EXHIBIT 10.12
GUARANTEE OF FRANCHISE LICENSE AGREEMENT
HOMEWOOD SUITES BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INTERNATIONAL AIRPORT, VA
THIS DOCUMENT AFFECTS AND WAIVES IMPORTANT RIGHTS OF THE PERSONS AND ENTITIES
SIGNING IT.
THIS GUARANTEE OF LICENSE AGREEMENT (the "Guarantee") is made by APPLE
SUITES, INC. (the "Guarantor"), as of the 25th day of June, 2001, in connection
with that certain Franchise License Agreement dated as of June 25, 2001 (the
"License Agreement"), by and between PROMUS HOTELS, INC. ("Licensor") and APPLE
SUITES MANAGEMENT, INC. ("Licensee") covering that certain Homewood Suites by
Hilton hotel located at ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ in Herndon, Virginia (the "Hotel").
WHEREAS, Guarantor is the owner of the real property where the Hotel is
located (the "Property") and is an affiliate of Licensee; and
WHEREAS, Licensor would not have entered into the License Agreement absent
Guarantor`s commitment to deliver this Guarantee; and
WHEREAS, Guarantor acknowledges that it will receive considerable benefits
as a result of Licensee holding the license pursuant to the License Agreement.
NOW, THEREFORE, for good and valuable consideration, including but not
limited to the execution of the License Agreement by Licensor, the undersigned
hereby unconditionally and irrevocably guarantees the following: (i) the full
and prompt payment of all sums owed under the License Agreement at the times and
according to the terms expressed therein, including, but not limited to, all
fees and charges, interest, default interest, and other costs and fees
(including, without limitation, attorneys' fees in connection with enforcement
of the License Agreement); and (ii) the performance of all other obligations of
Licensee arising under the License Agreement (Items (i) and (ii) are hereinafter
collectively referred to as the "Obligations").
By signing this Guarantee, Guarantor also agrees that:
1. Guarantee of Payment and Performance. Guarantor's liability under this
Guarantee is a guarantee of payment and performance of the License Agreement and
not of collectibility. Guarantor's liability hereunder will continue until all
Obligations under the License Agreement have been satisfied in full and will not
be limited or affected in any way by transfer of the Hotel or any disability of
Licensee. Guarantor further agrees that should Licensee cease to exist or become
unable to perform its obligations under the License Agreement, Guarantor will be
deemed Licensee under the License Agreement and will perform all obligations of
Licensee existing or accruing thereunder.
2. Waivers of Certain Rights and Defenses. This Guarantee is absolute and
unconditional. Guarantor hereby waives the rights or benefits otherwise provided
to sureties or guarantors under any state or federal law, except as provided in
this Agreement. This waiver is expressly intended to waive any and all benefits
and defenses under California Civil Code ("CC") Sections 2819, 2845, 2849, and
2850 and any benefits or defenses available under the laws of any other state
that may be deemed to be applicable to this Guarantee, including, without
limitation, the right to require Licensor to (i) obtain Guarantor's consent to
any modification of the License Agreement or any other agreement between
Licensor and any party other than Guarantor, (ii) proceed against any collateral
that may be given for any of the Obligations, or (iii) pursue any other right or
remedy for Guarantor's benefit, and agrees that Licensor may proceed against
Guarantor for the Obligations guaranteed herein without taking any action
against Licensee or any other guarantor or pledgor. Guarantor agrees that
Licensor may unqualifiedly exercise, in its sole discretion, any or all rights
and remedies available to it against Licensee
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or any other guarantor or pledgor without impairing Licensor's' rights and
remedies in enforcing the Guarantee, under which Guarantor's liabilities will
remain independent and unconditional. Guarantor acknowledges that Licensor's
exercise of certain of such rights or remedies may affect, or eliminate
Guarantor's right of subrogation or recovery against Licensee and that Guarantor
may incur a partially or totally nonreimbursable liability under this Guarantee.
3. Additional Waivers. No failure or delay on Licensor's part in exercising
any power or privilege hereunder will impair any such power, right, or privilege
or be construed as a waiver of or an acquiescence therein.
4. Guarantee Made With Full Knowledge. Guarantor has had the opportunity to
review the matters discussed and contemplated by the License Agreement,
including the remedies Licensor may pursue against Licensee in the event of a
default under the License Agreement and Licensee's financial condition and
ability to perform under the License Agreement. Guarantor further agrees to keep
Licensor fully informed on all aspects of Licensee's financial condition and the
performance of Licensee's obligations to Licensor and that Licensor has no duty
to disclose to Guarantor any information pertaining to Licensee or to notify
Guarantor of Licensee's default under the License Agreement.
5. Guarantee Continues if Payments Are Avoided or Recovered from Licensor.
If all or any portion of the Obligations guaranteed hereunder are paid or
performed, Guarantor's obligations hereunder will continue and remain in full
force and effect if all or any part of such payment or performance is avoided or
recovered directly or indirectly from Licensor as a preference, fraudulent
transfer or otherwise, irrespective of any notice of revocation given by
Guarantor prior to such avoidance or recovery.
6. Financial Information. Upon Licensor's' request, Guarantor will promptly
deliver to Licensor complete and current financial statements and tax returns
and such other financial information about Guarantor as Licensor may reasonably
request.
7. Changes, Waivers, Revocations, and Amendments in Writing. No terms or
provisions of this Guarantee may be changed, waived, revoked, or amended without
Licensor's prior written consent. Should any provision of this Guarantee be
determined by a court of competent jurisdiction to be unenforceable, all of the
other provisions will remain effective. This Guarantee embodies the entire
agreement among the parties hereto with respect to the matters set forth herein
and supersedes all prior agreements among the parties with respect to the
matters set forth herein. No course of prior dealing among the parties, no usage
of trade, and no parol or extrinsic evidence of any nature will be used to
supplement, modify, or vary any of the terms hereof. There are no conditions to
the full effectiveness of this Guarantee.
8. Other Guarantees. This Guarantee is in addition to the guarantees of any
other guarantors and any and all of Guarantor's other guarantees of Licensee's
liabilities to Licensor. This Guarantee will in no way limit or lessen any other
liability, howsoever arising, Guarantor may have for the payment of any other
obligation of Licensee to Licensor.
9. Representations and Warranties. The following representations and
warranties will be continuing representations and warranties so long as any
Obligation will remain unpaid or unperformed:
(a) Guarantor has the requisite power to execute, deliver, and perform
the terms and provisions of the Guarantee and has taken all necessary
[corporate/partnership/company] actions to authorize the execution, delivery and
performance by it of the Guarantee. This Guarantee is a valid, binding, and
legally enforceable obligation of Guarantor in accordance with its terms.
(b) The execution and delivery of this Guarantee are not, and the
performance of this Guarantee will not be, in contravention of, or in conflict
with, any agreement, indenture, or undertaking to which Guarantor is a party or
by which it or any of its property is or may be bound or affected.
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(c) Guarantor owns all rights, title, and interest in and to the
Property.
(d) Guarantor [owns all or a controlling interest in] [is an affiliate
of] Licensee.
10. Additional Provisions.
(a) If there is more than one Guarantor named herein, any reference to
Guarantor will mean any one and all of them and the singular will include the
plural. All obligations of each such Guarantor to Licensor of whatever nature
are hereby jointly and severally guaranteed by each Guarantor.
(b) Each Guarantor hereby jointly and severally holds harmless, and
agrees to defend, protect, and indemnify Licensor from any actions, causes of
action, liabilities, damages, losses, and fees (including attorneys' fees) and
all other claims of every nature which may arise as a result of any dispute
between or among any of Guarantor and any other persons or entities.
(c) Licensor may assign this Guarantee without in any way affecting
Guarantor's liability. Licensor will endeavor to give Guarantor notice of such
assignment, but the failure to do so will not affect Guarantor's liability. This
Guarantee will inure to the benefit of Licensor and its successors and assigns
and will bind Guarantor and Guarantor's heirs, executors, administrators,
successors, and assigns.
(d) Any notices, requests and demands to be made hereunder will be in
writing and will be effective on the earlier of (i) the day it is sent by
facsimile with a confirmation of receipt; or (ii) the day it is delivered by
express delivery service; or (iii) the third business day after it is sent by
first class or certified mail, to the appropriate party at the address, or to
the fax number, set forth below, or such other address or fax number of which
the notifying party has been notified:
If to Licensor: Promus Hotels, Inc.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Franchise Administration
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Guarantor: Apple Suites, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(e) If Guarantor is a partnership, limited liability company, or other
unincorporated association, its liability will not be affected by changes in the
name of the entity or in its membership.
(f) This Guarantee is executed in accordance with, and pursuant to, the
terms of the License Agreement and any default hereunder will be a default under
the License Agreement.
11. Governing Law/Jurisdiction. This guarantee will be enforced and
interpreted according to the laws of the State of New York irrespective of its
conflicts of laws rules. Guarantor agrees to submit to the jurisdiction of the
City and State of New York with respect to the enforcement of this Guarantee.
12. Venue. Any litigation arising out of this Guarantee, any breach of this
Guarantee, or any dispute between Licensor and Guarantor, shall be submitted to
and resolved exclusively by a court of competent jurisdiction located in the
City and State of New York. Guarantor waives, and agrees never to
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assert, move or otherwise claim that this venue is for any reason improper,
inconvenient, prejudicial or otherwise inappropriate (including any claim under
the judicial doctrine of forum non conveniens).
13. WAIVER OF JURY TRIAL. GUARANTOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY
JURY WITH RESPECT TO THE ENFORCEMENT OF THIS GUARANTEE. THIS WAIVER WILL APPLY
TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING
BUT NOT LIMITED TO CLAIMS RELATING TO THE ENFORCEMENT OR INTERPRETATION OF THIS
GUARANTEE, ALLEGATIONS OF STATE OR FEDERAL STATUTORY VIOLATIONS, FRAUD,
MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND A CONNECTION WITH ANY LEGAL
ACTION INITIATED FOR THE RECOVERY OF DAMAGES ARISING UNDER THIS GUARANTEE.
THE UNDERSIGNED GUARANTOR ACKNOWLEDGES THAT IT WAS AFFORDED THE OPPORTUNITY
TO READ THIS DOCUMENT CAREFULLY AND TO REVIEW IT WITH AN ATTORNEY OF ITS CHOICE
BEFORE SIGNING IT. GUARANTOR ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING
AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.
IN WITNESS WHEREOF, the parties have executed this Agreement which has an
effective date as of the date first written above.
GUARANTOR: LICENSOR:
APPLE SUITES, INC, PROMUS HOTELS, INC.,
a Virginia corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: Vice President
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