Exhibit 99.5
TAX SHARING AGREEMENT
TAX SHARING AGREEMENT, dated as of December 29, 1995, among Host
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Marriott Corporation, a Delaware corporation ("Host Marriott"), Host Marriott
Services Corporation, a Delaware corporation ("Services"), and their respective
direct and indirect subsidiaries. References herein to a "party" (or "parties")
to this Agreement, shall refer to Host Marriott, Services, and where appropriate
and the context so requires, their subsidiaries.
WHEREAS, Host Marriott and its subsidiaries have joined in filing
consolidated federal Tax Returns and certain consolidated, combined or unitary
state, local or foreign Tax Returns;
WHEREAS, Host Marriott and Services have entered into that certain
Distribution Agreement, dated as of the date hereof (the "Distribution
Agreement"), pursuant to which Host Marriott will distribute all of the
outstanding common stock in Services to its stockholders in a transaction
intended to qualify for tax-free treatment under Code Section 355 (the "Spin-
off");
WHEREAS, pursuant to the Spin-off, Services and its subsidiaries will
leave the Pre-Spin-off Group; and
WHEREAS, the parties hereto wish to provide for (i) allocations of,
and indemnifications against, certain liabilities for Taxes, (ii) the
preparation and filing of Tax Returns on a basis consistent with prior practice
and the payment of Taxes with respect thereto, and (iii) certain related
matters;
NOW THEREFORE, in consideration of their mutual promises, the parties
hereby agree as follows:
1. Definitions.
When used herein the following terms shall have the following
meanings:
"Affiliate" -- with respect to any corporation (the "given
corporation"), each person, corporation, partnership or other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the given corporation. For
purposes of this definition, "control" means the possession, directly or
indirectly, of 50% or more of the voting power or value of outstanding voting
interests.
"Affiliated Group" -- an affiliated group of corporations within the
meaning of Code Section 1504(a) for the Taxable Period or, for purposes of any
state income tax matters, any consolidated, combined or unitary group of
corporations within the meaning of the corresponding provisions of tax law for
the state in question.
"Caterair Transaction" -- that certain transaction dated as of
December 15, 1989 pursuant to which certain federal Tax audit adjustments have
been proposed.
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"Closing" -- the time at which the Spin-off shall become effective on
the Closing Date.
"Closing Date" -- the date on which the Spin-off is effected by Host
Marriott.
"Code" -- the Internal Revenue Code of 1986, as amended, or any
successor thereto, as in effect for the Taxable Year in question.
"Combined Jurisdiction" -- for any Taxable Period, any state, local or
foreign jurisdiction in which Host Marriott or a Host Marriott Affiliate is
included in a consolidated, combined, unitary or similar return with Host
Marriott or any Host Marriott Affiliate for state, local or foreign Tax
purposes.
"Distribution Agreement" -- as defined in the preamble to this
Agreement.
"Final Determination" -- (i) a decision, judgment, decree, or other
order by a court of competent jurisdiction, which has become final and
unappealable; (ii) a closing agreement or accepted offer in compromise under
Code Sections 7121 or 7122, or comparable agreements under the laws of other
jurisdictions; (iii) any other final settlement with the IRS or other Taxing
Authority; or (iv) the expiration of an applicable statute of limitations.
"Host Marriott"-- as defined in the preamble to this Agreement.
"Host Marriott Group" -- Host Marriott and each corporation that joins
with Host Marriott in filing a consolidated federal income tax return for any
Post-Closing Taxable Period. For purposes of this Agreement, the Host Marriott
Group shall exist from the beginning of the day immediately after the Closing
Date.
"Host Marriott Member" -- a corporation that was immediately before
the Spin-off a Pre-Spin-off Member and becomes a member of the Host Marriott
Group at the beginning of the day immediately after the Closing Date.
"Information Return(s)" -- with respect to any corporation or
Affiliated Group, any and all reports, returns, declarations or other filings
(other than Tax Returns) required to be supplied to any Tax Authority.
"IRS" -- the Internal Revenue Service.
"Net Tax(es)" -- Taxes (as defined herein) less any related interest
or penalty attributed to such Taxes.
"Overdue Rate" -- a rate of interest per annum that equals LIBOR plus
400 basis points.
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"Post-Closing Straddle Period" -- with respect to any Straddle Period,
the period beginning on the day after the Closing Date and ending on the last
day of such Taxable Year.
"Post-Closing Taxable Period" -- a Taxable Year that begins on or
after the day immediately after the Closing Date.
"Pre-Closing Straddle Period" -- with respect to any Straddle Period,
the period beginning on the first day of such Taxable Year and ending on the
close of business on the Closing Date.
"Pre-Closing Taxable Period" -- a Taxable Year that ends at or before
the close of business on the Closing Date.
"Preliminary Transactions" -- those certain transactions occurring on
or before the Closing Date that are described as "Preliminary Transactions" in
the request for rulings filed with the IRS on August 25, 1995, as supplemented
by subsequent submissions.
"Pre-Spin-Off Affiliate" -- any Affiliate of any Pre-Spin-Off Member.
"Pre-Spin-off Group" -- Host Marriott and each corporation that joined
with Host Marriott in filing a consolidated federal income tax return for any
Pre-Closing Taxable Period. For purposes of this Agreement, the Pre-Spin-off
Group shall terminate at the close of business on the Closing Date.
"Pre-Spin-off Member" -- a corporation that was a member of the Pre-
Spin-off Group at the close of business on the Closing Date.
"Representative" -- with respect to any person or entity, any of such
person's or entity's directors, officers, employees, agents, consultants,
accountants, attorneys and other advisors.
"Separate Return Basis" -- the Tax liability for the Services Group
(or any Services Member) calculated with Services as the common parent of the
Affiliated Group and without regard to any Host Marriott Members.
"Services"-- as defined in the preamble to this Agreement.
"Services Group" -- Services and each corporation that joins with
Services in filing a consolidated federal income tax return for any Post-Closing
Taxable Period. For purposes of this Agreement, the Services Group shall exist
from the beginning of the day immediately after the Closing Date.
"Services Member" -- a corporation that was a Pre-Spin-off Member and
becomes a member of the Services Group at the beginning of the day immediately
after the Closing Date.
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"Spin-off" -- as defined in the Preamble to this Agreement.
"Straddle Period" -- any Taxable Year beginning before and ending
after the close of business on the Closing Date.
"Tax(es)" -- with respect to any corporation or group of corporations,
any and all taxes based upon or measured by net income, gross income or gross
receipts (when levied in lieu of an income tax) or alternative minimum taxable
income, regardless of whether denominated as an "income tax," a "franchise tax"
or otherwise, imposed by any Taxing Authority, whether any such tax is imposed
directly or through withholding, together with any interest and any penalty,
addition to tax or additional amount.
"Taxable Period" -- a Pre-Closing Taxable Period, a Post-Closing
Taxable Period or a Straddle Period.
"Taxable Year" -- a taxable year (which may be shorter than a full
calendar or fiscal year), year of assessment or similar period with respect to
which any Tax may be imposed.
"Tax Benefit(s)" -- (i) in the case of a Tax for which a consolidated
federal, or a consolidated, combined or unitary state or other, Tax Return is
filed, the amount by which the Tax liability of the Affiliated Group or other
relevant group of corporations is actually reduced on a "with and without" basis
(by deduction, entitlement to refund, credit, offset or otherwise, whether
available in the current Taxable Year, as an adjustment to taxable income in any
other Taxable Year or as a carryforward or carryback, and including the effect
of such reduction on other Taxes), plus any interest received with respect to
any related Tax refund, and (ii) in the case of any other Tax, the amount by
which the Tax liability of a corporation is actually reduced on a "with and
without" basis (by deduction, entitlement to refund, credit, offset or
otherwise, whether available in the current Taxable Year, as an adjustment to
taxable income in any other Taxable Year or as a carryforward or carryback, and
including the effect of such reduction on other Taxes), plus any interest
received with respect to any related Tax refund.
"Taxing Authority" -- the IRS and any other domestic or foreign
governmental authority responsible for the administration of any Tax.
"Tax Practices" -- the most recently applied policies, procedures and
practices employed by the Pre-Spin-off Group in the preparation and filing of,
and positions taken on, any Tax Returns of Host Marriott or any Pre-Spin-off
Member or Pre-Spin-off Affiliate for any Pre-Closing Taxable Period.
"Tax Return(s)" -- with respect to any corporation or Affiliated
Group, all returns, reports, estimates, information statements, declarations and
other filings relating to, or required to be filed in connection with, the
payments or refund of any Tax for any Taxable Period.
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2. Obligations, Responsibilities and Rights of Host Marriott and
Services.
(a) Preparation and Filing of Tax Returns.
(i) By Host Marriott. Host Marriott shall prepare and
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timely file (or cause to be prepared and timely filed):
(A) all Tax and Information Returns of the Pre-Spin-off
Group and any Pre-Spin-off Member that are required to be filed on or before the
Closing Date;
(B) all Tax and Information Returns of the Pre-Spin-off
Group and any Pre-Spin-off Member for all Pre-Closing Taxable Periods (other
than such Returns that relate solely to any Services Member or group of Services
Members for all Taxable Years ending after December 28, 1990) that are not
required to be filed on or before the Closing Date;
(C) all Tax and Information Returns of the Host Marriott
Group and any Host Marriott Member for all Straddle Periods and Post-Closing
Taxable Periods; and
(D) all Tax and Information Returns not otherwise
required to be filed by Host Marriott or Services pursuant to this Section
2(a)(i) and Section 2(a)(ii).
(ii) By Services. Services shall prepare and timely file
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(or cause to be prepared and timely filed):
(A) all Tax and Information Returns that relate solely
to any Services Member or group of Services Members for all Pre-Closing Taxable
Periods ending after December 28, 1990 that are not required to be filed on or
before the Closing Date; and
(B) all Tax and Information Returns of the Services
Group and any Services Member for all Straddle Periods and Post-Closing Taxable
Periods.
(b) Provision of Filing Information. Each party shall cooperate
and assist the other party in the preparation and filing of all Tax and
Information Returns subject to Section 2(a) and submit to the other party (i)
all necessary filing information in a manner consistent with past Tax Practices
and (ii) all other information reasonably requested by the other party in
connection with the preparation of such Tax and Information Returns promptly
after such request.
(c) Taxable Year. Services and Host Marriott agree that, for Tax
purposes, (i) the Services Members shall be included in the consolidated federal
Tax Return of the Pre-Spin-off Group for the Taxable Year that ends at the close
of business on the Closing Date (and in all corresponding consolidated, combined
or unitary state or other Tax Returns of the Pre-Spin-off Group) and (ii) the
Services Group and each Services Member shall begin a new
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Taxable Year for purposes of such federal and, to the extent permitted by law,
state Taxes on the day after the Closing Date. The parties further agree that,
to the extent permitted by applicable law, all federal, state or other Tax
Returns shall be filed consistently with this position.
(d) Straddle Period Taxes.
(i) For purposes of this Agreement, Taxes shall be allocated
between the Pre- and Post-Closing Straddle Periods, in Host Marriott's
reasonable judgment with the consent of the appropriate Services' personnel,
which shall not be unreasonably withheld, in the following manner: (A) to the
extent not impractical, Taxes shall be allocated on the basis of the actual
taxable income for each such period, determined by closing the books of the Pre-
Spin-off Group at the close of business on the Closing Date; and (B) to the
extent that such an allocation based on a closing of the books is impractical,
Host Marriott shall be authorized to allocate Taxes based on rounding to the
next nearest accounting period-end.
(ii) Host Marriott shall pay to Services within fourteen
(14) days after receipt of an executed Straddle Period Tax Return prepared by
Services pursuant to Section 2(a)(ii)(B), the excess of any amount so allocated
(based on the amount of Tax shown on such Tax Return) to the Pre-Closing
Straddle Period over the amount of any estimated Taxes previously paid by any
Pre-Spin-off Member to the relevant Taxing Authority prior to the Closing Date;
or Services shall pay to Host Marriott within fourteen (14) days after the
filing of such Tax Return the excess of the amount of any estimated Taxes
previously paid by any Pre-Spin-off Member to the relevant Taxing Authority
prior to the Closing Date over the amount so allocated to such Period.
(e) Payment of Taxes. Host Marriott shall pay (i) all Taxes
shown to be due and payable on all Tax Returns filed by (A) Host Marriott
pursuant to Section 2(a)(i) hereof and (B) Services pursuant to Section
2(a)(ii)(A) hereof and (ii) subject to Section 3, all Taxes that shall
thereafter become due and payable with respect to all Tax Returns filed pursuant
to Sections 2(a)(i) and 2(a)(ii)(A) as a result of a Final Determination;
provided, however, that Services shall reimburse Host Marriott [within fourteen
(14) days of receipt of notification from Host Marriott] for the amount of Net
Taxes that are attributable to any Services Member on a Separate Return Basis
for all Pre-Closing Taxable Periods that shall thereafter become due and payable
as a result of a Final Determination (but excluding (i) Net Taxes attributable
to the Caterair Transaction and (ii) federal Taxes for all Taxable Years ending
on or prior to December 28, 1990). Services shall pay all Taxes attributable to
all Tax Returns filed by Services pursuant to Section 2(a)(ii)(B) hereof.
(f) Amendments to Tax Returns. No Tax Returns for any Pre-
Closing Taxable Periods filed by Host Marriott may be amended without Host
Marriott's and Services' consent, which shall not be unreasonably withheld .
(g) Refunds of Taxes.
(i) Host Marriott shall be entitled to any refund of Taxes
and
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any Tax Benefits realized as a result of a Final Determination with respect to
all Tax Returns filed by Host Marriott pursuant to Section 2(a)(i) and with
respect to all Tax Returns filed by Services pursuant to Section 2(a)(ii)(A);
provided, however, that Host Marriott shall reimburse Services for the amount of
any Tax Benefit attributable to any Services Member for all Pre-Closing Taxable
Periods which arises as a result of a Final Determination. Services shall be
entitled to any refund with respect to all Tax Returns filed by Services
pursuant to Section 2(a)(ii)(B). Any such refunds attributable to a Straddle
Period shall be allocated between the Pre-Closing Straddle Period and Post-
Closing Straddle Period on a basis consistent with the method used to allocate
the Tax liability for such Straddle Period. With respect to Straddle Period Tax
Returns prepared by Services pursuant to Section 2(a)(ii)(B), Host Marriott
shall be entitled to any refund attributable to a Pre-Closing Straddle Period.
(ii) If Host Marriott or any Host Marriott Member receives a
Tax refund or Tax Benefit to which Services or any Services Member is entitled
pursuant to this Agreement, Host Marriott shall pay (in accordance with Section
4) the amount of such Tax refund or Tax Benefit to Services [within fourteen
(14) days of] receipt thereof.
(iii) Except as otherwise provided in this Agreement, if
Services or any Services Member receives a Tax refund or Tax Benefit to which
Host Marriott or any Host Marriott Member is entitled pursuant to this
Agreement, Services shall pay (in accordance with Section 4) the amount of such
Tax refund or Tax Benefit (including any interest received thereon) to Host
Marriott [within fourteen (14) days of] receipt thereof.
(h) Carrybacks. Neither Services nor Host Marriott shall file any
carryback claim for federal Taxes or state, local or foreign Taxes in a Combined
Jurisdiction for the Services Group or any Services Member or the Host Marriott
Group or any Host Marriott Member into a Pre-Closing Taxable Period without the
prior written consent of Host Marriott or Services, as applicable, which shall
not be unreasonably withheld.
3. Indemnification.
(a) By Host Marriott.
(i) Taxes. Except as provided in Section 3(b), Host Marriott
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shall indemnify and hold Services and Services Members harmless against any and
all (A) Taxes attributable to all Tax Returns filed by Host Marriott pursuant to
Section 2(a)(i), (B) with respect to Straddle Period Tax Returns prepared by
Services pursuant to Section 2(a)(ii)(B), Taxes attributable to Pre-Closing
Straddle Periods as shown on such Tax Returns, and (C) Taxes attributable to the
Spin-off or the Preliminary Transactions.
(ii) Member Liability. Except as provided in Sections
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3(a)(i) and 3(b), Host Marriott shall indemnify and hold Services and the
Services Members harmless against each and every liability for Taxes of the Pre-
Spin-off Group under Treasury Regulation Section 1.1502-6 or any similar law,
rule or regulation administered by any Taxing Authority.
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(b) By Services. Services shall indemnify and hold Host Marriott
and Host Marriott Members harmless against any and all (i) Taxes attributable to
all Tax Returns filed by Services pursuant to Section 2(a)(ii)(B) (but excluding
Taxes attributable to Pre-Closing Straddle Periods that are shown on any
Straddle Period Tax Returns), and (ii) all Net Taxes attributable to any
Services Member on a Separate Return Basis for all Pre-Closing Taxable Periods
that shall thereafter become due and payable as a result of a Final
Determination (but excluding (A) Net Taxes attributable to the Caterair
Transaction and (B) federal Taxes for all Taxable Years ending on or prior to
December 28, 1990).
(c) Certain Reimbursements. Services (or Host Marriott, as the
case may be) shall notify Host Marriott (or Services) of any Taxes paid by the
Services Group or any Services Member (or the Host Marriott Group or any Host
Marriott Member) which are subject to indemnification under this Section 3. To
the extent not otherwise provided in this Section 3, any other notification
contemplated by this Section 3(c) shall include a detailed calculation
(including, if applicable, separate allocations of such Taxes between Pre- and
Post-Closing Taxable Periods and Pre- and Post-Closing Straddle Periods and
supporting work papers) and a brief explanation of the basis for indemnification
hereunder. Whenever a notification described in this Section 3(c) is given, the
notified party shall pay the amount requested in such notice to the notifying
party in accordance with Section 4, but only to the extent that the notified
party agrees with such request. To the extent the notified party disagrees with
such request, it shall, within 14 days, so notify the notifying party, whereupon
the parties shall use their best efforts to resolve any such disagreement. Any
payment made after such 14-day period shall include interest at the Overdue Rate
from the date such payment would have been made under Section 4 based upon the
original notice given by the notifying party.
(d) Other Indemnifications. Notwithstanding the foregoing, the
indemnification provisions in this Agreement shall not restrict the scope of any
other indemnification provisions between any Host Marriott Member and any
Services Member as set forth in any other intercompany agreements entered into
in connection with the Spin-off or the Preliminary Transactions, including, but
not limited to, that certain Management and Indemnification Agreement dated as
of May 25, 1995 between Host Marriott and Host Marriott Travel Plazas, Inc.
4. Method, Timing and Character of Payments Required by This
Agreement.
(a) Payment in Immediately Available Funds; Interest. All payments
made pursuant to this Agreement shall be made in immediately available funds.
Except as otherwise provided herein, any payment not made within fourteen (14)
days of when due shall thereafter bear interest at the Overdue Rate from the
date such payment was due.
(b) Characterization of Payments. Any payment (other than interest
thereon) made hereunder by Host Marriott to Services or by Services to Host
Marriott shall be treated by all parties for Tax purposes to the extent
permitted by law, and for accounting purposes to the extent permitted by
generally accepted accounting principles, as non-taxable dividend distributions
or capital contributions made prior to the close of business on the Closing
Date.
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5. Tax Returns; Cooperation; Document Retention; Confidentiality.
(a) Provision of Cooperation, Documents and Other Information.
Upon the reasonable request of any party to this Agreement, Host Marriott and
Services shall provide (and shall cause the members of their respective
Affiliated Groups to provide) the requesting party, promptly upon request, with
such cooperation and assistance, documents, and other information, without
charge, as may reasonably be requested by such party in connection with (i) the
preparation and filing of any original or amended Tax Return, (ii) the conduct
of any audit or other examination or any judicial or administrative proceeding
involving to any extent Taxes or Tax Returns within the scope of this Agreement,
or (iii) the verification by a party of an amount payable hereunder to, or
receivable hereunder from, another party. Such cooperation and assistance shall
include, without limitation: (i) the provision on demand of books, records, Tax
Returns, documentation or other information relating to any relevant Tax Return;
(ii) the execution of any document that may be necessary or reasonably helpful
in connection with the filing of any Tax Return, or in connection with any
audit, proceeding, suit or action of the type generally referred to in the
preceding sentence, including, without limitation, the execution of powers of
attorney and extensions of applicable statutes of limitations, with respect to
Tax Returns which Host Marriott may be obligated to file on behalf of Services
Members pursuant to Section 2(a); (iii) the prompt and timely filing of
appropriate claims for refund; and (iv) the use of reasonable best efforts to
obtain any documentation from a governmental authority or a third party that may
be necessary or helpful in connection with the foregoing. Each party shall make
its employees and facilities available on a mutually convenient basis to
facilitate such cooperation.
(b) Retention of Books and Records. Host Marriott, each Host
Marriott Member, Services and each Services Member shall retain or cause to be
retained all Tax Returns, and all books, records, schedules, workpapers, and
other documents relating thereto, until the expiration of the later of (i) all
applicable statutes of limitations (including any waivers or extensions
thereof), and (ii) any retention period required by law or pursuant to any
record retention agreement. The parties hereto shall notify each other in
writing of any waivers, extensions or expirations of applicable statutes of
limitations. The parties shall provide written notice of any intended
destruction of the documents referred to in this subsection. A party giving such
a notification shall not dispose of any of the foregoing materials without first
offering to transfer possession thereof to all notified parties.
(c) Status and Other Information Regarding Audits and Litigation.
Each party shall use reasonable best efforts to keep the other party advised, as
to the status of Tax audits and litigation involving any issue relating to any
Taxes, Tax Returns or Tax Benefits subject to indemnification under this
Agreement. To the extent relating to any such issue, each party shall promptly
furnish the other party copies of any inquiries or requests for information from
any Taxing Authority or any other administrative, judicial or other governmental
authority, as well as copies of any revenue agent's report or similar report,
notice of proposed adjustment or notice of deficiency.
(d) Confidentiality of Documents and Information. Except as
required by law or with the prior written consent of the other party, all Tax
Returns, documents,
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schedules, work papers and similar items and all information contained therein,
which Tax Returns and other materials are within the scope of this Agreement,
shall be kept confidential by the parties hereto and their Representatives,
shall not be disclosed to any other person or entity and shall be used only for
the purposes provided herein.
6. Contests and Audits.
(a) Notification of Audits or Disputes. Upon the receipt by a
party of notice of any pending or threatened Tax audit or assessment which may
affect the liability for Taxes that are subject to indemnification hereunder,
such party shall promptly notify the other party in writing of the receipt of
such notice.
(b) Control and Settlement. Host Marriott shall have the right and
obligation to control, and to represent the interests of all affected taxpayers
in, any Tax audit or administrative, judicial or other proceeding relating, in
whole or in part, to any Pre-Closing Taxable Period or any other Taxable Period
for which Host Marriott is responsible, in whole or in part, for Taxes under
Sections 2(e) and (3), and to employ counsel of its choice; provided, however,
that, with respect to such issues that may impact Services or any Services
Member for any such Taxable Period, Host Marriott (i) shall in good faith
consult with Services as to the handling and disposition of such issues and (ii)
shall not enter into any settlement that impacts Services or any Services Member
without the written consent of Services, which shall not be unreasonably
withheld; and provided, further, that Services' General Counsel shall hand
deliver to Host Marriott's Tax Director a written response to any notification
by Host Marriott of a proposed settlement within ten days of the receipt of such
notification. If Services' General Counsel fails to so respond within such ten
day period, Services shall be deemed to have consented to the proposed
settlement.
(c) Delivery of Powers of Attorney and Other Documents. Services
shall execute and deliver to Host Marriott, promptly upon request, powers of
attorney authorizing Host Marriott to extend statutes of limitations, receive
refunds, negotiate settlements and take such other actions that Host Marriott
reasonably considers to be appropriate in exercising its control rights pursuant
to Section 6(b), and any other documents reasonably necessary to effect the
exercising of such control rights.
7. Marriott International Tax Sharing Agreement. Notwithstanding
anything to the contrary in this Agreement, the parties hereto agree that the
Tax Sharing Agreement dated October 8, 1993 entered into by and among Host
Marriott (formerly Marriott Corporation), Marriott International, Inc. and their
respective direct and indirect subsidiaries (the "Marriott International
Agreement") shall remain in full force and effect. [To the extent any provision
in this Agreement conflicts with a provision in the Marriott International
Agreement, this Agreement shall govern.]
8. Miscellaneous.
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(a) Effectiveness. This Agreement shall be effective from and
after the Closing Date and shall survive until the expiration of any applicable
statute of limitations; provided, however, that this Agreement shall terminate
immediately upon a termination of the Distribution Agreement in accordance with
the terms of Section 11.07 thereof and thereafter this Agreement shall be of no
further force and effect.
(b) Entire Agreement. Except as provided in the Marriott
International Agreement, this Agreement contains the entire agreement among the
parties hereto with respect to the subject matter hereof. This Agreement
terminates and supersedes, on a prospective basis only, any and all other
sharing or allocation agreements with respect to Taxes in effect at the time
between the Pre-Spin-off Group and the Services Members (except for the Marriott
International Agreement), but shall not affect any such agreement to the extent
applicable only among Host Marriott Members.
(c) Guarantees of Performance. Host Marriott and Services hereby
guarantee the complete and prompt performance by the members of their respective
Affiliated Groups of all of their obligations and undertakings pursuant to this
Agreement. If, subsequent to the close of business on the Closing Date, either
Host Marriott or Services shall be acquired by another entity such that 50% or
more of its common stock is in common control, such acquirer shall, by making
such acquisition, simultaneously agree to jointly and severally guarantee the
complete and prompt performance by the acquired corporation and any Affiliate of
the acquired corporation of all of their obligations and undertakings pursuant
to this Agreement.
(d) Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable, the
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions hereof without including any of such
which may hereafter be declared invalid, void or unenforceable. In the event
that any such term, provision, covenant or restriction is hereafter held to be
invalid, void or unenforceable, the parties hereto agree to use their best
efforts to find and employ an alternate means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction.
(e) Indulgences, etc. Neither the failure nor any delay on the
part of any party hereto to exercise any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or further exercise of the same or any other right, nor
shall any waiver of any right with respect to any occurrence be construed as a
waiver of such right with respect to any other occurrence.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Maryland without
regard to the conflict of law principles thereof, except with respect to matters
of law concerning the internal corporate affairs of any corporate entity which
is a party to or subject of this Agreement, and
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as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.
(g) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement that are routine in
nature shall be made in writing and shall be delivered by hand or mailed by
registered or certified mail (return receipt requested) to the designated
representative of the tax department of each party and confirmed by a copy
thereof directed to the general counsel of each party, while all notices,
requests, demands and other communications of material importance shall be made
in the manner provided in Section 11.04 of the Distribution Agreement and
confirmed by a copy thereof directed to the designated representative of the tax
department of each party.
(h) Modification or Amendment. This Agreement may be amended at
any time by written agreement executed and delivered by duly authorized officers
of Services and Host Marriott.
(i) Successors and Assigns. A party's rights and obligations under
this Agreement may not be assigned without the prior written consent of the
other party. All of the provisions of this Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns, and shall survive any acquisition, disposition or other
corporate restructuring or transaction involving either party.
(j) No Third-Party Beneficiaries. This Agreement is solely for the
benefit of the parties to this Agreement and their respective Affiliates and
should not be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without this Agreement.
(k) Other. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all of such counterparts shall together constitute one and the same
instrument. The section numbers and captions herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof.
(l) Predecessors and Successors. To the extent necessary to give
effect to the purposes of this Agreement, any reference to any corporation,
Affiliated Group or member of an Affiliated Group shall also include any
predecessors or successors thereto, by operation of law or otherwise.
(m) Tax Elections. Nothing in this Agreement is intended to change
or otherwise affect any previous tax election made by or on behalf of the Pre-
Spin-off Group (including the election with respect to the calculation of
earnings and profits under Code Section 1552 and the regulations thereunder).
Host Marriott, as common parent of the Host Marriott Group, shall continue to
have discretion, reasonably exercised, to make any and all elections with
respect to all members of the Pre-Spin-off Group for all Pre-Closing Taxable
Periods for which it is obligated to file Tax or Information Returns under
Section 2(a)(i).
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(n) Injunctions. The parties acknowledge that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. The
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches hereto and to enforce specifically the terms and provisions hereof in
any court having jurisdiction; such remedy shall be in addition to any other
remedy available at law or in equity.
(o) Further Assurances. Subject to the provisions hereof, the
parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate
the transactions contemplated hereby. Subject to the provisions hereof, each
party shall, in connection with entering into this Agreement, performing its
obligations hereunder and taking any and all actions relating hereto, comply
with all applicable laws, regulations, orders and decrees, obtain all required
consents and approvals and make all required filings with any governmental
agency, other regulatory or administrative agency, commission or similar
authority and promptly provide the other party with all such information as it
may reasonably request in order to be able to comply with the provisions of this
sentence.
(p) Setoff. All payments to be made by any party under this
Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.
(q) Costs and Expenses. Unless otherwise specifically provided
herein, each party agrees to pay its own costs and expenses resulting from the
fulfillment of its respective obligations hereunder.
(r) Rules of Construction. Any ambiguities shall be resolved
without regard to which party drafted the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
above written.
HOST MARRIOTT CORPORATION AND SUBSIDIARIES
By:/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name:▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title:Senior Vice President
---------------------------
HOST MARRIOTT SERVICES CORPORATION AND
SUBSIDIARIES
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name:▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title:Senior Vice President
---------------------------
14