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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) November 19, 1999
HOST MARRIOTT CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 001-05664 53-0085950
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State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
10400 Fernwood Road, Bethesda, Maryland 20817-11090
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State or Other Jurisdiction (Zip Code)
The Registrant's telephone number, including area code: (301) 380-9000
Exhibit Index is on page 4
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ITEM 5. OTHER EVENTS
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PREFERRED STOCK OFFERING
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On November 19, 1999, Host Marriott Corporation (the "Company") and
Host Marriott, L.P. (the "Operating Partnership"), executed an Underwriting
Agreement (the "Underwriting Agreement") with Morgan Stanley & Co. Incorporated,
PaineWebber Incorporated, Bear, Stearns & Co. Inc., Deutsche Bank Securities,
Inc., Donaldson, Lufkin & Jenrette Securities Corporation and Prudential
Securities Incorporated as representatives for the several underwriters
(collectively, the "Underwriters"). Subject to the terms and conditions
contained in the Underwriting Agreement, the Company agreed to issue and sell to
the Underwriters $100,000,000 of 10% Class B Cumulative Redeemable Preferred
Stock (the "Preferred Stock"). The Preferred Stock will be issued on November
29, 1999. The price to the public for the Preferred Stock is $25.00 per share,
with underwriting discounts and commissions of $.8125 of the principal amount
at maturity, generating expected net proceeds to the Company (after deducting
estimated expenses of the offering) of approximately $96,750,000 before
expenses payable by the Company. The Preferred Stock will be sold pursuant to an
effective Registration Statement on Form S-3 (File No. 333-67907).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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7(c). EXHIBITS
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1.1 Underwriting Agreement dated November 19, 1999 among Host
Marriott Corporation, Host Marriott, L.P. and Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated, Bear, Stearns & Co.
Inc., Deutsche Bank Securities, Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and Prudential Securities
Incorporated.
4.1 Articles Supplementary (incorporated by reference to Form 8-A of
the Company filed November 23, 1999).
4.2 Form of Stock Certificate (incorporated by reference to Form 8-A
of the Company filed November 23, 1999).
5.1 Legal Opinion of Christopher G. Townsend, senior vice president
and corporate secretary to the Company.
10.1 Form of Second Amendment to Lease Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Host Marriott Corporation
/s/ Christopher G. Townsend
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Christopher G. Townsend
Senior Vice President and Corporate Secretary
November 23, 1999
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EXHIBIT INDEX
7(c). EXHIBITS Page No.
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1.1 Underwriting Agreement dated November 19, 1999 among Host 5
Marriott Corporation, Host Marriott, L.P. and Morgan
Stanley & Co. Incorporated, Paine Webber Incorporated,
Bear, Stearns & Co., Deutsche Bank Securities, Inc., Donaldson,
Lufkin & Jenrette Securities Corporation and Prudential
Securities Incorporated.
4.3 Articles Supplementary (incorporated by reference to
Form 8-A of the Company filed November 23, 1999).
4.4 Form of Stock Certificate (incorporated by reference to
Form 8-A of the Company filed November 23, 1999).
5.1 Legal Opinion of Christopher G. Townsend, 30
senior vice president and corporate secretary to the
Company.
10.1 Form of Second Amendment to Lease Agreement.
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Exhibit 1.1
4,000,000 Shares
HOST MARRIOTT CORPORATION
(a Maryland corporation)
10% Class B Cumulative Redeemable Preferred Stock
UNDERWRITING AGREEMENT
November 19, 1999
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November 19, 1999
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Bear, Stearns & Co. Inc.
Deutsche Bank Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Prudential Securities Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Host Marriott Corporation, a Maryland corporation (the "Company"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") 4,000,000 shares of its 10% Class B Cumulative Redeemable
Preferred Stock, par value $.01 per share (the "Firm Shares"). The Company also
proposes to issue and sell to the several Underwriters not more than an
additional 600,000 shares of its 10% Class B Cumulative Redeemable Preferred
Stock, par value $.01 per share (the "Additional Shares"), if and to the extent
that you, as Managers of the offering, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such shares of preferred stock
granted to the Underwriters in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares", and
the Company's 10% Class B Cumulative Redeemable Preferred Stock, par value $.01
per share, is hereinafter sometimes referred to as the "Class B Preferred
Stock".
The terms of the Shares will be set forth in articles supplementary (the
"Articles Supplementary") to be filed by the Company with the Maryland State
Department of Assessments and Taxation (the "SDAT"). The Company intends to
contribute or otherwise transfer the net proceeds from the sale of the Shares to
Host Marriott, L.P., a Delaware limited partnership (the "Operating
Partnership"), in exchange for Class B Preferred Units (the "Preferred Units")
in the Operating Partnership, the economic terms of which will be substantially
identical to those of the Class B Preferred Stock. The terms of the Units will
be set forth in one or more amendments (individually, an "Amendment" and,
collectively, the "Amendments") to the Operating Partnership's limited
partnership agreement, and the Company, in its capacity as general partner of
the Operating Partnership (the "General Partner"), will enter into an Amendment
each time that the Company issues Shares. The Company will list the Shares on
the New York Stock Exchange (the "NYSE").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 333-67907),
including a prospectus, relating to, among other things, the Shares. The
registration statement as amended at the time it became effective, including the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "Securities Act"), and the documents incorporated or deemed to be
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incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act at the time of such effectiveness, is hereinafter referred to as
the "Registration Statement"; and the related prospectus dated December 30, 1998
(the "Base Prospectus") and prospectus supplement relating to the Shares (the
"Prospectus Supplement"), each in the form first used to confirm sales of
Shares, together with the documents incorporated or deemed to be incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act at
the date of the Prospectus Supplement, are hereinafter referred to,
collectively, as the "Prospectus". If the Company has filed an abbreviated
registration statement to register additional shares of Class B Preferred Stock
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. As used in this
Agreement, all references to any "preliminary prospectus" shall mean,
collectively, the Base Prospectus, any preliminary prospectus supplement used in
connection with the offering of the Shares and the documents incorporated or
deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act. Any references in this Agreement to the date of the
Prospectus shall be deemed to mean the date of the Prospectus Supplement.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described," "set forth" or
"stated" in the Registration Statement, the Prospectus or any preliminary
prospectus, and all other references of like import, shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated or deemed to be incorporated by reference in the Registration
Statement, the Prospectus or such preliminary prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement, the Prospectus or any preliminary prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date of this
Agreement which is deemed to be incorporated by reference in the Registration
Statement, the Prospectus or such preliminary prospectus, as the case may be.
As used herein, (i) the term "Credit Agreement" means the Amended and
Restated Credit Agreement dated as of August 5, 1998 among the Company, as
successor by merger to Host Marriott Corporation, a Delaware corporation, the
Operating Partnership, the lenders party thereto, Wells Fargo Bank, National
Association, The Bank of Nova Scotia and Credit Lyonnais New York Branch, as co-
arrangers, and Bankers Trust Company, as arranger and administrative agent, as
amended, together with all promissory notes, guarantees, guaranty agreements and
pledge or other security agreements entered into by the Company, the Operating
Partnership or any of their respective subsidiaries in connection with any of
the foregoing, in each case as the same may have been or may be amended or
supplemented from time to time; (ii) the term "Senior Note Documents" means,
collectively, the 7% Series A Senior Notes due 2005, the 7% Series B Senior
Notes due 2008, the 8.45% Series C Senior Notes due 2008 and the 8% Series E
Senior Notes due 2006 of the Operating Partnership, the Amended and Restated
Indenture dated as of August 5, 1998 among the Operating Partnership, as
successor by merger to HMH Properties, Inc., a Delaware corporation, the
guarantors and subsidiary guarantors named therein, and Marine Midland Bank, as
trustee, pursuant to which the foregoing notes were issued, and all guarantees,
guaranty agreements and pledge or other security agreements entered into by the
Company, the Operating Partnership or any of their respective subsidiaries in
connection with any of the foregoing, in each case as the same may have been or
may be
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amended or supplemented from time to time; and (iii) all references to any
subsidiary or subsidiaries of the Company shall be deemed to include, without
limitation, the Operating Partnership and the Non-Controlled Subsidiaries (as
defined below).
1. Representations and Warranties. The Company and the Operating
Partnership, jointly and severally, represent and warrant to and agree with each
of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document filed or to be filed pursuant to the Exchange
Act and incorporated or deemed to be incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3 under the Securities Act
complied or will comply, as the case may be, when so filed in all material
respects with the requirements of the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (iii)
the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Maryland, has
the corporate power and authority to own and lease its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly organized, is validly
existing as a corporation, limited or general partnership or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its organization, has power and authority to own and
lease its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or in good standing would not
have a material adverse effect on the
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Company and its subsidiaries, taken as a whole; all of the issued and
outstanding capital stock, partnership interests, limited liability company
interests or other ownership interests, as the case may be (collectively,
"Ownership Interests"), of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and (except for general
partnership interests) non-assessable; approximately 78% of the outstanding
partnership interests in the Operating Partnership are owned directly by
the Company and all of the issued and outstanding Ownership Interests in
each of the Company's other subsidiaries are owned (except as otherwise set
forth in the Prospectus or in Schedule II hereto) directly or indirectly by
the Company, in each case free and clear of all liens, encumbrances, claims
or equities except for liens created by the Pledge Agreement dated as of
August 5, 1998 (the "Pledge Agreement") entered into by the Company and
certain of its subsidiaries in favor of Bankers Trust Company, as
collateral agent; the Company is the sole general partner of the Operating
Partnership and owns, directly, all of the outstanding general partnership
interests in the Operating Partnership; and Schedule II hereto sets forth
the name of each subsidiary of the Company all of whose outstanding
Ownership Interests are not owned, directly or indirectly, by the Company
and accurately sets forth the percentage of the outstanding Ownership
Interests in each such subsidiary which is owned, directly or indirectly,
by the Company.
(e) This Agreement has been duly authorized, executed and delivered by
the Company and the Operating Partnership.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus; and the
outstanding shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), and the Company's Class A Cumulative Redeemable
Preferred Stock, par value $.01 per share (the "Class A Preferred Stock"),
have been duly authorized and validly issued and are fully paid and non-
assessable and none of such shares was issued in violation of any
preemptive or similar rights.
(g) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement against payment of
the consideration specified in this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of the Shares will not be
subject to any preemptive or similar rights.
(h) The Amendments have been duly authorized by the Company in its
capacity as General Partner and, on the Closing Date and any Option Closing
Date (as such terms are defined below), an Amendment will have been duly
executed and delivered by the General Partner on behalf of the Operating
Partnership and will constitute a valid and binding agreement of the
Operating Partnership, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. The
Preferred Units have been duly authorized and, when issued and delivered by
the Operating Partnership to the Company in exchange for the Company's
contribution to the Operating Partnership of the net proceeds from the sale
of the Shares, will be validly issued, fully
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paid and non-assessable limited partnership interests in the Operating
Partnership, and the issuance of the Preferred Units will not be subject to
any preemptive or similar rights.
(i) The execution and delivery by the Company and the Operating
Partnership of, and the performance by the Company and the Operating
Partnership of their respective obligations under, this Agreement
(including, without limitation, the issuance and sale of the Shares to the
Underwriters and the issuance and sale of the Preferred Units to the
Company) will not (A) result in a violation of any provision of the charter
or by-laws of the Company or the limited partnership agreement or
certificate of limited partnership of the Operating Partnership, (B)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, (C) result
in a violation of any law, statute, rule or regulation which is applicable
to the Company or any of its subsidiaries or (D) result in a violation of
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any of its subsidiaries; and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
or the Operating Partnership of their respective obligations under this
Agreement, except (x) such as may be required by the securities or Blue Sky
laws of the various states and any foreign jurisdictions in connection with
the offer and sale of the Shares, (y) such as have been obtained under the
Securities Act and are in full force and effect and (z) such as are
required under the Exchange Act in connection with the listing of the
Shares on the New York Stock Exchange, and except for the filing of the
Articles Supplementary with the SDAT (which filing will be duly made prior
to the Closing Date).
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company and the Operating Partnership, threatened to which
the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each preliminary prospectus filed pursuant to Rule 424 under the
Securities Act complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(m) Neither the Company nor the Operating Partnership is and, after
giving effect to the offering and sale of the Shares, the issuance and sale
of the Preferred Units
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and the application of the proceeds thereof as described in the Prospectus,
neither the Company nor the Operating Partnership will be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(n) The Company and its subsidiaries and, to the knowledge of the
Company and the Operating Partnership in the case of properties leased by
the Company or any of its subsidiaries as lessors, the lessees of such
properties (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(p) There are no contracts, agreements or understandings between the
Company or any of its subsidiaries, on the one hand, and any person, on the
other hand, granting such person the right (i) to require the Company or
any of its subsidiaries to file a registration statement under the
Securities Act with respect to any securities of the Company or any of its
subsidiaries, except for the Registration Rights Agreement dated as of
December 30, 1998 among the Company and those entities specified on
Schedule 1 to the Contribution Agreement dated as of April 16, 1999 or (ii)
to require the Company or any of its subsidiaries to include such
securities with the Shares registered pursuant to the Registration
Statement or in the offering contemplated by the Prospectus.
(q) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
(r) The Company and its subsidiaries have good and marketable title in
fee simple to all land underlying the Company's hotel properties described
in the Prospectus as owned by them and good and marketable title to all
improvements thereon and to all personal property owned by them, in each
case which is material to the business of the Company and its subsidiaries
and in each case free and clear of all liens, encumbrances, claims,
equities, mortgages, security interests or pledges (each, a "Lien"), except
such as are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such
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property by the Company and its subsidiaries; any real property, buildings
and other improvements held under a lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Prospectus; all of the leases pursuant to which the Company or any of its
subsidiaries, as lessor, leases to a third party (each, a "Lessee") any
hotels or other real or personal property, buildings or other improvements
are in full force and effect; all of the management agreements and similar
agreements pursuant to which the Company, any of its subsidiaries or, to
the best knowledge of the Company and the Operating Partnership, any of the
Lessees has contracted with a third party to manage or operate any of the
hotels or other properties owned or leased, as lessee, by the Company or
any of its subsidiaries are in full force and effect; all franchise
agreements between the Company or any of its subsidiaries or , to the best
knowledge of the Company and the Operating Partnership, any of the Lessees,
on the one hand, and Marriott International, Inc., a Delaware corporation
("Marriott International"), or any other hotel operating or management
company (each, a "Manager"), on the other hand, are in full force and
effect; and the Company and its subsidiaries have complied with all of
their respective obligations and agreements under the leases, management
agreements and franchise agreements referred to above and , to the best
knowledge of the Company and the Operating Partnership, no default by any
other party to any of such leases, management agreements or franchise
agreements has occurred and is continuing which, individually or in the
aggregate, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(s) The Class B Preferred Stock will rank, with respect to the payment
of dividends and the distribution of assets upon liquidation, dissolution
or winding up of the Company, pari passu with the Class A Preferred Stock,
senior to the Common Stock and senior to the Company's authorized but
unissued Series A Junior Participating Preferred Stock (the "Junior
Participating Preferred Stock"). The Preferred Units will rank, with
respect to the payment of dividends and distributions and the distribution
of assets upon liquidation, dissolution or winding up of the Operating
Partnership, pari passu with the Operating Partnership's Class A preferred
units and will rank, with respect to the payment of dividends and
distributions and the distribution of assets upon liquidation, dissolution
or winding up of the Operating Partnership, senior to all of the other
limited and general partnership interests in the Operating Partnership
outstanding as of the date of this Agreement, the Closing Date and, if
applicable, the Option Closing Date.
(t) The merger (the "Merger") of Host Marriott Corporation, a Delaware
corporation ("Host Delaware"), with and into the Company, with the Company
as the surviving corporation, qualified as a reorganization under Section
368 of the Internal Revenue Code of 1986, as amended (the "Code").
(u) The Company is organized in conformity with the requirements for
qualification and taxation as a "real estate investment trust" under the
Code and the Company's method of operation will enable it to meet the
requirements for qualification
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and taxation as a "real estate investment trust" under the Code for its
1999 tax year and thereafter.
(v) From and after December 28, 1998, the first date that the
Operating Partnership had two or more partners, the Operating Partnership
at all times has been and will be qualified as a partnership for federal
income tax purposes and the Operating Partnership has not and will not be
treated as a publicly traded partnership taxable as a corporation.
(w) The Company has not been and will not be treated as owning voting
securities of Rockledge Hotel Properties, Inc. or Fernwood Hotel Assets,
Inc. (the "Non-Controlled Subsidiaries") within the meaning of Section
856(c)(4)(B) of the Code.
(x) All real estate leases which the Operating Partnership owns, or in
which the Operating Partnership has an interest, as a lessor or sub-lessor,
including the Harbor Beach Resort Lease (as defined below), will be treated
as true leases for federal income tax purposes.
(y) The Company is eligible to use Form S-3 under the Securities Act.
(z) Schedule III hereto accurately sets forth the jurisdiction of
organization of each subsidiary of the Company named thereon and accurately
indicates whether such subsidiary is a corporation, limited partnership,
general partnership or limited liability company.
(aa) The Class B Preferred Stock does not constitute "Voting Stock" as
defined in the Distribution Agreement dated as of September 15, 1993, as
amended (the "Distribution Agreement"), between the Company, as successor
to Marriott Corporation, a Delaware corporation, and Marriott
International, Marriott International does not and will not have any right
to acquire any Class B Preferred Stock pursuant to the Distribution
Agreement or otherwise, and no notice to or consent, approval or waiver of
Marriott International is required for the issuance and sale of the Shares
as contemplated hereby.
(bb) All of the Shares have been registered under the Company's
registration statement on Form S-3 (Registration No. 333-67907).
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the terms and
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective number of Firm Shares set forth in Schedule I
hereto opposite its name at a purchase price of $24.1875 a share (subject to
adjustment of such purchase price in the case of sales of 375,000 or more shares
to a single purchaser as provided in the second succeeding paragraph).
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly,
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up to 600,000 Additional Shares at a purchase price of $24.1875 a share (subject
to adjustment of such purchase price in the case of sales of 375,000 or more
shares to a single purchaser as provided in the next succeeding paragraph), plus
accrued dividends, if any, to but excluding the Option Closing Date. If you, on
behalf of the Underwriters, elect to exercise such option, you shall so notify
the Company in writing not later than 30 days after the date of this Agreement,
which notice shall specify the number of Additional Shares to be purchased by
the Underwriters and the date on which such shares are to be purchased. Such
date may be the same as the Closing Date (as defined below) but not earlier than
the Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
Notwithstanding the provisions of the two immediately preceding paragraphs,
but solely in the case of sales of 375,000 or more Shares by any Underwriter to
a single purchaser, the purchase price to be paid for such Shares to the Company
by the several Underwriters shall be $24.50 a share plus, solely in the case of
any such Shares which are Additional Shares, accrued dividends, if any, to but
excluding the Option Closing Date. For purposes of the immediately preceding
sentence, Firm Shares and any Option Shares sold by any Underwriter to a single
purchaser shall be aggregated.
The Company hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during
the period beginning on the date of this Agreement through and including the day
which is 30 days after the date of this Agreement, (i) offer, issue, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Class B Preferred Stock or other preferred stock, any shares of any other class
or series of capital stock which is substantially similar to the Class B
Preferred Stock, any preferred securities of a subsidiary trust or similar
financing vehicle, any depositary shares or depositary receipts representing or
evidencing any of the foregoing, or any securities convertible into or
exercisable or exchangeable for any of the foregoing (other than the Shares to
be sold to the Underwriters) or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any shares of Class B Preferred Stock or other preferred stock,
any shares of any other class or series of capital stock which is substantially
similar to the Class B Preferred Stock, any preferred securities of a subsidiary
trust or similar financing vehicle, any depositary shares or depositary receipts
representing or evidencing any of the foregoing, any securities convertible into
or exercisable or exchangeable for any of the foregoing, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Class B Preferred Stock, other securities, in cash or otherwise; provided
that the provisions of this paragraph shall not prevent the issuance by the
Company of its Junior Participating Preferred Stock pursuant to its shareholder
rights plan.
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3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$25.00 a share (the "Public Offering Price") plus accrued dividends, if any, and
to certain dealers selected by you at a price that represents a concession not
in excess of $0.50 a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of $0.45 a share, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on November 29, 1999, or at such
other time on the same or such other date, not later than December 6, 1999, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 2 or on such other date, in any event not later than January 3, 2000, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
temporary or definitive form and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the purchase price therefor set forth in this
Agreement.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become and
shall be effective under the Securities Act prior to the date of this Agreement.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review
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for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities
by any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company in his or her capacity as an executive officer of the Company
and in his or her capacity as an executive officer of the general partner
of the Operating Partnership, to the effect set forth in Section 5(a)(i)
above and to the effect that the representations and warranties of the
Company and the Operating Partnership contained in this Agreement are true
and correct as of the Closing Date and that the Company and the Operating
Partnership have complied with all of their agreements and satisfied all of
the conditions on their part to be performed or satisfied hereunder on or
before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Christopher G. Townsend, Senior Vice President and General
Counsel of the Company, to the effect that:
(i) the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(ii) each Subject Subsidiary (as defined below) has been duly
organized, is validly existing as a corporation, limited or general
partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its organization, has
the power and authority to own and lease its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Such
opinion shall state that the term "Subject
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Subsidiary", as used therein, means the Operating Partnership and each
of the other entities listed on Schedule III to this Agreement;
(iii) the outstanding shares of Common Stock and Class A
Preferred Stock have been duly authorized and validly issued and are
fully paid and non-assessable and none of such shares was issued in
violation of any preemptive or similar rights; and, to the best of such
counsel's knowledge, the issuance of the Shares is not subject to
preemptive or other similar rights arising under any instrument or
agreement to which the Company or any of its subsidiaries is a party or
by which any of them may be bound;
(iv) the outstanding Ownership Interests in each Subject
Subsidiary have been duly authorized and validly issued, are fully paid
and (except for general partnership interests) non-assessable; all of
the outstanding limited partnership interests in the Operating
Partnership are owned (except as otherwise set forth in the Prospectus)
directly by the Company, all of the outstanding general partnership
interests in the Operating Partnership are owned directly by the
Company, and all of the outstanding Ownership Interests in each of the
other Subject Subsidiaries are owned (except as otherwise set forth in
the Prospectus or on Schedule II hereto) directly or indirectly by the
Company, in each case free and clear of all liens, encumbrances,
equities or claims;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership;
(vi) the execution and delivery by the Company and the Operating
Partnership of, and the performance by the Company and the Operating
Partnership of their respective obligations under, this Agreement
(including the issuance and sale of the Shares to the Underwriters and
the issuance and sale of the Preferred Units to the Company) will not
(A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, the Credit
Agreement, any Senior Note Document or, to the best of such counsel's
knowledge, any other agreement or instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or (B) result in a breach or violation
of or default under any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any of
its subsidiaries; and no consent, approval, authorization or order of,
or qualification with, any Maryland or Delaware governmental body or
agency having jurisdiction over the Company or the Operating
Partnership is required under the laws of the State of Maryland or the
Delaware Revised Uniform Limited Partnership Act (the "Partnership
Act") for the offering, issuance or sale of the Shares or the
application of the net proceeds therefrom by the Company as
contemplated by this Agreement or for the issuance and sale of the
Preferred Units by the Operating Partnership to the Company as
contemplated by this Agreement, except such as may be required by
Maryland securities laws and except for the filing of the Articles
Supplementary with the SDAT (which filing has been duly made);
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(vii) The Amendment being entered into on the date of such
opinion has been duly authorized by the Company in its capacity as
General Partner, has been duly executed and delivered by the General
Partner on behalf of the Operating Partnership.
(viii) the statements (A) in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (the "1998 10-K")
under the captions "Business and Properties--Environmental and
Regulatory Matters", "Business and Properties--The Leases", "Business
and Properties--The Management Agreements" and "Business and
Properties--Non-Competition Agreements", (B) in the 1998 10-K under the
caption "Legal Proceedings", as supplemented by the information in note
(14) to the financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999, and (C)
in the Company's Proxy Statement dated April 15, 1999 under the caption
"Certain Relationships and Related Transactions", in each case insofar
as such statements constitute summaries of legal matters, documents or
proceedings, are accurate in all material respects;
(ix) to the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject that are required
to be described in the Registration Statement or the Prospectus and are
not so described or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(x) the Company and its subsidiaries (A) are in compliance with
any and all applicable Environmental Laws, (B) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (C) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; and
(xi) each document filed pursuant to the Exchange Act and
incorporated or deemed to be incorporated by reference in the
Registration Statement or the Prospectus pursuant to Item 12 of Form S-
3 under the Securities Act (except for financial statements and
schedules and other financial and statistical data, as to which such
counsel need not express any opinion) complied when so filed as to form
in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder. In passing upon
compliance as to form of such documents, such counsel may assume that
the statements made and incorporated by reference therein are correct
and complete.
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(d) The Underwriters shall have received on the Closing Date an
opinion of Latham & Watkins, counsel for the Company and the Operating
Partnership, dated the Closing Date, to the effect that:
(i) the Operating Partnership is a limited partnership duly
formed and validly existing under and by virtue of the Partnership Act
and, based solely upon certificates of public officials, is in good
standing under the laws of the State of Delaware and has the
partnership power and authority to own and lease its property and to
conduct its business as described in the Prospectus;
(ii) The Preferred Units have been duly authorized by the
Operating Partnership and, when issued by the Operating Partnership to
the Company in exchange for the Company's contribution to the Operating
Partnership of the net proceeds from the sale of the Shares, will
represent valid limited partnership interests in the Operating
Partnership;
(iii) (A) the execution and delivery by the Company and the
Operating Partnership of this Agreement, the offering, issuance and
sale of the Shares and the application of the net proceeds therefrom by
the Company to acquire Preferred Units from the Operating Partnership
as contemplated by this Agreement, and the issuance and sale of the
Preferred Units by the Operating Partnership to the Company as
contemplated by this Agreement, will not (1) violate any provision of
the limited partnership agreement or certificate of limited partnership
of the Operating Partnership, (2) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, the Senior Note Documents; or (3) violate any federal
law, statute, rule or regulation applicable to the Company or the
Operating Partnership or the Partnership Act; and (B) no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required under federal law or the
Partnership Act for the offering, issuance or sale of the Shares or the
application of the net proceeds therefrom by the Company to acquire
Preferred Units from the Operating Partnership as contemplated by this
Agreement or for the issuance and sale of the Preferred Units by the
Operating Partnership to the Company as contemplated by this Agreement,
except (x) such as may be required under state securities laws in
connection with the offer and sale of the Shares, (y) such as have been
obtained under the Securities Act and are in full force and effect and
(z) such as are required under the Exchange Act in connection with the
listing of the Shares on the New York Stock Exchange;
(iv) the discussion in the Prospectus Supplement under the
heading "Federal Income Tax Considerations", to the extent that it
describes matters of federal income tax law, is correct in all material
respects;
(v) neither the Company nor the Operating Partnership is and,
after giving effect to the offering and sale of the Shares, the
issuance and sale of the Preferred Units and the application of the
proceeds thereof as described in the Prospectus, neither the Company
nor the Operating Partnership will be an
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"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(vi) the Registration Statement and Prospectus (except for the
documents incorporated or deemed to be incorporated by reference
therein and the financial statements and schedules and other financial
and statistical data included or incorporated by reference therein, as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder. In passing upon
compliance as to form of such documents, such counsel may assume that
the statements made and incorporated by reference therein are correct
and complete.
(e) The Underwriters shall have received on the Closing Date an
opinion of Hogan & Hartson, L.L.P., counsel to the Company to the effect
that:
(i) the Company is organized in conformity with the requirements
for qualification and taxation as a real estate investment trust (a
"REIT") under the Code, effective for its taxable year beginning
January 1, 1999, and the Company's current and proposed method of
operation (including the assets that it holds directly and indirectly
through the Operating Partnership) will enable it to meet the
requirements for qualification and taxation as a REIT under the Code
for taxable year 1999 and thereafter;
(ii) The Leases will be respected as leases for federal income
tax purposes. Such opinion will define the term "Leases" as all real
estate leases on the hotels in which the Operating Partnership has a
direct or, through a Subsidiary Partnership, an indirect interest and
pursuant to which the Operating Partnership or a Subsidiary
Partnership, as lessor or sublessor, leases a hotel to a lessee or
sublessee, respectively, and shall state that such term includes,
without limitation, the lease of the Marriott Harbor Beach Resort from
Lauderdale Beach Association to Marriott Hotel Services, Inc. (the
"Harbor Beach Resort Lease"); and will define the term "Subsidiary
Partnership" as each partnership, limited liability company or other
entity treated as a partnership for federal income tax purposes in
which either the Company or the Operating Partnership has a direct or
indirect interest;
(iii) The discussion in the Base Prospectus under the heading
"Federal Income Tax Considerations," to the extent that it describes
matters of federal income tax law, is correct in all material respects;
(iv) The Merger qualified as a reorganization within the meaning
of Section 368(a) of the Code, and no gain or loss was required to be
recognized by either the Company or Host Marriott Corporation, a
Delaware corporation and the predecessor to the Company, solely by
reason of the Merger.
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(v) Based upon, subject to, and limited by the assumptions and
qualifications set forth in such opinion, such counsel confirms their
opinions described in the Base Prospectus under the caption "Federal
Income Tax Considerations", as such opinions were set forth in their
opinion letter to the Company dated December 29, 1998 that was filed
with the Securities and Exchange Commission as an exhibit to the
Registration Statement.
(f) The Underwriters shall have received on the Closing Date an
opinion of Ballard Spahr Andrews & Ingersoll, LLP, special Maryland counsel
to the Company, to the effect that:
(i) the Company has been duly incorporated and is validly
existing under the laws of the State of Maryland and is in good
standing with the SDAT; and the Company has the corporate power to own,
lease and operate its current properties and to conduct its business as
described in the Prospectus under the caption "The Company" and to
enter into and perform its obligations under this Agreement;
(ii) the authorized stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus;
(iii) the Shares have been duly authorized by all necessary
corporate action on the part of the Company for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued, fully paid
and non-assessable; and the issuance of the Shares is not subject to
preemptive rights arising by operation of the laws of the State of
Maryland or under the charter or bylaws of the Company;
(iv) the form of certificate used to represent the Shares
complies in all material respects with the applicable requirements of
the laws of the State of Maryland and the charter and bylaws of the
Company;
(v) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
(including the issuance and sale of the Shares to the Underwriters) do
not result in any violation of the provisions of the charter or by-laws
of the Company or, so far as is known to us, any applicable provision
of any Maryland law, statute, administrative regulation or
administrative or court decree applicable to the Company;
(vi) no consent, approval, authorization or order of, or
qualification with, any Maryland state governmental authority or agency
(other than as may be required under Maryland securities or blue sky
laws) is required in connection with the authorization, execution or
delivery of this Agreement or the Articles Supplementary or for the
offering, issuance or sale of the Shares as contemplated by this
Agreement, or the application by the Company of the net proceeds from
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the sale of the Shares as described in the Prospectus under the caption
"Use of Proceeds", except for the filing of the Articles Supplementary
with, and acceptance thereof for record by, the SDAT (which filing has
been made with and accepted for record by the SDAT in accordance with
the Maryland General Corporation Law);
(vii) We have reviewed the information (A) in the Prospectus
Supplement under the caption "Description of the Class B Preferred
Stock", (B) in the base prospectus under the captions "Risk Factors--We
Have Adopted Maryland Law Limitations on Changes in Control", "Risk
Factors--Maryland Control Share Acquisition Law Could Delay or Prevent
a Change in Control", "Description of Common Stock", "Restrictions on
Ownership and Transfer" and, to the extent not superceded by the
discussion under "Description of the Class B Preferred Stock" in the
Prospectus Supplement, "Description of Preferred Stock", and (C) in the
1998 10-K under the captions "Forward-Looking Statements--We have
adopted Maryland law limitation on changes in control" and "Forward-
Looking Statements--Maryland control share acquisition law could delay
or prevent a change in control", and in each case to the extent such
information constitutes matters of Maryland law, summaries of Maryland
legal matters, summaries of certain provisions of the Company's charter
or by-laws, the Articles Supplementary, the Shares or other instruments
or agreements governed by Maryland law, or legal conclusions with
respect to matters of Maryland law, such information is correct in all
material respects.
(g) The Underwriters shall have received on the Closing Date an
opinion of Brown & Wood LLP, counsel for the Underwriters, dated the
Closing Date, with respect to validity of the Shares, with respect to the
Registration Statement and the Prospectus and any amendments or supplements
thereto, with respect to the matters set forth in the immediately
succeeding paragraph, with respect to the authorization, execution and
delivery of this Agreement, and with respect to such other matters you may
reasonably request, and such counsel shall have received such documents and
information as they may reasonably request to enable them to pass upon such
matters.
In addition to the opinions set forth above in Sections 5(c) and 5(d),
respectively, Christopher G. Townsend and Latham & Watkins will each also
state that such counsel has participated in conferences with officers and
other representatives of the Company, representatives of the independent
public accountants for the Company, and representatives of the
Underwriters, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such counsel
may state that such counsel is not passing upon, and does not assume any
responsibility for the accuracy, completeness or fairness of, the
statements contained or incorporated by reference in the Registration
Statement and the Prospectus and such counsel has not made any independent
check or verification thereof (except as set forth in Section 5(c)(viii)
and 5(d)(iv), respectively), during the course of such participation, no
facts came to such counsel's attention that have caused such counsel to
believe that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
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the statements therein not misleading, or that the Prospectus, as of its
date or as of the date of such opinion, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
such counsel may state that they express no belief with respect to the
financial statements, schedules and other financial and statistical data
included or incorporated by reference in or omitted from the Registration
Statement or the Prospectus.
The opinions of Christopher G. Townsend, Latham & Watkins, Hogan &
Hartson, L.L.P. and Ballard Spahr Andrews & Ingersoll, LLP described in
Sections 5(c), 5(d), 5(e) and 5(f) above shall be rendered to the
Underwriters at the request of the Company and the Operating Partnership
and shall so state therein and shall further state, solely in the case of
those opinions of counsel which refer to subsidiaries of the Company, that
all references in such opinions to "subsidiaries" of the Company include,
without limitation, the Operating Partnership and the Non-Controlled
Subsidiaries. In addition, the opinion of Christopher G. Townsend shall
state that it covers matters arising under the laws of the State of
Maryland, the general corporation law of the State of Delaware (the
"DGCL"), the Partnership Act, the Delaware Limited Liability Company Act
and the federal laws of the United States, and shall further state that, to
the extent that the opinion set forth in Section 5(c)(vi) relates to any
instrument or agreement which is governed by the laws of any jurisdiction
other than the State of Maryland, such counsel has assumed that the laws of
such other jurisdiction are in all relevant respects identical to the laws
of the State of Maryland; the opinion of Latham & Watkins shall state that
it covers matters arising under the laws of the State of New York, the
Partnership Act and the federal laws of the United States, and shall
further state that, in rendering the opinion set forth in Section 5(d)(iv)
(which may be set forth in a separate legal opinion), such counsel has
relied upon and assumed the accuracy of the opinion of Hogan & Hartson
L.L.P. delivered pursuant to Section 5(e) of this Agreement; the opinion of
Hogan & Hartson, L.L.P. shall state that it covers matters arising under
the federal laws of the United States and that Latham & Watkins, in
rendering their legal opinion pursuant to Section 5(d)(iv) of this
Agreement, may rely upon such opinion; and the opinion of Ballard Spahr
Andrews & Ingersoll, LLP shall state that it covers matters arising under
the laws of the State of Maryland and shall further state that Latham &
Watkins and Brown & Wood LLP may rely upon such opinion as if it were
addressed to them for the purpose of delivering their opinions pursuant to
this Agreement.
(h) The Company shall have duly filed the Articles Supplementary with
the SDAT prior to the Closing Date and you shall have received evidence of
such filing satisfactory to you; the Underwriters shall have received on
the Closing Date a copy of an Amendment duly executed by the General
Partner; and, concurrently with the issuance and sale of the Shares to the
Underwriters, the Operating Partnership shall have issued and sold to the
Company Preferred Units with an aggregate liquidation preference equal to
the aggregate liquidation preference of such Shares.
(i) The Underwriters shall have received, on each of the date hereof
and on the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Arthur Andersen LLP,
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independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements of the Company and of
the Blackstone properties and certain financial information contained and
incorporated by reference in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(j) The Shares have been duly authorized for listing on the NYSE,
subject to official notice of issuance.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company and the Operating Partnership, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares (including, without limitation, updated legal opinions, comfort letters
and officers' certificates).
6. Covenants of the Company and the Operating Partnership. In further
consideration of the agreements of the Underwriters herein contained, the
Company and the Operating Partnership jointly and severally covenant with each
Underwriter as follows:
(a) To furnish to you, without charge, six signed copies of the
Registration Statement, including exhibits thereto and documents
incorporated or deemed to be incorporated by reference therein, and for
delivery to each other Underwriter a conformed copy of the Registration
Statement, without exhibits thereto but including documents incorporated or
deemed to be incorporated by reference therein, and to furnish to you in
New York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during the
period mentioned in Section 6(c) below, as many copies of the Prospectus
and any supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you
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will furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending on the last day of the third fiscal quarter of the
Company's 2000 fiscal year, which earning statement satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Contemporaneously with each issuance of Shares hereunder, the
Company, in its capacity as General Partner, will enter into an appropriate
Amendment and the Company will contribute the net proceeds from the sale of
such Shares to the Operating Partnership, and, in exchange for the
contribution of such net proceeds, the Operating Partnership will issue to
the Company Preferred Units with an aggregate liquidation preference equal
to the aggregate liquidation preference of such Shares, and the terms of
such Preferred Units will be substantially equivalent to the economic terms
of such Shares purchased by the Underwriters. The Operating Partnership
will apply such net proceeds as set forth under the caption "Use of
Proceeds" in the Prospectus Supplement.
(g) To use their best efforts to effect the listing of the Shares on
the NYSE no later than November 29, 1999.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of their respective obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's and the Operating Partnership's respective counsel and
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the Shares
for offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with
20
<PAGE>
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification, if any, of the offering of
the Shares by the National Association of Securities Dealers, Inc., (v) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Shares and all costs and
expenses incident to listing the Shares on the NYSE, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges
of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company and the Operating Partnership relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and the
Operating Partnership and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (ix) all other
costs and expenses incident to the performance of the obligations of the
Company and the Operating Partnership hereunder for which provision is not
otherwise made in this Section. Without limitation to the provisions of the
immediately preceding sentence, the Company will, within 24 hours after
request by the Representatives, pay expenses incurred by the Underwriters
in connection with this Agreement and the offering of the Shares in an
amount not to exceed $285,000, such payment to be made by wire transfer of
immediately available funds; provided that any expenses payable by the
Company pursuant to the immediately preceding sentence shall be excluded in
determining the dollar amount of expenses payable by the Company under this
sentence; and provided, further, that no payment shall be required by the
Company pursuant to this sentence unless the Underwriters shall have
purchased the Firm Shares. It is understood, however, that except as
provided in this Section, Section 7 entitled "Indemnity and Contribution",
and the last paragraph of Section 9 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
7. Indemnity and Contribution.
(a) The Company and the Operating Partnership jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any action or claim) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment to the Registration Statement, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the
21
<PAGE>
Company in writing by such Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with
-------- -------
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages
or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto
but excluding documents incorporated or deemed to be incorporated by
reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the
Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, the Operating Partnership and each person, if any,
who controls the Company or the Operating Partnership within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company and the
Operating Partnership to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 7(a) or 7(b), such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a),
and by the Company, in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying
22
<PAGE>
party to reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding. The obligations and
agreements of the Company and the Operating Partnership under this Section
7(c) are joint and several.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Operating Partnership
on the one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i) above
but also the relative fault of the Company and the Operating Partnership on
the one hand and of the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Operating Partnership on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate
Public Offering Price of the Shares. The relative fault of the Company and
the Operating Partnership on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Company or the Operating Partnership or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The obligations of the
Company and the Operating Partnership to contribute pursuant to this
Section 7 are joint and several. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(e) The Company, the Operating Partnership and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 7(d). The amount paid or payable by an indemnified
party as a result of the losses,
23
<PAGE>
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
that such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company and the Operating Partnership contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling
the Company or by or on behalf of the Operating Partnership, its partners
or any person controlling the Operating Partnership and (iii) acceptance of
and payment for any of the Shares. If any indemnified party shall suffer or
incur any losses, claims, damages or liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Prior Registration Statement (as defined below) or any amendment thereto in
connection with the offering of the Shares or any of the other matters
contemplated by this Agreement, or if any proceeding (including any
governmental investigation) shall be instituted involving an indemnified
party based thereon or in connection therewith, then all references to the
Registration Statement and any amendments or supplements thereto contained
in this Section 7 and in the representations and warranties of the Company
and the Operating Partnership in this Agreement and all references to the
effective date of the Registration Statement shall also be deemed to refer,
respectively, to such Prior Registration Statement (including the documents
incorporated or deemed to be incorporated by reference therein pursuant to
Item 12 of Form S-3) and any amendments or supplements thereto and to the
effective date of such Prior Registration Statement, mutatis mutandis. As
used in this Agreement, the term "Prior Registration Statement" means any
registration statement (other than the Registration Statement) filed by the
Company or Host Marriott Corporation, a Delaware corporation, with the
Commission.
8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or
24
<PAGE>
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in your judgment, is material and adverse and (b) in the case of
any of the events specified in clauses 8(a)(i) through 8(a)(iv), such event,
singly or together with any other such event, makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or the Operating
Partnership to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Operating Partnership shall
be unable to perform its obligations under this Agreement, the Company and the
Operating Partnership will, jointly and severally, reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably
25
<PAGE>
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
26
<PAGE>
Very truly yours,
HOST MARRIOTT CORPORATION
By: ______________________________________
Name:
Title:
HOST MARRIOTT, L.P.
By: HOST MARRIOTT CORPORATION,
its General Partner
By: ______________________________________
Name:
Title:
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Bear, Stearns & Co. Inc.
Deutsche Bank Securities Inc.
Donaldson, Lufkin & Jenrette Securities
Corporation
Prudential Securities Incorporated
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By: ______________________________________
Name: Michael Fusco
Title: Vice President
27
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Number of Firm Shares
Underwriter To Be Purchased
----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated.............................. 520,000
PaineWebber Incorporated....................................... 520,000
Bear, Stearns & Co. Inc........................................ 520,000
Deutsche Bank Securities Inc................................... 520,000
Donaldson, Lufkin & Jenrette Securities Corporation............ 520,000
Prudential Securities Incorporated............................. 520,000
ABN AMRO Incorporated.......................................... 40,000
CIBC World Markets Corp........................................ 40,000
A.G. Edwards & Sons, Inc....................................... 40,000
First Union Securities, Inc.................................... 40,000
Legg Mason Wood Walker, Incorporated........................... 40,000
Schroder & Co. Inc............................................. 40,000
SG Cowen Securities Corporation................................ 40,000
Advest, Inc.................................................... 20,000
Robert W. Baird & Co. Incorporated............................. 20,000
J.C. Bradford & Co............................................. 20,000
Crowell, Weedon & Co........................................... 20,000
Davenport & Company LLC........................................ 20,000
Fahnestock & Co. Inc........................................... 20,000
Ferris, Baker Watts, Incorporated.............................. 20,000
Fifth Third Securities, Inc.................................... 20,000
First Albany Corporation....................................... 20,000
First Security Van Kasper...................................... 20,000
Fleet Securities, Inc.......................................... 20,000
Gibraltar Securities Co. A Division of Tucker Anthony 20,000
Incorporated..................................................
Investec Ernst & Company....................................... 20,000
Janney Montgomery Scott LLC.................................... 20,000
Johnston, Lemon & Co. Inc...................................... 20,000
Josephthal & Co. Inc........................................... 20,000
Kirkpatrick, Pettis, Smith, Polian Inc......................... 20,000
Morgan Keegan & Company, Inc................................... 20,000
Neuberger & Berman, LLC........................................ 20,000
Parker/Hunter Incorporated..................................... 20,000
Pershing/Division of Donaldson, Lufkin & Jenrette Securities 20,000
Corporation...................................................
Robb, Peck, McCooey & Co., Inc................................. 20,000
The Robinson-Humphrey Company, LLC............................. 20,000
Southwest Securities, Inc...................................... 20,000
Stifel, Nicolaus & Company, Incorporated....................... 20,000
Stone & Youngberg LLC.......................................... 20,000
Tucker Anthony Incorporated.................................... 20,000
U.S. Bancorp Piper Jaffray Inc................................. 20,000
Wachovia Securities, Inc....................................... 20,000
Wedbush Morgan Securities...................................... 20,000
---------
Total.......................................... 4,000,000
=========
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
Subsidiaries Not Wholly Owned by the Company
--------------------------------------------
Percentage of Outstanding
Ownership Interest Owned,
Directly or Indirectly
Name by the Company
---- --------------
<S> <C>
HMC/Interstate Manhattan Beach, LP 75%
IHP Holdings Partnership, LP 47.8%
HMC/Interstate Ontario, LP 90%(1)
Host/Interstate Partnership, LP 95%
Ivy Street Hotel Limited Partnership 94.9%(2)
Philadelphia Market Street Marriott Hotel Limited Partnership 97.7%(3)
Pacific Gateway Ltd. 51.0%(4)
Lauderdale Beach Association 50.5%(5)
HMC RTZ Management LLC 1.0%
HMC/Interstate Waterford, L.P. 75%
</TABLE>
(1) HMC/Interstate Ontario, LP is 90% owned by HMC Partnership Holdings LLC, a
wholly owned indirect subsidiary of the Operating Partnership.
(2) Ivy Street Hotel Limited Partnership is owned 80% by Atlanta Marriott
Marquis II Limited Partnership and 14.9% by Ivy Street LLC, both wholly
owned indirect subsidiaries of the Operating Partnership.
(3) Philadelphia Market Street Marriott Hotel Limited Partnership is 97.75%
owned by New Market Street, LP a wholly owned indirect subsidiary of the
Operating Partnership.
(4) Pacific Gateway Ltd. is 41.23% owned by HMC Pacific Gateway LLC and 9.77% by
S.D. Hotels LLC, both wholly owned indirect subsidiaries of the Operating
Partnership.
(5) Lauderdale Beach Association is owned 50.5% by Marriott Hotels Limited
Partnership, a wholly owned indirect subsidiary of the Operating
Partnership.
29
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
Subject Subsidiaries
--------------------
Jurisdiction of
Name Type of Entity* Organization
---- --------------- --------------
<S> <C> <C>
1. Durbin LLC. LLC Delaware
HMC Retirement Properties L.P................................................. LP Delaware
2. HMC Burlingame LLC............................................................ LLC Delaware
HMC Burlingame II LLC......................................................... LLC Delaware
HTKG Development Associates, Limited Partnership.............................. LP California
3. HMC Atlanta LLC............................................................... LLC Delaware
Atlanta Marriott Marquis II Limited Partnership............................... LP Delaware
Ivy Street Hotel Limited Partnership.......................................... LP Georgia
HMA-GP LLC.................................................................... LLC Delaware
HMA Realty Limited Partnership................................................ LP Delaware
4. HMC Capital LLC............................................................... LLC Delaware
HMC Capital Resources LLC..................................................... LLC Delaware
YBG Associates LLC............................................................ LLC Delaware
5. HMC Desert LLC................................................................ LLC Delaware
Desert Springs Marriott Limited Partnership................................... LP Delaware
HMC DSM LLC................................................................... LLC Delaware
DS Hotel LLC.................................................................. LLC Delaware
6. HMC East Side II LLC.......................................................... LLC Delaware
HMC East Side LLC............................................................. LLC Delaware
East Side Hotel Associates, L.P............................................... LP Delaware
7. HMC IHP Holding LLC........................................................... LLC Delaware
HMH General Partner Holdings LLC.............................................. LLC Delaware
IHP Holdings Partnership L.P.................................................. LP Pennsylvania
8. HMC Market Street LLC......................................................... LLC Delaware
New Market Street LP.......................................................... LP Delaware
Philadelphia Market Street Hotel Corporation.................................. CORP Delaware
Philadelphia Market Street Marriott Hotel Limited Partnership................. LP Delaware
9. HMC Properties II LLC......................................................... LLC Delaware
HMC MHP II LLC................................................................ LLC Delaware
Marriott Hotel Properties II Limited Partnership.............................. LP Delaware
Santa Clara HMC LLC........................................................... LLC Delaware
Santa Clara Marriott Hotel Limited Partnership................................ LP Delaware
</TABLE>
-----------------------------
* "CORP" means corporation; "LP" means limited partnership; "GP" means
general partnership; and "LLC" means limited liability company.
30
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction of
Name Type of Entity* Organization
---- --------------- ---------------
<S> <C> <C>
10. HMC Properties I LLC......................................................... LLC Delaware
Marriott Hotel Properties Limited Partnership................................ LP Delaware
#819 Lauderdale Beach Association............................................ GP --
11. HMC Swiss Holdings LLC....................................................... LLC Delaware
BRE/Swiss L.L.C.............................................................. LLC Delaware
12. HMH WTC LLC................................................................. LLC Delaware
13. Times Square GP LLC......................................................... LLC Delaware
Times Square LLC............................................................ LLC Delaware
Times Square Marquis Hotel, L.P............................................. LP New York
</TABLE>
31
<PAGE>
EXHIBIT 5.1
[CGT LETTERHEAD]
November 23, 1999
Host Marriott Corporation
10400 Fernwood Road
Bethesda, Maryland 20817
Re: 10% Class B Cumulative Redeemable Preferred Stock
---------------------------------------------------
Ladies and Gentlemen:
In connection with the offering of up to 4,600,000 shares of 10% Class B
Cumulative Redeemable Preferred Stock of the Company, par value $.01 per share
(the "Shares"), pursuant to an effective registration statement on Form S-3
filed with the Securities and Exchange Commission (the "Commission") (File No.
333-67907) (the "Registration Statement"), under the Securities Act of 1933, as
amended (the "Act"), by Host Marriott Corporation, a Maryland corporation (the
"Company"), you have requested my opinion with respect to the matters set forth
below.
In my capacity as your counsel in connection with this offering, I am
familiar with the proceedings taken and proposed to be taken by the Company in
connection with the authorization, issuance and sale of the Shares. In addition,
I have made such legal and factual examinations and inquiries, including an
examination of originals or copies certified or otherwise identified to my
satisfaction of such documents, corporate records and instruments, as I have
deemed necessary or appropriate for purposes of this opinion.
In my examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me originals, and the conformity to
authentic original documents of all documents submitted to me as copies.
I am opining herein as to the effect on the subject transaction only of the
General Corporation Law of the State of Maryland, and I express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any
other jurisdiction or as to any matters of municipal law or the laws of any
local agencies within any state.
Subject to the foregoing, it is my opinion that the Shares have been duly
authorized, and, upon issuance, delivery and payment therefor in the manner
contemplated by the Registration Statement, will be validly issued, fully paid
and nonassessable.
<PAGE>
Host Marriott Corporation
November 23, 1999
Page 2
I consent to your filing this opinion as an exhibit to Form 8-K and to
the reference to me contained under the heading "Legal Matters" in the
Prospectus Supplement, dated November 19, 1999.
Very truly yours,
/s/ Christopher G. Townsend
------------------------------------
Christopher G. Townsend
<PAGE>
Exhibit 10.1
PROPERTY NAME
PROPERTY NUMBER
SECOND AMENDMENT
TO
LEASE AGREEMENT
This Second Amendment to Lease Agreement (the "Amendment") is entered into
as of August 15, 1999, by and between LANDLORD NAME AND ENTITY ("Landlord"),
and TENANT, a Delaware limited liability company ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have entered into that certain Lease Agreement
dated as of December 31, 1998 (the "Original Lease"), pursuant to which Landlord
has leased to Tenant the Leased Property (as defined in the Original Lease),
which was amended by a First Addendum to Lease Agreement entered into effective
as of 11:59 p.m. on December 31, 1998 (the "First Addendum"), and by a First
Amendment to Lease Agreement dated as of January 1, 1999 (the "First
Amendment"); and
WHEREAS, the Original Lease, as amended by the First Addendum and First
Amendment, is herein collectively referred to as the "Lease"; and
WHEREAS, Landlord and Tenant desire to amend the Lease in the respects more
particularly set forth below.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. All capitalized terms used herein and not otherwise defined shall have
the respective meanings ascribed such terms in the Lease.
2. Article I of the Lease is hereby amended by inserting the following
additional definitions:
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"Renewal Notice" shall have the meaning given such term in Section
2.4.
"Renewal Option" shall have the meaning given such term in Section
2.4.
"Renewal Term" shall have the meaning given such term in Section 2.4.
3. Section 2.4 of the Lease is hereby deleted in its entirety and replaced
by the following:
2.4 Term.
2.4.1 Term. The term of this Lease (the "Term") shall commence on
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the Commencement Date and shall expire at 11:59 p.m. on the last day
of the ORIGINAL LEASE TERM Lease Year, unless sooner terminated
pursuant to the terms of this Lease; provided that, subject to the
terms of Article 13, the Term shall also include any period of holding
over by Tenant and any Renewal Term.
2.4.2 Renewal Option. Landlord hereby grants to Tenant the right,
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exercisable at Tenant's option, subject to Section 20.5(c) (a "Tenant
Renewal Option"), to renew the term of this Lease for RENEWAL OPTION
additional terms of seven (7) years each (each a "Renewal Term") at
the Fair Market Rental as of the commencement of each such Renewal
Term. If exercised, and if the conditions applicable thereto have been
satisfied, the first Renewal Term shall commence immediately upon the
expiration of the initial term hereof, and each succeeding Renewal
Term shall commence immediately upon the expiration of the preceding
term. The rights of renewal herein granted to Tenant shall be subject
to, and shall be exercised in accordance with, the following terms and
conditions:
(a) Tenant shall exercise its right with respect to each Renewal
Term by giving Landlord Notice thereof during the month of April of
the year immediately preceding the scheduled commencement of such
Renewal Term (the "Renewal Notice").
(b) If the Renewal Notice is not timely given with respect to
any Renewal Term, then Tenant's rights of renewal pursuant to this
Section 2.4.2 shall lapse and be of no further force or effect with
respect to all remaining Renewal Terms .
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(c) Landlord shall be entitled to terminate all unexercised
Tenant Renewal Options by providing Notice to Tenant thereof at any
time during the calendar month of March of the year immediately
preceding a year in which a Renewal Term is scheduled to commence.
(d) Landlord and Tenant shall use commercially reasonable
efforts to negotiate and jointly determine the Fair Market Rental to
be effective during any Renewal Term by no later than March 31st of
the year immediately preceding such Renewal Term. In the event
Landlord and Tenant are unable to agree on the Fair Market Rental for
a Renewal Term prior to Tenant's exercise of its Tenant Renewal
Option, the Fair Market Rental shall be determined in accordance with
the appraisal procedures set forth in Article 19 by no later than
August 1st of the year immediately preceding the applicable Renewal
Term.
(e) The components of Fair Market Rental, including Minimum Rent
and Revenue Percentages and Breakpoints, determined as set forth in
subparagraph (d), shall be set forth in revised Schedules 3.1.1 and
3.1.2, which Schedules shall, upon commencement of the applicable
Renewal Term, be attached to the Lease and shall supersede such
Schedules as were effective prior thereto.
4. A new Section 20.5 is hereby added to the Lease as follows:
20.5. Consent of Lender.
(a) Landlord shall, upon the request of Tenant at any time
during the year immediately preceding the year in which a Renewal Term
is to commence, exercise commercially reasonable efforts to obtain the
consent of any and all Facility Mortgagees, ground lessors, partners
or other third parties ("Consent Party") to the exercise of Tenant
Renewal Options, and to the change in the Rent for any Renewal Period,
if any, provided hereunder, to the extent such consent is reasonably
determined by Landlord to be required pursuant to the terms of any
Facility Mortgage, ground lease, partnership or joint venture
agreement or any other third party agreement ("Third Party
Agreement").
(b) Landlord shall exercise commercially reasonable efforts to
cause any and all Third Party Agreements hereafter entered into, as
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<PAGE>
well as all other documents or agreements hereafter entered into in
connection with any such Third Party Agreements to permit the exercise
of Tenant Renewal Options without any Consent Party's consent.
(c) In the event that Landlord reasonably concludes and notifies
Tenant prior to the scheduled commencement of a Renewal Term that,
despite Landlord's commercially reasonable efforts to obtain the
consent of any Consent Party pursuant to this Section 20.5, the
exercise by Tenant of a Tenant Renewal Option or the change in the
Rent for any Renewal Period will cause Landlord to be in default under
the terms of the applicable Third Party Agreement, Tenant agrees that
it shall not elect to exercise a Tenant Renewal Option (and any prior
exercises shall be null and void).
5. Article 24 of the Lease is hereby deleted in its entirety and replaced
by the following:
ARTICLE 24
TERMINATION RIGHTS
24.1 Landlord's Right to Purchase or Cause an Affiliate to Purchase
Tenant's Leasehold Interest upon Sale or Tax Law Change.
(a) In the event (i) Landlord enters into a bona fide contract
to sell the Leased Property to a non-Affiliate, or (ii) of a Tax Law
Change, then, in either such event, Landlord may purchase or cause an
Affiliate to purchase Tenant's interest in this Lease by giving not
less than sixty (60) days prior Notice to Tenant of Landlord's
election to purchase or to cause an Affiliate to purchase Tenant's
interest in this Lease concurrently with or immediately prior to the
closing under such contract or upon a date specified by Landlord which
is on or after the effective date of the Tax Law Change. Landlord or
its Affiliate shall be entitled to purchase Tenant's interest in this
Lease by reason of a Tax Law Change only if Tenant's leasehold
interest in all other Pool Leases and Other Leases are concurrently
purchased, other than any other Pool Lease or Other Lease that relates
to a property that Host REIT, Host O.P. or any wholly owned Subsidiary
thereof cannot own, following such Tax Law Change, without incurring
potential adverse effects for Host REIT, Host O.P. or such Subsidiary,
unless such property is subject to a lease. (The term "Tax Law Change"
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<PAGE>
shall mean any change in the Code (including, without limitation, a
change in the Treasury regulations promulgated thereunder), or in the
judicial or administrative interpretations of the Code, which in
Landlord's determination will permit Landlord, Host REIT, Host O.P. or
another entity in which Host REIT or Host O.P. owns substantially all
of the economic interests to operate the Facility as a hotel without
adversely affecting Host REIT's qualification for taxation as a real
estate investment trust under applicable Code provisions). Landlord,
in the event it enters into a bona fide contract to sell the Leased
Property to a non-Affiliate, and subject to the restrictions set forth
in Section 20.4, shall alternatively be permitted to transfer the
Leased Property subject to the Lease, provided, however, that the
parties shall make such reasonable modifications, if any, hereto as
shall be necessary or appropriate in connection with such transfer,
including, without limitation, termination or modification of the
Related Agreements and/or the Asset Management Agreement as they
relate to this Lease, but no amendment hereto shall (i) increase
Tenant's rental obligations or other financial obligations hereunder,
(ii) have a material adverse effect upon Tenant's rights hereunder,
(iii) materially increase Tenant's non-economic obligations hereunder,
or (iv) decrease Landlord's obligations hereunder; and provided
further that in such event Landlord shall not, without the consent of
Tenant, transfer the Leased Property or any interest therein to any
Person which (A) does not have sufficient financial resources and
liquidity to fulfill "Owner's" obligations under the Management
Agreement and Landlord's obligations under this Lease, or (B) who has
been, or is in control of, controlled by or under common control with
Persons who have been, convicted of felonies involving moral turpitude
in any state or federal court.
(b) The purchase price for Landlord's (or Landlord's
Affiliate's) purchase of Tenant's leasehold estate under this Article
24 shall be payable at closing in cash (or in the event Landlord
elects to purchase or to cause an Affiliate to purchase Tenant's
leasehold estate because of a Tax Law Change, at Landlord's option,
may also be payable in the form of stock in Host REIT) and shall be an
amount equal to the Fair Market Value of Tenant's leasehold estate
hereunder (excluding any Renewal Term, whether exercised or
unexercised) as of such closing. Alternatively, in lieu of payment of
the purchase price at such closing, at Landlord's election, Landlord
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shall have the right, exercisable not more than one (1) year prior to
the anticipated closing date and in any event not later than sixty
(60) days prior to the closing of such sale, to offer to lease to
Tenant, pursuant to one or more leases, one or more substitute hotel
facilities (a "Comparable Lease") that (A) are comparable, in Tenant's
commercially reasonable judgment, to the average quality of the
properties leased pursuant to the other Pool Leases and the Other
Leases, taking into consideration the age, physical condition,
location and other relevant factors, and (B) would create for Tenant
leasehold estates having an aggregate Fair Market Value as to that
portion of its term equal to the remaining Term (excluding any Renewal
Term, whether exercised or unexercised) hereunder of no less than the
Fair Market Value of the remaining Term hereunder (excluding any
Renewal Term, whether exercised or unexercised), both such values to
be determined as of the closing of the sale of the Leased Property. It
is the intent of the parties that the Comparable Lease shall result in
substantially the same ratio between Tenant's Operating Profit and
Rent as then exists under this Lease for the Fiscal Year immediately
preceding the sale. For the purposes of determining the Fair Market
Value for purposes of this Section 24.1 or pursuant to any other
Section of this Lease providing for such compensation of Tenant upon a
Lease termination or purchase of Tenant's leasehold estate, a discount
rate of twelve percent (12%) per annum will be used, and the annual
income for the remainder of the Term (excluding any Renewal Term,
whether exercised or unexercised) will be assumed to be equal to the
average Tenant Operating Profit generated during the three (3) Fiscal
Years immediately preceding the termination date or date of the
transfer of Tenant's leasehold estate, as applicable, or if three (3)
Fiscal Years have not elapsed since the Commencement Date, the average
during the preceding Fiscal Years that have elapsed (with the annual
income for each of such Fiscal Years escalated from the end of each
such Fiscal Year to the date of determination at the rate of inflation
before such average is determined), provided that this amount shall be
determined on a pro forma basis if the Leased Property has not
operated as a hotel for at least the preceding twelve (12) months. In
the event Landlord and Tenant are unable to agree upon the Fair Market
Value of the original leasehold estate (excluding any Renewal Term,
whether exercised or unexercised) or the proposed Comparable Lease
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leasehold estate, it shall be determined by arbitration pursuant to
the procedure set forth in Article 15. The parties agree that, if
Landlord elects to offer to enter into a Comparable Lease, to the
extent that the Fair Market Value of the Comparable Lease is less than
the Fair Market Value of the original leasehold estate, calculated as
set forth above, then Landlord shall compensate Tenant in cash for the
deficiency prior to the effective date of the transfer of Tenant's
leasehold estate.
(c) Notwithstanding the provisions of Section 24.1(b), Landlord
shall be entitled to terminate this Lease in connection with a sale or
other transfer of the Leased Property to an unrelated Person or a
Person in which Host O.P. owns, directly or indirectly, less than two-
thirds of the equity interests, without payment of any termination
fee, by giving not less than sixty (60) days prior written Notice to
Tenant, provided that the landlords under the Other Leases and the
other Pool Leases (excluding this Lease and the leases applicable to
properties commonly known as Minneapolis, MN (Airport/Bloomington),
Denver, CO (Southeast), and Saddle Brook, NJ) relating to an aggregate
of fewer than twelve (12) hotels have elected to terminate such Other
Leases or other Pool Leases (excluding this Lease and the leases
applicable to properties commonly known as Minneapolis, MN
(Airport/Bloomington) Denver, CO (Southeast) and Saddle Brook, NJ)
without payment of a termination fee.
(d) Host O.P. agrees to guarantee Landlord's obligation to pay
to Tenant the compensation for (i) termination by a Superior Mortgagee
or Superior Landlord under Section 20.2, (ii) termination of this
Lease following a Casualty pursuant to Section 10.2.3, or (iii)
termination of this Lease by Tenant by reason of Landlord's election
not to make an Award available to Tenant for restoration following a
Condemnation pursuant to Section 11.2; provided that at the time of
any such termination Landlord is a wholly owned direct or indirect
subsidiary of Host O.P., and if Landlord is then partially owned,
directly or indirectly, by Host O.P., Host O.P. shall guaranty that
portion of such compensation that represents the same percentage of
the total compensation payable as Host O.P.'s direct or indirect
percentage ownership interest in Landlord. Landlord agrees to be
exclusively responsible for (and shall reimburse Tenant for any
payment Tenant otherwise might be required to make) the Manager's
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termination fee (if any) payable to Manager because of the termination
of the Management Agreement in connection with the sale of the Leased
Property.
24.2 Tenant's Right to Terminate Lease upon Certain Events.
Notwithstanding any provision of this Lease to the contrary,
Tenant shall be entitled to terminate this Lease by giving not less
than 180 days' prior Notice to Landlord, without penalty, provided
that the Other Tenants have theretofore elected to terminate Other
Leases and other Pool Leases (excluding this Lease and the leases
applicable to the properties commonly known as Albuquerque, NM,
Greensboro, NC (High Point/Airport), Houston, TX (Medical Center),
Miami, FL (Biscayne Bay Hotel and Marina), Scottsdale, AZ (Mountain
Shadows), and Seattle, WA (SEA-TAC Airport) terminated pursuant to
Section 24.2(b) of such leases) relating to an aggregate of fewer than
twelve (12) hotels without penalty pursuant to a similar provision
contained in such Other Leases or other Pool Leases (excluding this
Lease and the leases applicable to the properties commonly known as
Albuquerque, NM, Greensboro, NC (High Point/Airport), Houston, TX
(Medical Center), Miami, FL (Biscayne Bay Hotel and Marina),
Scottsdale, AZ (Mountain Shadows), and Seattle, WA (SEA-TAC Airport)).
24.3 Termination of Lease Following Notice of Termination of
Guarantee.
At any time after a notice of termination has been given
pursuant to Section 10(a) of the Guarantee and the six-month period
specified in Section 10(a)(iii) of the Guarantee has commenced,
Landlord shall be entitled to terminate this Lease by giving Notice
thereof to Tenant, and upon expiration of the time, if any, fixed in
such Notice, this Lease shall terminate and except as otherwise
expressly provided herein the rights and obligations of the parties
under this Lease shall cease, subject to compliance with the
provisions of this Section 24.3. Landlord shall not be required to
pay any termination fee under this Article 24 if such termination
pursuant to this Section 24.3 occurs no later than twelve (12) months
after the date on which the six-month period specified in Section
10(a)(iii) of the Guarantee commenced; provided, however, that if the
termination occurs after such 12-month period, then Landlord shall be
required to pay Tenant a termination fee calculated as if it were the
purchase price for Tenant's leasehold interest in accordance with
Section 24.1(b). Notwithstanding the foregoing, in the event any other
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Pool Lease under which there does not then exist a default by the
Other Tenant thereunder beyond the applicable notice and cure period,
is terminated pursuant to a provision similar to the foregoing,
Landlord's right to terminate this Lease under this Section 24.3
without payment of a termination fee shall be conditioned upon
termination of this Lease and all other Pool Leases no later than four
(4) months after the earliest date on which termination of this Lease
or any other Pool Lease pursuant to this Section 24.3 becomes
effective. The provisions of this 24.3 shall be in addition to, and
not in lieu of, the right of Landlord to terminate this Lease by
reason of the occurrence of an Event of Default hereunder pursuant to
the provisions of Article 12, without regard to the time limits or
other provisions of this Section 24.3.
24.4 Effect of Termination.
Effective upon the date of closing of the sale of Tenant's
interest in this Lease or upon the termination date as set forth in
any Notice provided by the terminating party pursuant to this Article
24, Tenant's rights and obligations under this Lease shall terminate
and be of no further force and effect (and, if this Lease is
terminated, Landlord's rights and obligations hereunder shall likewise
terminate) except as to any obligations of the parties existing as of
such date that survive termination of this Lease or transfer of
Tenant's leasehold interest under this Lease, and all Rent, including
Percentage Rent and Additional Charges, shall be adjusted as of the
closing or termination date.
Wherever occurring in this Lease, the phrase "expiration or
earlier termination of this Lease," or the phrase "expiration or
earlier termination of the Term," or any similar language of
comparable effect, is hereby deemed to include the termination,
effective upon the date of closing, of Tenant's interest in the
leasehold estate evidenced by this Lease by virtue of a transfer of
Tenant's leasehold interest under this Lease to Landlord or Landlord's
affiliate under this Article 24.
6. To the extent that the execution and delivery of this Amendment violate
the terms of any Third Party Agreement (as defined herein) in existence on the
date hereof, neither Tenant nor Landlord shall be deemed to have any rights or
obligations created hereby unless and until the consent of the applicable
Consent Party is obtained, for so long as such Third Party Agreement remains in
effect.
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7. Except as amended hereby, the Lease remains unmodified and in full
force and effect in accordance with its terms.
8. This Amendment may be executed in counterpart copies, each complete set
of which shall constitute an original instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
LANDLORD:
LANDLORD NAME AND ENTITY
By: BY
By:
----------------------------
Name: Donald D. Olinger
Title: Vice-President
TENANT:
TENANT,
a Delaware limited liability company
By:
---------------------------
Name: John J. McMahon, Jr.
Title: Vice-President
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