EX-10.5 Agrmt and Guarantee by Westbrige Hsptlty



 







Exhibit 10.5

EXECUTION COPY




AGREEMENT AND GUARANTY




     This AGREEMENT AND GUARANTY (this “Agreement”) dated as of May 19, 2006 is made by WESTBRIDGE
HOSPITALITY MANAGEMENT LIMITED, a Bermuda exempted company, for and on behalf and in its capacity
as general partner of Westbridge Hospitality Fund, L.P. (the “Fund”), an exempted limited
partnership formed under the laws of Bermuda, in favor of Boykin Lodging Company (the “Company”),
an Ohio corporation.



RECITALS




     WHEREAS, Cadfund L.P., a Bermuda exempted limited partnership (“CDP”), as limited partner,
Westbridge Hospitality Investors Limited, a Bermuda exempted company (“Westmont”), as limited
partner, Westbridge Hospitality Management Limited, a Bermuda exempted company (the “General
Partner”), as general partner, and the other parties thereto, entered into that certain Amended and
Restated Agreement of Exempted Limited Partnership (the “Partnership Agreement”) of the Fund, dated
as of February 2, 2006;



     WHEREAS, pursuant to Section 5.4 of the Partnership Agreement, the General Partner is
specifically authorized to make or hold some or all of the Fund’s investments in whole or in part
through special purpose entities (including partnerships, corporations, real estate investment
trusts, or other types of entities) and in accordance therewith has established the Investment
Vehicle (as defined below) to effect the consummation of the transactions contemplated by the
Merger Agreement (as defined below);



     WHEREAS, Braveheart Investors LP, Braveheart II Realty (Ohio) Corp., Braveheart II Properties
Holding LLC, Braveheart II Properties Company LLC, being certain affiliates of the Fund
(collectively, the “Investment Vehicle”), have entered into that certain Agreement and Plan of
Merger, dated May 19, 2006, with the Company and certain affiliates of the Company (the “Merger
Agreement”), pursuant to which Braveheart II Realty (Ohio) Corp. will merge with and into the
Company and Braveheart II Properties Company LLC will merge with and into Boykin Hotel Properties
L.P. (collectively, the “Transaction”);



     WHEREAS, the Fund has agreed to provide in favor of the Company the guaranty contemplated by
this Agreement and to call and reserve capital in an amount sufficient to enable the Fund to
satisfy its obligations under this Agreement.



     NOW, THEREFORE, in consideration of the premises, the mutual agreements contained herein and
for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:



     1. Subject to Section 10 hereto, the Fund hereby unconditionally (except as
expressly set forth herein), absolutely and irrevocably guaranties to the Company, as primary
obligor and not
as a surety, the prompt payment in full when due of any and all monetary obligations owed to the
Company by the Investment Vehicle arising out of the Merger Agreement (the “Subject Obligation”);
provided, that in no event shall the Subject Obligation or the maximum amount owing or payable by
the Fund under this Agreement exceed $135,000,000 in the aggregate. The



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Fund agrees that if the Investment Vehicle shall fail to pay in full when due any Subject
Obligation, the Fund will promptly pay the same in cash, without any demand or notice whatsoever.




     2. The Company may, in its sole and absolute discretion, without notice or further
assent of the Fund and without in any way releasing, altering, impairing, discharging or
invalidating the obligations and liabilities of the Fund hereunder:




	 	(a)	 	waive compliance with, performance or payment of, or default under the Merger
Agreement or any Subject Obligation deriving therefrom, or take or fail to take any
action of any kind whether pursuant to the Merger Agreement, at law or otherwise, or
exercise or refrain from exercising any right or take or refrain from taking any
action, against the Investment Vehicle or others;
	 
	 	(b)	 	modify or supplement any provision of the Merger Agreement or any Subject
Obligation deriving therefrom, including any modification or supplement that has the
effect of changing, renewing, extending, continuing, accelerating, surrendering,
compromising, waiving or releasing, in whole or in part, any Subject Obligation or any
provision of, or right under, the Merger Agreement, but in all cases subject to the
terms thereof applicable to such amendments;
	 
	 	(c)	 	effect any release, compromise, subordination or settlement of any Subject
Obligation;
	 
	 	(d)	 	accept, release or discharge the Investment Vehicle, a permitted successor or
assign of the Investment Vehicle or any other person or entity; and
	 
	 	(e)	 	from time to time, apply any sums at any time received from the Investment
Vehicle or any other person or entity in such manner, in such amounts and in
satisfaction of such part of the Subject Obligation as it considers best.





     3. The guaranty obligations of the Fund set forth in Section 1 hereto (a)
shall constitute a guaranty of payment and not just collection, (b) shall be absolute, continuing,
irrevocable and unconditional; provided that the obligation of the Fund to make payment hereunder
shall be conditioned on and subject to the default of the Investment Vehicle with respect to the
Subject Obligation, (c) shall not be conditioned upon the pursuit by the Company of all available
rights or remedy which it may have against the Investment Vehicle, any other person or any
collateral or other guaranties or indemnities held by the Company, or the joining of any party in
any proceeding to enforce the Merger Agreement or any Subject Obligation, and (d) shall not be
diminished or relieved in any way because of any insolvency, bankruptcy, receivership, assignment
for the benefit of creditors, or similar proceeding by or against the Investment Vehicle, or any
reorganization, restructuring, dissolution, sale of all or substantially all assets, or similar
event with respect to the Investment Vehicle.



     4. The Fund expressly waives (a) diligence, notice, demand for payment, presentment
and protest with respect to any Subject Obligation, (b) notice that any Subject Obligation is due
or notice of default, dishonor or non-payment with respect to any Subject Obligation (unless prior
thereto, the Fund has notified the Company in writing that the Fund requires copies of



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notices of non-payment), (c) any right to a jury trial in any action brought at any time or
from time to time with respect to this Agreement, (d) any renewal or extension of time for
performance of the Merger Agreement or Subject Obligation, any discharge of the Investment Vehicle,
any change in the terms of, or any other change in, the Merger Agreement or Subject Obligation, (e)
any defense or equitable discharge based upon any act or omission of the Company (except those in
bad faith) that materially increases the scope of the Fund’s risk and (f) any defense based on the
suretyship defenses of extension of time and modification of the underlying obligation (but no
other defenses).




     5. The Fund warrants that it has adequate means of obtaining information with
respect to, and assumes all responsibility for being and keeping itself informed of, the Investment
Vehicle’s financial condition and assets, the Investment Vehicle’s performance of the Merger
Agreement and the Subject Obligation, all other circumstances bearing upon the risk of non-payment
or non-performance of the Merger Agreement and Subject Obligation, and the nature, scope and extent
of the risks hereby assumed. The Fund further agrees that the Company shall not have any
obligation to advise the Fund of information known to the Company regarding any such circumstances
or risks.



     6. The Fund hereby agrees that until the indefeasible payment and satisfaction in
full in cash of all of the Subject Obligation, it shall waive any claim and shall not exercise any
right or remedies, direct or indirect, arising by reason of any performance by it of its guarantee
in paragraph 1, whether by subrogation or otherwise, against the Investment Vehicle of any of the
Subject Obligation. Any indebtedness of the Investment Vehicle to the Fund shall be subordinated
to the Investment Vehicle’s obligation to pay pursuant to the Merger Agreement.



     7. The Fund hereby represents and warrants to the Company that, as of the date
hereof:




	 	(a)	 	the Fund is duly organized and validly existing under the laws of Bermuda, and
has all requisite corporate power and authority to enter into this Agreement;
	 
	 	(b)	 	the execution, delivery and performance of this Agreement has been duly
authorized by all necessary limited partnership action on the part of the Fund and this
Agreement constitutes a legal, valid and binding obligation of the Fund, enforceable
against the Fund in accordance with its terms;
	 
	 	(c)	 	the execution and delivery of this Agreement and performance by the Fund of its
obligations hereunder do not contravene any provisions of the Fund’s certificate of
formation or any law, regulation, rule, decree, order, judgment or contractual
restriction binding on or affecting it or its undertakings, property and assets;
	 
	 	(d)	 	no consent, approval, order or authorization or the giving of notice to or the
registration with, or the taking of any other action in respect of any governmental
authority or agency is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement;
	 
	 	(e)	 	pursuant to the Partnership Agreement, the limited partners of the Fund have
agreed to make capital commitments (“Capital Commitments”) in the aggregate amount of
$350,000,000, of which amount $172,056,044 has been received by the




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	 	 	 	Fund in connection with capital calls made prior to the date hereof and an
additional amount of approximately $18,184,726 of which has been budgeted to be
called by the general partner of the Fund in connection with other transactions (the
“Proposed Draw”). The capital contributions made to date were used to acquire
interests in entities owning various European-based hotel assets (the “Closed
Investment”) at a total cost (including transaction fees) of approximately
€367,415,000, which interests constitute substantially all of the assets of the
Fund. The Fund indirectly owns such entities through an intermediate holding company
(the “Holding Company”) formed in connection with such acquisition. The Fund’s
direct interest in the Holding Company has not been pledged to any person or entity,
although interests in entities owned directly and indirectly by the Holding Company
and such real estate assets have been pledged in connection with the acquisition
financing relating to such transaction. As of the date hereof, the aggregate amount
of the funded indebtedness of the Holding Company and its subsidiaries does not
exceed €235,000,000. The Fund has Capital Commitments that remain undrawn and not
budgeted in connection with the Proposed Draw in the aggregate amount of
approximately $156,759,230 and has budgeted up to approximately $135,000,000 of the
aggregate Capital Commitments for the Transaction;






	 	(f)	 	under the Partnership Agreement, the general partner of the Fund is
authorized to make, and the limited partners are obligated to fund, a capital call to
the limited partners in accordance with their relative Capital Commitments in order to
satisfy the Fund’s obligations under this Agreement;
	 
	 	(g)	 	upon a duly made capital call, each limited partner of the Fund shall be
irrevocably and unconditionally obligated to the Fund to contribute capital to the Fund
in the amount of such call up to its stated capital commitment without any setoff
against, defense to or reduction of such obligation based on any claim that such
limited partner has against any person or entity;
	 
	 	(h)	 	the Fund has not made any distributions to its partners; and
	 
	 	(i)	 	no material adverse change has occurred with respect to the financial condition
of the assets acquired in connection with the formation of the Holding Company and the
related transactions since the date of acquisition thereof and no new additional debt
has been incurred in connection with such assets since the date of acquisition thereof.





     8. The Fund hereby covenants with the Company that (i) in connection with the
financial obligations of the Investment Vehicle under the Merger Agreement, including the
obligation to pay the merger consideration payable thereunder, and its obligations under this
Agreement, including its obligations after an event of default under the Merger Agreement or this
Agreement, the General Partner shall timely make a capital call to the limited partners of the
Fund, in accordance with the Partnership Agreement, for equity funding sufficient to satisfy such
obligations in an amount not to exceed $135,000,000, which the General Partner shall request



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that the limited partners satisfy by making their investments through the Investment Vehicle,
and (ii) so long as the Merger Agreement is in full force and effect and has not been terminated or
the Transaction consummated, the General Partner agrees not to commit the Fund to make any
investment or undertake any other activity (including creating or suffering to exist any pledge,
claim, lien, charge, encumbrance or security interest of any kind or nature whatsoever, right of
first refusal or offer and option on the Closed Investment or its right to make a call with respect
to the Capital Commitments or on the proceeds to be derived from a call) to the extent the making
of such investment or the undertaking of such activity would cause (x) the Fund to be unable to
perform its obligations arising under this Agreement or (y) result in the net worth of the Fund
(based on the book value of all assets of the Fund, less the Fund’s liabilities) at any time being
less than $75,000,000 (the “Net Worth Test”).




     9. The Fund hereby covenants with the Company that the general partner will not make
any distributions to the partners of the Fund prior to termination of the Merger Agreement or
consummation of the Transaction to the extent the making of such distributions would (i) cause the
Fund to be unable to perform its obligations arising under this Agreement or (ii) result in the Net
Worth Test not being satisfied.



     10. Notwithstanding anything to the contrary contained herein, at any time
Braveheart II Realty (Ohio) Corp. or Braveheart Investors LP (“Braveheart”) holds, for its
benefit, an irrevocable unconditional standby letter of credit (an “LC”) in an amount
available for drawing of not less than $50,000,000 (less any drawings deposited into Escrow
(as defined below) or paid in connection with the satisfaction of any Subject Obligation) issued by
(A) a financial institution whose senior long-term unsecured obligations are rated at least A and
A2 by S&P and Moody’s, respectively, (B) by Citibank, N.A., or (C) by RBC Financial Group (or one
of its affiliates with the same or greater credit rating) then neither of (x) the Net Worth Test
set forth in Sections 8(ii)(y) or 9(ii) above, nor (y) the guaranty
obligations of the Fund set forth in Section 1 hereto shall be applicable to the Fund or of
any force or effect for so long as such LC shall be Maintained. For the purposes of this
Section 10, the term “Maintained” shall mean that (i) such LC is issued in favor of
Braveheart, as beneficiary; (ii) the LC is drawable (A) at any time by Braveheart into Escrow in
an amount not less than $50,000,000 (less any drawings deposited into Escrow (as defined
below) or paid in connection with the satisfaction of any Subject Obligation), (B) by the Company
into Escrow, in favor of Braveheart, at any time after a judgment has been rendered by a court of
competent jurisdiction against Braveheart in favor of the Company in respect of a default by
Braveheart under the Merger Agreement or by the Fund under this Agreement, or (C) by the Company
into Escrow at any time during which the LC shall have fewer than thirty (30) days remaining until
its stated date of expiration or at any time the Company shall have provided written notice to
Braveheart not consenting to the revocation, withdrawal or termination of the LC within the ten
(10) day time period specified in the last proviso of this Section 10; (iii) the LC meets
all of the requirements set forth above; (iv) such LC is not subject to any pledge, claim, lien,
charge, encumbrance or security interest of any kind or nature whatsoever, right of first refusal
or offer or option in favor of any other party (other than the Company or its affiliates); (v)
Braveheart is not then subject to any bankruptcy, insolvency, dissolution, liquidation,
reorganization, receivership or other debtor relief proceeding; and (vi) if the LC has been drawn,
the proceeds therefrom have been paid to either (or a combination of) the Company or the Escrow;
provided however, that each of the foregoing clauses (i) through (vi) shall be
deemed to be satisfied if the failure of any such clause to be satisfied results from an act



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of the Company or any of its affiliates. For the avoidance of doubt, the LC shall provide that
the presentment of the ‘draw certificate’ to the LC issuer may be made by either of the parties
hereto on the terms provided herein; provided that the ‘sight draft’ shall indicate that any
drawing shall be made solely to the Escrow Agent (as defined below). In addition, Braveheart agrees
that it (nor its affiliates) shall not cause the LC to be revoked, withdrawn or terminated, until
ten (10) days after providing written notice to the Company requesting the Company’s consent;
provided that the Company shall provide written notice not to consent to any
revocation, withdrawal or termination of the LC requested by the Fund or Braveheart within ten (10)
days of receipt of evidence (which is reasonably satisfactory) to the Company that the Fund is then
in compliance with the Net Worth Test.




     11. Any LC obtained pursuant to this Agreement shall be issued in favor of
Braveheart but shall be drawable only as set forth in Sections 10(ii)(A)-(C). For
the purposes of this Agreement, the term “Escrow” shall mean an escrow account to be established
with an escrow agent (“Escrow Agent”) reasonably satisfactory to the parties hereto which shall be
established contemporaneously with the issuance of any LC (it being agreed that Citibank, Wells
Fargo or any title company shall be acceptable). The agreement governing the Escrow shall contain
such other terms as shall be reasonably acceptable to the parties hereto and shall provide that
that funds held therein shall only be released (i) to Braveheart upon the termination of this
Agreement in accordance with its terms; (ii) pursuant to a judicial order directing payment to such
party as shall be provided therein; (iii) by mutual agreement of the parties hereto; or (iv) to the
Company, at the request of Braveheart, to satisfy any Subject Obligation.



     12. If any claim is ever made upon the Company for repayment or recovery of any
amount received by it in payment or on account of any Subject Obligation and the Company repays all
or part of such amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over the Company or any of their property, or (b) any
settlement or compromise of any such claim effected by the Company with any such claimant
(including any other guarantor), then in such event the Fund agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon the Fund and the Fund shall be and remain
liable hereunder for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by the Company, notwithstanding any termination of this Agreement,
the Merger Agreement or any Subject Obligation.



     13. In the event that pursuant to: (i) any bankruptcy, insolvency, dissolution,
liquidation, reorganization, receivership or other debtor relief law, any judgment, order or
decision thereunder; or (ii) any other judgment, order, decision, settlement or compromise, the
Company must rescind or restore any payment, or any part thereof, received in satisfaction of any
Subject Obligation, any prior release or discharge from the terms of this Agreement in respect
thereof relating to such payment shall be without effect to the same extent as if such amount had
never been received by the Company, notwithstanding any termination of this Agreement, the Merger
Agreement or any Subject Obligation.



     14. This Agreement is a continuing agreement and shall not terminate or be
discharged until the earliest of the performance and indefeasible payment and performance of all of
the Subject Obligation, the termination of the Merger Agreement in accordance with its terms or the
closing of the Transaction. If demand for, or acceleration of the time for, payment by the



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Investment Vehicle to the Company of any Subject Obligation is stayed upon the bankruptcy,
insolvency, reorganization, receivership or proposed compromise or arrangement with creditors of
the Investment Vehicle, all of the Subject Obligation of which payment or performance is stayed
that would otherwise be subject to the demand for payment or acceleration shall nonetheless be
payable by the Fund immediately upon demand by the Company.




     15. This Agreement constitutes the entire agreement between the parties hereto with
respect to its subject matter and supersedes all prior agreements, contracts and discussions,
whether written or oral, with respect thereto. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature whatsoever, shall be used to supplement or modify
the terms of this Agreement. The execution and delivery of this Agreement has not been induced by
any representations, warranties, conditions, other guaranties or acknowledgements not expressly
made. There are no conditions to the full effectiveness of this Agreement, and, other than the
default by the Investment Vehicle with respect to any Subject Obligation, there are no conditions
to the right to make demand under this Agreement.



     16. This Agreement cannot be modified, revoked or terminated except by an instrument
in writing signed by the parties hereto.



     17. The validity, construction and enforcement of this Agreement shall be governed
by the laws of the State of New York, United States of America, without reference to its conflicts
of law rules. Each of the Fund and the Company hereby irrevocably and unconditionally (i) submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court for the Southern
District of New York, and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or for recognition or enforcement of same or any judgment,
(ii) agrees that all claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal court, (iii) agrees that
a final judgment in any such action or proceeding may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law, (iv) 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 Agreement in any court
referred to above, (v) waives, to the fullest extent permitted by law, the defense of forum non
conveniens to the maintenance of such action or proceeding in any such court and (vi) agrees that
service of all writs, process and summonses in any such suit, action or proceeding brought in the
State of New York may be made upon the process agent of the undersigned appointed below. Each of
the Fund and the Company hereby irrevocably appoints the person set forth on the line marked
“Process Agent” on the signature page hereto as its process agent and as its true and lawful
attorney-in-fact in the name, place and stead of it to accept such service of any and all such
writs, process and summonses.



     18. If any provision of this Agreement or its application in any circumstance is
invalid or unenforceable to any extent, the remainder of this Agreement shall not be affected.



     19. Any notice, demand, statement or request (each a “Notice”) to be given under
this Agreement shall be in writing and addressed to the Company or to the Fund, as the case may be,
at such address as such party has set forth in the Merger Agreement (notices to the Fund shall be



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addressed to the designees of the “Parent” party to the Merger Agreement). Any such Notice or
other communication given as aforesaid shall be deemed to have been given (a) when personally
delivered by courier, overnight delivery, or otherwise, or (b) on the Business Day following the
day upon which such Notice or other communication is sent by facsimile transmission, provided that
there has been confirmation of transmission. If such Notice is given on a day that is not a
Business Day or after 5:00 p.m. on a Business Day, it shall be deemed given and received on the
Business Day next following the date of receipt. For purposes hereof, a “Business Day” shall be
any day upon which commercial banks are open for business in The City of New York.




     20. This Agreement shall be binding upon, and be enforceable by, the Fund, the
Company and their respective permitted successors, transferees and assigns. The assignment by the
Fund or the Company of the obligations hereunder shall be null and void and without effect without
the prior written consent of the other party, which consent may be withheld for any reason or for
no reason.



     21. This Agreement may be executed in counterparts, each of which when executed and
delivered shall have the force and effect of an original and all of which together shall constitute
one and the same instrument.



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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.



	 	 	 	 	 
	 	 	FUND:
	 
	 	 	 	 
	 	 	WESTBRIDGE HOSPITALITY FUND, L.P.
	 
	 	 	 	 
	 	 	By its General Partner,
	 	 	Westbridge Hospitality Management Limited
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Majid Mangalji
	 

	 	 	 	 
	 	 	Name: Majid Mangalji
	 	 	Title: Director and President
	 
	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	BOYKIN LODGING COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Richard C. Conti
	 

	 	 	 	 
	 	 	Name: Richard C. Conti
	 	 	Title: President and Chief Operating Officer






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Name and Address of Fund and Braveheart Process Agent in State of New York




Davies Ward Phillips & Vineberg LLP

626 Madison Avenue

New York, New York 10022

Attention: Gawain S.E. Smart, Esq.




Name and Address of Company Process Agent in State of New York




C T Corporation System

111 Eighth Avenue

New York, New York 10011






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