Exhibit 4.2
IRREVOCABLE TRUST AGREEMENT
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Irrevocable Trust Agreement, dated as of December 21, 1995 (the
"Agreement"), between Host Marriott Corporation (the "Company") and The First
National Bank of Chicago, a banking association formed under the laws of the
United States of America (the "Trustee").
W I T N E S S E T H:
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WHEREAS, the Board of Directors of the Company has heretofore
authorized the issuance and sale of shares of a series of preferred stock of the
Company, designated as Series A Cumulative Convertible Preferred Stock
("Convertible Preferred Stock") pursuant to that certain Certificate of
Designation Rights and Preferences of the Series A Cumulative Convertible
Preferred Stock without par value of Host Marriott Corporation, formerly known
as Marriott Corporation (the "Certificate of Designation");
WHEREAS, the Company has outstanding on the date hereof 10.888 shares
of its Convertible Preferred Stock represented by 10,888 shares of publicly
traded depositary shares ("Depositary Shares");
WHEREAS, the Board of Directors of the Company have determined to
cause the Company to call for redemption (the "Redemption") any and all shares
of Convertible Preferred Stock on January 15, 1996 (the "Redemption Date")
pursuant to Section 4 of the Certificate of Designation;
WHEREAS, on December 7, 1995, the Company gave to holders of
Convertible Preferred Stock notice of the Redemption pursuant to Section 4(c) of
the Certificate of Designation;
WHEREAS, the Company desires to deposit in trust, for the account of
the holders of shares of Convertible Preferred Stock to be redeemed, $683,684.74
representing funds sufficient to pay, in full, the redemption price for the
outstanding shares of Convertible Preferred Stock (the "Redemption Fund"), as
permitted by Section 4(d) of the Certificate of Designation;
WHEREAS, the Trustee has full power and authority to execute this
Agreement and to accept the trust imposed upon it;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
ARTICLE I
APPOINTMENT OF TRUSTEE
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1.1 Appointment of Trustee. The Company hereby appoints The First
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National Bank of Chicago as Trustee hereunder, and the Trustee accepts the trust
created by this Agreement upon the terms and conditions hereof.
ARTICLE II
REDEMPTION
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2.1 Covenant to Redeem. The Company hereby irrevocably covenants to
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redeem in accordance with the Certificate of Designation all shares of the
Convertible Preferred Stock outstanding on the Redemption Date at the redemption
price of $62,792.50 per share of Convertible Preferred Stock, representing a
redemption price per Depositary Share of $62.7925 (the "Redemption Price"). All
references herein to Convertible Preferred Stock and the redemption thereof
shall be deemed to include a reference to Depositary Shares and the redemption
of such Depositary Shares.
2.2 Corporate Authorization. The Company represents that it has
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taken all corporate action necessary to authorize the Company's election to
redeem the Convertible Preferred Stock.
2.3 Notice of Redemption. The Company represents that it has given
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the holders of the Convertible Preferred Stock notice which complies, in all
material respects, with the requirements for such notice set forth in Section
4(c) of the Certificate of Designation.
ARTICLE III
THE TRUST ESTATE
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3.1 Assignment of Rights and Interests. With respect to the
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Convertible Preferred Stock, there is hereby created and established with the
Trustee a special and irrevocable trust (the "Trust") to be held by the Trustee
separate and apart from all other assets of the Company or the Trustee. The
Company hereby transfers and assigns to the Trustee and its successors, in
trust, for the purposes herein specified, all right, title and interest of the
Company in and to the Redemption Fund, for the benefit of holders of Convertible
Preferred Stock. The Redemption Fund held in trust hereunder as well as any
interest received thereon by the Trustee are hereinafter referred to as the
"Trust Estate."
The Trustee shall deposit into the Trust Estate, as and when received
by the Trustee, the Redemption Fund and any interest or other payments received
thereon.
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Pursuant to the Certificate of Designation, shares of Convertible
Preferred Stock are convertible into shares of common stock, $1.00 par value per
share ("Common Stock"), of the Company until the close of business on January 5,
1996. Upon the Trustee's receipt of any notice from First Chicago Trust Company
of New York, Conversion and Redemption Agent for the Convertible Preferred Stock
(the "Conversion and Redemption Agent"), stating that a specified number of
shares of Convertible Preferred Stock have been converted into shares of Common
Stock pursuant to the terms of the Certificate of Designation, the Trustee shall
promptly return to the Company from the Redemption Fund any funds in respect of
such shares of Convertible Preferred Stock converted into shares of Common
Stock.
3.2 Purpose of Trust. The Trust is established for the purpose of
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satisfying the Company's obligations in respect of the redemption of the
Convertible Preferred Stock. The Trust Estate will be used to pay, on the
Redemption Date, the Redemption Price, which includes accrued and unpaid
dividends on the Convertible Preferred Stock up to and including the Redemption
Date. On the Redemption Date, and upon the request of the Conversion and
Redemption Agent, the Trustee shall pay to the Conversion and Redemption Agent
funds in an amount equal to the aggregate Redemption Price for shares of
Convertible Preferred Stock for the Conversion and Redemption Agent specifies
that which holders have properly surrendered for redemption through the
Redemption Date. Thereafter, and until termination of the Trust pursuant to
Section 5.1, at the request of the Conversion and Redemption Agent, the Trustee
shall pay to the Conversion and Redemption Agent the Redemption Price for any
shares of Convertible Preferred Stock properly surrendered to the Conversion and
Redemption Agent for redemption. Any securities, cash or other assets
constituting a part of the Trust Estate in excess of the amount necessary to
redeem shares of Convertible Preferred Stock shall be paid over and distributed
to the Company from, and free of, the applicable Trust pursuant to Section 3.1
or Section 5.1 hereof. Except as provided in this Article or Section 5.1, the
Trust Estate shall not be used for any other purpose.
3.3 Administration of Trust Estate. Monies deposited in the Trust
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Estate shall be invested by the Trustee at the direction of the Company.
ARTICLE IV
THE TRUSTEE
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4.1 Limitations on Liability.
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(a) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement. The liability of the Trustee for the
payment of the Redemption Price to the holders of the Convertible Preferred
Stock shall be limited to the application of the cash (or any other assets) in
the Trust Estate.
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(b) The Trustee may rely, and shall be protected in acting or
refraining from acting in reliance upon, any direction, certificate, statement
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper person or persons.
(c) The Trustee may consult with counsel or other experts and any
written opinion of such counsel or other experts shall be full and complete
authorization and protection with respect to any action taken or suffered or
omitted by the Trustee hereunder in good faith and in accordance with such
opinion of counsel or other experts.
(d) The Trustee shall not be liable for any actions taken, suffered or
omitted by it and believed by it to be authorized or within its duties or powers
conferred upon it by this Agreement so long as the Trustee is not acting in bad
faith or with negligence.
(e) The Trustee may execute any of the trust powers hereunder and
perform any duty hereunder and exercise any right hereunder either directly or
by or through its agents or attorneys.
(f) The Trustee shall have no duty with respect to amounts payable to
it in respect of the Trust Estate other than to receive them and to apply the
amounts actually received in accordance with this Agreement. The Trustee shall
not be obligated to take legal action to enforce the payment obligations of the
issuers of any securities in the Trust Estate. The Company may, after 10 days'
written notice to the Trustee, enforce any such obligations, in the Company's
name or in the Trustee's name, at the Company's sole expense.
(g) The Trustee shall have no duty to see to any filing, recording or
registration of this Agreement or of any agreement amendatory or supplemental
hereto or of any instrument of assignment, conveyance, or further assurance, or
to the payment of any taxes, fees or charges in connection therewith, or to give
any notice with respect thereto or to inquire or see to the payment of, or be
under any duty in respect of, any tax or assessment or other governmental charge
which may be levied or assessed on the Trust Estate or any part thereof or
against the Company. The Trustee shall cooperate with the Company to the extent
necessary to enable the Company to take any of the actions contemplated by this
paragraph, but all at the Company's expense.
(h) The Trustee shall not be required to post any bond or other
security or risk any funds in connection with its duties as Trustee hereunder.
(i) The Trustee shall not be liable for any loss resulting from any
investment made pursuant to the terms of this Agreement, except as otherwise
provided by Section 4.1(d) hereof.
4.2 Indemnification. The Company agrees to indemnify, defend and
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hold harmless the Trustee and its successors, assigns, agents and servants, from
and against any
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and all liabilities, losses, damages, penalties, claims, actions, suits, costs,
expenses and disbursements (including reasonable legal fees and expenses) of
whatsoever kind and nature, which may be imposed on, incurred by or asserted
against, at any time, the Trustee, arising from or out of the execution,
delivery or administration, of this Agreement (including, without limitation,
the establishment of the Trust Estate, the acceptance of the cash, securities or
other assets deposited therein, the sufficiency of the Redemption Fund, the
retention of the Redemption Fund or the proceeds thereof and any payment,
transfer or other application of securities or cash by the Trustee in accordance
with the provisions of this Agreement or as may arise by reason of any act,
omission or error of the Trustee made in good faith in the conduct of its duties
hereunder) except for those caused by its own negligence or bad faith. The
obligations of the Company to indemnify the Trustee pursuant to this paragraph
shall survive the termination of this Agreement. The Trustee shall have no
right to obtain payment from the Trust Estate of amounts owing to the Trustee
pursuant to this Section 4.2.
4.3 Compensation of the Trustee. In consideration of the service
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rendered by the Trustee under this Agreement, the Company agrees to and shall
pay to the Trustee compensation as agreed from time to time between the Trustee
and the Company. The Trustee shall be reimbursed for its out-of-pocket costs,
expenses and attorneys fees and expenses reasonably incurred by it as Trustee
with respect to the Trust Estate. The Trustee shall have no right to obtain
payments of its fees and expenses hereunder from the Trust Estate. The
provisions of this Section 4.3 shall survive the termination of this Agreement.
ARTICLE V
MISCELLANEOUS
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5.1 Termination.
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(a) This Agreement shall terminate upon the earlier to occur of (i)
the payment by the Trustee of the Redemption Price in respect of all shares of
Convertible Preferred Stock outstanding on the Redemption Date or (ii) January
15, 1998. Upon termination of this Agreement, any cash, securities or other
assets remaining in the Trust Estate shall be transferred promptly to the
Company. Any portion of the Redemption Fund which shall remain unclaimed by the
holders of Convertible Preferred Stock as of January 15, 1998 shall be promptly
repaid to the Company and thereafter the holder of any such shares shall look
only to the Company for the payment of the Redemption Price.
5.2 No Effect on Certificate of Designation and Convertible Preferred
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Stock. Except as expressly provided in the Certificate of Designation, this
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Agreement (and the consummation of the transactions contemplated hereby) is not,
and shall not be construed to be, a termination of or an amendment to the
Certificate of Designation, nor shall it alter any provision of the Convertible
Preferred Stock.
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5.3 Notices. All instruction, notices and other communications shall
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be given by mail, addressed as follows:
In the case of the Company:
Host Marriott Corporation
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Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
In the case of the Trustee:
The First National Bank of Chicago
c/o First Chicago Trust Company of New York
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Mail Suite 4607
or at any other address furnished in writing by any of the parties hereto.
5.4 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
5.5 Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
HOST MARRIOTT CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇. ▇. ▇▇▇▇▇▇▇
Vice President
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