Exhibit 10-20
GUARANTY OF PAYMENT AND PERFORMANCE
THIS GUARANTY dated December 31, 1997 (the "GUARANTY") from Essex Partners
Inc., a New York corporation, with an office for the transaction of business
located at 000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "GUARANTOR") To
KEYBANK NATIONAL ASSOCIATION, a national banking association with an office for
the transaction of business located at 00 Xxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx
00000 (the "LENDER").
WITNESSETH:
WHEREAS, Erie Hotel LLC, a New York limited liability company, (herein
called the "BORROWER"), is about to borrow from the Lender the sum of Four
Million Seven Hundred Thousand and 00/100 Dollars, (the "LOAN"); and
WHEREAS, the Lender is unwilling to make the Loan to the Borrower unless it
receives this Guaranty; and
WHEREAS, the Guarantor is willing to enter into this Guaranty in order to
induce the Lender to make the Loan and the Guarantor has approved the form and
substance of any documents executed or delivered by Borrower in connection with
the Loan (the "Loan Documents").
NOW, THEREFORE, in order to induce the Lender to make the Loan to the
Borrower and in consideration of the premises and of other good and valuable
consideration, the Guarantor intends to guarantee absolutely and unconditionally
to the Lender, the punctual payment of the Loan and all notes or other evidences
of indebtedness given by the Borrower to the Lender in connection therewith and
all extensions, modifications or renewals thereof (collectively, the "Note") and
all interest and other sums due under the Note or any Loan Document and such
further payment and performance as may be set forth in Article 2 hereof.
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
The Guarantor hereby represents and warrants to Lender that:
SECTION 1.1 CAPACITY OF THE GUARANTOR. Guarantor:
(A) Has the capacity to enter into this Guaranty.
(B) Has an office at the address set forth at the head of this
Guaranty.
SECTION 1.2 NO VIOLATION OF RESTRICTIONS. Neither the execution and
delivery of this Guaranty, the consummation of the transactions contemplated
hereby nor the fulfillment of or compliance with the provisions of this Guaranty
will conflict with or result in a breach of any of the
terms, covenants, conditions or provisions of any agreement, judgment or order
to which any party named as a Guarantor is a party or by which the Guarantor is
bound, or will constitute a default under any of the foregoing, or result in the
creation or imposition of any lien of any nature whatsoever.
SECTION 1.3 COMPLIANCE WITH LAW. Each party named as a Guarantor (A) is not
in violation of any law, ordinance, governmental rule, regulation, order or
judgment to which the Guarantor may be subject or which would materially affect
the business of the Guarantor and (B) has not failed to obtain any license,
permit, franchise or other governmental authorization necessary to the conduct
of their present business.
SECTION 1.4 FINANCIAL STATEMENTS. The financial statements submitted by
each party named as Guarantor, including balance sheets, statement of income,
retained earnings and other related schedules, to Lender fairly represent the
financial condition as of the date of each statement and there has been no
adverse change in the financial condition of any Guarantor since the date of the
respective statements submitted to Lender.
SECTION 1.5 SOLVENCY OF GUARANTOR AND BORROWER. Each party named as a
Guarantor is solvent and Each Guarantor has made an appropriate financial
investigation of the Borrower and has determined that the Borrower is solvent at
the time of execution of this Guaranty.
ARTICLE 2
COVENANTS AND AGREEMENTS
SECTION 2.1 GUARANTY OF PAYMENT. The Guarantor irrevocably, absolutely and
unconditionally guarantees to the Lender:
(A) The punctual payment of the Loan, the Note, all principal and
interest due thereunder and any other sums due under the Note or any Loan
Document.
(B) The full and prompt payment and performance of any and all
obligations of Borrower to Lender under the Loan Documents including,
without limitation, the obligations of Borrower concerning hazardous
materials and other environmental matters contained in any of the Loan
Documents.
SECTION 2.2 OBLIGATIONS UNCONDITIONAL. This Guaranty shall remain in full
force and effect until the Loan, the Note and all sums due thereunder or under
any Loan Document are paid in full, irrespective of any interruptions in the
business relationships of the Borrower and the Guarantor with the Lender, and
shall not be affected, modified or impaired by any state of facts or the
happening from time to time of any event, including, without limitation, any of
the following, whether or not with notice to or the consent of the Guarantor:
- 2 -
(A) The invalidity, irregularity, illegality or unenforceability of, or
any defect in, the Note or any Loan Document or any collateral security for
the Loan (the "Collateral").
(B) Any present or future law or order of any government (DE JUERE or
DE FACTO) or of any agency thereof purporting to reduce, amend or otherwise
affect the Note or any other obligation of the Borrower or any other
obligor or to any other terms of payment.
(C) The waiver, compromise, settlement, release or termination of any
or all of the obligations, covenants or agreements of the Borrower under
the Note or any Loan Documents or of any party named as a Guarantor under
this Guaranty.
(D) The failure to give notice to the Guarantor of the occurrence of an
event of default under the Note or any other Loan Document.
(E) The loss, release, sale, exchange, surrender or other change in any
Collateral.
(F) The extension of the time for payment of any principal of or
interest on the Note or of the time for performance of any other
obligations, covenants or agreements under or arising out of the Note or
any Loan Document or the extension or the renewal of any thereof.
(G) The modification or amendment (whether material or otherwise) of
any obligation, covenant or agreement set forth in the Note or any Loan
Document.
(H) The taking of, or the omission to take, any of the actions referred
to in the Note or any Loan Document.
(I) Any failure, omission or delay on the part of the Lender to
enforce, assert or exercise any right, power or remedy conferred on the
Lender in the Note or any Loan Document.
(J) The voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition with
creditors or readjustment of, or other similar proceedings affecting the
Guarantor or the Borrower or any of their assets, or any allegation or
contest of the validity of the Note or any Loan Document.
(K) The default or failure of the Guarantor to fully perform any
obligations set forth in this Guaranty.
(L) 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
Guaranty.
- 3 -
(M) Any other circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or a guarantor.
SECTION 2.3 WAIVER BY GUARANTOR. The Guarantor hereby waives:
(A) Notice of acceptance of this Guaranty.
(B) Diligence, presentment and demand for payment of the Loan and/or
the Note.
(C) Protest and notice of protest, dishonor or default to the Guarantor
or to any other party with respect to the Loan.
(D) Any and all notices to which the Guarantor might otherwise be
entitled.
(E) Any demand for payment under this Guaranty.
(F) Any and all defenses to payment including, without limitation, any
defenses and counterclaims of the Guarantor or the Borrower based upon
fraud, negligence or the failure of any condition precedent or claims of
offset or defenses involving the invalidity, irregularity or
unenforceability of all or any part of the liabilities herein guaranteed or
any defense otherwise available to the Guarantor or the Borrower.
(G) Until the Loan is repaid in full, unless Lender is required by a
court of competent jurisdiction to disgorge any payment(s) received by it,
any and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution or any other claim which the Guarantor may now or hereafter
have against the Borrower or any other person directly or contingently
liable for the Loan guaranteed hereunder, or against or with respect to the
Borrower's property (including, without limitation, property
collateralizing the Loan), arising from the existence or performance of
this Guaranty and whether or not such claim, right or remedy arises in
equity, under contract, by statute, under common law or otherwise.
SECTION 2.4 NATURE OF GUARANTY. This Guaranty is a guaranty of payment and
not of collection and the Guarantor hereby waives the right to require that any
action be brought first against the Borrower or any other Guarantor, or any
security, or to require that resort be made to any security or to any balance of
any deposit account on credit on the books of the Lender in favor of the
Borrower or of any Guarantor.
SECTION 2.5 CONTINUATION OF GUARANTY. The Guarantor further agrees that the
obligations hereunder shall continue to be effective or reinstated, as the case
may be, if at any time payment or any part thereof of the Loan or the Note is
rescinded or must otherwise be restored by the Lender upon the bankruptcy or
reorganization of the Borrower, the Guarantor or otherwise.
SECTION 2.6 SUBORDINATION OF DEBT. The Guarantor hereby subordinates any
and all indebtedness of Borrower now or hereafter owed to Guarantor to all
indebtedness of Borrower to
- 4 -
Lender and agrees with Lender that Guarantor shall not demand or accept any
payment from Borrower, shall not claim any offset or other reduction of
Guarantor's obligations hereunder because of any such indebtedness and shall not
take any action to obtain any interest in any of the security described in and
encumbered by the Loan Documents; provided, however, that, if Lender so
requests, such indebtedness shall be collected, enforced and received by
Guarantor as trustee for Lender and paid over to Lender on account of the
indebtedness of Borrower to Lender, but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guaranty
except to the extent the principal amount of such outstanding indebtedness shall
have been reduced by such payment.
SECTION 2.7 FINANCIAL STATEMENTS. Guarantor will advise Lender in writing
if Guarantor operates on other than a calendar year basis. Guarantor will at all
times keep proper books of record and account in which full, true and correct
entries shall be made in accordance with generally accepted accounting
principles and will deliver to Lender, within one hundred fifty (150) days
after the end of each fiscal year of Guarantor, a copy of the annual financial
statements of Guarantor relating to such fiscal year, such statements to include
(A) the balance sheet of Guarantor as at the end of such fiscal year and (B) the
related income statement, statement of retained earnings and statement of
changes in the financial position of Guarantor for such fiscal year, prepared by
such certified public accountants as may be reasonably satisfactory to Lender.
Guarantor also agrees to deliver to Lender from time to time at the request of
Lender, such other financial information with respect to Guarantor as Lender may
request. If Guarantor fails to provide any statement required by this Section
for ten (10) days after notice of said failure from Lender, Guarantor will be
obligated to pay a fee of $500.00 for each successive thirty (30) day period
after the expiration of the notice period during which Lender has not received
the required statement or return.
SECTION 2.8 TRANSFER OF INTEREST. Guarantor agrees not to make or permit to
be made, by a voluntary or involuntary means, any transfer of the interest of
Guarantor in the Borrower, without first obtaining the prior written consent of
Lender.
ARTICLE 3
EVENTS OF DEFAULT
SECTION 3.1 EVENTS OF DEFAULT DEFINED. An "Event of Default" shall exist if
any of the following occurs:
(A) Any party named as a Guarantor fails to perform or observe any
covenant contained herein.
(B) Any warranty, representation or other statement by or on behalf of
any party named as a Guarantor contained in this Guaranty is false or
misleading in any material respect when made.
- 5 -
(C) A receiver, liquidator or trustee of any party named as a Guarantor
or any of his or its property is appointed by court order, or any party
named as a Guarantor is adjudicated bankrupt or insolvent or any of his or
its property is sequestered by court order and such order remains in effect
for more than sixty (60) days, or a petition is filed against any party
named as a Guarantor under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and is not dismissed
within sixty (60) days of such filing.
(D) Any party named as a Guarantor files a petition in voluntary
bankruptcy or seeks relief under any provision of any reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
law of any jurisdiction, whether now or hereafter in effect, or consents to
the filing of any petition against it under any such law.
(E) Any party named as a Guarantor makes an assignment for the benefit
of creditors or admits in writing inability to pay debts generally as they
become due, or consents to the appointment of a receiver, trustee or
liquidator of all or any part of his or its property.
(F) The occurrence of an Event of Default under any other Loan
Document.
SECTION 3.2 REMEDIES ON DEFAULT. If an event of default exists, Lender may
proceed to enforce the provisions hereof and to exercise any other rights,
powers and remedies available to the Lender.
SECTION 3.3 WAIVER AND NOTICE.
(A) No remedy herein conferred upon or reserved to the Lender is
intended to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Guaranty now or hereafter existing at
law or in equity or by statute.
(B) No delay or omission to exercise any right or power accruing upon
the occurrence of any Event of Default shall impair any such right or power
or shall be construed to be a waiver thereof, but any such right or power
may be exercised from time to time and as often as may be deemed expedient.
(C) In order to entitle the Lender to exercise any remedy reserved to
it in this Guaranty, it shall not be necessary to give any notice, other
than such notice as may be expressly required in this Guaranty.
(D) No waiver, amendment, release or modification of this Guaranty
shall be established by conduct, custom or course of dealing.
- 6 -
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 CONSTRUCTION. If this Guaranty is executed by two or more
parties, they shall be jointly and severally liable hereunder and the phrase
Guarantor whenever used herein shall be construed to refer to each of the
parties in the same manner and with the same effect as if each party had signed
a separate guaranty.
SECTION 4.2 GOVERNING Law. This Guaranty shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 4.3 SUBMISSION TO JURISDICTION. The Guarantor hereby irrevocably
and unconditionally agrees that any suit, action or proceeding arising out of or
relating to this Guaranty shall be brought in the state courts of the State of
New York or federal district court for the Western District of New York and
waives any right to object to jurisdiction within either of the foregoing forums
by Lender. Nothing contained herein shall prevent Lender from bringing any suit,
action or proceeding or exercising any rights against any security and against
any Guarantor personally, and against any property of any Guarantor, within any
other jurisdiction and the initiation of such suit, action or proceeding or
taking of such action in any such other jurisdiction shall in no event
constitute a waiver of the agreements contained herein with respect to the laws
of the State of New York governing the rights and obligations of the parties
hereto or the agreement of the Guarantor to submit to personal jurisdiction
within the State of New York.
SECTION 4.4 WAIVER OF JURY TRIAL. The Guarantor and Lender agree that any
suit, action or proceeding arising under or in connection with this Guaranty
shall be before a court without a jury.
SECTION 4.5 SUCCESSORS AND ASSIONS. This Guaranty shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto.
SECTION 4.6 NOTICES. Any notices required or permitted to be given
hereunder shall be: (i) personally delivered or (ii) given by registered or
certified mail, postage prepaid, return receipt requested, or (iii) forwarded by
overnight courier service, in each instance addressed to the addresses set forth
at the head of this Guaranty, or such other addresses as the parties may for
themselves designate in writing as provided herein for the purpose of receiving
notices hereunder. All notices shall be in writing and shall be deemed given, in
the case of notice by personal delivery, upon actual delivery, and in the case
of appropriate mail or courier service, upon deposit with the U.S. Postal
Service or delivery to the courier service.
SECTION 4.7 ENTIRE AGREEMENT. This Guaranty and the Note and other Loan
Documents constitute the entire understanding between Borrower, the Guarantor
and the Lender and to the extent that any writings not signed by the Lender or
oral statements or conversations at any time
- 7 -
made or had are inconsistent with the provisions of this Guaranty, the Note or
the other Loan Documents, the same shall be null and void.
SECTION 4.8 AMENDMENTS. No amendment, change, modification, alteration or
termination of this Guaranty shall be made except upon the written consent of
the Lender.
SECTION 4.9 ASSIGNMENT. This Guaranty is assignable by Lender in whole or
in part in conjunction with an assignment of the Note and any assignment hereof
or any transfer or assignment of the Note or portions thereof shall operate to
vest in any such assignee the rights and powers, in whole or in part, as
appropriate, herein conferred upon and granted to Lender.
SECTION 4.10 PARTIAL INVALIDITY. The invalidity or unenforceability of any
one or more phrases, sentences, clauses or sections in this Guaranty shall not
affect the validity or enforceability of the remaining portions of the Guaranty
or any part thereof.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the day
and year first above written.
ESSEX PARTNERS INC.
BY: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Senior Vice-President
STATE OF NEW YORK )
COUNTY OF MONROE ) ss.:
On the 31st day of December, 1997, before me personally came Xxxxxxx X.
Xxxxxx, to me known who, being by me duly sworn, did depose and say that she
resides at 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx; that she is the Senior
Vice-President of Essex Partners Inc., the corporation described in and which
executed the foregoing instrument; and that she signed her name thereto by order
of the Board of Directors of said corporation.
/s/ Xxxx X. Xxxxxxxx
------------------------------
Notary Public
XXXX X. XXXXXXXX
Notary Public in the State of New York
MONROE COUNTY
Commission Expires May 31, 1999
- 8 -