Exhibit 10.36
GUARANTY
THIS GUARANTY (this “
Guaranty ”) is executed as of February 9, 2009, by MHI
HOSPITALITY CORPORATION, a Maryland corporation (“
Guarantor ”), for the benefit of CRP/MHI HOLDINGS,
L.L.C., a Delaware limited liability company (“ Lender
”).
W I T N E S S E T
H:
WHEREAS , pursuant to that certain Promissory Note,
dated as of February 9, 2009, in the original principal amount
of $4,750,000.000 (the “ Note ”) made by MHI
Hotel Investments Holdings, LLC, a Delaware limited liability
company, as maker, having its principal place of business at c/o
MHI Hospitality Corporation, 4801 Courthouse Street, Suite 201,
Williamsburg, Virginia 23188 (the “ Borrower ”),
and payable to the order of Lender, Borrower has become indebted to
Lender with respect to a loan (the “ Loan ”)
made pursuant to the Note;
WHEREAS , Guarantor is the general partner of the
limited partnership that indirectly owns 100% of the ownership
interest in Borrower, and Lender has required, as a condition of
making the Loan, that Guarantor enter into this
Guaranty;
WHEREAS , Guarantor will directly benefit from the
making of the Loan and Lender is not willing to make the Loan to
Borrower unless Guarantor unconditionally guaranteed payment and
performance to Lender of the Guaranteed Obligations (as herein
defined);
NOW, THEREFORE
, in consideration for the making of
the Loan to Borrower, and other good and valuable consideration,
the receipt, sufficiency and adequacy of which are hereby
acknowledged, and to induce Lender to make the Loan to Borrower,
Guarantor does hereby unconditionally, absolutely and irrevocably
guarantee to Lender, its successors and assigns, the due payment,
fulfillment and performance of the Guaranteed Obligations
(as more particularly set forth below).
ARTICLE I
NATURE AND SCOPE OF
GUARANTY
1.1 Guaranteed Obligations
. As used herein, the
term “ Guaranteed Obligations ” means the full,
complete and prompt payment of all amounts now or hereafter owing
to Lender under the Note, whether principal, interest (including,
without limitation, interest at the Default Rate (as defined in the
Note)), fees, expenses or otherwise plus all costs of collection
(including, without limitation, reasonable attorneys’ fees
and court costs).
1.2 Guaranty of Obligation
. Guarantor hereby
irrevocably, absolutely and unconditionally guarantees to Lender
and its successors and assigns the payment and performance of the
Guaranteed Obligations as and when the same shall be due and
payable, whether by lapse of time, by acceleration of maturity or
otherwise. Guarantor hereby irrevocably and unconditionally
covenants and agrees that it is liable for the Guaranteed
Obligations as a primary obligor.
1.3 Nature of Guaranty
. This Guaranty is an
irrevocable, absolute, continuing guaranty of payment and
performance and not a guaranty of collection. This Guaranty may not
be revoked by Guarantor and shall continue to be effective with
respect to any Guaranteed Obligations arising or created after any
attempted revocation by Guarantor. The fact that at any time or
from time to time the Guaranteed Obligations may be extended or
reduced shall not release or discharge the obligation of Guarantor
to Lender with respect to the Guaranteed Obligations. This Guaranty
may be enforced by Lender and any subsequent holder of the Note and
shall not be discharged by the assignment or negotiation of all or
part of the Note.
1.4 Guaranteed Obligations Not
Reduced by Offset . The Guaranteed Obligations and the liabilities
and obligations of Guarantor to Lender hereunder shall not be
reduced, discharged or released because or by reason of any
existing or future offset, claim or defense of Borrower or any
other party against Lender or against payment of the Guaranteed
Obligations, whether such offset, claim or defense arises in
connection with the Guaranteed Obligations (or the transactions
creating the Guaranteed Obligations) or otherwise.
1.5 Payment By Guarantor
. If all or any part of
the Guaranteed Obligations shall not be punctually paid when due,
whether at demand, maturity, acceleration or otherwise, Guarantor
shall, immediately upon demand by Lender and without presentment,
protest, notice of protest, notice of non-payment, notice of
intention to accelerate the maturity, notice of acceleration of the
maturity or any other notice whatsoever, pay in lawful money of the
United States of America, the unpaid amount of the Guaranteed
Obligations to Lender at Lender’s address as set forth
herein. Such demand(s) may be made at any time coincident with or
after the time for payment of all or part of the Guaranteed
Obligations and may be made from time to time with respect to the
same or different items of Guaranteed Obligations. Such demand
shall be deemed made, given and received in accordance with the
notice provisions hereof.
1.6 No Duty To Pursue
Others . It shall not
be necessary for Lender (and Guarantor hereby waives any rights
which Guarantor may have to require Lender), in order to enforce
the obligations of Guarantor hereunder, first to (i) institute
suit or exhaust its remedies against Borrower or others liable on
the Loan, (ii) enforce Lender’s rights against any
collateral which may have been given to secure the Loan,
(iii) join Borrower or any others liable on the Loan in any
action seeking to enforce this Guaranty, (iv) exhaust any
remedies available to Lender against any collateral which may have
been given to secure the Loan, or (v) resort to any other
means of obtaining payment of the Guaranteed Obligations. Unless
required by applicable law, Lender shall not be required to
mitigate damages or take any other action to reduce, collect or
enforce the Guaranteed Obligations.
1.7 Waivers .
Guarantor agrees to the provisions
of the Note and hereby waives notice of (i) any assignments of
the Note by Lender, (ii) acceptance of this Guaranty,
(iii) any amendment not increasing the principal amount of the
Note and any extension of the Note, (iv) the execution and
delivery by Borrower and Lender of any other loan or credit
agreement or of Borrower’s execution and delivery of the Note
or other documents arising under the Loan, (v) the occurrence
of any breach by Borrower under the Note or the occurrence of an
Event of Default (as defined in the Note), (vi) Lender’s
transfer or disposition of the Guaranteed Obligations, or any part
thereof, (vii) sale or foreclosure (or posting or advertising
for sale or foreclosure) of any collateral for the Guaranteed
Obligations, (viii) protest or proof of non-payment
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by Borrower, or (ix) any other action at
any time taken or omitted by Lender and, generally, all demands and
notices of every kind in connection with this Guaranty, the Note
and any documents or agreements evidencing, securing or relating to
any of the Guaranteed Obligations and the obligations hereby
guaranteed.
1.8 Payment of Expenses
. In the event that
Guarantor should breach or fail to timely perform any provisions of
this Guaranty, Guarantor shall, immediately upon demand by Lender,
pay Lender all reasonable costs and expenses (including court costs
and reasonable attorneys’ fees) incurred by Lender in the
enforcement hereof or the preservation of Lender’s rights
hereunder. The covenant contained in this Section 1.8 shall
survive the payment and performance of the Guaranteed
Obligations.
1.9 Effect of Bankruptcy
. In the event that
pursuant to any insolvency, bankruptcy, reorganization,
receivership or other debtor relief law or any judgment, order or
decision thereunder, Lender must rescind or restore any payment or
any part thereof received by Lender in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or
discharge from the terms of this Guaranty given to Guarantor by
Lender shall be without effect and this Guaranty shall remain in
full force and effect. It is the intention of Guarantor that
Guarantor’s obligations hereunder shall not be discharged
except by Guarantor’s performance of such obligations and
then only to the extent of such performance.
1.10 Waiver of Subrogation-
Reimbursement and Contribution . Notwithstanding anything to the contrary
contained in this Guaranty, Guarantor hereby unconditionally and
irrevocably waives, releases and abrogates any and all rights it
may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating the Guarantor
to the rights of Lender), to assert any claim against or seek
contribution, indemnification or any other form of reimbursement
from Borrower or any other party liable for payment of any or all
of the Guaranteed Obligations for any payment made by Guarantor
under or in connection with this Guaranty or otherwise.
1.11 Borrower .
The term “Borrower” as
used herein shall include any new or successor corporation,
association, partnership (general or limited), limited liability
company joint venture, trust or other individual or organization
formed as a result of any merger, reorganization, sale, transfer,
devise, gift or bequest of Borrower or any interest in
Borrower.
ARTICLE II
EVENTS AND CIRCUMSTANCES NOT
REDUCING
OR DISCHARGING
GUARANTOR’S OBLIGATIONS
Guarantor hereby consents and agrees
to each of the following and agrees that Guarantor’s
obligations under this Guaranty shall not be released, diminished,
impaired, reduced or adversely affected by any of the following and
waives any common law, equitable, statutory or other rights
(including, without limitation, rights to notice) which Guarantor
might otherwise have as a result of or in connection with any of
the following:
2.1 Modifications
. Any renewal, extension,
increase, modification, alteration or rearrangement of all or any
part of the Guaranteed Obligations, the Note or any other document,
instrument, contract or understanding between Lender, Borrower
and/or Guarantor pertaining to the Guaranteed Obligations or any
failure of Lender to notify Guarantor of any such
action.
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2.2 Adjustment
. Any adjustment,
indulgence, forbearance or compromise that might be granted or
given by Lender to Borrower or Guarantor.
2.3 Condition of Borrower or
Guarantor . The
insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation, disability, dissolution or lack of power of Borrower
or Guarantor or any other party at any time liable for the payment
of all or part of the Guaranteed Obligations; or any dissolution of
Borrower or Guarantor or any sale, lease or transfer of any or all
of the assets of Borrower or Guarantor or any changes in the
shareholders, partners or members of Borrower or Guarantor; or any
reorganization of Borrower or Guarantor.
2.4 Invalidity of Guaranteed
Obligations . The
invalidity, illegality or unenforceability of all or any part of
the Guaranteed Obligations or any document or agreement executed in
connection with the Guaranteed Obligations for any reason
whatsoever, including without limitation the fact that (1) the
Guaranteed Obligations or any part thereof exceeds the amount
permitted by law, (ii) the act of creating the Guaranteed
Obligations or any part thereof is ultra vires ,
(iii) the officers or representatives executing the Note or
otherwise creating the Guaranteed Obligations acted in excess of
their authority, (iv) the Guaranteed Obligations violate
applicable usury laws, (v) Guarantor has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which
render the Guaranteed Obligations wholly or partially uncollectible
from Guarantor, (vi) the creation, performance or repayment of
the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the
Guaranteed Obligations or given to secure the repayment of the
Guaranteed Obligations) is illegal, uncollectible or unenforceable,
or (vii) the Note has been forged or otherwise is irregular or
not genuine or authentic.
2.5 Release of Obligors
. Any partial release of
the liability of Guarantor on the Guaranteed Obligations or any
other person or entity now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay,
perform, guarantee or assure the payment of the Guaranteed
Obligations, or any part thereof, it being recognized, acknowledged
and agreed by Guarantor that Guarantor may be required to pay the
Guaranteed Obligations in full without assistance or support of any
other party, and Guarantor has not been induced to enter into this
Guaranty on the basis of a contemplation, belief, understanding or
agreement that other parties will be liable to pay or perform the
Guaranteed Obligations, or that Lender will look to other parties
to pay or perform the Guaranteed Obligations.
2.6 Other Collateral
. The taking or accepting
of any other security, collateral or guaranty, or other assurance
of payment, for all or any part of the Guaranteed
Obligations.
2.7 Release of Collateral
. Any release, surrender,
exchange, subordination, deterioration, waste, loss or impairment
(including, without limitation, negligent, willful, unreasonable or
unjustifiable impairment) of any collateral, property or security
at any time existing in connection with, or assuring or securing
payment of, all or any part of the Guaranteed
Obligations.
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2.8 Care and Diligence
. The failure of Lender
or any other party to exercise diligence or reasonable care in the
preservation, protection, enforcement, sale or other handling or
treatment of all or any part of any collateral, property or
security, including but not limited to any neglect, delay,
omission, failure or refusal of Lender (i) to take or
prosecute any action for the collection of any of the Guaranteed
Obligations or (ii) to take or prosecute any action in
connection with any instrument or agreement evidencing or securing
all or any part of the Guaranteed Obligations. Notwithstanding the
foregoing or any other provision in this Guaranty, the Guaranteed
Obligations shall not include any damages, losses, costs or
expenses resulting from the gross negligence, fraud, willful
misconduct or illegal acts of Lender.
2.9 Unenforceability
. The fact that any
collateral, security, security interest or lien contemplated or
intended to be given, created or granted as security for the
repayment of the Guaranteed Obligations, or any part thereof, shall
not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or
lien, it being recognized and agreed by Guarantor that Guarantor is
not entering into this Guaranty in reliance on, or in contemplation
of the benefits of, the validity, enforceability, collectibility or
value of any of the collateral for the Guaranteed
Obligations.
2.10 Offset .
The Note, the Guaranteed Obligations
and the liabilities and obligations of the Guarantor to Lender
hereunder shall not be reduced, discharged or released because of
or by reason of any existing or future right of offset, claim or
defense of Borrower and/or Guarantor against Lender, or any other
party, or against payment of the Guaranteed Obligations, whether
such right of offset, claim or defense arises in connection with
the Guaranteed Obligations (or the transactions creating the
Guaranteed Obligations) or otherwise.
2.11 Merger .
The reorganization, merger or
consolidation of Borrower or Guarantor into or with any other
Person (as defined
