Exhibit 4.6
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GUARANTEE AGREEMENT
Host Marriott Corporation
and
IBJ Xxxxxxxx Bank & Trust Company
Relating to the Preferred Securities of
Host Marriott Financial Trust
Dated as of December 2, 1996
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CROSS REFERENCE TABLE/*/
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a)................................................................... 4.1(a)
310(b).............................................................. 4.1(c), 2.8
310(c)............................................................. Inapplicable
311(a)................................................................... 2.2(b)
311(b)................................................................... 2.2(b)
311(c)............................................................. Inapplicable
312(a)................................................................... 2.2(a)
312(b)................................................................... 2.2(b)
313......................................................................... 2.3
314(a)...................................................................... 2.4
314(b)............................................................. Inapplicable
314(c)...................................................................... 2.5
314(d)............................................................. Inapplicable
314(e)............................................................ 1.1, 2.5, 3.2
314(f)...................................................................... 3.2
315(a)................................................................... 3.1(d)
315(b)...................................................................... 2.7
315(c)...................................................................... 3.1
315(d)................................................................... 3.1(d)
316(a)............................................................ 1.1, 2.6, 5.4
316(b)...................................................................... 5.3
317(a)............................................................. Inapplicable
317(b)............................................................. Inapplicable
318(a)................................................................... 2.1(b)
318(b)...................................................................... 2.1
318(c)................................................................... 2.1(a)
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/*/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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TABLE OF CONTENTS
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Page
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ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions................................................... 2
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.............................. 5
SECTION 2.2. List of Holders............................................... 5
SECTION 2.3. Reports by the Guarantee Trustee.............................. 6
SECTION 2.4. Periodic Reports to Guarantee Trustee......................... 6
SECTION 2.5. Evidence of Compliance with Conditions Precedent.............. 6
SECTION 2.6. Events of Default; Waiver..................................... 7
SECTION 2.7. Event of Default; Notice...................................... 7
SECTION 2.8. Conflicting Interests......................................... 7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.................... 8
SECTION 3.2. Certain Rights of Guarantee Trustee........................... 10
SECTION 3.3. Indemnity..................................................... 13
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility................................ 13
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.................................................... 14
ARTICLE 5
GUARANTEE
SECTION 5.1. Guarantee..................................................... 15
i
SECTION 5.2. Waiver of Notice and Demand................................... 15
SECTION 5.3. Obligations Not Affected...................................... 15
SECTION 5.4. Rights of Holders............................................. 16
SECTION 5.5. Guarantee of Payment.......................................... 17
SECTION 5.6. Subrogation................................................... 17
SECTION 5.7. Independent Obligations....................................... 18
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination................................................. 18
SECTION 6.2. Certain Covenants of the Guarantor............................ 18
ARTICLE 7
TERMINATION
SECTION 7.1. Termination................................................... 20
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Successors and Assigns........................................ 20
SECTION 8.2. Amendments.................................................... 21
SECTION 8.3. Notices....................................................... 21
SECTION 8.4. Benefit....................................................... 22
SECTION 8.5. Interpretation................................................ 22
SECTION 8.6. Governing Law................................................. 24
ii
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of December 2, 1996, is
executed and delivered by Host Marriott Corporation, a Delaware corporation (the
"Guarantor") and IBJ Xxxxxxxx Bank & Trust Company, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Host Marriott Financial Trust, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of December 2, 1996 among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing 9,000,000 (11,000,000 if the over-allotment option is exercised in full)
of its 6 3/4% Convertible Quarterly Income Preferred Securities (liquidation
preference $50 per preferred security) (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with IBJ Xxxxxxxx Bank & Trust Company, as Property Trustee under the
Trust Agreement, as trust assets;
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default (as
defined in the Indenture (as defined herein)), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments (as
defined in the Common Securities Guarantee) under the Common Securities
Guarantee shall be subordinated to the rights of Holders of Preferred Securities
to receive Guarantee Payments (as defined herein) under this Guarantee;
NOW, THEREFORE, in consideration of the purchase by each Holder
of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct common
control with such specified Person, provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common
beneficial interests in the assets of the Issuer.
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"Common Stock" shall mean the common stock, par value $1.00, per
share, of the Guarantor.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Trust Agreement) required to be paid
on the Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor, and
(iii) upon a voluntary or involuntary dissolution, winding-up or liquidation of
the Issuer, unless Debentures are distributed to the Holders, the lesser of
(a) the aggregate of the liquidation preference of $50 per Preferred Security
plus accrued and unpaid Distributions on the Preferred Securities to the date of
payment to the extent the Issuer shall have funds on hand available to make such
payment and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means IBJ Xxxxxxxx Bank & Trust Company,
until a Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guar-
3
antor, the Guarantee Trustee or any Affiliate of the Guarantor or the Guarantee
Trustee.
"Indenture" means the Convertible Subordinated Indenture dated as
of December 2, 1996, as supplemented and amended between the Guarantor and IBJ
Xxxxxxxx Bank & Trust Company, as trustee.
"List of Holders" has the meaning specified in Section 2.2 (a).
"Majority in Liquidation Preference of the Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the liquidation preference of all the
outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by (i) the Chairman, Chief Executive Officer, President or a
Vice President, and by (ii) the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Executive Vice President, Senior Vice President, any First Vice
President, any Vice President, any Assistant Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer
or Assistant Trust Officer or any other officer of the Corporate Trust Services
Division of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application. (a) This
Guarantee Agreement is subject to the provisions of the Trust Indenture Act that
are required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders. (a) The Guarantor shall furnish
or cause to be furnished to the Guarantee Trustee (unless the Guarantee Trustee
is
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acting as Securities Registrar with respect to the Debentures under the
Indenture) (i) semi-annually, on or before January 15 and July 15 of each year,
a list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (ii) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished, in each case to the extent
such information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee. Notwithstanding the foregoing, the Guarantor
shall not be obligated to provide such List of Holders at any time the Preferred
Securities are represented by one or more Global Certificates (as defined in the
Indenture). The Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3. Reports by the Guarantee Trustee. On or before
July 15, of each calendar year, the Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information, if any, as
required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide
6
to the Guarantee Trustee such evidence of compliance with such conditions
precedent, if any, provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver. The Holders of a
Majority in Liquidation Preference of the Securities may, by vote, on behalf of
the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice. (a) The Guarantee
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders, notices of all
Events of Default known to the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with the
administration of the Trust Agreement shall have obtained written notice, of
such Event of Default.
SECTION 2.8. Conflicting Interests. The Trust Agreement and
the Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
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ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit
of the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default actually known to the Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to the Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
8
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred;
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Preference of the Securities relating to
the time, method and place of con-
9
ducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee. (a) Subject
to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, proxy, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting to take any
10
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith
on its part, request and rely upon an Officers' Certificate
which, upon receipt of such request from the Guarantee Trustee,
shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel,
and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion. Such legal counsel may be legal counsel
to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(v) shall
be taken to relieve the Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Guarantee
11
Agreement and use the same degree of care and skill in the
exercise thereof as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through its agents or attorneys or any Affiliate, and
the Guarantee Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee Trustee
(A) may request instructions from the Holders of a Majority in
Liquidation Preference of the Securities, (B) may refrain from
enforcing such remedy or right or taking such other action until
such instructions are received, and (C) shall be protected in
acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall
12
be illegal, or in which the Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power and authority.
SECTION 3.3. Indemnity. The Guarantor agrees to indemnify the
Guarantee Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payment as a result
of any amount due to it under this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility. (a) There shall
at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and
surplus of at least $50,000,000, and shall be a corporation
meeting the requirements of Section 310(a) of the Trust Indenture
Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of
this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such corporation shall
be deemed to be its
13
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee. (a) Subject to Section 4.2(b) the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by an instrument in writing executed
by such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court
14
may thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert other than the defense of payment. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of the Guarantee Agreement and of any
liability to which it applies or may apply, presentment, demand for payment, any
right to require a proceeding first against the Guarantee Trustee, Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee Agreement
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Debentures as so provided
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in the Indenture), Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the extension of time for
the performance of any other obligation under, arising out of, or in connection
with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or the Guarantee
Trustee to give notice to, or obtain the consent of, the Guarantor with respect
to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in Liquidation Preference of the
Securities have the right to direct the time, method and place of con-
16
ducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee Agreement or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under this Guarantee Agreement; (iv)
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person;
and (v) if an Event of Default with respect to the Debentures constituting the
failure to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable has occurred and is continuing, then any
Holder shall have the right, which is absolute and unconditional, to proceed
directly against the Guarantor to obtain Guarantee Payments without first
waiting to determine if the Guarantee Trustee has enforced this Guarantee
Agreement or instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person.
SECTION 5.5. Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement and
shall have the right to waive payment by the Issuer pursuant to Section 5.1;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
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SECTION 5.7. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debt or hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
5.3 hereof.
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination. The Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank subordinate
and junior in right of payment to all liabilities of the Guarantor and pari
passu with any guarantee now or hereafter entered into by the Guarantor in
respect of the Common Securities or of any preferred or preference stock of any
affiliate of the Guarantor.
SECTION 6.2. Certain Covenants of the Guarantor. (a)
Guarantor covenants and agrees that if and so long as (i) the Issuer is the
holder of all the Debentures, (ii) a Tax Event (as defined in the Trust
Agreement) in respect of the Issuer has occurred and is continuing and (iii) the
Guarantor has elected, and has not revoked such election, to pay Additional Sums
(as defined in the Trust Agreement) in respect of the Preferred Securities and
Common Securities, the Guarantor will pay to the Issuer such Additional Sums.
(b) The Guarantor covenants and agrees that it will not, and
will not permit any subsidiary of the Guarantor to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's capital stock or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities (including guarantees of indebtedness
for money borrowed) of the Guarantor that rank pari passu with or junior to the
Debentures (other than (a) any dividend, redemption, liquidation, interest,
principal or guarantee payment by Guarantor where the payment is made by way of
securities (including capital
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stock) that rank pari passu with or junior to the securities on which such
dividend, redemption, interest, principal or guarantee payment is being made,
(b) redemptions or purchases of any rights pursuant to the Shareholders Rights
Plan (as defined in the Indenture), or any successor to such Shareholders Rights
Plan, and the declaration of a dividend of such rights or the issuance of
preferred stock under such plans in the future, (c) payments under this
Agreement, (d) purchases of Common Stock related to the issuance of Common Stock
under any of the Guarantor's benefit plans for its directors, officers or
employees, (e) as a result of a reclassification of the Guarantor's capital
stock or the exchange or conversion of one series or class of the Guarantor's
capital stock for another series or class of the Guarantor's capital stock and
(f) the purchase of fractional interests in shares of the Guarantor's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged) if at such time (i) there shall have
occurred any event of which the Guarantor has actual knowledge that (a) with the
giving of notice or the lapse of time, or both, would constitute an "Event of
Default" under the Indenture with respect to the Debentures and (b) in respect
of which the Guarantor shall not have taken reasonable steps to cure, (ii) the
Guarantor shall be in default with respect to its payment of any obligations
under the Guarantee or (iii) the Guarantor shall have given notice of its
selection of an Extension Period (as defined in the Indenture) with respect to
the Debentures and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing.
(c) The Guarantor covenants and agrees (i) to maintain
directly or indirectly 100% ownership of the Common Securities, provided that
certain successors which are permitted by the Indenture may succeed to the
Guarantor's ownership of the Common Securities, (ii) not to voluntarily
terminate, wind-up or liquidate the Issuer, except (a) in connection with a
distribution of the Debentures to the holders of the Preferred Securities in
liquidation of the Issuer or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement, (iii) to use
its reasonable efforts, consistent with the terms and provisions of the Trust
Agreement, to cause the Issuer to remain classified as a grantor trust and not
as an association taxable as a
19
corporation for United States Federal income tax purposes, (iv) for so long as
Preferred Securities are outstanding, not to convert Debentures except pursuant
to a notice of conversion delivered to the Conversion Agent (as defined in the
Trust Agreement) by a Holder, (v) to maintain the reservation for issuance of
the number of shares of Common Stock that would be required from time to time
upon the conversion of all the Debentures then outstanding, (vi) to deliver
shares of Common Stock upon an election by the Holders to convert such Preferred
Securities into Common Stock and (vii) to honor all obligations relating to the
conversion or exchange of the Preferred Securities into or for Common Stock or
Debentures.
ARTICLE 7
TERMINATION
SECTION 7.1. Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon (i) full payment of the
Redemption Price of all Preferred Securities, (ii) the distribution of
Debentures to the Holders in exchange for all of the Preferred Securities, (iii)
full payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer or (iv) upon the distribution, if any, of Common Stock
the holders of the Preferred Securities in respect of the conversion of all such
holders' Preferred Securities into Common Stock. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantor
20
that is permitted under Article 8 of the Indenture and pursuant to which the
assignee agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder.
SECTION 8.2. Amendments. Except with respect to any changes
which do not adversely affect the rights of the Holders in any material respect
(in which case no consent of the Holders will be required), this Guarantee
Agreement may only be amended with the prior approval of the Holders of not less
than a Majority in Liquidation Preference of the Securities. The provisions of
Article 6 of the Trust Agreement concerning meetings of the Holders shall apply
to the giving of such approval. The Guarantor shall furnish the Guarantee
Trustee with an Officers' Certificate and an Opinion of Counsel to the effect
that any amendment of this Agreement is authorized and permitted.
SECTION 8.3. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or mailed
by first class mail as follows: (a) if given to the Guarantor, to the address
set forth below or such other address as the Guarantor may give notice of to the
Holders:
Host Marriott Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: General Counsel
(b) if given to the Issuer, in care of the Guarantee Trustee,
at the Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give notice
of to the Holders:
Host Marriott Financial Trust
c/o Host Marriott Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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Attention: General Counsel
with a copy to:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust & Agency
Department
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and is not separately transferable from the Preferred
Securities.
SECTION 8.5. Interpretation. In this Guarantee Agreement,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
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(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
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SECTION 8.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
HOST MARRIOTT CORPORATION
By: ____________________________
Name:
Title:
IBJ XXXXXXXX BANK & TRUST
COMPANY, as Guarantee Trustee
By: ____________________________
Name:
Title:
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