GUARANTY AGREEMENT

 

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                                                                 EXHIBIT 10.34.2

 

                THIS GUARANTY IS SUBJECT TO ARBITRATION PURSUANT

           TO THE FEDERAL ARBITRATION ACT AND/OR SECTION 15-48-10 OF

               THE SOUTH CAROLINA CODE OF LAWS (1976), AS AMENDED

 

                               GUARANTY AGREEMENT

 

            This Guaranty Agreement (this "Guaranty") is made as of the 27th day

of April, 2005, by FelCor Lodging Limited Partnership, a Delaware limited

partnership ("Guarantor"), in favor of Bank of America, N.A., a national banking

association (together with its successors and assigns "Administrative Agent") on

behalf of the Lenders (as defined in the Loan Agreement (defined below)).

 

                             PRELIMINARY STATEMENTS

 

      Administrative Agent, Lenders, and Grande Palms, L.L.C. ("Borrower"), have

entered into, are entering into concurrently herewith, or contemplate entering

into, that certain Construction Loan Agreement dated of even date herewith

(herein called, as it may hereafter be modified, supplemented, restated,

extended, or renewed and in effect from time to time, the "Loan Agreement"),

which Loan Agreement sets forth the terms and conditions of a loan (the "Loan")

to Borrower for the construction of the Improvements on, and with respect to,

land located in Horry County, South Carolina, as more particularly described in

the Loan Agreement and identified therein as the Land.

 

      A condition precedent to Lenders' and Administrative Agent's obligation to

make the Loan to Borrower is Guarantor's execution and delivery to

Administrative Agent on behalf of the Lenders of this Guaranty.

 

      The Loan is, or will be, evidenced by those certain Promissory Notes

designated as "Promissory Note (Name of Lender)" of even date with the Loan

Agreement, executed by Borrower and payable to the order of particular Lenders

in the aggregate principal face amount of Sixty-Nine Million Eight Hundred

Thousand and No/100 Dollars ($69,800,000.00) (such notes, as each may hereafter

be renewed, extended, supplemented, increased or modified and in effect from

time to time, and all other notes given in substitution therefor, or in

modification, renewal, or extension thereof, in whole or in part, is herein

called, collectively, the "Note").

 

      Any capitalized term used and not defined in this Guaranty shall have the

meaning given to such term in the Loan Agreement. This Guaranty is one of the

Loan Documents described in the Loan Agreement.

 

                              STATEMENT OF AGREEMENTS

 

      For good and valuable consideration, the receipt and adequacy of which are

hereby acknowledged, and as a material inducement to Administrative Agent and

the Lenders to extend credit to Borrower, Guarantor hereby guarantees to

Administrative Agent and the Lenders the prompt payment of the Indebtedness

(collectively called the "Guaranteed Obligations"), this Guaranty being upon the

following terms and conditions:

 

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      1.     Guaranty of Payment. Guarantor hereby unconditionally and

irrevocably guarantees to Administrative Agent and the Lenders the punctual

payment when due, whether by lapse of time, by acceleration of maturity, or

otherwise, of principal, interest (including interest accruing after the

commencement of any bankruptcy or insolvency proceeding by or against Borrower,

whether or not allowed in such proceeding), fees, late charges, costs, expenses,

indemnification indebtedness, and other sums of money now or hereafter due and

owing, or which Borrower is obligated to pay, pursuant to (i) the terms of the

Note, the Loan Agreement, the Mortgage, the Environmental Agreement, Swap

Contract, any application, agreement, note or other document executed and

delivered in connection with any Letter of Credit, or any other Loan Documents

and any indemnifications contained in the Loan Documents, now or hereafter

existing, and (ii) all renewals, extensions, refinancings, modifications,

supplements or amendments of such indebtedness, or any of the Loan Documents, or

any part thereof (the indebtedness described in clauses (i) and (ii) above in

this Section 1 is herein collectively called the "Indebtedness"); provided such

renewals, extensions, financings, modifications, supplements or amendments are

made with Guarantor's written consent. This Guaranty covers the Indebtedness,

whether presently outstanding or arising subsequent to the date hereof,

including all amounts advanced by Administrative Agent in stages or

installments. The guaranty of Guarantor as set forth in this Section 1 is a

continuing guaranty of payment and not a guaranty of collection.

 

      2.     [Reserved.]

 

      3.     Primary Liability of Guarantor.

 

      (a)    This Guaranty is an absolute, irrevocable and unconditional guaranty

of payment. Guarantor shall be liable for the payment of the Guaranteed

Obligations as a primary obligor. This Guaranty shall be effective as a waiver

of, and Guarantor hereby expressly waives, any and all rights to which Guarantor

may otherwise have been entitled under any suretyship laws in effect from time

to time, including any right or privilege, whether existing under statute, at

law or in equity, to require Administrative Agent to take prior recourse or

proceedings against any collateral, security or Person (hereinafter defined)

whatsoever.

 

      (b)    Guarantor hereby agrees that in the event of a Default (as defined

in the Loan Agreement) by Borrower in payment of the Guaranteed Obligations, or

any part thereof, when such indebtedness becomes due, either by its terms or as

the result of the exercise of any power to accelerate, Guarantor shall, on

demand and without presentment, protest, notice of protest, further notice of

nonpayment or of dishonor, default or nonperformance, or notice of acceleration

or of intent to accelerate, or any other notice whatsoever, without any notice

having been given to Guarantor previous to such demand of the acceptance by

Administrative Agent of this Guaranty, and without any notice having been given

to Guarantor previous to such demand of the creating or incurring of such

indebtedness, all such notices being hereby waived by Guarantor, pay the amount

due thereon to Administrative Agent and pay all costs and expenses that may

arise in consequence of such Event of Default (including, without limitation,

all reasonable attorneys' fees and expenses, investigation costs, court costs,

and any and all other costs and expenses reasonably incurred by Administrative

Agent or the Lenders in connection with the collection and enforcement of the

Note or any other Loan Document), whether or not suit is filed thereon, or

whether at maturity or by acceleration, or whether before or after

 

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maturity, or whether in connection with bankruptcy, insolvency or appeal. It

shall not be necessary for Administrative Agent, in order to enforce such

payment by Guarantor, first to institute suit or pursue or exhaust any rights or

remedies against Borrower or others liable on such indebtedness or for such

performance, or to enforce any rights against any security that shall ever have

been given to secure such indebtedness or performance, or to join Borrower or

any others liable for the payment or performance of the Guaranteed Obligations

or any part thereof in any action to enforce this Guaranty, or to resort to any

other means of obtaining payment or performance of the Guaranteed Obligations;

provided, however, that nothing herein contained shall prevent Administrative

Agent from suing on the Note or foreclosing the Mortgage or from exercising any

other rights thereunder, and if such foreclosure or other remedy is availed of,

only the net proceeds therefrom, after deduction of all charges and expenses of

every kind and nature whatsoever, shall be applied in reduction of the amount

due on the Note and Mortgage, and Administrative Agent shall not be required to

institute or prosecute proceedings to recover any deficiency as a condition of

payment hereunder or enforcement hereof. At any sale of the Property or other

collateral given for the Indebtedness or any part thereof, whether by

foreclosure or otherwise, Administrative Agent may at its discretion purchase

all or any part of the Property or collateral so sold or offered for sale for

its own account and may, in payment of the amount bid therefor, deduct such

amount from the balance due it pursuant to the terms of the Note, Mortgage and

other Loan Documents.

 

      (c)    Suit may be brought or demand may be made against Borrower or

against the Guarantor or any other guarantor of the Guaranteed Obligations, or

against any one or more of them, separately or together, without impairing the

rights of Administrative Agent or the Lenders against any party hereto.

 

      4.     Certain Agreements and Waivers by Guarantor.

 

      (a)    Guarantor hereby agrees that neither Administrative Agent's nor

Lenders' rights or remedies nor Guarantor's obligations under the terms of this

Guaranty shall be released, diminished, impaired, reduced or affected by any one

or more of the following events, actions, facts, or circumstances, and the

liability of Guarantor under this Guaranty shall be absolute and unconditional

irrespective of:

 

            (i)      any limitation of liability or recourse in any other Loan

Document or arising under any law;

 

            (ii)     any claim or defense that this Guaranty was made without

consideration or is not supported by adequate consideration;

 

            (iii)    the taking or accepting of any other security or guaranty

for, or right of recourse with respect to, any or all of the Guaranteed

Obligations;

 

            (iv)     any homestead exemption or any other exemption under

applicable law;

 

            (v)      any release, surrender, abandonment, exchange, alteration,

sale or other disposition, subordination, deterioration, waste, failure to

protect or preserve, impairment, or loss of, or any failure to create or perfect

any lien or security interest with respect to, or any other dealings with, any

collateral or security at any time existing or purported, believed or expected

to

 

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exist in connection with any or all of the Guaranteed Obligations, including any

impairment of Guarantor's recourse against any Person or collateral;

 

             (vi)     except as expressly provided for herein, any partial release

of the liability of Guarantor hereunder (whether by operation of law or

otherwise), or if one or more other guaranties are now or hereafter obtained by

Administrative Agent covering all or any part of the Guaranteed Obligations, any

complete or partial release of any one or more of such guarantors under any such

other guaranty, or any complete or partial release of Borrower or any other

party liable, directly or indirectly, for the payment of any or all of the

Guaranteed Obligations;

 

            (vii)    the insolvency, bankruptcy, dissolution, liquidation,

termination, receivership, reorganization, merger, consolidation, change of

form, structure or ownership, sale of all assets, or lack of corporate,

partnership or other power of Borrower or any other party at any time liable for

the payment or performance of any or all of the Guaranteed Obligations;

 

            (viii)   with consent of Guarantor: any renewal, extension,

modification, supplement, subordination or rearrangement of the terms of any or

all of the Guaranteed Obligations and/or any of the Loan Documents, including,

without limitation, material alterations of the terms of payment (including

changes in maturity date(s) and interest rate(s)) or performance (including

changes in the Plans and other terms or aspects of construction of the

Improvements) or any other terms thereof, or any waiver, termination, or release

of, or consent to departure from, any of the Loan Documents or any other

guaranty of any or all of the Guaranteed Obligations, or any adjustment,

indulgence, forbearance, or compromise that may be granted from time to time by

Administrative Agent on behalf of the Lenders to Borrower, Guarantor, and/or any

other Person at any time liable for the payment or performance of any or all of

the Guaranteed Obligations;

 

            (ix)     any neglect, lack of diligence, delay, omission, failure, or

refusal of Administrative Agent to take or prosecute (or in taking or

prosecuting) any action for the collection or enforcement of any of the

Guaranteed Obligations, or to foreclose or take or prosecute any action to

foreclose (or in foreclosing or taking or prosecuting any action to foreclose)

upon any security therefor, or to exercise (or in exercising) any other right or

power with respect to any security therefor, or to take or prosecute (or in

taking or prosecuting) any action in connection with any Loan Document, or any

failure to sell or otherwise dispose of in a commercially reasonable manner any

collateral securing any or all of the Guaranteed Obligations;

 

            (x)      except as expressly provided for herein, any failure of

Administrative Agent to notify Guarantor of any creation, renewal, extension,

rearrangement, modification, supplement, subordination, or assignment of the

Guaranteed Obligations or any part thereof, or of any Loan Document, or of any

release of or change in any security, or of any other action taken or refrained

from being taken by Administrative Agent against Borrower or any security or

other recourse, or of any new agreement between Administrative Agent and

Borrower, it being understood that Administrative Agent shall not be required

(other than as expressly provided herein) to give Guarantor any notice (other

than as expressly provided herein) of any kind under any circumstances with

respect to or in connection with the Guaranteed Obligations, any and all rights

to notice Guarantor may have otherwise had being hereby waived by Guarantor, and

the

 

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Guarantor shall be responsible for obtaining for itself information regarding

the Borrower, including, but not limited to, any changes in the business or

financial condition of the Borrower, and the Guarantor acknowledges and agrees

that the Administrative Agent shall have no duty to notify the Guarantor of any

information which the Administrative Agent or Lenders may have concerning the

Borrower.

 

            (xi)     if for any reason Administrative Agent is required to refund

any payment by Borrower to any other party liable for the payment or performance

of any or all of the Guaranteed Obligations or pay the amount thereof to someone

else;

 

            (xii)    the making of advances by Administrative Agent on behalf of

the Lenders to protect its interest in the Property, preserve the value of the

Property or for the purpose of performing any term or covenant contained in any

of the Loan Documents;

 

            (xiii)   the existence of any claim, counterclaim, setoff or other

right that Guarantor may at any time have against Borrower, Lenders,

Administrative Agent, or any other Person, whether or not arising in connection

with this Guaranty, the Note, the Loan Agreement, or any other Loan Document;

 

             (xiv)    the unenforceability of all or any part of the Guaranteed

Obligations against Borrower, whether because the Guaranteed Obligations exceed

the amount permitted by law or violate any usury law, or because the act of

creating the Guaranteed Obligations, or any part thereof, is ultra vires, or

because the officers or Persons creating the Guaranteed Obligations acted in

excess of their authority, or because of a lack of validity or enforceability of

or defect or deficiency in any of the Loan Documents, or because Borrower has

any valid defense, claim or offset with respect thereto, or because Borrower's

obligation ceases to exist by operation of law, or because of any other reason

or circumstance, it being agreed that Guarantor shall remain liable hereon

regardless of whether Borrower or any other Person be found not liable on the

Guaranteed Obligations, or any part thereof, for any reason (and regardless of

any joinder of Borrower or any other party in any action to obtain payment or

performance of any or all of the Guaranteed Obligations);

 

            (xv)     any order, ruling or plan of reorganization emanating from

proceedings under Title 11 of the United States Code with respect to Borrower or

any other Person, including any extension, reduction, composition, or other

alteration of the Guaranteed Obligations, whether or not consented to by

Administrative Agent; or

 

            (xvi)    any other condition, event, omission, action or inaction

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 or any other agreement;

 

            (xvii)   [Reserved];

 

            (xviii) Administrative Agent's enforcement or forbearance from

enforcement of the Guaranteed Obligations on a net or gross basis; or

 

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            (xix)    any invalidity, irregularity or unenforceability in whole or

in part (including with respect to any netting provision) of any Interest Rate

Protection Agreement or any confirmation, instrument or agreement required

thereunder or related thereto, or any transaction entered into thereunder, or

any limitation on the liability of Borrower 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.

 

      (b)    In the event any payment by Borrower or any other Person to

Administrative Agent or the Lenders is held to constitute a preference,

fraudulent transfer or other voidable payment under any bankruptcy, insolvency

or similar law, or if for any other reason Administrative Agent or Lenders are

required to refund such payment or pay the amount thereof to any other party,

such payment by Borrower or any other party to Administrative Agent or Lenders

shall not constitute a release of Guarantor from any liability hereunder, and

this Guaranty shall continue to be effective or shall be reinstated

(notwithstanding any prior release, surrender or discharge by Administrative

Agent of this Guaranty or of Guarantor), as the case may be, with respect to,

and this Guaranty shall apply to, any and all amounts so refunded by

Administrative Agent or Lenders or paid by Administrative Agent or Lenders to

another Person (which amounts shall constitute part of the Guaranteed

Obligations), and any interest paid by Administrative Agent or Lenders and any

attorneys' fees, costs and expenses paid or incurred by Administrative Agent or

Lenders in connection with any such event. It is the intent of Guarantor and

Administrative Agent that the obligations and liabilities of Guarantor hereunder

are absolute and unconditional under any and all circumstances and that until

the Guaranteed Obligations are fully and finally paid, and not subject to refund

or disgorgement, the obligations and liabilities of Guarantor hereunder shall

not be discharged or released, in whole or in part, by any act or occurrence

that might, but for the provisions of this Guaranty, be deemed a legal or

equitable discharge or release of a guarantor.

 

      (c)    If acceleration of the time for payment of any amount payable by

Borrower under the Note, the Loan Agreement, or any other Loan Document is

stayed or delayed by any law or tribunal, all such amounts shall nonetheless be

payable by Guarantor on demand by Administrative Agent.

 

      (d)    Guarantor agrees that neither the Guarantor nor anyone claiming

through or under the Guarantor shall or will set up, claim or seek to take

advantage of any appraisement, valuation, stay, extension or redemption laws now

or hereafter in force, in order to prevent or hinder the enforcement or

foreclosure of the Mortgage or the absolute sale of the Property or the final

and absolute putting into possession thereof, immediately after such sale, of

the purchasers thereat, and the Guarantor, for themselves and all who may at any

time claim through or under any of them, hereby waive the benefit of all such

laws and any and all rights to have the assets comprising the Property

marshalled upon any foreclosure of the Mortgage.

 

      5.     Subordination. If, for any reason whatsoever, Borrower is now or

hereafter becomes indebted to Guarantor:

 

      (a)    such indebtedness and all interest thereon and all liens, security

interests and rights now or hereafter existing with respect to property of

Borrower securing such indebtedness shall, at all times, be subordinate in all

respects to the Guaranteed Obligations and to all liens,

 

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security interests and rights now or hereafter existing to secure the Guaranteed

Obligations. All promissory notes or other evidences of such indebtedness of

Borrower, now or hereafter held by Guarantor, of obligations of Borrower to

Guarantor shall contain a specific written notice thereon that the indebtedness

evidenced thereby is subordinated under and is subject to the terms of this

Guaranty; and

 

      (b)    Guarantor shall not be entitled to enforce or receive payment,

directly or indirectly, of any such indebtedness of Borrower to Guarantor until

the Guaranteed Obligations have been fully and finally paid except for the

project management fees to be paid by Borrower to the Guarantor under the Budget

or other amounts specifically identified in the Budget.

 

      6.     Other Liability of Guarantor or Borrower. If Guarantor is or becomes

liable, by endorsement or otherwise, for any indebtedness owing by Borrower to

Lenders or Administrative Agent other than under this Guaranty, such liability

shall not be in any manner impaired or affected hereby, and the rights of

Lenders and Administrative Agent hereunder shall be cumulativ