Exhibit 10.29
POOL GUARANTEE
THIS POOL GUARANTEE (this "GUARANTEE") is made as of ____________________,
199_____ by Crestline Capital Corporation, a Maryland corporation ("CCC"),
and _____________________, a Delaware corporation ("POOL PARENT") (individually
a "GUARANTOR" and collectively the "GUARANTORS"), to and for the benefit of each
of the entities listed on Schedule 1 attached hereto (as such Schedule 1 may be
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amended from time to time to reflect any entities that are landlords under any
Leases (as hereinafter defined) added or deleted from Schedule 3 attached
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hereto, collectively, the "LANDLORDS").
WHEREAS, CCC is the owner of all of the capital stock of Pool Parent; and
WHEREAS, Pool Parent is the owner, directly or through wholly owned
subsidiaries, of all of the equity interests of each of the entities listed on
Schedule 2 attached hereto (as such Schedule 2 may be amended from time to time
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to reflect any entities that are tenants under any Leases added or deleted from
Schedule 3 attached hereto, collectively, the "TENANTS"); and
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WHEREAS, the Tenants and the Landlords have executed and delivered the
leases (the "LEASES"), working capital notes, and other agreements and
instruments listed on Schedule 3 attached hereto (as such Schedule 3 may be
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amended from time to time to reflect any addition or deletion of Leases on
Schedule 1 to the Pooling Agreement (as hereinafter defined)) and the
Guarantors, Tenants, and Landlords have executed and delivered a Pooling and
Security Agreement of even date herewith (as such agreement may be amended from
time to time, the "POOLING AGREEMENT" and, together with the agreements and
instruments listed on Schedule 3, the "AGREEMENTS"); and
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WHEREAS, each Landlord is willing to enter into the Agreements to which it
is a party only upon the condition that it receive this guarantee of the
Tenants' payment and performance under all of the Agreements;
WHEREAS, the Guarantors desire to induce the Landlords to enter into the
Leases, which may be reasonably expected to benefit, directly or indirectly, the
Guarantors;
WHEREAS, certain capitalized terms used herein are defined in Section 11 of
this Guarantee.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Landlords to enter into the Agreements to which they are a party, the Guarantors
jointly and severally agree as follows:
1. GUARANTEE OF OBLIGATIONS
The Guarantors unconditionally and absolutely guarantee the due and
punctual payment of rent and all other the monies due or which may become due
under the Agreements, and the due and punctual performance and observance by the
Tenants or any
Guarantor of all of the other terms, covenants and conditions of the Agreements
to be performed by any Tenant, whether according to the present terms thereof,
at any earlier or accelerated date or dates as provided therein, or pursuant to
any extension of time or to any change or changes in the terms, covenants and
conditions thereof now or at any time hereafter made or granted, and including
obligations that, but for any automatic stay under Section 362(a) of the
Bankruptcy Code (11 U.S.C. (S)101 et seq.) (or other successor provision), would
become due. All payments due hereunder shall be made in accordance with the
procedures set forth in the Pooling Agreement, and payment in accordance with
such procedures shall be deemed to satisfy the obligations of the Guarantors
hereunder.
2. LIMIT OF CCC'S LIABILITY
Notwithstanding any provisions of this Guarantee to the contrary (except as
specifically stated), the obligations and liabilities of CCC under this
Guarantee shall at all times be subject to the CCC Limit of Liability; provided
that the CCC Limit of Liability shall not limit the obligation of CCC (i) to
guarantee repayment of funds misappropriated or wrongfully applied by Pool
Parent or any Tenant or Tenant Member (as defined in the Pooling Agreement) in
violation of the provisions of the Pooling Agreement, but only to the extent of
the funds misappropriated or wrongfully applied, or (ii) to pay for any losses
of Landlords resulting from the fraud of Pool Parent or any Tenant or Tenant
Member, or (iii) to discharge any liens on any property of Pool Parent or any
Tenant existing in violation of the obligations of Pool Parent or any Tenant
under the Pooling Agreement or any applicable Lease (the obligations described
in clauses (i), (ii), and (iii), collectively, the "SPECIAL GUARANTEE
OBLIGATIONS").
3. COLLATERAL
The obligations of Pool Parent hereunder are secured by the pledge of
certain accounts and other collateral pursuant to the Pooling Agreement.
4. CERTAIN WAIVERS
The Guarantors waive diligence, presentment, protest, notice of dishonor,
demand, extension of time for payment, notice of non-payment at maturity and
indulgences and notices of every kind, and consent to any and all forbearances
and extensions of time of payment of any monies due or which may become due
under the Agreements, and to any and all changes in terms, covenants and
conditions of the Agreements; it being the intention hereof that each Guarantor
shall remain liable as a principal until the full amount of all sums payable
under the Agreements shall have been fully paid, the terms, covenants and
conditions of the Agreements shall have been performed and observed by the
Tenants and each Guarantor and all other amounts payable under this Guarantee
shall have been fully paid, notwithstanding any act, omission or thing which
might otherwise operate as a legal or equitable discharge of the Guarantors, or
any one or more of them.
5. OBLIGATIONS UNCONDITIONAL
(a) The Guarantors agree that the obligation of each Guarantor as a
Guarantor shall not be impaired, modified, changed, released or limited in any
manner
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whatsoever by any impairment, modification, change, release or limitation
of the liability of any one or more of the Tenants or their respective estates
in bankruptcy, resulting from the operation of any present or future provision
of the bankruptcy laws or other similar statute, or from the decision of any
court.
(b) The Guarantors agree that any one or more of the Landlords shall have
the full right, in its or their sole discretion and without any notice to or
consent from the Guarantors, from time to time and at any time and without
affecting, impairing or discharging, in whole or in part, the liability of the
Guarantors hereunder: (i) to make any change, amendment or modification
whatsoever of any of the terms or conditions of any one or more of the
Agreements; (ii) to extend, in whole or in part, by renewal or otherwise, and on
one or any number of occasions, the time for the payment of any amount pursuant
to any one or more of the Agreements or for the performance of any term or
condition of any one or more of the Agreements; (iii) to settle, compromise,
release, substitute, surrender, modify or impair, to enforce and exercise, or to
fail or refuse to enforce or exercise, any claims, rights or remedies, of any
kind or nature, which any one or more of the Landlords may at any time have
against any one or more of the Tenants or any Guarantor, or with respect to any
security interest of any kind held by any one or more of the Landlords at any
time, whether under any one or more of the Agreements or otherwise; (iv) to
release, substitute, surrender or enforce any security interest of any kind held
by any one or more of the Landlords at any time, and to collect and retain or
liquidate any collateral subject to such security interest, whether under this
Guarantee or otherwise; and (v) to apply any sums by whomsoever paid or
howsoever realized to any liability or liabilities of any one or more of the
Tenants to any one or more of the Landlords regardless of what liabilities of
any one or more of the Tenants remain unpaid.
6. OBLIGATIONS INDEPENDENT
The Guarantors agree that the Guarantors' obligations hereunder are
irrevocable, are joint and several (except as the obligations of CCC may be
limited under Section 2), and are independent of the obligations of any one or
more of the Tenants; that a separate action or actions may be brought and
prosecuted against the Guarantors or any one or more of them regardless of
whether any action is brought against any one or more of the Tenants (or against
any other Guarantor) or whether any one or more of the Tenants (or any other
Guarantor) is joined in any such action or actions; and that the Guarantors
waive the benefit of any statute of limitations affecting their liability
hereunder or the enforcement hereof.
7. NO SUBROGATION
The Guarantors agree that the Guarantors shall have no right of subrogation
whatever with respect to the payment and performance obligations of the Tenants
under the Agreements or to any collateral securing such payment and performance
obligations unless and until such payment and performance obligations have been
paid and performed in full.
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8. REMEDIES
(a) The Guarantors agree that this Guarantee is a continuing guaranty and
that all liabilities which are guaranteed by the Guarantors hereunder shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Landlord in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which any Landlord would otherwise have. No
notice to or demand on any one or more of the Guarantors in any case shall
entitle any one or more of the Guarantors to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Landlord to any other or further action in any circumstances without notice or
demand.
(b) The Guarantors agree that in the event that any one or more of the
Landlords retain or engage an attorney or attorneys to enforce this Guarantee
and one or more of the Landlords prevail in such enforcement action, the
Guarantors will reimburse the Landlords for all expenses incurred, including
reasonable attorneys' fees and disbursements, without regard to the CCC Limit of
Liability set forth in Section 2. In the event that the Guarantors prevail in
any such enforcement action, the Landlords bringing such action will reimburse
the Guarantors for all expenses incurred, including reasonable attorneys' fees
and disbursements. If the Guarantors commence an action to enforce their rights
hereunder, the parties prevailing in such action shall be reimbursed by the
parties losing such action for all expenses incurred, including reasonable
attorneys' fees and disbursements, without regard to the CCC Limit of Liability.
9. BENEFIT OF GUARANTEE
The Guarantors agree that this Guarantee shall inure to the benefit of and
may be enforced by each of the Landlords and its respective successors,
transferees and assigns, and shall be binding upon and enforceable against the
Guarantors and the Guarantors' successors or assigns. Without limiting the
generality of the foregoing, the Guarantors further agree that each Landlord may
assign or otherwise transfer its rights under the Agreements or any interest in
any of the foregoing to any person or entity (including any lender or other
creditor of such Landlord), and such other person or entity shall thereupon
become vested with all of the rights in respect thereof granted to the Landlords
herein or otherwise; provided that no Landlord shall be permitted to assign its
rights hereunder to any Person to which such Landlord sells or conveys any hotel
subject to a Lease, other than a Subsidiary (as defined in the Pooling
Agreement) of the Landlord Representative.
10. TERMINATION OF GUARANTEE; REINSTATEMENT
(a) At any time when the CCC Limit of Liability shall be equal to zero as
of the most recent Distribution Date (as defined in the Pooling Agreement),
after giving effect to any payments of Rent Shortfalls on such date, Pool Parent
shall be entitled to cause this Guarantee and the Pooling Agreement to terminate
(except to the extent provided in paragraph (b) below) by giving Landlord
Representative (as defined in the Pooling Agreement) notice of termination, in
which event the following provisions will apply:
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(i) If (x) the notice is given after the end of a Fiscal Year, (y) the
CCC Limit of Liability as of the end of the Fiscal Year immediately preceding
the date of such notice was zero, and (z) either the notice is given prior to
the Distribution Date with respect to the first Accounting Period of a Fiscal
Year or the Cumulative Guarantee Payments as of the end of the Fiscal Year
immediately preceding the date of such notice are greater than or equal to the
Cumulative Guarantee Ceiling for the Fiscal Year in which such notice is
given, this Guarantee will terminate (except to the extent provided in
paragraph (b) below) effective on the date 6 months after the date of such
notice, and the provisions of paragraph (iii) below shall apply during such 6-
month period.
(ii) If the conditions set forth in paragraph (i) above do not apply,
then the following provisions will be applicable.
(A) Pool Parent shall provide to Landlord Representative, together
with the termination notice, a statement setting forth a calculation of
the Allowable Projected Year-End Guarantee Payments as of the end of the
then current Fiscal Year and the Allowable Projected Annual Operating
Deficit for each Lease as to which a Guarantee Payment has been made in
such Fiscal Year.
(B) If the statement provided by the Pool Parent under paragraph (A)
shows that the Allowable Projected Year-End Guarantee Payments as of the
end of the then current Fiscal Year are greater than or equal to the
Cumulative Guarantee Ceiling for such Fiscal Year, and the Landlord
Representative does not dispute such calculation, then the termination
will be effective six months after the date of such notice, and the
provisions of paragraph (iii) below shall apply during such 6-month
period.
(C) If the statement provided by the Pool Parent does not show that
the Allowable Projected Year-End Guarantee Payments as of the end of the
then current Fiscal Year are greater than or equal to the Cumulative
Guarantee Ceiling for such Fiscal Year, or the Landlord Representative
informs the Pool Parent that it reasonably believes that the calculations
on the statement incorrectly show that the Allowable Projected Year-End
Guarantee Payments as of the end of the then current Fiscal Year are
greater than or equal to the Cumulative Guarantee Ceiling for such Fiscal
Year, then the notice will not be given effect at such time, and the
provisions of paragraph (D) will apply.
(D) If the initial statement does not show that the Allowable
Projected Year-End Guarantee Payments as of the end of the then current
Fiscal Year are greater than or equal to the Cumulative Guarantee Ceiling
for such Fiscal Year or the Landlord Representative reasonably disputes
the conclusion set forth in the statement, then Pool Parent may provide
additional statements with respect to subsequent Accounting Periods in
such Fiscal Year, setting forth the calculations in the manner set forth
in paragraph (A). If a subsequent statement shows that the Allowable
Projected Year-End Guarantee Payments as of the end of the then current
Fiscal Year are greater than or equal to the Cumulative Guarantee Ceiling
for such Fiscal Year, and the Landlord
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Representative does not dispute such calculation, then the termination
will be effective six months after the end of the applicable Accounting
Period, and the provisions of paragraph (iii) below shall apply during
such 6-month period.
(E) If, as of the end of the Fiscal Year in which the notice of
termination is given, the CCC Limit of Liability, based on actual
results, is zero, then the termination will be effective six months after
the end of such Fiscal Year, and the provisions of paragraph (iii) below
shall apply during such 6-month period.
(F) If, as of the end of the Fiscal Year in which the notice of
termination is given, the CCC Limit of Liability, based on actual
results, is greater than zero, then the notice of termination will be
deemed to be void and of no further effect.
(G) If (i) a notice of termination becomes effective pursuant to
paragraph (D) or (E) above, (ii) CCC and the Pool Parent made additional
Guarantee Payments after the date of the initial notice and (iii) the CCC
Limit of Liability as of the end of the Fiscal Year (disregarding the
floor of zero) was less than the CCC Limit of Liability computed
(disregarding the floor of zero) as of the Distribution Date on which the
notice was initially given or immediately preceding the date of such
notice, then, promptly after the date on which the relevant financial
information becomes available that permits such determination, the
Landlord Representative shall reimburse Pool Parent for the lesser of the
amount of such additional Guarantee Payments after the date of the
initial notice and the amount by which the CCC Limit of Liability as of
the end of such Fiscal Year was less than the CCC Limit of Liability
computed as of the time of such notice.
(iii) During the six-month period after a notice of termination
becomes effective pursuant to paragraph (i), (ii)(B), (ii)(D), or (ii)(E)
above, CCC shall have no obligations hereunder other than with respect to
Special Guarantee Obligations, which shall survive termination of this
Guarantee, and the obligations of Pool Parent under this Guarantee shall
remain in full force and effect, provided that the aggregate liability of Pool
Parent for payment of Rent Shortfalls during such six-month period shall not
exceed the aggregate amount of Distributable Cash with respect to all Leases
during such period.
(b) Upon expiration of the six-month period specified in paragraph (iii),
neither CCC nor Pool Parent shall have any obligations hereunder other than with
respect to Special Guarantee Obligations which shall survive such termination.
(c) In the event that, on or before the 91st day after the expiration of
the six-month period specified in paragraph (a)(iii) above, any Tenant or Pool
Parent shall have become the debtor in any voluntary or involuntary bankruptcy
proceeding, the Guarantee shall not be deemed to terminate as a result of such
notice and shall be reinstated.
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11. CERTAIN DEFINITIONS
As used in this Guarantee, the following capitalized terms have the
meanings set forth below:
"ANNUAL OPERATING DEFICIT" shall mean, with respect to any hotel for each
full Fiscal Year in the Measurement Period (treating the period from the date of
this Guarantee to the end of the Fiscal Year ending on or about December 31,
1999 as one full Fiscal Year), an amount equal to the excess (if any) of Tenant
Operating Expenses for such Fiscal Year over Gross Revenues for such Fiscal
Year. If Gross Revenues for such Fiscal Year are greater than or equal to
Tenant Operating Expenses for such Fiscal Year with respect to the hotel, then
there shall be no Annual Operating Deficit for such period with respect to such
hotel.
"ALLOWABLE PROJECTED ANNUAL OPERATING DEFICIT" means, for any Lease with
respect to the Fiscal Year in which the date of determination occurs, an amount
equal to (i) the projected Annual Operating Deficit, if any, for such Lease as
of the end of such Fiscal Year, based on the actual Gross Revenues and Tenant
Operating Expenses through the end of the most recent Accounting Period and the
projected Gross Revenues and the projected Tenant Operating Expenses for the
remaining Accounting Periods in such Fiscal Year as set forth in the most recent
projected operating results prepared by the applicable hotel manager, less (ii)
an amount equal to 1% of the amount of Rent under such Lease for the remaining
Accounting Periods in such Fiscal Year as reasonably projected by the Tenant on
the basis of the most recent projected operating results prepared by the
applicable hotel manager.
"ALLOWABLE PROJECTED YEAR-END GUARANTEE PAYMENTS" means, as of any date of
determination, an amount equal to the sum of (i) the Cumulative Guarantee
Payments as of the end of the prior Fiscal Year plus (ii) with respect to each
Lease as to which any Guarantee Payment has been made in the then current Fiscal
Year, the lesser of (x) the aggregate amount of such Guarantee Payments or (y)
the Allowable Projected Annual Operating Deficit (as defined below) for such
Lease for such Fiscal Year.
"CCC LIMIT OF LIABILITY" at any time during a Fiscal Year shall be an
amount (not less than zero) equal to the excess, if any, of (i) the Cumulative
Guarantee Ceiling for such Fiscal Year over (ii) the Cumulative Guarantee
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Payments (as hereinafter defined) as of the date of determination.
"CUMULATIVE GUARANTEE CEILING" means, (i) for Fiscal Year 1999,
$_________________/1/ and (ii) for any subsequent Fiscal Year, ten percent (10%)
of the greater of (x) the aggregate Rent, prior to any FF&E Adjustments and
excluding Additional Charges (as all such terms are defined in the Leases),
payable with respect to the previous Fiscal Year pursuant to all of the Leases
and (y) the aggregate actual Rent (prior to FF&E Adjustments and excluding
Additional Charges) payable with respect to Fiscal Year 1999 pursuant to all of
the Leases.
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/1/ An agreed estimate of 10% of the aggregate amount of Rent (prior to FF&E
Adjustments and excluding Additional Charges) payable under all Leases listed on
Schedule 3 for Fiscal Year 1999.
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"CUMULATIVE GUARANTEE PAYMENTS" shall mean, with respect to any date of
determination, the lesser of (i) the aggregate amount of Annual Operating
Deficits and Current Year Operating Deficits with respect to all Leases during
the applicable Measurement Period and (ii) the aggregate amount of Guarantee
Payments made by Pool Parent and CCC during the applicable Measurement Period.
"CURRENT YEAR OPERATING DEFICIT" shall mean, with respect to any hotel as
of any date of determination, an amount equal to the excess (if any) of Tenant
Operating Expenses for the period from the beginning of the Fiscal Year in which
the most recently completed Accounting Period falls to the end of the most
recently completed Accounting Period over Gross Revenues for such period. If
Gross Revenues for such period are greater than or equal to Tenant Operating
Expenses for such period with respect to the hotel, then there shall be no
Current Year Operating Deficit for such period with respect to such hotel.
"GROSS REVENUES" shall have the meaning ascribed thereto for each hotel in
the applicable Lease.
"GUARANTEE PAYMENT" shall mean a payment by Pool Parent or CCC in respect
of a Rent Shortfall (as defined in the Pooling Agreement).
"MEASUREMENT PERIOD" means, as of any date of determination, the period
beginning on the first day of the Accounting Period in which the date of this
Guarantee occurs and ending on the last day of the Accounting Period ending
immediately preceding such date of determination.
"TENANT OPERATING EXPENSES" shall mean, with respect to any hotel, all
expenses incurred by Tenant or the applicable hotel manager on behalf of Tenant
in connection with the operation of such hotel, including Rent and base and
incentive management fees payable by Tenant, all determined in accordance with
GAAP; provided that Tenant Operating Expenses shall not include (i) any amounts
that are Landlord Obligations under the applicable Lease, (ii) any debt service
payable by Tenant, or (iii) any administrative or overhead expenses of Tenant
(other than such expenses reimbursable to the applicable hotel manager).
12. MISCELLANEOUS
(a) This Guarantee, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of Maryland (but not including the choice of law rules
thereof).
(b) The Guarantors agree that service of process may be made upon any one
or more of them by registered mail (return receipt requested) directed to the
applicable Guarantors at their respective addresses designated for notice on the
signature page hereof, and service so made upon a Guarantor shall be deemed to
be completed upon receipt by such applicable Guarantor. Nothing in this Section
12(b) shall affect the right of any Landlord to serve legal process in any other
manner permitted by law.
(c) To the maximum extent permitted by law, the Guarantors hereby waive any
right that they may have to a trial by jury of any dispute (whether a claim in
tort,
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contract, equity or otherwise) arising under or related to this Guarantee or any
related matters, and agree that any such dispute shall be tried before a judge
sitting without a jury.
(d) For all purposes of this Guarantee, except as otherwise expressly
provided or unless the context otherwise requires, (i) all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance
with generally accepted accounting principles consistently applied, (ii) all
references in this Guarantee to designated "Sections" and other subdivisions are
to the designated Sections and other subdivisions of this Guarantee, (iii) the
term "including" shall have the same meaning as "including, without limitation,"
and (v) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Guarantee as a whole and not to any particular Section or
other subdivision.
(e) This Guarantee may be executed in two or more counterparts, each of
which shall constitute an original, but which, when taken together, shall
constitute but one instrument and shall become effective as of the date hereof
when copies hereof, which, when taken together, bear the signatures of each of
the parties hereto, shall have been signed.
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IN WITNESS WHEREOF, the Guarantors have executed this Guarantee as of the
day and year first above written.
CRESTLINE CAPITAL CORPORATION
By:________________________________
Xxxxx X. Xxxxxxxxx
President and CEO
Address for Notice:
Crestline Capital Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
[POOL PARENT]
By:________________________________
Xxxxx X. Xxxxxxx
President
Address for Notice:
c/o Crestline Capital Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
HOST MARRIOTT, L.P.
By: Host Marriott Corporation, its general
partner
By:________________________________
Name:
Title:
Address for Notice:
Host Marriott, L.P.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
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Schedule 1
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to
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Guarantee
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LIST OF LANDLORDS
[TO BE PROVIDED]
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Schedule 2
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to
--
Guarantee
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LIST OF TENANTS
[TO BE PROVIDED]
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Schedule 3
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to
--
Guarantee
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LIST OF AGREEMENTS
[List will include the following agreements in connection with each lease
pool: all Leases, all working capital notes, and all owner's agreements]
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