Moody National REIT II, Inc. 8-K [mnrtii-8k_072417.htm]

 

Exhibit 10.2

GUARANTY

THIS GUARANTY dated as of September 27, 2017, executed and delivered by each of
the undersigned, whether one or more, (collectively, the “Guarantor”), in favor
of (a) KeyBank National Association, a national banking association, in its
capacity as agent (the “Agent”), for the Lenders under that certain Term Loan
Agreement dated as of even date herewith, by and among MOODY NATIONAL OPERATING
PARTNERSHIP II, LP, a Delaware limited partnership (the “Borrower”), the
financial institutions party thereto and their assignees in accordance therewith
(the “Lenders”), and the Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the “Loan Agreement”), and (b) the Lenders. Capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in the Loan
Agreement.

WHEREAS, pursuant to the Loan Agreement, the Lenders have made available to the
Borrower certain financial accommodations on the terms and conditions set forth
in the Loan Agreement;

WHEREAS, the Borrower and Guarantor, though separate legal entities, are
mutually dependent on each other in the conduct of their respective businesses
as an integrated operation and have determined it to be in their mutual best
interests to obtain financing from the Agent and the Lenders through their
collective efforts;

WHEREAS, Guarantor acknowledges that it will receive direct and indirect
benefits from the Agent and the Lenders making such financial accommodations
available to the Borrower under the Loan Agreement and, accordingly, Guarantor
is willing to guarantee the Borrower’s obligations to the Agent and the Lenders
on the terms and conditions contained herein; and

WHEREAS, Guarantor’s execution and delivery of this Guaranty is one of the
conditions precedent to the Agent and the Lenders making, or continuing to make,
such financial accommodations available to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Guarantor, Guarantor agrees as follows:

Section 1. Guaranty. Guarantor hereby absolutely and unconditionally, jointly
and severally, guaranties the due and punctual payment and performance of all of
the following when due (collectively referred to as the “Obligations”): (a) all
indebtedness and obligations owing by the Borrower to any of the Lenders or the
Agent under or in connection with the Loan Agreement and any other Loan
Document, including without limitation, the repayment of all principal of the
Loans made by the Lenders to the Borrower under the Loan Agreement and the
payment of all interest, fees, charges, reasonable attorneys fees and other
amounts payable to any Lender or the Agent thereunder or in connection therewith
(including any obligations under any Derivatives Contract); (b) any and all
extensions, renewals, modifications, amendments or substitutions of the
foregoing; and (c) all expenses, including, without limitation, reasonable
attorneys’ fees and disbursements, that are incurred by the Lenders or the Agent
in the enforcement of any of the foregoing or any obligation of such Guarantor
hereunder. Notwithstanding anything in the Guaranty to the contrary, the
obligations guaranteed under this Guaranty shall not include any Excluded Swap
Obligations.

Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a
guaranty of payment, and not of collection, and a debt of Guarantor for its own
account. Accordingly, the Lenders and the Agent shall not be obligated or
required before enforcing this Guaranty against any Guarantor: (a) to pursue any
right or remedy the Lenders or the Agent may have against the Borrower, any
other Guarantor or any other Person or commence any suit or other proceeding
against the Borrower, any other Guarantor or any other Person in any court or
other tribunal; (b) to make any claim in a liquidation or bankruptcy of the
Borrower, any other Guarantor or any other Person; or (c) to make demand of the
Borrower, any other Guarantor or any other Person or to enforce or seek to
enforce or realize upon any collateral security held by the Lenders or the Agent
which may secure any of the Obligations. In this connection, Guarantor hereby
waives the right of such Guarantor to require any holder of the Obligations to
take action against the Borrower as provided by any Applicable Law of any
Governmental Authority.

-1- 

 

 

Section 3. Guaranty Absolute. Guarantor guarantees that the Obligations will be
paid in accordance with the terms of the documents evidencing the same,
regardless of any Applicable Law now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or the Lenders with
respect thereto. The liability of Guarantor under this Guaranty shall be
absolute and unconditional in accordance with its terms and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever (other than the full and final payment and performance of the
Obligations), including, without limitation, the following (whether or not such
Guarantor consents thereto or has notice thereof):

(a)       

(i) any change in the amount, interest rate or due date or other term of any of
the Obligations; (ii) any change in the time, place or manner of payment of all
or any portion of the Obligations; (iii) any amendment or waiver of, or consent
to the departure from or other indulgence with respect to, the Loan Agreement,
any other Loan Document, or any other document or instrument evidencing or
relating to any Obligations; or (iv) any waiver, renewal, extension, addition,
or supplement to, or deletion from, or any other action or inaction under or in
respect of, the Loan Agreement, any of the other Loan Documents, or any other
documents, instruments or agreements relating to the Obligations or any other
instrument or agreement referred to therein or evidencing any Obligations or any
assignment or transfer of any of the foregoing;

(b)       

any lack of validity or enforceability of the Loan Agreement, any of the other
Loan Documents, or any other document, instrument or agreement referred to
therein or evidencing any Obligations or any assignment or transfer of any of
the foregoing;

(c)       

any furnishing to the Agent or the Lenders of any security for the Obligations,
or any sale, exchange, release or surrender of, or realization on, any
collateral security for the Obligations;

(d)       

any settlement or compromise of any of the Obligations, any security therefor,
or any liability of any other party with respect to the Obligations, or any
subordination of the payment of the Obligations to the payment of any other
liability of the Borrower;

(e)       

any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any other
Guarantor, the Borrower or any other Person, or any action taken with respect to
this Guaranty by any trustee or receiver, or by any court, in any such
proceeding;

(f)       

any nonperfection of any security interest or other Lien on any of the
collateral securing any of the Obligations;

(g)       

any act or failure to act by the Borrower or any other Person which may
adversely affect such Guarantor’s subrogation rights, if any, against the
Borrower to recover payments made under this Guaranty;

(h)       

any application of sums paid by the Borrower or any other Person with respect to
the liabilities of the Borrower to the Agent or the Lenders, regardless of what
liabilities of the Borrower remain unpaid;

(i)       

any defect, limitation or insufficiency in the borrowing powers of the Borrower
or in the exercise thereof; or

(j)       

any other circumstance which might otherwise constitute a defense available to,
or a discharge of, any Guarantor hereunder.

The value of the consideration received and to be received by each Guarantor is
reasonably worth at least as much as the liability and obligation of each
Guarantor incurred or arising under the Loan Documents. Each Guarantor has
determined that such liability and obligation may reasonably be expected to
substantially benefit each Guarantor directly or indirectly. Each Guarantor has
had full and complete access to the underlying papers relating to the Loans and
all of the Loan Documents, has reviewed them and is fully aware of the meaning
and effect of their contents. Each Guarantor is fully informed of all
circumstances which bear upon the risks of executing this Guaranty and which a
diligent inquiry would reveal. Each Guarantor has adequate means to obtain from
each other Credit Party on a continuing basis information concerning such other
Credit Party’s financial condition, and is not depending on the Administrative
Agent or the Lenders to provide such information, now or in the future. Each
Guarantor agrees that neither the Administrative Agent nor any of the Lenders
shall have any obligation to advise or notify any Guarantor or to provide any
Guarantor with any data or information regarding any other Credit Party.

-2- 

 

 

Section 4. Action with Respect to Obligations. The Lenders and the Agent may in
accordance with the Loan Agreement, at any time and from time to time, without
the consent of, or notice to, any Guarantor, and without discharging any
Guarantor from its obligations hereunder take any and all actions described in
Section 3 and may otherwise: (a) amend, modify, alter or supplement the terms of
any of the Obligations, including, but not limited to, extending or shortening
the time of payment of any of the Obligations or the interest rate that may
accrue on any of the Obligations; (b) amend, modify, alter or supplement the
Loan Agreement or any other Loan Document; (c) sell, exchange, release or
otherwise deal with all, or any part, of any collateral securing any of the
Obligations; (d) release any Person liable in any manner for the payment or
collection of the Obligations; (e) exercise, or refrain from exercising, any
rights against the Borrower or any other Person (including, without limitation,
any other Guarantor); and (f) apply any sum, by whomsoever paid or however
realized, to the Obligations in such order as the Lenders or the Agent shall
elect in accordance with the Loan Agreement.

Section 5. Representations and Warranties. Guarantor hereby makes to the Agent
and the Lenders all of the representations and warranties made by the Borrower
with respect to or in any way relating to such Guarantor in the Loan Agreement
and the other Loan Documents, as if the same were set forth herein in full.

Section 6. Covenants. Guarantor will comply with all covenants which the
Borrower is to cause such Guarantor to comply with under the terms of the Loan
Agreement or any other Loan Documents.

Section 7. Waiver. Guarantor, to the fullest extent permitted by applicable law,
hereby waives notice of acceptance hereof or any presentment, demand, protest or
notice of any kind, and any other act or thing, or omission or delay to do any
other act or thing, which in any manner or to any extent might vary the risk of
such Guarantor or which otherwise might operate to discharge such Guarantor from
its obligations hereunder.

Section 8. Inability to Accelerate Loan. If the Agent and/or the Lenders are
prevented from demanding or accelerating payment thereof by reason of any
automatic stay or otherwise, the Agent and/or the Lenders shall be entitled to
receive from Guarantor, upon demand therefor, the sums which otherwise would
have been due had such demand or acceleration occurred.

Section 9. Reinstatement of Obligations. Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, with
respect to any Obligations if at any time payment of any such Obligations is
rescinded or otherwise must be restored by the Agent and/or the Lenders upon the
bankruptcy or reorganization of the Borrower or any Guarantor or otherwise.

Section 10. Subrogation. Until the date which is ninety-one (91) days after all
of the Obligations shall have been paid in full, any right of subrogation a
Guarantor may have shall be subordinate to the rights of Agent and the Lenders
and Guarantor hereby waives any right to enforce any remedy which the Agent
and/or the Lenders now have or may hereafter have against the Borrower, and
Guarantor hereby waives any benefit of, and any right to participate in, any
security or collateral given to the Agent and the Lenders to secure payment or
performance of any of the Obligations.

Section 11. Payments Free and Clear. As and to the extent provided in Sections
4.4(b) and 4.4(c) of the Loan Agreement with respect to payments by Borrower,
all sums payable by Guarantor hereunder shall be made free and clear of and
without deduction for any tax or other charge.

-3- 

 

 

Section 12. Set-off. Guarantor hereby grants to Agent, on behalf of the Lenders,
a security interest in and lien on all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by Agent to or for the credit or the account of any Guarantor. In addition
to any rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
in accordance with Section 13 of the Loan Agreement, any and all deposits
(general or special, time or demand, provisional or final but excluding any
funds held by the Borrower on behalf of tenants or other third parties) at any
time held and other obligations at any time owing by such Lender to or for the
credit or the account of any Guarantor against any of and all the obligations of
such Guarantor now or hereafter existing under this Guaranty held by such Lender
then due and payable.

Section 13. Subordination. Guarantor hereby expressly covenants and agrees for
the benefit of the Agent and the Lenders that all obligations and liabilities of
the Borrower or any other Guarantor to such Guarantor of whatever description,
including without limitation, all intercompany receivables of such Guarantor
from the Borrower or any other Guarantor (collectively, the “Junior Claims”)
shall be subordinate and junior in right of payment to all Obligations;
provided, however, that payment thereof may be made so long as no Event of
Default shall have occurred and be continuing. If an Event of Default shall have
occurred and be continuing, then no Guarantor shall accept any direct or
indirect payment (in cash, property, securities by setoff or otherwise) from the
Borrower or any other Guarantor on account of or in any manner in respect of any
Junior Claim until all of the Obligations have been indefeasibly paid in full.

Section 14. Avoidance Provisions. It is the intent of Guarantor, the Agent and
the Lenders that in any Proceeding, such Guarantor’s maximum obligation
hereunder shall equal, but not exceed, the maximum amount which would not
otherwise cause the obligations of such Guarantor hereunder (or any other
obligations of such Guarantor to the Agent and the Lenders) to be avoidable or
unenforceable against such Guarantor in such Proceeding as a result of
applicable law, including without limitation, (a) Section 548 of the Bankruptcy
Code of 1978, as amended (the “Bankruptcy Code”) and (b) any state fraudulent
transfer, fraudulent conveyance or voidable transaction act or statute applied
in such Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or
otherwise. The applicable laws under which the possible avoidance or
unenforceability of the obligations of such Guarantor hereunder (or any other
obligations of such Guarantor to the Agent and the Lenders) shall be determined
in any such Proceeding are referred to as the “Avoidance Provisions.”
Accordingly, to the extent that the obligations of any Guarantor hereunder would
otherwise be subject to avoidance under the Avoidance Provisions, the maximum
Obligations for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, as of the time any of the Obligations are deemed to have
been incurred under the Avoidance Provisions, would not cause the obligations of
any Guarantor hereunder (or any other obligations of such Guarantor to the Agent
and the Lenders), to be subject to avoidance under the Avoidance Provisions.
This Section is intended solely to preserve the rights of the Agent and the
Lenders hereunder to the maximum extent that would not cause the obligations of
any Guarantor hereunder to be subject to avoidance under the Avoidance
Provisions, and no Guarantor nor any other Person shall have any right or claim
under this Section as against the Agent and the Lenders that would not otherwise
be available to such Person under the Avoidance Provisions.

Section 15. Information. Guarantor assumes all responsibility for being and
keeping itself informed of the financial condition of the Borrower, of the other
Guarantors and of all other circumstances bearing upon the risk of nonpayment of
any of the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that none of the Agent or any
Lender shall have any duty whatsoever to advise any Guarantor of information
regarding such circumstances or risks.

Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 17. Jurisdiction; Venue; JURY WAIVER.

(a)       

Each party hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the state and federal courts
in Boston, Massachusetts and in New York, New York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Guaranty or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that the Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Guaranty or
any other Loan Document against the Guarantor or its properties in the courts of
any jurisdiction.

-4- 

 

 

(b)       

Each party hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty or any other Loan Document in any court
referred to in paragraph (a) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(c)       

WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
GUARANTY, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 18. Loan Accounts. The Agent may maintain books and accounts setting
forth the amounts of principal, interest and other sums paid and payable with
respect to the Obligations, and in the case of any dispute relating to any of
the outstanding amount, payment or receipt of Obligation or otherwise, the
entries in such account shall be presumptively binding upon Guarantor as to the
outstanding amount of such Obligations and the amounts paid and payable with
respect thereto absent manifest error. The failure of the Agent to maintain such
books and accounts shall not in any way relieve or discharge any Guarantor of
any of its obligations hereunder.

Section 19. Waiver of Remedies. No delay or failure on the part of the Agent or
the Lenders in the exercise of any right or remedy it may have against any
Guarantor hereunder or otherwise shall operate as a waiver thereof, and no
single or partial exercise by the Agent or the Lenders of any such right or
remedy shall preclude other or further exercise thereof or the exercise of any
other such right or remedy.

Section 20. Successors and Assigns. Each reference herein to the Agent or the
Lenders shall be deemed to include such Person’s respective successors and
assigns (including, but not limited to, any holder of the Obligations) in whose
favor the provisions of this Guaranty also shall inure, and each reference
herein to any Guarantor shall be deemed to include the Guarantor’s successors
and assigns, upon whom this Guaranty also shall be binding. The Lenders and the
Agent may, in accordance with the applicable provisions of the Loan Agreement,
assign, transfer or sell any Obligation, or grant or sell participation in any
Obligations, to any Person or entity without the consent of, or notice to, any
Guarantor and without releasing, discharging or modifying such Guarantor’s
obligations hereunder. Guarantor hereby consents to the delivery by the Agent or
any Lender to any assignee, transferee or participant of any financial or other
information regarding the Borrower or any Guarantor. Guarantor may not assign or
transfer its obligations hereunder to any Person.

Section 21. Amendments. This Guaranty may not be amended except as provided in
the Loan Agreement.

Section 22. Payments. All payments made by any Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the Agent
at the place and time provided for in the Loan Agreement on the date three (3)
Business Days after written demand therefor to such Guarantor by the Agent.

Section 23. Notices. All notices, requests and other communications hereunder
shall be in writing and shall be given as provided in the Loan Agreement.
Guarantor’s address for notice is set forth below its signature hereto.

-5- 

 

 

Section 24. Severability. In case any provision of this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

Section 25. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.

Section 26. Definitions. (a) For the purposes of this Guaranty:

“Proceeding” means any of the following: (i) a voluntary or involuntary case
concerning any Guarantor shall be commenced under the Bankruptcy Code or any
other applicable bankruptcy laws; (ii) a custodian (as defined in the Bankruptcy
Code or any other applicable bankruptcy laws) is appointed for, or takes charge
of, all or any substantial part of the property of any Guarantor; (iii) any
other proceeding under any applicable law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for adjustment
of debts, whether now or hereafter in effect, is commenced relating to any
Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any
order of relief or other order approving any such case or proceeding is entered
by a court of competent jurisdiction; (vi) any Guarantor makes a general
assignment for the benefit of creditors; (vii) any Guarantor shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts.

(b)       

Terms not otherwise defined herein are used herein with the respective meanings
given them in the Loan Agreement.

Section 27. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE GUARANTORS
HEREUNDER AND UNDER OTHER LOAN DOCUMENTS SHALL BE JOINT AND SEVERAL, AND
ACCORDINGLY, GUARANTOR (BUT NOT ITS LIMITED PARTNERS, SHAREHOLDERS OR MEMBERS)
CONFIRMS THAT IT (BUT NOT ITS LIMITED PARTNERS, SHAREHOLDERS OR MEMBERS) IS
LIABLE FOR THE FULL AMOUNT OF THE OBLIGATIONS AND ALL OF THE OBLIGATIONS AND
UNDER OTHER LOAN DOCUMENTS.

[Remainder of Page Intentionally Left Blank]

-6- 

 

 

IN WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as
of the date and year first written above.

MOODY NATIONAL REIT II, INC.,

a Maryland corporation

By:  /s/ Brett C. Moody   Name: Brett C. Moody   Title: President  

 

MN REIT II TRS, INC.,

a Delaware corporation

By:  /s/ Brett C. Moody   Name: Brett C. Moody   Title: President  

 

MOODY NATIONAL 1 POLITO LYNDHURST HOLDING, LLC,

MOODY NATIONAL INTERNATIONAL-FORT WORTH HOLDING, LLC,

MN LYNDHURST VENTURE, LLC,

MN FORT WORTH VENTURE, LLC,

each a Delaware limited liability company

By:  /s/ Brett C. Moody   Name: Brett C. Moody   Title: President  

 

Address for Notices:

 

c/o Moody National Companies

6363 Woodway Drive, Suite 110

Houston, Texas 77057

Attention: Brett C. Moody, CEO

Attention: Mary Smith, General Counsel

 

  With copies to:      

Moody National Companies

6363 Woodway Drive, Suite 110

Houston, Texas 77057

Attention: Mary Smith, Esquire

Gresham Savage Nolan & Tilden, PC

550 West C Street, Suite 1810

San Diego, California 92101

Attention: Jerome A. Grossman, Esquire

 

 

 

[Signature page to Guaranty]