Exhibit 10.1
AMENDED AND RESTATED DEBT SERVICE GUARANTY
Dated April 7, 1994
made by
HOST MARRIOTT CORPORATION,
as Guarantor,
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in favor of
THE LENDERS PARTY TO THE 1994 LOAN AGREEMENTS
REFERRED TO HEREIN
and
CITIBANK, N.A.,
as Agent
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TABLE OF CONTENTS
Section Page
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1. GUARANTY; LIMITATION OF LIABILITY................................... 2
2. GUARANTY ABSOLUTE................................................... 2
3. WAIVERS............................................................. 3
4. PAYMENTS FREE AND CLEAR OF TAXES, ETC............................... 5
5. REPRESENTATIONS AND WARRANTIES...................................... 6
6. AFFIRMATIVE COVENANTS............................................... 8
7. NEGATIVE COVENANTS.................................................. 10
8. AMENDMENTS, ETC..................................................... 10
9. NOTICES, ETC........................................................ 11
10. NO WAIVER; REMEDIES................................................. 11
11. WAIVER OF JURY TRIAL................................................ 11
12. CONTINUING GUARANTY; ASSIGNMENTS UNDER THE 1994 LOAN
AGREEMENTS........................................................ 11
13. GOVERNING LAW....................................................... 12
14. CONSENT TO JURISDICTION............................................. 12
15. RELEASE............................................................. 12
16. INSTRUMENT FOR PAYMENT OF MONEY ONLY................................ 12
Exhibit A Form of Host Subordinated Note
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AMENDED AND RESTATED
DEBT SERVICE GUARANTY
AMENDED AND RESTATED DEBT SERVICE GUARANTY dated April 7, 1994 (the
"Guaranty") made by HOST MARRIOTT CORPORATION, a Delaware corporation formerly
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known as MARRIOTT CORPORATION (the "Guarantor"), in favor of the lenders (the
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"Lenders") party to the 1994 Loan Agreements (as defined below; the terms
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defined in the 1994 Loan Agreements and not otherwise defined herein being used
herein as therein defined) and CITIBANK, N.A. ("Citibank"), as agent (the
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"Agent") for the Lenders.
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PRELIMINARY STATEMENTS.
(1) Courtyard by Marriott Limited Partnership, a Delaware limited
partnership (the "Borrower"), Citibank, The First National Bank of Chicago
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("FNBC"), Bankers Trust Company, Bank of America National Trust and Savings
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Association, The Bank of Nova Scotia, First Interstate Bank of California and
Security Pacific National Bank (such banks being the "Original Banks"), and
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Citibank and FNBC as agents for the Original Banks entered into (a) a Loan
Agreement, dated as of August 14, 1986 (the "1986 Multistate Loan Agreement") in
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which the Original Banks agreed to make loans to the Borrower in the aggregate
principal amount not in excess of $322,050,133 and (b) a Loan Agreement, dated
as of August 14, 1986 (the "1986 California Loan Agreement" and together with
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the 1986 Multistate Loan Agreement, the "1986 Loan Agreements") in which the
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Original Banks agreed to make loans to the Borrower in the aggregate principal
amount not in excess of $51,098,867. The 1986 Loan Agreements were amended and
restated by two Amended and Restated Loan Agreements, each dated as of June 15,
1988 (the "1988 Loan Agreements").
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(2) In connection with the 1986 Loan Agreements, the Guarantor
executed and delivered a Debt Service Guaranty, dated as of August 14, 1986 (the
"1986 Debt Service guaranty"), providing for, among other things, the guaranty
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of payments of principal and interest on the Series B Notes (as defined in the
1986 Debt Service Guaranty) issued under the 1986 Loan Agreements. The 1986
Debt Service Guaranty was amended on June 15, 1988 (the 1986 Debt Service
Guaranty as so amended being the "Amended 1986 Debt Service Guaranty") to
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reflect, among other things, the amendment and restatement of the 1986 Loan
Agreements by the 1988 Loan Agreements and provide for, among other things, the
continuation of the guaranty in respect of the Amended and Restated Series B
Notes (as defined in the Amended 1986 Debt Service Guaranty) issued under the
1988 Loan Agreements in replacement of the Series B Notes and evidencing 1988
Multistate Loan B and 1988 California Loan B.
(3) The Borrower did not make on the June 15, 1993 maturity date the
payments required under the 1988 Loan Agreements. The Borrower has requested
that the Banks, among other things, consent to the reorganization of Marriott
Corporation and extend the maturity date of the loans governed by the 1988 Loan
Agreements. The Banks have agreed to the Borrower's request on the terms and
conditions set forth in each of (a) that certain $304,788,924.58 Second Amended
and Restated Loan Agreement (said Agreement, as it may hereafter be amended or
otherwise modified from time to time, being the "Multistate Loan Agreement"),
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dated as of the date hereof, among the Borrower, the Agent and the Lenders and
(b) that certain $48,360,075.42 Second Amended and Restated Loan Agreement (said
Agreement, as it may hereafter be amended or otherwise modified from time to
time, being the "California Loan Agreement" and, together with the Multistate
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Loan Agreement, the "1994 Loan Agreements"), dated as of the date hereof, among
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the Borrower, the Agent and the Lenders.
(4) CBM One Corporation, an indirect, wholly owned Subsidiary of the
Guarantor, is the sole general partner of the Borrower. The Guarantor will
derive substantial direct and indirect benefits from the transactions
contemplated by the 1994 Loan Agreements. It is
a condition precedent to the effectiveness of each 1994 Loan Agreement that the
Guarantor shall have entered into this amendment and restatement of the Amended
1986 Debt Service Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into each of the Multistate Loan Agreement and the
California Loan Agreement, the Guarantor hereby agrees with the Agent for its
benefit and the ratable benefit of the Lenders that the 1986 Amended Debt
Service Guaranty is amended and restated in its entirety as follows:
SECTION 1. Guaranty; Limitation of Liability. (a) The Guarantor
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hereby unconditionally guarantees the punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all Obligations of the
Borrower now or hereafter existing under the Combined Loan Documents, whether
for principal, interest, fees, expenses or otherwise (such obligations being the
"Guaranteed Obligations"), and agrees to pay any and all expenses (including
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reasonable counsel fees and expenses) incurred by the Agent or the Lenders in
enforcing any rights under this Guaranty. Without limiting the generality of
the foregoing, subject to Section l(b) hereof, the Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by the Borrower to the Agent or the Lenders under the Combined
Loan Documents but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower. In addition, the Guarantor agrees that if the purchase price of
the interest rate cap described in Section 6.01(j) of the 1994 Loan Agreements
exceeds $2,704,019.64 the Guarantor will lend to the Borrower the amount in
excess of $2,704,019.64 necessary to enable the Borrower to fund such purchase.
Any amount required to be loaned pursuant to the preceding sentence shall be
included in the term "Guaranteed Obligations" for purposes of the limitation in
Section l(b) below.
(b) The liability of the Guarantor to pay the Guaranteed Obligations
under this Guaranty, together with the amounts payable by the Guarantor pursuant
to Section 4, shall not exceed in the aggregate at any time an amount equal to
the lesser of (i) $40,000,000 or (ii) (A) $40,000,000 minus (B) the sum of (1)
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the aggregate amount of the payments of the Guaranteed Obligations and the
payments under Section 4 (the "Host Tax Obligations") made hereunder by the
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Guarantor after the date hereof and prior to such time and (2) the aggregate
amount of the payments of the Backup Guaranteed Obligations and the MI Tax
Obligations (each as defined in the Backup Debt Service Guaranty) made under the
Backup Debt Service Guaranty by Marriott International after the date hereof and
prior to such time plus (C) the sum of (1) the aggregate amount of payments of
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principal and interest of the Host Subordinated Notes (as defined in Section
3(e) below) after the date hereof and prior to such time and (2) the aggregate
amount of payments of principal and interest of the International Subordinated A
Notes (as defined in the Backup Debt Service Guaranty) after the date hereof and
prior to such time. All payments made hereunder shall be made on behalf of the
Borrower directly to the Agent, the Lenders or their order and, as between the
Guarantor and the Borrower, shall be deemed to be advances by the Guarantor to
the Borrower under the Host Subordinated Notes. Payments made hereunder shall
be allocated to the Obligations of the Borrower and the Host Tax Obligations by
the Agent.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that the
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Guaranteed Obligations will be paid strictly in accordance with the terms of the
Combined Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or the Lenders to enforce any Obligations against the
Borrower or any Loan Party other than the Guarantor. The obligations of the
Guarantor under this Guaranty are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Guaranty, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
The liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
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(a) any lack of validity or enforceability of any Combined Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Combined Loan
Document (but subject to Section l(b) hereof) provided that with respect to
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any increase in the Guaranteed Obligations resulting from the extension of
additional credit to the Borrower (including amounts paid by the Agent or
any Lender that are deemed to constitute extensions of credit to the
Borrower) this clause (b) shall apply only to any increase in the
Guaranteed Obligations resulting from credit extended to protect and
preserve any Multistate Collateral or California Collateral or the Lien in
favor of the Agent and the Lenders therein;
(c) any taking, exchange, release or non-perfection of any Multistate
Collateral or California Collateral, or any taking, release or amendment or
waiver of or consent to departure from any other guaranty, for all or any
of the Guaranteed Obligations;
(d) any manner of application of Multistate Collateral or California
Collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Multistate
Collateral or California Collateral for all or any of the Guaranteed
Obligations or any other assets of the Borrower;
(e) any change, restructuring or termination of the partnership
structure or existence of the Borrower or the discharge or other
modification, in bankruptcy or otherwise, of the obligations of the
Borrower;
(f) any failure of the Agent or the Lenders to disclose to the
Guarantor any information relating to the business, condition (financial or
otherwise), operations, performance, properties (including the Hotel
Properties and the respective interest of any Loan Party therein) or
prospects of any other Loan Party now or in the future known to the Agent
or any Lender (the Guarantor waiving any duty on the part of the Agent and
the Lenders to disclose such information); or
(g) any other circumstance (including, without limitation, any
statute of limitations) that might otherwise constitute a defense available
to, or a discharge of, the Borrower or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
SECTION 3. Waivers. (a) The Guarantor hereby waives promptness,
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diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that the Agent or
any Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against the Borrower or any
other Person or any Multistate Collateral or California Collateral.
(b) The Guarantor acknowledges that the Agent may, without notice to
or demand upon the Guarantor and without affecting the liability of the
Guarantor under this Guaranty or the enforceability of this Guaranty, foreclose
any California Mortgage, California Assignment of Leases, Multistate Mortgage or
Multistate Assignment of Leases, in each case relating to the interests of one
or more Loan Parties in Hotel Properties located in the State of California (or
elsewhere) by nonjudicial Sale, and the Guarantor hereby waives any defense to
the
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recovery by the Lenders and the Agent against the Guarantor of any deficiency or
otherwise to the enforcement of this Guaranty after any such nonjudicial sale
and any defense or benefits that may be afforded by Sections 580a, 580d and 726
of the California Code of Civil Procedure or any statute or law in any other
jurisdiction having similar effect. Without limitation on the foregoing, the
Guarantor (i) acknowledges that following, and as a result of, the completion of
any such nonjudicial sale involving interests in real property located in the
State of California, the Guarantor may not be permitted to assert or enforce
rights of subrogation, reimbursement, exoneration, contribution or
indemnification or any other rights or remedies against the Borrower or its
direct or indirect general partners for recovery of amounts paid by the
Guarantor in respect of any Guaranteed Obligations or otherwise (including,
without limitation, the right to enforce any Host Subordinated Note (as defined
below) executed by the Borrower in favor of the Guarantor), (ii) understands
that, in the absence of the waiver set forth in clause (iii) below, the
Guarantor may have a defense to the enforcement by the Agent and the Lenders of,
and to any recovery by the Agent and the Lenders against the Guarantor under,
this Guaranty following any such nonjudicial sale, by reason of the fact that
the Agent's election to proceed with the completion of any such nonjudicial sale
may prevent the Guarantor from asserting or enforcing rights of subrogation,
reimbursement, exoneration, contribution or indemnification or other rights or
remedies as set forth in clause (i) above, (iii) hereby knowingly waives any
such defense and any similar defense that might otherwise be available to the
enforcement of, or to any recovery by the Agent and the Lenders against the
Guarantor under, this Guaranty following any such nonjudicial sale,
notwithstanding the fact that such nonjudicial sale may prevent the Guarantor
from asserting or enforcing such rights and remedies, and (iv) further knowingly
waives any claim against the Agent and the Lenders (including any claim for
recovery or on account of any payments made by the Guarantor under any of the
Combined Loan Documents) and any right to assert any setoff or counterclaim
against the Agent and the Lenders, and agrees that its obligations under the
Combined Loan Documents shall not be impaired or otherwise affected, in either
case as a result of any such loss of subrogation, contribution or reimbursement
rights or other rights or remedies for any reason.
(c) The Guarantor hereby further irrevocably waives any defense or
benefits that may be derived from California Code Sections 2808, 2809, 2810,
2815, 2819, 2845, 2849 or 2850 and comparable provisions of the laws of any
other jurisdiction and all other suretyship defenses it would otherwise have
under the laws of California or any other jurisdiction.
(d) The Guarantor hereby waives any right to revoke this Guaranty,
and acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
(e) In consideration of and in exchange for the Guarantor's waiver of
its subrogation and other rights as set forth in this Section 3, the Guarantor
agrees that upon any payment by it hereunder of any amount pursuant to Section 1
hereof or Section 4 hereof the Guarantor's sole right against the Borrower or
the General Partner will be to receive a promissory note of the Borrower in the
form of Exhibit A (a "Host Subordinated Note") in a principal amount not in
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excess of the amounts so paid by the Guarantor pursuant to Section 1 and Section
4 hereof. The Guarantor further agrees that its rights against the Borrower for
such payment shall be limited as expressly set forth in such Host Subordinated
Note and the Subordination Agreement, and as such rights may be further limited
as set forth in this Section 3.
(f) Except to the extent that the Guarantor is entitled to receive
any payment from the Borrower pursuant to the terms of any Host Subordinated
Note issued in accordance with Section 3(e) and the Subordination Agreement, the
Guarantor hereby irrevocably waives any claim or other rights that it may now or
hereafter acquire against the Borrower that arise from the existence, payment,
performance or enforcement of the Guarantor's Obligations under this Guaranty,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Agent or
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any Lender against the Borrower or any Multistate Collateral or California
Collateral, 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 the Borrower, 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. The Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by the
Combined Loan Documents and that the waiver set forth in this subsection is
knowingly made in contemplation of such benefits.
(g) Nothing contained in this Section 3 shall be construed as an
agreement or acknowledgment that the Guarantor's obligations under this Guaranty
shall be governed by or subject to the laws of the State of California.
SECTION 4. Payments Free and Clear of Taxes, Etc. (a) Subject to
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Section 1(b), any and all payments made by the Guarantor hereunder shall be
made, in accordance with Sections 2.09 and 2.10 of each 1994 Loan Agreement,
free and clear of and without deduction for any and all present or future Taxes.
If the Guarantor shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender or the Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) such Lender or the Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Guarantor shall make such deductions and (iii) the Guarantor shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Guarantor agrees to pay any present or future
Other Taxes.
(c) Subject to Section 1(b), the Guarantor will indemnify each Lender
and the Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by such Lender or the Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, in each case on account of payments made by
the Guarantor under this Guaranty. This payment shall be made within 30 days
from the date such lender or the Agent, as the case may be, makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Guarantor will furnish to the Agent, at its address referred to in the 1994 Loan
Agreements, appropriate evidence of payment thereof. If no Taxes are payable in
respect of any payment hereunder by the Guarantor through an account or branch
outside the United States or on behalf of the Guarantor by a payor that is not a
United States person, the Guarantor will furnish, or will cause such payor to
furnish, to the Agent a certificate from each appropriate taxing authority or
authorities, or an opinion of counsel acceptable to the Agent, in either case
stating that such payment is exempt from or not subject to Taxes.
(e) Without prejudice to the survival of any other agreement of the
Guarantor hereunder, the agreements and obligations of the Guarantor contained
in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
SECTION 5. Representations and Warranties. On and as of the Closing
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Date, the Guarantor hereby represents and warrants as follows:
(a) The Guarantor (A) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (B) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or
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leases property or in which the conduct of its business requires it to so
qualify or be licensed, and (C) has all requisite corporation power and
authority to own or lease and operate its properties and to carry on its
business as now conducted and proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued and is
fully paid and nonassessable.
(b) The General Partner is a direct or indirect wholly owned
Subsidiary of the Guarantor.
(c) The execution, delivery and performance by the Guarantor of this
Guaranty, each other Combined Loan Document and each Related Document to
which it is or is to be a party and the consummation of the Reorganization
and the other transactions contemplated hereby and by the other Combined
Loan Documents are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action of the Guarantor, and do not
(A) contravene the Guarantor's charter or by-laws, (B) violate any law
(including, without limitation, the Securities Exchange Act of 1934 and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized
Crime Control Act of 1970), rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination, award,
franchise or permit binding on or affecting the Guarantor or any of its
Subsidiaries or any of their properties, (C) conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
deed of trust, lease or other instrument binding on or affecting the
Guarantor or any of its Subsidiaries or any of their properties except, in
the case of the Reorganization, such conflicts, breaches and defaults that
would not have a Host Material Adverse Effect or (D) except for the Liens
created by the Multistate. Collateral Documents and the California
Collateral Documents, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of the Guarantor or
any of its Subsidiaries. Neither the Guarantor nor any of its Subsidiaries
is in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination, award, franchise or permit or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument the violation or breach of which would be
reasonably likely to have a Host Material Adverse Effect. As used in this
Guaranty, "Host Material Adverse Effect" means a material adverse effect on
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(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of Host Marriott, in each case taken
as a whole, (b) the rights and remedies of the Agent or any Lender under
any Combined Loan Document or Related Document to which Host Marriott is or
is to be a party or (c) the ability of the Guarantor to perform its
Obligations under any Combined Loan Document or Related Document to which
it is or is to be a party.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by the Guarantor of this Guaranty, any other Combined
Loan Document or any Related Document to which it is or is to be a party,
or for the consummation of the transactions contemplated hereby or thereby
or (ii) the exercise by the Agent or any Lender of its rights with respect
to the Guarantor and its assets under the Combined Loan Documents to which
the Guarantor is or is to be a party, except for (A) the authorizations,
approvals, actions, notices and filings to be accomplished under Article
III of the 1994 Loan Agreements, all of which have been duly obtained,
taken, given or made and are in full force and effect and (B) such
approvals of courts and trustees (excluding trustees for any trusts that
are party to any Multistate Mortgage or California Mortgage. All
applicable waiting periods in connection with the Reorganization and the
other transactions contemplated hereby and by the other Combined Loan
Documents have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially adverse
conditions upon the
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Reorganization or the rights of the Guarantor freely to transfer or
otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by it.
(e) This Guaranty has been, and each other Combined Loan Document and
each Related Document to which the Guarantor is or is to be a party when
delivered under the 1994 Loan Agreements will have been, duly executed and
delivered by the Guarantor. This Guaranty is, and each other Multistate
Loan Document and each Related Document to which the Guarantor is or is to
be a party when delivered under the 1994 Loan Agreements will be, the
legal, valid and binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with its terms.
(f) Since December 31, 1992 there has been no Host Material Adverse
Effect as specified in clauses (a) and (c) of the definition thereof
except, and only except, for the change in the business and properties of
the Guarantor arising solely and directly from the consummation of the
Reorganization and the consummation of the transactions contemplated by the
Combined Loan Documents.
(g) No information, exhibit or report furnished by or on behalf of
the Guarantor to the Agent or any Lender in connection with the negotiation
of the Combined Loan Documents or pursuant to the terms of the Combined
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements made therein not
misleading taken as a whole.
(h) Except as set forth on Schedule 5(h), there is no action, suit,
investigation, litigation or proceeding affecting the Guarantor or any of
its Subsidiaries, including any Environmental Action, pending or, to the
Knowledge of the Guarantor, threatened before any court, governmental
agency or arbitrator that (i) could have a Host Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of this
Guaranty, any other Combined Loan Document or any Related Document to which
the Guarantor is or is to be a party, the Reorganization or the
consummation of the transactions contemplated by the 1994 Loan Agreements.
(i) None of the business or properties of the Guarantor is affected
by any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance) that would be
reasonably likely to have a Host Material Adverse Effect.
(j) Neither the Guarantor nor any of its Subsidiaries is a party to
or otherwise bound by any contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument or subject to any other
restriction or any judgment, order, writ, injunction, decree,
determination, award, law, rule or regulation or subject to any charter or
corporate or partnership restriction that would be reasonably likely to
have a Host Material Adverse Effect.
(k) The Guarantor and each of its Subsidiaries have filed, have
caused to be filed or have been included in all tax returns (federal,
state, local and foreign) that are required to be filed and have paid all
taxes shown thereon to be due and payable, together with applicable
interest and penalties or pursuant to any assessment or notice of tax claim
or deficiency received by it, except as contested in good faith by the
Guarantor or its Subsidiaries or where the time for payment thereof without
penalty has not expired. All tax liabilities of the Guarantor were
adequately provided for at the end of the most recent Fiscal Year of the
Guarantor and are now so provided for on the books of the Guarantor except
for those contested in good faith by the Guarantor.
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(1) Neither the Guarantor nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(m) The Guarantor, individually and together with its Subsidiaries,
(i) is Solvent and (ii) was Solvent immediately prior to, and immediately
after giving effect to, the Reorganization.
(n) The Guarantor has, independently and without reliance upon the
Agent or any Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Guaranty. The Guarantor is fully familiar with each Loan Agreement
and all Combined Loan Documents related thereto. The Guarantor has
established adequate means of obtaining from the General Partner and the
Borrower on a continuing basis information pertaining to, and is now and on
a continuing basis will be completely familiar with, the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the General Partner and the Borrower.
(o) The Reorganization was consummated substantially in accordance
with its terms; all transfers described in Section 9.11 of the 1994 Loan
Agreements occurred in compliance with all material agreements and
instruments relating thereto; and the Guarantor has received a ruling from
the Internal Revenue Service that the Distribution is a distribution which
fully qualifies for nonrecognition treatment pursuant to Sections 355(a)
and 355(c) of the Internal Revenue Code. All representations and
statements of fact made to the Internal Revenue Service with respect to the
request for such ruling are correct and the Reorganization and all related
transactions occurred substantially and in all material respects as
described in such ruling. Neither the Guarantor nor any of its officers
has any reason to believe that such ruling is invalid for any reason.
(p) To the Knowledge of each of the Guarantor and the General
Partner, there exists no event occurring or continuing, or resulting from
the transactions contemplated by the 1994 Loan Agreements, that constitutes
a Default.
SECTION 6. Affirmative Covenants. The Guarantor covenants and agrees
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that, so long as any part of the Guaranteed Obligations shall remain unpaid, the
Guarantor will, unless the Required Lenders under each 1994 Loan Agreement shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
-------------------------
all applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with all Real Property Laws, ERISA
and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970.
(b) Preservation of Corporate Existence. Preserve and maintain its
-----------------------------------
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect the interests of the
Lenders or the Agent hereunder, or the ability of the Guarantor to perform
its obligations hereunder.
(c) Keep Books. Keep proper books of record and account, in which
----------
full and correct entries shall be made of all of financial transactions and
the assets and business of the Guarantor in accordance with generally
accepted accounting principles in effect from time to time.
-8-
(d) Reporting Requirements. Furnish to the Agent for the benefit of
----------------------
the Lenders, and in the case of clause (iv)(A) only, to Marriott
International:
(i) as soon as practicable and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Guarantor, unaudited consolidated balance sheets of the
Guarantor and its Subsidiaries as of the end of such quarter and
consolidated statements of income and retained earnings of the
Guarantor and its Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, all
in reasonable detail and certified by the principal accounting officer
of the Guarantor or designee of such officer under the supervision of
such officer as having been prepared in accordance with generally
accepted accounting principles consistently applied, subject to year-
end audit adjustments;
(ii) as soon as available and in any event within 120 days
after the end of each fiscal year of the Guarantor, consolidated
balance sheets of the Guarantor and its Subsidiaries as of the end of
such fiscal year and consolidated statements of income and retained
earnings of the Guarantor and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the
end of such fiscal year, all in reasonable detail and prepared in
accordance with generally accepted accounting principles consistently
applied, together with an audit report and opinion in respect of such
financial statements of Xxxxxx Xxxxxxxx & Co. or other independent
certified public accountants of recognized national standing selected
by the Guarantor and reasonably acceptable to the Required Lenders,
which report and opinion shall be unqualified as to the scope of the
audit;
(iii) as soon as possible and in any event within two Business
Days after the Guarantor obtains Knowledge of any Default under either
1994 Loan Agreement, a statement of the principal accounting officer
of the Guarantor or designee of such officer under the supervision of
such officer specifying the nature of such Default, the period of
existence thereof and what action the Guarantor has taken and proposes
to take with respect thereto;
(iv) (A) as soon as practicable and in any event within sixty
(60) days after the end of each Tenant Accounting Quarter, a statement
of the aggregate payments made by the Guarantor in respect of the
Guaranteed Obligations and the aggregate amount of principal and
interest paid by the Borrower and received by the Guarantor under all
Host Subordinated Notes and (B) within ten (10) days after receipt by
the Guarantor of the statement of Marriott International provided
pursuant to Section 6(d)(iv)(A) of the Backup Debt Service Guaranty, a
statement of the maximum aggregate amount that the Guarantor may be
called upon to pay in respect of the Guaranteed Obligations under
paragraph 1 of this Guaranty (assuming the correctness of the
information provided by Marriott International in its statement), as
at the end of such Tenant Accounting Quarter for which Marriott
International has provided such statement, each in reasonable detail
and certified by the principal accounting officer of the Guarantor or
designee of such officer under the supervision of such officer;
provided, that with respect to information provided by Marriott
--------
International, such certification shall state that to such officer's
Knowledge such information is not inaccurate;
(v) promptly upon their becoming available, copies of all
financial statements, reports, notices and statements sent or made
available generally by the Guarantor, Host Marriott Hospitality, Inc.,
the General Partner and, upon request by any Lender through the Agent,
any other Subsidiary of the Guarantor to their
-9-
stockholders and bondholders and of all reports, registration
statements and prospectuses filed by the Guarantor, Host Marriott
Hospitality, Inc., the General Partner and, upon request by any Lender
through the Agent, any other Subsidiary of the Guarantor with any
securities exchange or with the Securities and Exchange Commission, or
any governmental authority succeeding to any of its functions; and
(vi) Promptly, and in any event within thirty (30) days after
the occurrence thereof, notice and a description of any change in the
designation of the positions of the officers of the Guarantor who in
the ordinary course of their responsibilities include, or will be
handling, matters relating to the operation of the Hotel Properties
and the administration of any of the Combined Loan Documents.
SECTION 7. Negative Covenants. The Guarantor covenants and agrees
------------------
that, so long as any part of the Guaranteed Obligations shall remain unpaid, the
Guarantor will not, without the prior written consent of the Required Lenders
under each 1994 Loan Agreement:
(a) Mergers. Merge or consolidate with any Person or permit any
-------
Person to merge into it except that the Guarantor may merge into or
consolidate with any other Person or permit any other Person to merge into
or consolidate with it, provided, however, that after giving effect
-------- -------
thereto, either (i) no "Default" or "Event of Default" under any credit
agreement to which the Guarantor is a party would exist or (ii) no Host
Material Adverse Effect would occur and in either case if the Guarantor is
not the surviving corporation, the successor corporation expressly assumes
the Guarantor's obligations hereunder.
(b) Change in Nature of Business; Sales of Assets. Make, or permit
---------------------------------------------
any of its Subsidiaries to make, any change in the nature of its business
as carried on at the date of this Guaranty or sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, all or substantially all of its or its
Subsidiaries' assets except as would not result in a Host Material Adverse
Effect.
SECTION 8. Amendments, Etc. No amendment or waiver of any provision
---------------
of this Guaranty and no consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Agent and the Required Lenders under each 1994 Loan Agreement, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
-------- -------
waiver or consent shall, unless in writing and signed by all the Lenders, (a)
limit the liability of the Guarantor hereunder, (b) postpone any date fixed for
payment hereunder or (c) change the number of Lenders required to take any
action hereunder.
SECTION 9. Notices, Etc. All notices and other communications
------------
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, sent by reputable overnight courier,
telegraphed, telecopied, telexed, cabled or delivered to it, if to the
Guarantor, addressed to it at (a), if sent by mail, 00000 Xxxxxxxx Xxxx,
Xxxxxxxxxx, X.X. 00000, Attention: Law Department 72/923, and (b) otherwise, at
00000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Law Department 72/923,
if to the Agent or any Lender, at its address specified in the 1994 Loan
Agreements, or as to any party at such other address as shall be designated by
such party in a written notice to each other party. All such notices and other
communications shall (a) when mailed be effective upon receipt of the same at
the applicable address described above or upon the refusal of an employee or
other agent of the Guarantor, the Agent or such Lender, as applicable, to accept
the same, (b) when sent by a reputable overnight courier, be effective when the
same is delivered to the applicable address described above and (c) when
telegraphed, telecopied, telexed or cabled, be effective when the same is
telegraphed, telecopied and the telecopy is confirmed by telephone, telexed and
confirmed by telex answerback,
-10-
or delivered to the cable company, respectively, except that notices and
communications to the Agent shall not be effective until received by the Agent.
SECTION 10. No Waiver; Remedies. No failure on the part of the Agent
-------------------
or any Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 11. Waiver of Jury Trial. The Guarantor, the Agent and each
--------------------
Lender each hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Combined Loan Documents, the
transactions contemplated thereby or the actions of the Agent or any Lender in
the negotiation, administration, performance or enforcement thereof.
SECTION 12. Continuing Guaranty; Assignments Under the 1994 Loan
----------------------------------------------------
Agreements. This Guaranty is a continuing guaranty and shall (a) remain in full
----------
force and effect until the cash payment in full of the Guaranteed Obligations
(including, without limitation, any contingent or disputed obligations) and all
other amounts payable under this Guaranty, (b) be binding upon the Guarantor,
its successors and assigns and (c) inure to the benefit of and be enforceable by
the Lenders, the Agent and their successors and transferees and assigns under
Section 9.07 of the 1994 Loan Agreements. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the 1994 Loan Agreements (including,
without limitation, all or any portion of the Combined Advances owing to it and
the Multistate Note or Notes or California Note or Notes held by it) to any
other Person permitted by Section 9.07 of the 1994 Loan Agreements, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein, under the Combined Loan Documents and
under applicable law. As used herein, the terms "Agent," "Lenders," "Combined
Loan Documents," "Multistate Note," "California Note" and "Combined Advances"
shall have the meanings set forth herein for such terms and set forth in any
documents renewing, extending, refunding and refinancing the Guaranteed
Obligations or any part thereof. This Guaranty shall remain in full force and
effect in the event of any renewal, extension, refunding or refinancing of the
Guaranteed Obligations and, without limitation, shall apply to the Obligations
of the Borrower as so renewed, extended, refunded or refinanced.
SECTION 13. Governing Law. This Guaranty shall be governed by, and
-------------
construed in accordance with, the laws of the State of New York.
SECTION 14. Consent to Jurisdiction. (a) The Guarantor hereby
-----------------------
irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in New York City, and any appellate court from any thereof in any action
or proceeding arising out of or relating to this Guaranty and the Guarantor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or in such
Federal court. The Guarantor hereby irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Guarantor irrevocably consents to
the service of any and all process in any such action or proceeding, by the
mailing of copies of such process to the Guarantor at its address specified in
Section 9. The Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive, and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 14 shall affect the right of any Lender
or the Agent to serve legal process in any other manner permitted by law, or
affect the right of any Lender or the
-11-
Agent to bring any action or proceeding against the Guarantor or its property in
the courts of other jurisdictions.
SECTION 15. Release. The Guarantor on behalf of itself and its
-------
Subsidiaries hereby forever releases and discharges the Agent and each Lender,
and their respective Subsidiaries, Affiliates, officers, directors, employees
and agents (including attorneys and accountants) and participants, successors
and assigns, if any (the "Releases"), from any and all of their Obligations
--------
under the 1986 Multistate Loan Documents and the 1988 Multistate Loan Documents
and from any and all claims, debts, demands, allegations, actions, causes of
action, suits, duties, controversies, agreements, promises, omissions,
variances, damages, judgments, costs, expenses, losses, obligations, liabilities
or rights whatsoever, known or unknown, whether in law, equity or otherwise,
absolute or contingent, determined or speculative, which the Guarantor or any of
its Affiliates ever have had, may have now or in the future may, can or shall
have against any Releasee relating to, based upon or arising out of the
execution, delivery, performance, administration or enforcement of (i) the 1986
Multistate Loan Documents, the 1986 Multistate Loans and the Lenders' ownership
of the Notes (as defined in the l988 Multistate Loan Agreement), (ii) the 1986
Multistate Loan Documents, the 1988 Multistate Loans and the Lenders' ownership
of the Notes (as defined in the 1988 Multistate Loan Agreement) and (iii) any of
the transactions contemplated thereby, any act or omission of any Releasee or
other Person in connection therewith or relating thereto, including efforts to
obtain payment thereof or thereunder.
SECTION 16. Instrument for Payment of Money Only. The Guarantor
------------------------------------
hereby agrees and acknowledges that this Guaranty is an instrument for the
payment of money only and hereby consents that the Lenders, at their sole
option, in the event of a default by the Guarantor in the payment of any of the
amounts payable by the Guarantor hereunder, shall have the right to bring a
motion or action under New York CPLR Section 3213.
-12-
IN WITNESS WHEREOF, the Guarantor and the Agent have caused this
Guaranty to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
HOST MARRIOTT CORPORATION
By:
--------------------------------
Title: Vice President
-----------------------------
CITIBANK, N.A., as Agent
By:
--------------------------------
Title: Vice President
-----------------------------
-13-
EXHIBIT A
Form of Host Subordinated Note
EXHIBIT A
PROMISSORY NOTE
(HOST SUBORDINATED NOTE)
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE PRIOR
PAYMENT IN FULL IN CASH OF THE SENIOR OBLIGATIONS (AS DEFINED IN THE 1994
SUBORDINATION AGREEMENT HEREINAFTER REFERRED TO) PURSUANT TO, AND TO THE EXTENT
PROVIDED IN, THE 1994 SUBORDINATION AGREEMENT. UNDER THE 1994 SUBORDINATION
AGREEMENT, NO ACTION MAY BE BROUGHT IN RESPECT OF THIS NOTE PRIOR TO THE PAYMENT
IN FULL IN CASH OF THE SENIOR OBLIGATIONS.
$_____________________________ Dated: ___________, 199__
FOR VALUE RECEIVED, the undersigned, COURTYARD BY MARRIOTT LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Borrower"), HEREBY PROMISES TO
--------
PAY to the order of Host Marriott Corporation (the "Payee") on
-----
__________________________ * or such earlier date following the date that the
Senior Obligations are paid in full in cash (the "Payment Date") the principal
------------
sum of $_______________________ or, if less, the then unpaid principal amount
hereof.
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
Base Rate.
This Promissory Note may, at the option of the Borrower, be prepaid at
any time in whole or in part, without penalty or premium, together with accrued
interest at the Base Rate to the date of such prepayment on the principal amount
prepaid, to the extent such prepayments are permitted under the 1994
Subordination Agreement (including payments under Section 5.06 of the Hotel
Lease permitted by the 1994 Subordination Agreement).
"Base Rate" means the fluctuating interest rate per annum in effect
---------
from time to time equal to the rate of interest announced by The First National
Bank of Chicago, in Chicago, Illinois from time to time as its base rate.
Both principal and interest are payable in lawful money of the United
States of America to the Payee at [Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000], Account No. __________________ in same day funds. All payments
of principal hereof shall be recorded by the Payee and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is a part of this Promissory
Note.
No amendment or waiver of any provision of this Promissory Note, nor
consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Payee, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
No failure on the part of the Payee to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall a
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
------------------------
* Insert a date no earlier than June 16, 1999.
This Promissory Note shall be binding on and inure to the benefit of
the Payee and the Borrower and their respective successors and assigns.
This Promissory Note is one of the Host Subordinated Notes referred to
in, and is entitled to the benefits of and is subject to the subordination and
other provisions in, the Consolidated Amended and Restated Subordination
Agreement dated as of April __, 1994 (as it may hereafter be amended or
otherwise modified from' time to time, the "1994 Subordination Agreement") made
----------------------------
by the Borrower, Marriott International, Inc., the Payee, Host Restaurants,
Inc., Casa Xxxxx of Maryland, Inc., Newark Properties, Inc., Essex House
Condominium Corporation and CBM One Corporation in favor of the Lenders referred
to therein and Citibank, N.A., as agent under the Multistate Loan Agreement and
the California Loan Agreement (both referred to therein). Among other things,
the 1994 Subordination Agreement contains provisions (1) prohibiting the
payment, except under certain circumstances, of this Promissory Note until the
Senior Obligations are paid in full in cash and (2) restricting the amendment of
and assignment of this Promissory Note until the Senior Obligations (as defined
therein) shall be paid in full in cash.
The Payee, by accepting this Promissory Note, and the Borrower each
hereby (i) irrevocably submits to the nonexclusive jurisdiction of any Maryland
State or Federal court, and any appellate court from any thereof in any action
or proceeding arising out of or relating to this Promissory Note, and (ii)
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Maryland State court or in such Federal court.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of Maryland.
COURTYARD BY MARRIOTT
LIMITED PARTNERSHIP
By: CBM ONE CORPORATION,
its General Partner
By:
--------------------------------
Title:
--------------------------------
Payments of Principal
Amount of Amount of Principal
Date Advance Paid or Prepaid Unpaid Principal Balance Notation Made by
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