Exhibit 10.4
INTEREST/PRINCIPAL GUARANTY
INTEREST/PRINCIPAL GUARANTY dated as of July 10, 1990, made by MARRIOTT
CORPORATION, a Delaware corporation (the "Guarantor") having an address at 00000
Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, Marriott/Portman Finance Corporation, a Delaware corporation
(the "Issuer"), The Citizens and Southern National Bank, as collateral trustee,
senior trustee and subordinated trustee, and the Guarantor, which Guarantor
expects to derive benefits, directly or indirectly, from the proceeds of the
offering described herein, have entered into an Indenture dated as of July 1,
1990 (as amended, modified or supplemented from time to time, the "Indenture")
in connection with the issuance by the Issuer of U.S. $159,000,000 Principal
Amount of Senior Secured Notes due July 10, 1997 (the "Senior Notes") and of
U.S. $40,000,000 Principal Amount of Subordinated Secured Notes due July 10,
1997 (the "Subordinated Notes"). The Senior Notes and the Subordinated Notes are
collectively referred to herein as the "Notes";
WHEREAS, this Interest/Principal Guaranty is provided pursuant to the
terms of the Indenture and the Notes;
WHEREAS, it is a condition precedent to the issuance of the Notes by
the Issuer pursuant to the Indenture that the Guarantor shall have executed and
delivered to the Collateral Trustee a guaranty of certain of the obligations of
the Issuer under the Notes; and
WHEREAS, the Guarantor has determined that its execution, delivery and
performance of this Interest/Principal Guaranty directly benefit, and are within
the corporate purposes and in the best interests of, the Guarantor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein, the Guarantor hereby makes the following representations, warranties,
covenants and agreements to the Collateral Trustee, for the benefit of each
holder of the Notes (a "Holder" and collectively the "Holders") and to each
Holder, and hereby agrees as follows:
SECTION 1. Definitions. Reference is hereby made to the Indenture for a
statement of the terms thereof. All terms used in this Interest/Principal
Guaranty which are defined
therein and not otherwise defined herein shall have the same meanings herein as
set forth therein.
SECTION 2. Interest/Principa1 Guaranty.
(a) The Guarantor hereby irrevocably, absolutely and unconditionally
guaranties to the Collateral Trustee, for the benefit of each Holder, and to
each Holder the prompt payment as and when due and payable from time to time of
all amounts now or hereafter owing with respect to the Notes and the Indenture
for interest, Deferred Interest, Yield Maintenance Amount, Additional Interest
on the Notes or that portion of the Principal Amount of the Notes that shall
constitute the Accreted Amount, (collectively, the "Interest Obligations");
provided, however, that, notwithstanding any other provision of this
Interest/Principal Guaranty to the contrary, the maximum liability of the
Guarantor hereunder with respect to the Interest Obligations shall in no event
exceed the Maximum Interest Guarantied Amount (as defined below). The Guarantor
and the Collateral Trustee acknowledge that the Interest Obligations may at any
time and from time to time exceed the Maximum Interest Guarantied Amount and
that same shall not impair this Interest/Principal Guaranty or affect the rights
and remedies of the Collateral Trustee and the Holders hereunder.
(b) The Guarantor hereby irrevocably, absolutely and unconditionally
guaranties to the Collateral Trustee, for the benefit of each Holder, and to
each Holder the prompt payment as and when due and payable at Maturity of that
portion of the Principal Amount of the Notes that shall constitute the Original
Principal Amount of the Notes (the "Principal Obligations"); provided, however,
that notwithstanding any other provision of this Interest/Principal Guaranty to
the contrary, the maximum liability of the Guarantor hereunder with respect to
the Principal Obligations shall in no event exceed the Maximum Principal
Guarantied Amount (as defined below). The Guarantor and the Collateral Trustee
acknowledge that the Principal Obligations may at any time and from time to time
exceed the Maximum Principal Guarantied Amount and the same shall not impair
this Interest/Principal Guaranty or affect the rights and remedies of the
Collateral Trustee and the Holders hereunder.
(c) Subject to Section 2(d), below, the Maximum Interest Guarantied
Amount shall mean (A) (i) $25,000,000 if the Guaranty Default Date (as defined
below) occurs during the period from and including July 10, 1990 through and
including December 31, 1991; or (ii) $20,000,000 if the Guaranty Default Date
occurs at any time thereafter; less (B) the amount, if any, paid by the
Guarantor pursuant to this Interest/Principal Guaranty with respect to the
Interest Obligations and the Principal Obligations; less (C) the amount, if any,
of borrowings of the Owner (unsecured by any assets of the Owner) from the
Guarantor
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to the extent that the proceeds of such borrowings have been applied to the
Interest Obligations or the Principal Obligations; less (D) the amount, if any,
of borrowings of the Owner (unsecured by any assets of the Owner) from any
Person not an Affiliate of the Guarantor (an "Unaffiliated Lender") to the
extent that (x) the proceeds of such borrowings have been applied to the payment
of the Interest Obligations or the Principal Obligations and (y) the repayment
of such borrowings to the Unaffiliated Lender has been guarantied by the
Guarantor; plus (E) the amount, if any, repaid by the Owner or the Issuer to the
Guarantor in respect of the amounts described in clause (B) and (C) above; plus
(F) the amount, if any, repaid by the Owner to the Unaffiliated Lender in
respect of the amounts described in clause (D) above.
(d) Notwithstanding any other provision of this Interest/Principal
Guaranty or any Financing Document, (i) the Guarantor shall not be required to
make any payment of Interest Obligations with respect to the Senior Notes
pursuant to this Interest/Principal Guaranty to the extent such payment, when
added to the sum of (X) all payments of Interest Obligations with respect to the
Senior Notes previously paid by the Guarantor pursuant to this
Interest/Principal Guaranty or previously paid by the Owner pursuant to
borrowings described in clauses (C) or (D) of Section 2(c) above, to the extent
proceeds thereof were applied to the payment of Interest Obligations (but not
Principal Obligations) on the Senior Notes, less the amount of any repayments
described in clauses (E) or (F) of Section 2(c) above to the extent such
repayments were applied to the repayment of payments or borrowings the proceeds
of which were applied to the payment of Interest Obligations (but not Principal
Obligations) on the Senior Notes, and (Y) 0.79875 (determined by dividing the
sum of the total interest, Deferred Interest and Accreted Amount that will
accrue on the Senior Notes during their term by the sum of the total interest,
Deferred Interest and Accreted Amount that will accrue on the Senior Notes and
the Subordinated Notes during their term) multiplied by the amount of any
payments of Ground Rent (as defined in the Deed) made from the proceeds of Cash
Flow Loans (as defined in the Marriott Commitment) made by the Guarantor
pursuant to the Marriott Commitment (as defined in the Deed) to the extent such
portion of such Cash Flow Loans has not been repaid to Guarantor pursuant to the
Marriott Commitment ("Net Guarantor Ground Lease Payments"), would cause the sum
of all such payments to exceed twenty percent (20%) of the total interest,
Deferred Interest and Accreted Amount that will accrue on the Senior Notes
during their term (i.e., 20% of $119,460,327); and (ii) the Guarantor shall not
be required to make any payment of Interest Obligations with respect to the
Subordinated Notes pursuant to this Interest/Principal Guaranty to the extent
such payment, when added to the sum of (X) all payments of Interest Obligations
with respect to the Subordinated Notes previously paid by the Guarantor pursuant
to this
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Interest/Principal Guaranty or previously paid by the Owner pursuant to
borrowings described in clauses (C) or (D) of Section 2(c) above, to the extent
proceed thereof were applied to the payment of Interest Obligations (but not
Principal Obligations) on the Subordinated Notes, less the amount of any
repayments described in clauses (E) or (F) of Section 2(c) above, to the extent
such repayments were applied to the repayment of payments or borrowings the
proceeds of which were applied to the payment of Interest Obligations (but not
Principal Obligations on the Subordinated Notes), and (Z) 0.20125 (determined by
dividing the sum of the total interest, Deferred Interest and Accreted Amount
that will accrue on the Subordinated Notes during their term by the sum of the
total interest, Deferred Interest and Accreted Amount that will accrue on the
Senior Notes and the Subordinated Notes during their term) multiplied by the
amount of Net Guarantor Ground Lease Payments, would cause the sum of all such
payments to exceed twenty percent (20%) of the total interest, Deferred Interest
and Accreted Amount that will accrue on the Subordinated Notes during their term
(i.e., 20% of $30,097,793).
(e) The Maximum Principal Guarantied Amount shall mean (A)(i) zero if
the Guaranty Default Date occurs during the period from and including July 10,
1990 through and including December 31, 1991; or (ii) $2,000,000 if the Guaranty
Default Date occurs during the period from and including January 1, 1992 through
and including December 31, 1992; or (iii) $9,000,000 if the Guaranty Default
Date occurs during the period from and including January 1, 1993 through and
including December 31, 1993; or (iv) $16,000,000 if the Guaranty Default Date
occurs during the period from and including January 1, 1994 through and
including December 31, 1994; or (v) $20,000,000 if the Guaranty Default Date
occurs on or after January 1, 1995; less (B) the sum of the amounts, if any,
specified in clauses (B), (C) and (D) of Section 2(c) above; plus (C) the sum of
the amounts, if any, specified in clauses (E) and (F) of Section 2(c).
(f) For the purpose of this Interest/Principal Guaranty the "Guaranty
Default Date" shall be the date of Maturity of the Notes (whether at the Stated
Maturity, or earlier by declaration of acceleration or call for redemption or
otherwise), unless the declaration of acceleration results from an Event of
Default described in Sections 501(1) or (2) of the Indenture, in which case the
Guaranty Default Date shall be the date of such Event of Default; provided,
however, that if the Event of Default with respect to which the Interest
Obligations or the Principal Obligations have been accelerated shall thereafter
be cured and cease to be continuing, the Maximum Interest Guarantied Amount and
the Maximum Principal Guarantied Amount, as the case may be, shall thereafter be
determined by reference to the next succeeding Guaranty Default Date.
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(g) The Guarantor hereby agrees to pay any and all reasonable expenses
(including counsel fees and expenses) incurred by the Collateral Trustee and the
Holders in enforcing their rights under this Interest/Principal Guaranty.
SECTION 3. Additional Provisions
(a) Payments of Interest Obligations pursuant to this
Interest/Principal Guaranty shall, pursuant to Section 506(a)(v) of the
Indenture, be made with respect to the Senior Notes and the Subordinated Notes
ratably, without preference or priority of any kind, according to the amounts
due and payable for the respective Interest Obligations. Notwithstanding the
foregoing, if an Event of Default under the Indenture shall have occurred and be
continuing, any moneys collected by the Collateral Trustee, any Series Trustee
or any Holder pursuant to this Interest/Principal Guaranty shall be applied as
provided in Section 506(a)(ii) of the Indenture.
(b) Upon the occurrence and during the continuance of an Event of
Default under the Indenture, the Collateral Trustee and the Holders of the
Subordinated Notes shall make demand for payment under the Principal Guaranty
prior to making demand for payment under this Interest/Principal Guaranty, but
only with respect to the payment of that portion of the Original Principal
Amount of the Subordinated Notes then due and payable that does not exceed the
Maximum Principal Guarantied Amount under the Principal Guaranty. If payment
shall not be made under the Principal Guaranty on or prior to the close of
business on the Business Day following the date of such demand, the Collateral
Trustee and the Holders shall have the right to exercise any and all of the
remedies provided in Article Five of the Indenture or Article 19 of the Deed, or
otherwise.
(c) Upon the occurrence and during the continuance of an Event of
Default under the Indenture with respect to the payment of Interest Obligations
on the Notes, the Collateral Trustee and/or the Holders shall make demand for
payment of all such due and unpaid Interest Obligations under this
Interest/Principal Guaranty prior to exercising the remedies provided in Article
Five of the Indenture or Article 19 of the Deed. If payment shall not be made
under this Interest/Principal Guaranty on or prior to the close of business on
the Business Day following the date of such demand, the Collateral Trustee and
the Holders shall have the right to exercise any and all of the remedies
provided in Article Five of the Indenture or Article 19 of the Deed, or
otherwise.
SECTION 4. Covenants. The Guarantor agrees that so long as any of the
Interest Obligations or Principal Obligations (individually and collectively,
the "Obligations") are
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outstanding, unless the Collateral Trustee shall otherwise consent in writing to
the Guarantor, the Guarantor will:
(a) Financial Statements. Furnish to the Collateral Trustee (i) as soon
as practicable and in any event within sixty (60) days after the close of each
of the first three quarters of each fiscal year of the Guarantor, as at the end
of and for the period commencing at the end of the previous fiscal year and
ending with such quarter, an unaudited consolidated balance sheet of the
Guarantor and its subsidiaries, together with unaudited consolidated statements
of income and surplus accounts of the Guarantor and its subsidiaries, all in
reasonable detail and certified by the chief accounting officer of the Guarantor
but subject to year-end audit and adjustments; (ii) as soon as practicable and
in any event within ninety (90) days after the close of each fiscal year of the
Guarantor as at the end and for the fiscal year just closed, a consolidated
balance sheet of the Guarantor and its subsidiaries and a consolidated statement
of income and surplus accounts of the Guarantor and its subsidiaries for such
fiscal year, all in reasonable detail and audited by Xxxxxx Xxxxxxxx & Co. or
other independent certified public accountants of recognized standing selected
by the Guarantor; and (iii) with reasonable promptness, copies of all regular
and periodical financial and/or other reports which the Guarantor and its
subsidiaries may make available generally to stockholders and bondholders.
(b) Unsecured Borrowings. Furnish to the Collateral Trustee, as soon as
practicable and in any event within ninety (90) days after the close of each
fiscal year of the Guarantor, as at the end and for the fiscal year just closed,
an Officer's Certificate of the Guarantor setting forth the following:
(i) the outstanding amount, if any, of unsecured borrowings of the
Owner from the Guarantor to the extent that the proceeds of such borrowings
have been applied to each of (A) the Interest Obligations with respect to
the Senior Notes, (B) the Principal Obligations with respect to the Senior
Notes, (C) the Interest Obligations with respect to the Subordinated Notes,
and (D) the Principal Obligations with respect to the Subordinated Notes;
(ii) the outstanding amount, if any, of borrowings of the Owner
(unsecured by any assets of the Owner) from an Unaffiliated Lender, the
repayment of which to the Unaffiliated Lender has been guarantied by the
Guarantor, to the extent that the proceeds of such borrowings have been
applied to the payment of each of (A) the Interest Obligations with respect
to the Senior Notes, (B) the Principal Obligations with respect to the
Senior Notes, (C) the Interest Obligations with respect to the Subordinated
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Notes, and (D) the Principal Obligations with respect to the Subordinated
Notes;
(iii) the outstanding amount, if any, paid by the Guarantor (A)
pursuant to this Interest/Principal Guaranty with respect to each of (1)
the Interest Obligations with respect to the Senior Notes, (2) the
Principal Obligations with respect to the Senior Notes, (3) the Interest
Obligations with respect to the Subordinated Notes, and (4) the Principal
Obligations with respect to the Subordinated Notes, and (B) with respect to
the amounts described in clause (i) of this Section 4(b);
(iv) the outstanding amount of Net Guarantor Ground Lease
Payments.
SECTION 5. Designated Events.
(a) For the purpose of this Interest/Principal Guaranty, the term
"Designated Event" shall mean an event or series of events as a result of which:
(i) any Person or Group (within the meaning of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than the Marriott Family (as hereinafter defined) and other
than any Employee Benefit Plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended) maintained by the
Guarantor or by any Affiliate of the Guarantor, becomes the Beneficial
Owner (as defined in Rule 13d-3 under the Exchange Act) of Voting Shares
(as hereinafter defined) entitled to cast more than 30% of the votes
entitled to be cast by the holders of all then outstanding Voting Shares;
provided that if the Marriott Family shall not be at the time of the event
the Beneficial Owner, in the aggregate, of Voting Shares entitled to cast
at least 20% of the votes entitled to be cast by the holders of all then
outstanding Voting Shares, a Designated Event shall be deemed to have
occurred if any Person or Group, other than any such Employee Benefit Plan,
becomes the Beneficial Owner of Voting Shares entitled to cast more than
20% of the votes entitled to be cast by the holders of all then outstanding
Voting Shares. For the purpose of this Interest/Principal Guaranty, the
term "Voting Shares" shall mean any issued and outstanding shares of
capital stock of the Guarantor then entitled to vote in the election of
directors and the term "Marriott Family" means X. Xxxxxxx Marriott, Sr.,
his spouse, his siblings and their spouses, and any lineal descendants of
any of them, and their spouses (or any nominee, trust, foundation, holding
company or Affiliate holding shares of Marriott established by or for the
benefit of any of them);
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(ii) the Marriott Family shall acquire Voting Shares so that after
giving effect to such acquisition the Marriott Family shall become the
Beneficial Owner, in the aggregate, of Voting Shares entitled to cast more
than 50% of the votes entitled to be cast by the holders of all then
outstanding Voting Xxxxxx;
(iii) the Guarantor shall merge or consolidate with or into
another Person (whether or not the Guarantor is the surviving corporation),
or enter into any sale, lease, exchange, transfer or other disposition (in
a transaction or series of related transactions) of all or substantially
all of the assets of the Guarantor, in either event pursuant to a
transaction in which all or substantially all of the Guarantor's Voting
Shares are changed into or exchanged for cash, securities or other property
and excluding transactions between the Guarantor and any of its
Subsidiaries. For the purpose of this clause (iii) only, the term
"Subsidiary" shall mean any corporation or other entity of which a majority
of each class or series of equity securities or other comparable ownership
interests is owned, directly or indirectly, by the Guarantor immediately
prior to the time the merger, consolidation or disposition of assets
occurs;
(iv) the Guarantor or any Subsidiary acquires, by merger,
consolidation or acquisition of assets or stock or otherwise, any Person
whose total assets on a consolidated basis have a fair market value (as
determined in good faith by the Board of Directors of the Guarantor, whose
determination shall be conclusive) which exceeds 50% of the fair market
value as determined in good faith by the Board of Directors of the
Guarantor, whose determination shall be conclusive) of the Guarantor's
total assets on a consolidated basis immediately prior to such acquisition.
For the purpose of clauses (iv) and (vi) only, the term "Subsidiary" shall
mean any corporation or other entity of which the Guarantor owns a majority
of the issued and outstanding securities then entitled to vote in the
election of directors, general partners or other persons or entities
holding similar duties, obligations and powers;
(v) during any period of twenty-four (24) consecutive months,
Persons who at the beginning of such period constitute the Guarantor's
Board of Directors cease to constitute a majority of the directors then in
office other than with the consent of a majority of the Continuing
Directors. For the purpose of this clause (v), "Continuing Directors" shall
mean a Person who was a member of the Board of Directors of the Guarantor
as of January 1, 1990, or a Person thereafter elected by the stockholders
or appointed
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by the Board of Directors whose appointment or recommendation by the
Board of Directors for election by the Guarantor's stockholders was
approved by at least a majority of the Continuing Directors then on the
Board of Directors;
(vi) the Guarantor and/or any Subsidiary purchases or otherwise
acquires, directly or indirectly, the Guarantor's Voting Shares, if after
giving effect to any such acquisition, the Guarantor and its Subsidiaries
have acquired 30% or more of such Voting Shares within any period of twelve
(12) consecutive months; or
(vii) on any date, the Guarantor makes any distribution of cash,
property or securities (other than additional Voting Shares of the
Guarantor or regular cash dividends) to holders of the Guarantor's Voting
Shares or purchases or otherwise acquires its Voting Shares and the sum of
such distributions and purchases during any period of twelve (12)
consecutive months is at least 30% of the aggregate fair market value
(based on the Current Market Price (as defined below)) of the Guarantor's
outstanding capital stock on the day prior to the first day of such
distribution or purchase. For the purpose of this Interest/Principal
Guaranty, "Current Market Price" shall mean the closing price (or, if none,
the average of the last daily bid and asked prices) of the applicable class
of capital stock as quoted by the primary securities exchange on which the
stock is traded, or, if none, the primary inter-dealer quotation system,
which reports quotations for the class of capital stock, for the last
trading day immediately prior to the occurrence of the event to which this
definition applies.
The Guarantor shall give to the Collateral Trustee written notice of the
occurrence of a Designated Event, not later than 10 days following the date of
the first public announcement or public notice of the Designated Event in the
case of any Designated Event specified in clauses (i) or (ii) and not later than
10 days following the date of the occurrence of the Designated Event in the case
of any Designated event specified in clauses (iii), (iv), (v), (vi) or (vii).
(b) From and after the occurrence of a Triggering Event (as hereinafter
defined) the Guarantor shall comply with the provisions of Article Fourteen of
the Indenture. The term "Triggering Event" shall mean the reduction of the
Rating of the Guarantor by either Rating Agency to less than Baa3 (in the case
of Xxxxx'x Investor Services, Inc.) or BBB- (in the case of Standard & Poor's
Corporation) during the Determination Period. The term "Determination Period"
shall mean the 90-day period commencing on the first public announcement or
public notice of a Designated Event; provided that if a Rating Agency shall
publicly
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announce during such 90-day period that the Rating of the Guarantor is under
review, the Determination Period shall be extended for an additional period,
expiring on the earlier of 180 days following the initial commencement of the
Determination Period and the first Business Day following the public
announcement by the Rating Agency of the Rating of the Guarantor or that the
Rating of the Guarantor is no longer under review.
SECTION 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation as set
forth on the first page hereof, (ii) has all requisite corporate power and
authority to execute, deliver and perform this Interest/Principal Guaranty, the
Principal Guaranty, the Indenture and each other agreement or instrument related
thereto to which the Guarantor is a party, and (iii) is duly qualified to do
business in every jurisdiction in which the failure so to qualify could have a
material adverse effect on the business of the Guarantor and its consolidated
subsidiaries taken as a whole.
(b) The Guarantor has examined the Indenture, including the Exhibits
annexed thereto, and all of the representations and warranties set forth in the
Indenture, to the extent the same relate to the Guarantor, are true and correct
in all material respects.
(c) Except for defaults, conflicts and breaches that do not materially
affect the Guarantor's right, authority and ability to perform its obligations
under the Indenture, the Notes, this Interest/Principal Guaranty, the Principal
Guaranty and each other agreement or instrument related thereto to which the
Guarantor is a party (all such documents are together referred to herein as the
"Marriott Documents") or that do not materially impair the rights, remedies or
security of the Collateral Trustee and the Holders under this Interest/Principal
Guaranty, the execution, delivery and performance by the Guarantor of the
Marriott Documents (i) have been duly authorized by all necessary corporate
action, (ii) do not and will not contravene its charter or by-laws, law or any
contractual restriction binding on or affecting the Guarantor or any of its
properties, and (iii) do not and will not result in or require the creation of
any lien, security interest or other charge or encumbrance upon, or with respect
to, any of its properties.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or other regulatory body is required
on or prior to the date hereof for the due execution, delivery and performance
by the Guarantor of the Marriott Documents.
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(e) Each of the Marriott Documents is a legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and except that the availability of equitable remedies is
subject to the discretion of the court before which any proceedings may be
brought.
(f) After giving effect to the transactions contemplated by the
Indenture and the execution and delivery of this Interest/Principal Guaranty and
the other Marriott Documents, the Guarantor has complied with and performed all
of its material covenants and agreements contained in all applicable provisions
of its agreements for borrowed money and there has not occurred any event of
default, or any condition, act or event, which upon the giving of notice or
lapse of time or both, would constitute an event of default, under its
agreements for borrowed money, except for defaults that do not materially affect
the Guarantor's right, authority and ability to perform its obligations under
the Marriott Documents or do not materially impair the Collateral Trustee's or
the Holders' rights, remedies or security under this Interest/Principal
Guaranty.
(g) There is no action, suit or proceeding pending or, to the best of
the Guarantor's knowledge, threatened against or otherwise affecting the
Guarantor before any court or other governmental authority or any arbitrator
which may reasonably be expected to materially adversely affect the Guarantor's
ability to perform its obligations hereunder or under any other Marriott
Document.
(h) After giving effect to the transactions contemplated by the
Indenture, the Notes, this Interest/Principal Guaranty and the Principal
Guaranty, the Guarantor is Solvent.
(i) The Guarantor will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises; provided, however, that the Guarantor
shall not be required to preserve any such right or franchise if it shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Guarantor.
SECTION 7. Events of Default. An "Event of Default" shall exist under
this Interest/Principal Guaranty if any of the following shall have occurred:
(a) the Guarantor defaults in the payment of its obligations with
respect to this Interest/Principal Guaranty as and when the same shall become
due and payable;
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(b) the Guarantor defaults in the payment, observation or performance
of any covenant, condition or agreement set forth herein (other than the payment
of the Obligations) and such failure continues for more than thirty (30) days
after written notice of such default has been given to the Guarantor by the
Subordinated Trustee;
(c) any event of default under any Indebtedness (or any Refinancing
thereof), whether now existing or hereafter created, issued pursuant to the
Indenture, dated as of March 1, 1985, between the Guarantor and The First
National Bank of Chicago, as trustee (the "Marriott Indenture"), if either (i)
such event of default results from any failure to pay all or any portion of such
Indebtedness as and when due (after giving effect to any applicable cure period)
or (ii) as a result of such event of default such Indebtedness (or such
Refinancing) shall become due and payable prior to the stated maturity thereof.
As used in this Section, "Refinancing" shall mean any Indebtedness issued in
exchange for or the proceeds of which are used to repay, refund, refinance or
otherwise retire for value Indebtedness under the Marriott Indenture or any
Refinancing;
(d) the entry by a court having jurisdiction of a decree or order for
relief in respect of the Guarantor in an involuntary case or proceeding
commenced against the Guarantor under any applicable Federal or state
bankruptcy, insolvency, reorganization (relating to an insolvency) or other
similar law or the appointment of a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Guarantor, or of any
substantial part of its property, or in connection with such a proceeding
ordering the winding up or liquidation of its affairs, and any such decree or
order for relief or any such appointment remains unstayed and in effect for a
period of ninety (90) consecutive days;
(e) the commencement by the Guarantor of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization (in
connection with an insolvency) or other similar law or the commencement by the
Guarantor of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Guarantor to the entry of a decree or order for
relief in an involuntary case or proceeding commenced against the Guarantor
under any applicable Federal or state bankruptcy, insolvency, reorganization (in
connection with the insolvency of the Guarantor) or other similar law, or the
filing by the Guarantor of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state bankruptcy,
insolvency or similar law, or the consent by the Guarantor to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
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of any substantial part of the property of the Guarantor, or the making by the
Guarantor of an assignment for the benefit of creditors generally, or the
admission by the Guarantor in writing of its inability to pay its debts
generally as they become due;
(f) any warranty, representation or other statement by the Guarantor
contained in this Interest/Principal Guaranty or any other writing delivered in
connection herewith or in connection with the Indenture or any other Marriott
Document shall prove to have been false or misleading in any material respect
when made and (i) the same is not cured or corrected within thirty (30) days
after written notice thereof to the Guarantor by the Collateral Trustee or any
Series Trustee, or (ii) the same cannot be cured; or
(g) the Guarantor fails to pledge the Guaranty Support Collateral if
and as required in accordance with Article Fourteen of the Indenture.
The Guarantor acknowledges that an Event of Default under this
Interestl/Principal Guaranty shall constitute an Event of Default under the
Indenture with the effect as in the Indenture provided.
SECTION 8. Guarantor's Obligations Unconditional.
(a) The Guarantor hereby guaranties, subject to the Maximum Principal
Guarantied Amount and the Maximmm Interest Guarantied Amount and, in the case of
the Interest Obligations, to the provisions of Section 2(d), that the
Obligations will be paid strictly in accordance with the terms of the Indenture.
The liability of the Guarantor hereunder shall be absolute and unconditional
irrespective of: (i) any lack of validity, irregularity or enforceability of the
Indenture, this Interest/Principal Guaranty, the Principal Guaranty, the Notes,
the Real Estate Security Documents or any other agreement or instrument relating
thereto; (ii) any change in the time, manner or place of payment of or in any
other term in respect of all or any of the Obligations, or any other amendment
or waiver of, or consent to, any departure from the Indenture, this
Interest/Principal Guaranty, the Principal Guaranty, the Real Estate Security
Documents, the Notes or any other agreement or instrument relating thereto;
(iii) any exchange or release of or non-perfection of any lien on or security
interest in, any collateral, or any release or amendment or waiver of or consent
to any departure from the Deed, the Secured Note, the Indenture or the Notes
granted by the Collateral Trustee or by any Holder, for all or any of the
Obligations, provided, however, that, notwithstanding the foregoing, no such
change, release, amendment, waiver or consent shall, without the consent of the
Guarantor, increase the Yield Maintenance Amount, the Principal Amount of the
Notes, the Original Principal Amount of the Notes,
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the Interest Rate, the Payment Rate, the Default Rate, the Deferred Interest or
the Accreted Amount thereon or increase any premium payable upon redemption
thereof; (iv) any failure to enforce the provisions of the Indenture, any Real
Estate Security Documents, any Note or any other agreement or instrument
relating thereto; or (v) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Owner, the Issuer or the
Collateral Trustee or any other guarantor with respect to the Obligations or the
Guarantor with respect hereto or the obligations of the Guarantor under any
Marriott Documents.
(b) This Interest/Principal Guaranty (i) is a continuing guaranty and
shall remain in full force and effect until the indefeasible satisfaction in
full of the Obligations and the payment of the other expenses to be paid by the
Guarantor pursuant hereto; and (ii) shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by any Holder upon the
insolvency, bankruptcy or reorganization of the Owner, the Issuer or otherwise,
all as though such payment had not been made.
(c) The Guarantor understands that upon the occurrence of an "Event of
Default" under the Deed causing the acceleration of the Secured Note, any
proceeds realized as a result of the foreclosure of the Mortgaged Premises or
any part thereof, or other enforcement of the Deed or any other disposition of
any collateral security for the Secured Note shall be deemed to have been
applied in the order of priority established by Section 506(a) of the Indenture,
notwithstanding that, as a result of the direction of any court, the Collateral
Trustee shall apply any of such payments or proceeds in any other or different
order of priority. Therefore, the Guarantor further agrees that in the event net
proceeds shall be realized as a result of the foreclosure of the Mortgaged
Premises or other enforcement of the Deed or otherwise (whether prior to or
after maturity of the Secured Note) or net proceeds shall be realized upon the
disposition of any other collateral security for the Secured Note, or if the
Collateral Trustee receives any other payments or prepayments of the Secured
Note or with respect of any of the collateral security for the Secured Note,
then, irrespective of the collateral security in respect of which such proceeds
were derived, without regard to the priority of application of such proceeds
pursuant to the Real Estate Security Documents, such payments or net proceeds
shall, for purposes of this Interest/Principal Guaranty, be deemed allocable,
and be applied, in accordance with the priorities established by Section 506(a)
of the Indenture.
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SECTION 9. Waivers; Waiver of Subrogation.
(a) The Guarantor hereby waives (i) promptness and diligence; (ii)
notice of acceptance and notice of the incurrence of any Obligation by the
Issuer; (iii) notice of any actions taken by the Issuer, any Holder, the
Collateral Trustee, any Series Trustee or any other party under the Indenture,
the Real Estate Security Documents or any other agreement or instrument relating
thereto; (iv) notice of any actions against the Owner taken by the Issuer, any
Holder, the Collateral Trustee, any Series Trustee or any other party under the
Indenture, the Real Estate Security Documents or any other agreement or
instrument relating thereto; (v) (except for notices and demands for which
express provision is made in this Interest/Principal Guaranty) all other
notices, presentments, demands and protests, and all other formalities of every
kind in connection with the enforcement of the Obligations or of the obligations
of the Guarantor hereunder, the omission of or delay in which, but for the
provisions of this Section 9, might constitute grounds for relieving the
Guarantor of its obligations hereunder; (vi) the filing of a claim with a court
in the event of merger or bankruptcy of the Issuer or the Owner; and (vii) any
requirement including, without limitation, the provisions of Official Code of
Georgia Annotated Section 10-7-24, that the Collateral Trustee, any Series
Trustee or any Holder protect, secure, perfect or insure any security interest
or lien or any property subject thereto or exhaust any right or take any action
against the Owner, the Issuer or any other Person or any collateral.
(b) Until the Notes and the Secured Note have been indefeasibly paid in
full, the Guarantor will not exercise any rights which it may have or acquire by
way of subrogation hereunder, by any payment made by it hereunder or otherwise.
Until the Notes and the Secured Note have been indefeasibly paid in full, the
Guarantor hereby unconditionally and irrevocably waives any subrogation rights
and any rights of reimbursement, contribution or indemnity from or with respect
to the Collateral Trustee, the Issuer, the Owner or AMMLP whether now or
hereafter existing and whether arising under contract, under law or equity or
otherwise. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time prior to the indefeasible payment in full of the
Notes and the Secured Note, and all such other expenses, such amount (subject to
the limitations of Section 2 hereof) shall be paid over to the Collateral
Trustee, in the original form and on the date of receipt thereof, with any
necessary endorsements, to be applied in whole or in part by the Collateral
Trustee against the Obligations, whether matured or unmatured, and all such
other expenses in accordance with the terms of this Interest/Principal Guaranty
and the Indenture, as such Indenture relates to the Notes.
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SECTION 10. Submission to Jurisdiction; Waivers.
(a) By the execution and delivery of this Interest/Principal Guaranty,
the Guarantor hereby irrevocably submits, to the extent permitted by applicable
law, to the exclusive jurisdiction of any New York State or Federal court
sitting in New York City, Borough of Manhattan, or of any Georgia State or
Federal Court sitting in Xxxxxx County, Georgia in any action or proceeding
arising out of or relating to the Indenture, this Interest/Principal Guaranty or
the Notes, and the Guarantor hereby irrevocably agrees that all claims against
it with respect to such action or proceeding against the Guarantor may be heard
and determined in such courts. To the extent permitted by applicable law, no
other court, except those described in the preceding sentence, will have any
jurisdiction in any action or proceeding against the Guarantor arising out of or
relating to the Indenture, this Interest/Principal Guaranty or the Notes. The
Guarantor hereby irrevocably appoints The Xxxxxxxx-Xxxx Corporation System, Inc.
(the "Process Agent") at its offices at Xxx Xxxx & Xxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 as its agent
to receive, on behalf of the Guarantor and its property, service of the summons
and complaint and any other process which may be served in any such action or
proceeding in the courts referred to in the first sentence of this Section 10.
Such service may be made by delivering by hand or certified or overnight mail a
copy of such process to the Guarantor, in care of the Process Agent at either of
the Process Agent's addresses set forth above and the Guarantor hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf, with delivery of a copy thereof to the Guarantor in the same manner
and to the same address as notices are required to be delivered to the Guarantor
under Section 11. To the extent permitted by applicable law, the Guarantor
agrees that a final judgment obtained in any such court described in the first
sentence of this Section 10 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) Subject to the exclusive jurisdiction provided in Subsection (a)
above, nothing in this Section 10 shall affect the right of the Collateral
Trustee or any Holder to serve legal process in any other manner permitted by
law.
(c) To the extent that the Guarantor has or hereafter may acquire any
immunity from jurisdiction of any such court referred to in the first sentence
of Subsection (a) above or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, to the extent permitted by
applicable law, the Guarantor hereby irrevocably
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waives such immunity with respect to its obligations under the Indenture, this
Interest/Principal Guaranty and the Notes.
(d) The Guarantor hereby irrevocably waives, to the extent permitted by
applicable law, any objection, including, without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any such action or proceeding in
such respective courts referred to in the first sentence of Subsection (a)
above.
(e) The Guarantor and each Holder, by its purchase of the Notes,
irrevocably waive (and, in the case of each Holder, direct the Collateral
Trustee to waive), to the extent permitted by applicable law, all right to trial
by jury in any action, proceeding or counterclaim arising out of or relating to
the Indenture, this Interest/Principal Guaranty or the Notes or the transactions
contemplated hereby or thereby.
(f) The appointment of the Process Agent pursuant to Subsection (a)
above shall be irrevocable so long as the Holders shall have any rights pursuant
to the terms of this Interest/Principal Guaranty until the appointment of a
successor by the Guarantor with the consent of the Collateral Trustee (which
consent will not be unreasonably withheld or delayed) and such successor's
acceptance of such appointment. The Guarantor further agrees to take any and all
action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
such agent or successor.
SECTION 11. Notices, Etc. All notices and other communications provided
for hereunder to be given to
(a) the Collateral Trustee by the Guarantor shall be deemed sufficient
for every purpose hereunder when received by the Collateral Trustee at its
Corporate Trust Office, 00 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: Corporate Trust Department, either personally, by courier, telegram,
facsimile transmission or mailed, first-class postage prepaid, or
(b) the Guarantor by the Collateral Trustee shall be sufficient for
every purpose hereunder when received by the Guarantor at 00000 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Legal Department, with copies to the
Issuer, or at any other address for the Guarantor filed with the Collateral
Trustee by the Guarantor if in writing and either delivered personally with
receipt acknowledged, by courier with receipt acknowledged, or mailed by
registered or certified mail, first-class postage prepaid, return receipt
requested. Any notice or other communication delivered under this Section ll(b)
shall be deemed given or served as of the date
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of the delivery to the Guarantor, except that if a notice or other communication
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 12. Miscellaneous.
(a) The Guarantor will make each payment hereunder in lawful money of
United States of America and in immediately available funds to the trust account
designated by the Collateral Trustee.
(b) No amendment of any provision of this Interest/Principal Guaranty
shall be effective unless it is in writing and signed by the Guarantor, the
Issuer and the Collateral Trustee, and no waiver of any provision of this
Interest/Principal Guaranty, and no consent to any departure by the Guarantor
therefrom, shall be effective unless it is in writing and signed by, the Issuer
and the Collateral Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(c) No failure on the part of the Collateral Trustee or any Holder to
exercise, and no delay in exercising, any right hereunder or under the Indenture
or any other agreement or instrument related thereto shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Collateral Trustee or any Holder provided herein, in the
Indenture and in any other agreement or instrument related thereto are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Collateral Trustee and the Holders under the
Indenture or any other agreement or instrument related thereto against any party
thereto are not conditional or contingent on any attempt by the Collateral
Trustee or any Holder to exercise any of its rights under the Indenture and the
Real Estate Security Documents or any other agreement or instrument related
thereto against such party or against any other Person.
(d) Any provision of this Interest/Principal Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
(e) This Interest/Principal Guaranty shall (i) be binding on the
Guarantor and its successors and assigns, and (ii) inure, together with all
rights and remedies of the Collateral Trustee and each Holder hereunder, to the
benefit of each Holder
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and its successors, transferees and assigns. Without limiting the generality of
clause (ii) of the immediately preceding sentence, each Holder may assign or
otherwise transfer its Note and its rights under the Indenture or any other
agreement or instrument related thereto in accordance with the terms of the Note
and the Indenture, to any other Person, and such other Person shall thereupon
become vested with all of the benefits with respect thereto granted to the
Holder herein or otherwise. None of the rights or obligations of the Guarantor
hereunder may be assigned or otherwise transferred without the prior written
consent of the Issuer and the Collateral Trustee.
(f) This Interest/Principal Guaranty shall be governed by and construed
in accordance with the law of the State of New York applicable to contracts made
and to be performed wholly within such State.
(g) This Interest/Principal Guaranty shall not be valid or obligatory
for any purpose as to any Note until a certificate of authentication of such
Note shall have been manually executed by or on behalf of the Collateral
Trustee.
(h) Time is of the essence in the performance of this
Interest/Principal Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Interest/Principal
Guaranty to be executed by an officer thereunto duly authorized, as of the date
first above written.
MARRIOTT CORPORATION
By: Xxxxxx X. Xxxxxxx, Xx.
------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Asst. Treasurer
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