatory or voluntary prepayment pursuant to any Transaction Document,
or otherwise, and that the Guaranteed Obligations which are performance
obligations which are required to be performed during the term of this Agreement
shall be fully performed at the times and in the manner such performance is
required by the Transaction Documents. With respect to the Guaranteed
Obligations which are monetary obligations, this guarantee is a guarantee of
payment and not of collectibility and is absolute and in no way conditional or
contingent. In case any part of the Guaranteed Obligations shall not have been
paid when due and payable or performed at the time performance is required, the
Guarantor shall, within five (5) days after receipt of notice from HPT, pay or
cause to be paid to HPT the amount thereof as is then due and payable and unpaid
(including interest and other charges, if any, due thereon through the date of
payment in accordance with the applicable provisions of the Transaction
Documents) or perform or cause to be performed such obligations in accordance
with the Transaction Documents.
5. UNENFORCEABILITY OF GUARANTEED OBLIGATIONS, ETC. If the Tenant is for
any reason under no legal obligation to discharge any of the Guaranteed
Obligations, or if any other moneys included in the Guaranteed Obligations have
become unrecoverable from the Tenant by operation of law or for any other
reason, including, without limitation, the invalidity or irregularity in whole
or in part of any Guaranteed Obligation or of any Transaction Document or any
limitation on the liability of the Tenant thereunder or any limitation on the
method or terms of payment thereunder which may now or hereafter be caused or
imposed in any manner whatsoever, the guarantees contained in this Agreement
shall nevertheless remain in full force and effect in accordance with the terms
set forth herein and shall be binding upon the Guarantor to the same extent as
if the
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Guarantor at all times had been the principal debtor on all such Guaranteed
Obligations.
6. ADDITIONAL GUARANTEES. This Agreement shall be in addition to any
other guarantee or other security for the Guaranteed Obligations and it shall
not be prejudiced or rendered unenforceable by the invalidity of any such other
guarantee or security or by any waiver, amendment, release or modification
thereof.
7. CONSENTS AND WAIVERS, ETC. The Guarantor hereby acknowledges receipt
of correct and complete copies of each of the Transaction Documents and consents
to all of the terms and provisions thereof, as the same may be from time to time
hereafter amended or changed in accordance therewith, and waives, to the extent
the Guarantor lawfully may do so, (a) presentment, demand for payment, and
protest of nonpayment, of any of the Guaranteed Obligations, (b) notice of
acceptance of this Agreement and of diligence, presentment, demand and protest,
(c) notice of any default hereunder and any default, breach or nonperformance or
Event of Default under any of the Guaranteed Obligations or the Transaction
Documents, except as expressly provided in Section 4, (d) notice of the terms,
time and place of any private or public sale of collateral held as security for
the Guaranteed Obligations, (e) demand for performance or observance of, and any
enforcement of any provision of, or any pursuit or exhaustion of rights or
remedies against the Tenant or any other guarantor of the Guaranteed
Obligations, under or pursuant to the Transaction Documents, or any agreement
directly or indirectly relating thereto and any requirements of diligence or
promptness on the part of the holders of the Guaranteed Obligations in
connection therewith, and (f) any and all demands and notices of every kind and
description with respect to the foregoing or which may be required to be given
by any statute or rule of law.
8. NO IMPAIRMENT, ETC. The obligations, covenants, agreements and duties
of the Guarantor under this Agreement shall not be affected or impaired by any
assignment or transfer in whole or in part of any of the Guaranteed Obligations
without notice to the Guarantor, or any waiver by HPT or any holder of any of
the Guaranteed Obligations or by the holders of all of the Guaranteed
Obligations of the performance or observance by the Tenant or any other
guarantor of any of the agreements, covenants, terms or conditions contained in
the Guaranteed Obligations or the Transaction Documents or any indulgence in or
the extension of the time for payment by the Tenant or any other
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guarantor of any amounts payable under or in connection with the Guaranteed
Obligations or the Transaction Documents or any other instrument or agreement
relating to the Guaranteed Obligations or of the time for performance by the
Tenant or any other guarantor of any other obligations under or arising out of
any of the foregoing or the extension or renewal thereof, or the modification or
amendment (whether material or otherwise) of any duty, agreement or obligation
of the Tenant or any other guarantor set forth in any of the foregoing, or the
voluntary or involuntary sale or other disposition of all or substantially all
the assets of the Tenant or any other guarantor or insolvency, bankruptcy, or
other similar proceedings affecting the Tenant or any other guarantor or any
assets of the Tenant or any such other guarantor, or the release or discharge of
the Tenant or any such other guarantor from the performance or observance of any
agreement, covenant, term or condition contained in any of the foregoing without
the consent of the holders of the Guaranteed Obligations by operation of law.
9. REIMBURSEMENT, SUBROGATION, ETC. The Guarantor hereby covenants and
agrees that the Guarantor will not enforce or otherwise exercise any rights of
reimbursement, subrogation, contribution or other similar rights against the
Tenant or any other person with respect to the Guaranteed Obligations prior to
the payment in full of all amounts then due and owing but unpaid with respect to
the Amended and Restated Lease, and until the Guaranteed Obligations have been
satisfied in full, the Guarantor shall not have any right of subrogation, and
the Guarantor waives any defense it may have based upon any election of remedies
by HPT which destroys the Guarantor's subrogation rights or the Guarantor's
rights to proceed against the Tenant for reimbursement, including, without
limitation, any loss of rights the Guarantor may suffer by reason of any rights,
powers or remedies of the Tenant in connection with any anti-deficiency laws or
any other laws limiting, qualifying or discharging the indebtedness to HPT.
Until all obligations of the Tenant pursuant to the Transaction Documents shall
have been paid and satisfied in full, the Guarantor waives any right to enforce
any remedy which HPT now has or may in the future have against the Tenant, any
other guarantor or any other person and any benefit of, or any right to
participate in, any security whatsoever now or in the future held by HPT.
10. DEFEASANCE. (a) Unless sooner terminated pursuant to paragraph (b)
below, this Agreement shall terminate at such time as the Guaranteed Obligations
have been paid and performed in full and all other obligations of the Guarantor
to HPT under
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this Agreement have been satisfied in full; provided, however, if at any time,
all or any part of any payment applied on account of the Guaranteed Obligations
is or must be rescinded or returned for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or reorganization of the Tenant),
this Agreement, to the extent such payment is or must be rescinded or returned,
shall be deemed to have continued in existence notwithstanding any such
termination.
(b) Provided that (x) no (i) monetary Default, (ii) Default as to which
Notice thereof has been given to Tenant or (iii) Event of Default shall have
occurred and be continuing under the Amended and Restated Lease, (y) Cash Flow
(as defined below) on a cumulative basis for a period of twelve (12) full
consecutive Accounting Periods equals or exceeds Minimum Rent by fifty percent
(50%) with respect to such period, and (z) HPT shall receive a schedule
evidencing the foregoing, in form and substance reasonably satisfactory to HPT
prepared by a, so-called, "Big-Six" accounting firm or such other certified
public accountants as are approved by HPT (such approval not to be unreasonably
withheld, delayed or conditioned), this Agreement shall terminate ten (10)
Business Days after delivery to HPT of the financial statements described in
clause (z) preceding, and HPT shall, within ten (10) Business Days after the
written request of the Guarantor, confirm such termination by executing a
release of the Guarantor from all obligations and liabilities arising under this
Agreement subsequent to the release date and returning any unapplied balance of
the Guaranty Retained Funds (as hereinafter defined) to the Guarantor, together
with any accrued and unpaid interest thereon.
As used herein, "CASH FLOW" shall mean the net income before federal and
state income tax (or loss) of the Tenant in connection with the operation of the
Hotels, calculated in accordance with GAAP for the applicable period, as
illustrated in Exhibit A attached hereto, adjusted by adding back (a) all
extraordinary expense items, (b) depreciation and amortization, (c) interest
expense on Indebtedness permitted under the Amended and Restated Lease, (d)
Minimum Rent and Additional Rent, (e) base management fees, incentive management
fees, trade name fees, franchise fees, royalty fees and central marketing fees
paid to the Manager to the extent subordinate to payment of rent pursuant to the
Amended and Restated Lease from and after the occurrence of an Event of Default,
and further adjusted by deducting (f) required contributions to the FF&E Reserve
and (g) all extraordinary income items.
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11. SECURITY FOR GUARANTY. As security for the obligations of the
Guarantor hereunder, HPT has retained the sum of Ten Million Sixty-Four Thousand
Eight Hundred Seventy-Five Dollars ($10,064,875) (the "Guaranty Retained
Funds"). HPT shall have no obligation to hold the Guaranty Retained Funds in a
segregated account and may commingle the same with its general funds. Provided
that no Event of Default shall have occurred and be continuing, HPT shall credit
the Guarantor or its assigns with interest on any unapplied balance of the
Guaranty Retained Funds at a rate of 11.11% per annum. Such interest shall be
credited in arrears and pro rated with respect to any partial month. Provided
that (x) no (i) monetary Default, (ii) Default as to which Notice thereof has
been given to Tenant or (iii) Event of Default shall have occurred and be
continuing under the Amended and Restated Lease, (y) Cash Flow on a cumulative
basis for a period of twelve (12) full consecutive Accounting Periods equals or
exceeds Minimum Rent by forty percent (40%) with respect to such period, and (z)
HPT shall receive a schedule evidencing the foregoing, in form and substance
reasonably satisfactory to HPT prepared by certified public accountants approved
by HPT (such approval not to be unreasonably withheld, delayed or conditioned),
HPT shall, within ten (10) Business Days after the written request of the
Guarantor, pay any unapplied balance of the Guaranty Retained Funds, together
with any accrued and unpaid interest with respect thereto, to the Guarantor. At
the written request of the Guarantor, HPT shall credit accrued interest on the
Guaranty Retained Funds against the monthly Minimum Rent.
12. NOTICES. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall be
delivered either in hand, by telecopier with written acknowledgment of receipt,
or by mail or Federal Express or similar expedited commercial carrier, addressed
to the recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which
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is not a Business Day, the day of receipt or required delivery shall
automatically be extended to the next Business Day.
(c) All such notices shall be addressed,
if to HPT to:
c/o Hospitality Properties Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
if to the Guarantor to:
Candlewood Hotel Company, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇ ▇▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
13. SUCCESSORS AND ASSIGNS. Whenever in this Agreement, any of the
parties hereto is referred to, such reference shall
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be deemed to include the successors and assigns of such party, including without
limitation the holders, from time to time, of the Guaranteed Obligations; and
all representations, warranties, covenants and agreements by or on behalf of the
Guarantor which are contained in this Agreement shall inure to the benefit of
HPT's successors and assigns, including, without limitation, such holders,
whether so expressed or not; provided, however, that, if HPT shall transfer the
Guaranty Retained Funds to a person having a Net Worth less than ten (10) times
the unapplied balance thereof, HPT shall guaranty repayment thereof and payment
of any accrued interest thereon to the Guarantor in accordance with the terms of
this Agreement pursuant to a guaranty in form and substance reasonably
satisfactory to the Guarantor.
14. APPLICABLE LAW. Except as to matters regarding the internal affairs
of HPT and issues of or limitations on any personal liability of the
shareholders and trustees of HPT for obligations of HPT, as to which the laws of
the State of Maryland shall govern, this Agreement and any other instruments
executed and delivered to evidence, complete or perfect the transactions
contemplated hereby shall be interpreted, construed, applied and enforced in
accordance with the laws of The Commonwealth of Massachusetts applicable to
contracts between residents of Massachusetts which are to be performed entirely
within Massachusetts, regardless of (i) where any such instrument is executed or
delivered; or (ii) where any payment or other performance required by any such
instrument is made or required to be made; or (iii) where any breach of any
provision of any such instrument occurs, or any cause of action otherwise
accrues; or (iv) where any action or other proceeding is instituted or pending;
or (v) the nationality, citizenship, domicile, principal place of business, or
jurisdiction of organization or domestication of any party; or (vi) whether the
laws of the forum jurisdiction otherwise would apply the laws of a jurisdiction
other than Massachusetts; or (vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as may be provided by law; and the parties
consent to the jurisdiction of said court or courts located in Massachusetts and
to service of process by registered mail, return receipt requested, or by any
other manner provided by law.
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15. MODIFICATION OF AGREEMENT. No modification or waiver of any
provision of this Agreement, nor any consent to any departure by the Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by HPT, and such modification, waiver or consent shall be effective
only in the specific instances and for the purpose for which given. No notice to
or demand on the Guarantor in any case shall entitle the Guarantor to any other
or further notice or demand in the same, similar or other circumstances.
16. WAIVER OF RIGHTS BY HPT. Neither any failure nor any delay on HPT's
part in exercising any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise or the exercise of any other right, power
or privilege.
17. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, but this Agreement
shall be reformed and construed and enforced to the maximum extent permitted by
applicable law.
18. ENTIRE CONTRACT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and shall
supersede and take the place of any other instruments purporting to be an
agreement of the parties hereto relating to the subject matter hereof.
19. HEADINGS; COUNTERPARTS. Headings in this Agreement are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument,
and in pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
20. REMEDIES CUMULATIVE. No remedy herein conferred upon HPT is intended
to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.
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21. AMENDMENT AND RESTATEMENT. This Agreement amends, restates and
replaces in its entirety that certain Guaranty Agreement, dated as of December
24, 1997, as the same may have been amended from time to time, by the Guarantor
for the benefit of the Landlord and HPT.
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WITNESS the execution hereof under seal as of the date above first
written.
CANDLEWOOD HOTEL COMPANY, INC.
By:________________________________
Its:___________________________
ACKNOWLEDGED AND AGREED:
HPT CW PROPERTIES TRUST
By:____________________________
Its (Vice) President
HOSPITALITY PROPERTIES TRUST
By:____________________________
Its (Vice) President
EXHIBIT A
SUMMARY PROFIT AND LOSS STATEMENT
REVENUE:
Rooms
Guest phone
Guest ancillary
TOTAL REVENUES (EXCLUSIVE OF DEDUCTIONS PER AMENDED AND RESTATED LEASE
AGREEMENT, SECTION 1.109)
DIRECT DEPARTMENT EXPENSE:
Rooms
Guest phone
Guest ancillary
TOTAL DEPARTMENT PROFIT
OPERATING EXPENSES:
General and administrative
Sales and promotion
Maintenance
Utilities
TOTAL OPERATING EXPENSES
GROSS OPERATING PROFIT
MANAGEMENT FEES
FRANCHISE FEES (AND OTHER DEFINED FEES, IF ANY, PER GUARANTY AGREEMENT,
PARAGRAPH 10, CLAUSES (a) THROUGH (f))
FIXED CHARGES:
Property Taxes
Insurance
Others
TOTAL FIXED CHARGES
NET OPERATING INCOME
OWNERSHIP COSTS:
Interest
Depreciation & Amortization
Minimum Rent
Additional Rent
TOTAL OWNERSHIP COSTS
NET INCOME BEFORE FEDERAL AND STATE INCOME TAXES
ADD: Defined Fees & Expenses (per Guaranty Agreement,
Paragraph 10, Clauses (a) through (e))
Base Rent
Additional Rent
DEDUCT: Defined Fees, Expenses and Reserves (per Guaranty
Agreement, Paragraph 10, Clauses (f) and (g))
CASH FLOW