EXHIBIT 4
GUARANTEE
OF
BLACKSTONE REAL ESTATE PARTNERS IV L.P.
Guarantee, dated as of March 5, 2004, by Blackstone Real Estate
Partners IV L.P. (the "GUARANTOR"), in favor of Extended Stay America, Inc. (the
"GUARANTEED PARTY").
1. GUARANTEE. To induce the Guaranteed Party to enter into an Agreement
and Plan of Merger, dated as of March 5, 2004, (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "MERGER
AGREEMENT"), among BHAC Capital IV, L.L.C., a Delaware limited liability company
and an affiliate of the Guarantor ("PARENT"), BHAC Acquisition IV, Inc., a
Delaware corporation and a wholly-owned subsidiary of PARENT ("MERGER SUB"),
where Merger Sub will merge with and into the Guaranteed Party, Guarantor
absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party,
the due and punctual observance, performance and discharge of all of the payment
obligations and liabilities of Parent and Merger Sub under the Merger Agreement
(the "OBLIGATIONS"); provided the maximum amount payable by Guarantor hereunder
shall not exceed $50,000,000 (the "CAP").
2. NATURE OF GUARANTEE. The Guaranteed Party shall not be obligated to
file any claim relating to the Obligations in the event that Parent or Merger
Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and
the failure of the Guaranteed Party to so file shall not affect the Guarantor's
obligations hereunder. In the event that any payment to the Guaranteed Party in
respect of any Obligations is rescinded or must otherwise be returned for any
reason whatsoever, the Guarantor shall remain liable hereunder with respect to
such Obligations as if such payment had not been made. This is an unconditional
guarantee of payment and not of collectibility.
3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that
the Guaranteed Party may at any time and from time to time, without notice to or
further consent of the Guarantor, extend the time of payment of or renew any of
the Obligations, and may also make any agreement with Parent or Merger Sub or
with any other party to, or person liable on any of, the Obligations or
interested therein, for the extension, renewal, payment, compromise, discharge
or release thereof, in whole or in part, or for any modification of the terms
thereof or of any agreement between the Guaranteed Party and Parent or Merger
Sub or any such other party or person without in any way impairing or affecting
this Guarantee. The Guarantor agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (a) the failure of the Guaranteed Party to assert any claim or
demand or to enforce any right or remedy against Parent or Merger Sub or any
other entity or other person primarily or secondarily liable with respect to any
of the Obligations; (b) any change in the time, place or manner of payment of
any of the Obligations or any rescission, waiver, compromise, consolidation or
other amendment or modification of any of
the terms or provisions of the Merger Agreement or any other agreement
evidencing, securing or otherwise executed in connection with any of the
Obligations, (c) the addition, substitution or release of any entity or other
person primarily or secondarily liable for any Obligation;(d) any change in the
corporate existence, structure or ownership of Parent of Merger Sub or any other
entity or person liable with respect to any of the Obligations; (e) any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
Parent or Merger Sub or any other entity or person liable with respect to any of
the Obligations; (f) any lack of validity or enforceability of the Merger
Agreement or any agreement or instrument relating thereto; (g) the existence of
any claim, set-off or other rights which the Guarantor may have at any time
against Parent, Merger Sub or the Guaranteed Party, whether in connection with
the Obligations or otherwise; (h) the adequacy of any other means the Guaranteed
Party may have of obtaining repayment of any of the Obligations; (i) the taking,
exchange, release, non-perfection or impairment of any collateral securing any
of the Obligations; (j) any other act or omission which might in any manner or
to any extent vary the risk of the Guarantor or otherwise operate as a release
or discharge of the Guarantor, all of which may be done without notice to the
Guarantor; or (k) any other event or circumstances, whether similar or
dissimilar to the foregoing (other than final payment in full of the
Obligations). To the fullest extent permitted by law, the Guarantor hereby
expressly waives any and all rights or defenses arising by reason of any law
which would otherwise require any election of remedies by the Guaranteed Party.
The Guarantor waives promptness, diligence, notice of the acceptance of this
Guarantee and of the Obligations, presentment, demand for payment, notice of
non-performance, default, dishonor and protest, notice of any Obligations
incurred and all other notices of any kind, all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Parent or Merger Sub or any other entity or other person primarily or
secondarily liable with respect to any of the Obligations, and all suretyship
defenses generally. The Guarantor hereby unconditionally and irrevocably waives
any duty on the part of the Guaranteed Party to disclose to the Guarantor any
matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of Parent, Merger
Sub or any of their affiliates now or hereafter known by the Guaranteed Party.
The Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the transactions contemplated by the Merger Agreement and that the
waivers set forth in this Guarantee are knowingly made in contemplation of such
benefits.
The Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against Parent, Merger Sub or
any other entity or person liable with respect to any of the Obligations that
arise from the existence, payment, performance, or enforcement of the
Guarantor's Obligations under or in respect of this Guarantee or any other
agreement in connection therewith, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Guaranteed Party against
Parent, Merger Sub or any other entity or person liable with respect to any of
the Obligations, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from Parent, Merger Sub or any other entity or person liable
with respect to any of the Obligations, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim, remedy or right, unless and until all of the Obligations and all
other amounts payable under this Guarantee shall have been paid in
full in cash. If any amount shall be paid to the Guarantor in violation of the
immediately preceding sentence at any time prior to the payment in full in cash
of the Obligations and all other amounts payable under this Guarantee, such
amount shall be received and held in trust for the benefit of the Guaranteed
Party, shall be segregated from other property and funds of the Guarantor and
shall forthwith be paid or delivered to the Guaranteed Party in the same form as
so received (with any necessary endorsement or assignment) to be credited and
applied to the Obligations and all other amounts payable under this Guarantee,
in accordance with the terms of the Merger Agreement, whether matured or
unmatured, or to be held as collateral for any Obligations or other amounts
payable under this Guarantee thereafter arising.
4. EXPENSES. The Guarantor agrees to pay on demand all reasonable fees
and out of pocket expenses (including the reasonable fees and expenses of the
Guaranteed Party's counsel) in any way relating to the enforcement or protection
of the rights of the Guaranteed Party hereunder; provided, that such fees and
expenses shall not be subject to the Cap; and provided further, that the
Guarantor shall not be liable for any expenses of the Guaranteed Party if no
payment under this Guarantee is due.
5. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the
Guaranteed Party to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Guaranteed Party of any right, remedy or power hereunder
preclude any other or future exercise of any right, remedy or power. Each and
every right, remedy and power hereby granted to the Guaranteed Party or allowed
it by law or other agreement shall be cumulative and not exclusive of any other,
and may be exercised by the Guaranteed Party at any time or from time to time.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that:
(a) the execution, delivery and performance of this Guarantee
have beeen duly authorized by all necessary partnership action and do not
contravene any provision of the Guarantor's charter, partnership agreement,
operating agreement or similar organizational documents or any law,
regulation, rule, decree, order, judgment or contractual restriction
binding on the Guarantor or its assets;
(b) all consents, approvals, authorizations, permits of, filings
with and notifications to, any governmental authority necessary for the due
execution, delivery and performance of this Guarantee by the Guarantor have
been obtained or made and all conditions thereof have been duly complied
with, and no other action by, and no notice to or filing with, any
governmental authority or regulatory body is required in connection with
the execution, delivery or performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance
with its terms, subject to (i) the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and (ii) general equitable
principals (whether considered in a proceeding in equity or at law);
(d) Guarantor has the financial capacity to pay and perform its
obligations under this Guarantee, and all funds necessary for Guarantor to
fulfill its Obligations under this Guarantee shall be available to
Guarantor for so long as this Guarantee shall remain in effect in
accordance with Section 9 hereof.
7. ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may
assign its rights, interests or obligations hereunder to any other person
(except by operation of law) without the prior written consent of the Guaranteed
Party or the Guarantor, as the case may be.
8. NOTICES. All notices and other communications hereunder shall be in
writing in the English language and shall be given (a) on the date of delivery
if delivered personally, (b) on the first business day following the date of
dispatch if delivered by a nationally recognized next-day courier service, (c)
on the fifth business day following the date of mailing if delivered by
registered or certified mail (postage prepaid, return receipt requested) or (d)
if sent by facsimile transmission, when transmitted and receipt is confirmed.
All notices to the Guarantor hereunder shall be delivered as set forth below:
Blackstone Real Estate Partners IV L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000) 000-0000
Attention: Xxxxxxxx X. Xxxx
with a copy to:
Blackstone Capital Partners IV L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
and a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
or to such other address or facsimile number as the Guarantor shall have
notified the Guaranteed Party in a written notice delivered to the Guaranteed
Party in accordance with the Merger Agreement.
9. CONTINUING GUARANTEE. This Guarantee shall remain in full force and
effect and shall be binding on the Guarantor, its successors and assigns until
all of the Obligations and all amounts payable under this Guarantee have been
indefeasibly paid, observed, performed or satisfied in full. Notwithstanding the
foregoing, this Guarantee shall terminate and the Guarantor shall have no
further obligations under this Guarantee as of (i) the Effective Time (as
defined in the Merger Agreement) or (ii) the second year anniversary of any
termination of the Merger Agreement in accordance with its terms (other than
under circumstances where the Parent Termination Fee is payable under Section
8.03 of the Merger Agreement)
10. NO RECOURSE. The Guaranteed Party by its acceptance of the benefits
hereof, covenants, agrees and acknowledges that no person other than the
Guarantor shall have any obligation hereunder and that no recourse hereunder or
under any documents or instruments delivered in connection herewith shall be had
against any current or future officer, agent or employee of the Guarantor,
against any current or future general or limited partner of the Guarantor or any
current or future director, officer, employee, general or limited partner,
member, affiliate or assignee of any of the foregoing whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of any
statute, regulation or other applicable law, it being expressly agreed and
acknowledged that no personal liability whatsoever shall attach to, be imposed
on or otherwise be incurred by any current or future officer, agent or employee
of the Guarantor or any current or future general or limited partner of the
Guarantor or any current or future director, officer, employee, general or
limited partner, member, affiliate or assignee of any of the foregoing, as such,
for any obligations of the Guarantor under this Guarantee or any documents or
instruments delivered in connection herewith or for any claim based on, in
respect of or by reason of such obligations or their creations.
11. GOVERNING LAW. This Guarantee shall be governed and construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that State. All actions arising out of or
relating to this Guarantee shall be heard and determined exclusively in the
Delaware Court of Chancery. The parties hereto hereby (a) submit to the
exclusive jurisdiction of the Delaware Court of Chancery for the purpose of any
action arising out of or relating to this Guarantee brought by any party hereto,
and (b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named court, that its property is exempt or immune
from attachment or execution, that the action is brought in an inconvenient
forum, that the venue of the action is improper, or that this Guarantee or the
transactions contemplated hereby may not be enforced in or by the above-named
court.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, this Guarantee has been duly executed and delivered
by the Guarantor to the Guaranteed Party as of the date first above written.
BLACKSTONE REAL ESTATE PARTNERS IV L.P.
By: Blackstone Real Estate Associates IV L.P., a
Delaware limited partnership, its general
partner
By: Blackstone Real Estate Management
Associates IV L.P., a Delaware limited
partnership, its general partner
By: BREA IV L.L.C., a Delaware
limited liability company, its
general partner
/s/ Xxxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxxx X. Xxxx
Title: Senior Managing
Director and Vice
President
