<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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): December 9, 1998
HOST MARRIOTT CORPORATION
------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 001-05664 53-0085950
- ------------------------------ ---------------- ------------------------------
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION OF FILE NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
10400 FERNWOOD ROAD, BETHESDA, MARYLAND 20817
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP)CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (301) 380-9000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 5. OTHER EVENTS
------------
SENIOR NOTES OFFERING
---------------------
On December 9, 1998, Host Marriott Corporation, ("Host Marriott"), Host
Marriott Hospitality, Inc., its wholly owned subsidiary ("Hospitality"),
HMH Properties, Inc. (the "Company") an indirect wholly-owned subsidiary of Host
Marriott and a direct wholly-owned subsidiary of Hospitality, and certain
subsidiaries of the Company executed an Underwriting Agreement (the
"Underwriting Agreement") with Donaldson, Lufkin & Jenrette Securities
Corporation, BT Alex. Brown Incorporated, Barclays Capital Inc., Bear, Stearns &
Co. Inc., Credit Lyonnais Securities (USA) Inc., Deutsche Bank Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Nationsbanc Montgomery
Securities LLC, Salomon Smith Barney Inc. and SG Cowen Securities Corporation
(collectively, the "Underwriters"). Subject to the terms and conditions
contained in the Underwriting Agreement, the Company agreed to issue and sell to
the Underwriters $500,000,000 aggregate principal amount of 8.45% Series C
Senior Notes due 2008 ("Series C Notes"). The Series C Notes are fully and
unconditionally guaranteed by Host Marriott, Hospitality and by certain of the
Company's subsidiaries. The price to the public for the Series C Notes was
99.664%, with underwriting discounts and commissions of 1.664% of the principal
amount at maturity, generating expected net proceeds to the Company (after
deducting estimated expenses of the offering) of approximately $488,000,000. The
Series C Notes were sold pursuant to a Registration Statement on Form S-3 (File
No. 333-50729) as amended by Pre-Effective Amendment No. 1 to Post-Effective
Amendment No. 1 to the Registration Statement which became effective on December
7, 1998. The offering of the Series C Notes was consummated on December 11,
1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
------------------------------------------------------------------
7(c). EXHIBITS
--------
*1.1 Underwriting Agreement dated December 9, 1998 among HMH Properties,
Inc., certain guarantors signatories thereto, Donaldson, Lufkin & Jenrette
Securities Corporation, BT Alex. Brown Incorporated, Barclays Capital Inc.,
Bear, Stearns & Co. Inc., Credit Lyonnais Securities (USA) Inc., Deutsche Bank
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Nationsbanc
Montgomery Securities LLC, Salomon Smith Barney Inc. and SG Cowen Securities
Corporation.
4.1 Amended and Restated Indenture dated as of August 5, 1998, by and
among HMH Properties, Inc., the Guarantors and the Non-Guarantors named therein
and Marine Midland Bank, as Trustee (incorporated by reference to Current Report
on Form 8-K of Host Marriott Corporation dated July 29, 1998, filed on August 6,
1998)
*4.2 Second Supplemental Indenture to Amended and Restated Indenture
dated as of December 11, 1998 among HMH Properties, the Guarantors and
Subsidiary Guarantors named in the Amended and Restated Indenture, dated as of
August 5, 1998 and Marine Midland Bank, as trustee (including the form of 8.45%
Series C Senior Notes due 2008).
4.3 Pledge and Security Agreement, dated as of August 5, 1998 made by
pledgors signatory thereto in favor of Bankers Trust Company, as Collateral
Agent for the benefit of the Secured Creditors (as defined therein)
(incorporated by reference to Registration Statement on Form S-3 of Host
Marriott and certain other Co-Registrants (File No. 333-50729).
*25.1 Statement of Eligibility and Qualifications on Form T-1 of Marine
Midland Bank, as Trustee, under the Indenture, with respect to the Series C
Senior Notes.
- --------------
* Filed herewith
2
<PAGE>
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
---------------------------
December 11, 1998 Christopher G. Townsend
Senior Vice President and
General Counsel
3
<PAGE>
Exhibit 1.1
HMH PROPERTIES, INC.
8.45% Series C Senior Notes due 2008
Payment of Principal and Interest Unconditionally
Guaranteed by the Guarantors Thereof
UNDERWRITING AGREEMENT
----------------------
December 9, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN INCORPORATED
BARCLAYS CAPITAL INC.
BEAR, STEARNS & CO. INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
DEUTSCHE BANK SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
SALOMON SMITH BARNEY INC.
SG COWEN SECURITIES CORPORATION
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
HMH Properties, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ"), BT Alex. Brown Incorporated ("BT"), Barclays Capital Inc., Bear,
Stearns & Co. Inc., Credit Lyonnais Securities (USA) Inc., Deutsche Bank
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, NationsBanc
Montgomery Securities LLC, Salomon Smith Barney Inc., and SG Cowen Securities
Corporation (collectively, the "Underwriters") an aggregate of $500,000,000
principal amount of 8.45% Series C Senior Notes due 2008 (the "Series C Notes"),
which notes are fully and unconditionally
<PAGE>
guaranteed by Host Marriott Corporation, a Delaware corporation ("Host
Marriott"), Host Marriott Hospitality, Inc., a Delaware corporation
("Hospitality"), and the Subsidiary Guarantors listed on Schedule A hereto (the
----------
"Subsidiary Guarantors," and together with Host Marriott and Hospitality, the
"Guarantors"). The Securities are to be issued pursuant to the provisions of the
Amended and Restated Indenture, dated as of August 5, 1998, by and among HMH
Properties, Inc., the Guarantors (as named therein) and Marine Midland Bank, as
trustee (the "Trustee") (the "Base Indenture") and the Second Supplemental
Indenture ("Second Supplemental Indenture," together with the Base Indenture,
the "Indenture") to be dated as of December 11, 1998, by and among the Company,
the Guarantors, the Subsidiary Guarantors and the Trustee.
For purposes of this agreement, the term "Securities" means the
$500,000,000 aggregate principal amount of the Series C Notes, together with the
guarantees (the "Guarantees") thereof by each of the Guarantors. The Securities
and the Indenture are more fully described in the Prospectus Supplement (as
hereinafter defined). Capitalized terms used herein without definition have the
respective meanings specified in the Prospectus (as defined below).
1. Registration Statement and Prospectus. Host Marriott has prepared
and filed with the Securities and Exchange Commission (the "Commission)" in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement (No. 333-50729) on Form S-3, including a
prospectus, for the registration of the Securities (and certain other
securities). Such registration statement, as amended through and including that
certain Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 thereto,
dated December 7, 1998 ("Post-Effective Amendment No. 1"), has been declared
effective by the Commission and, as amended through the date hereof, including
the information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Act, is hereinafter
referred to as the "Registration Statement." The prospectus contained in the
Registration Statement at the time that Post-Effective Amendment No. 1 first
became effective is hereinafter referred to as the "Base Prospectus"; and the
prospectus supplement specifically relating to the offer and sale of the
Securities in the form as filed with the Commission and used to confirm the sale
of Securities is hereinafter referred to as the "Prospectus Supplement." The
term "Prospectus" means the Base Prospectus and the Prospectus Supplement. The
Registration Statement and the Prospectus shall include, in each case, the
documents incorporated therein by reference. The terms "supplement" and
"amendment" or "amend" as used in this Agreement with respect to the
Registration Statement or the Prospectus shall include all documents
subsequently filed by the Company with the Commission pursuant to the Securities
Act of 1934, as amended, and
2
<PAGE>
the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by reference in the
Registration Statement and the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representa
tions and warranties contained in this Agreement, and subject to the terms and
conditions herein set forth, the Company and, as to the Guarantees, the
Guarantors, agree to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company
and, as to the Guarantees, the Guarantors, at a purchase price to the Company
equal to 98.0% of the principal amount of the Series C Notes (the "Purchase
Price"), in the respective principal amount set forth opposite their names on
Schedule B hereto.
- ----------
3. Terms of Public Offering. The Company is advised by you that you
propose (i) to make a public offering of your respective portions of the
Securities as soon after the execution and delivery of this Agreement as in your
respective judgments is advisable and (ii) initially to offer the Securities
upon the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to you of and payment for the
Securities shall be made at 10:00 A.M., New York City time at the offices of
Latham & Watkins at 885 Third Avenue, Suite 1000, New York, New York 10022 on
the second business day (which may be varied by agreement among the Company and
you) (such time and date being referred to as the "Closing Date") following the
date of this Agreement, at such place as you shall reasonably designate. The
Closing Date and the location of delivery of the Securities may be varied by
agreement among you and the Company.
One or more of the Series C Notes, in definitive form, registered in
the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), or
such other name(s) as the Underwriters may request in writing upon at least two
business days notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of such series of Securities
(the "Global Securities"). The Series C Notes shall be delivered by the Company
to the Underwriters on the Closing Date, with any transfer taxes payable upon
initial issuance thereof duly paid by the Company, for your respective accounts
against payment by the Underwriters of the purchase price thereof in currently
available funds, to the order of the Company. The Global Securities shall be
made available to you at the offices of DLJ (or at such other place as shall be
acceptable to you) for inspection not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
3
<PAGE>
5. Agreements of the Company and the Guarantors. Each of the
Company and the Guarantors, jointly and severally, agrees with each of you that:
(a) It will advise you promptly and, if requested by any of you,
confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (ii) of the issuance
by the Commission or any state securities commission of any stop order
suspending the qualification or effective ness of the Registration Statement or
of the suspension of qualification or exemption of any Securities for offering
or sale in any jurisdiction designated by the Underwriters pursuant to Section
5(h) hereof, or the initiation of any proceeding by the Commission or any state
securities commission for such purposes, (iii) when any amendment to the
Registration Statement becomes effective or (iv) of the happening of any event
during the period referred to in Section 5(e) below which makes any statement of
a material fact made in the Registration Statement untrue or which requires the
making of any additions to or changes in the Registration Statement in order to
make the statements therein not misleading or that makes any statement of a
material fact made in the Prospectus untrue or which requires the making of any
additions to or change in the Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the Company and the Guarantors shall use its reasonable
best efforts to prevent the issuance of any order suspending the registration of
any of the Securities under the Exchange Act or the qualification or exemption
of the Securities under any state securities or Blue Sky laws, and, if at any
time, any state securities commission or other federal or state regulatory
authority shall issue an order suspending the qualification or effectiveness of
the Registration Statement or the qualifications or exemption of the securities
under any state securities or Blue Sky laws, the Company and the Guarantors
shall use every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) It will not, prior to the Closing Date, make any amendments or
supplements to the Prospectus, of which you shall not previously have been
advised and provided a copy within two business days prior to the delivery
thereof or to which you shall reasonably object.
(c) The Company and the Guarantors consent to your use of the
Prospectus (and any amendments or supplements thereto) in connection with offers
and resales of the Securities contemplated hereunder.
(d) It will prepare the Prospectus, the form and substance of which
shall be satisfactory to you and file the Prospectus (and any amendments or
4
<PAGE>
supplements thereto) in such form with the Commission within the applicable
period specified in and as required by Rule 424(b) under the Act; during the
period specified in Section 5(e) below, it will not file any further amendment
to the Registration Statement and will not make any amendment or supplement to
the Prospectus, of which you shall not previously have been advised and provided
a copy within two business days prior to the delivery thereof or to which you
shall reasonably object after being so advised; and, during such period, it will
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Securities by you, and it will use its reasonable best
efforts to cause any such amendment to the Registration Statement to become
promptly effective.
(e) As soon as practicable, but in no event later than 10:00 A.M., New
York City time on the second business day after the date of this Agreement and
from time to time thereafter for such period as in the opinion of your counsel,
a prospectus is required by law to be delivered in connection with sales by any
of you or a dealer, the Company and the Guarantors will furnish in New York City
to each of you as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may reasonably request.
(f) The Company and the Guarantors will furnish to you 11 conformed
copies of the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits, and will furnish to you and each
underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(g) If, during the period specified in Section 5(e), any event shall
occur or condition shall exist as a result of which it becomes necessary to
amend or supplement the Prospectus in order to make the statements therein, in
light of the circumstances existing as of the date the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with any law, it will, as promptly as practicable, prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented, will not, in the light of the circumstances existing as of the
date the Prospectus is so delivered, be misleading, and will comply with
applicable law, and will furnish to you without charge such number of copies
thereof as you may reasonably request.
5
<PAGE>
(h) Prior to any public offering of the Securities, it will cooperate
with you and your counsel in connection with the registration or qualification
of the Securities for offer and sale by you and by dealers under the state
securities or Blue Sky laws of such jurisdictions as you may request (provided
that neither the Company nor any of the Guarantors shall be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not so qualified or
to take any action that would subject it to general consent to service of
process in any jurisdiction in which it is not now so subject or to subject
itself to taxation in excess of a minimal dollar amount in any such
jurisdiction). The Company and the Guarantors will continue such registration or
qualification in effect so long as required by law for distribution of the
Securities and will file such consents to service of process or other documents
as may be necessary in order to effect such registration or qualification.
(i) The Company will make generally available to its security holders
as soon as practicable an earnings statement covering a period of at least
twelve months beginning after the "effective date" (as defined in Rule 158 under
the Act) of the Registration Statement) that shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(j) So long as the Securities are outstanding, the Company will file
on a timely basis with the Commission, to the extent such filings are accepted
by the Commission, and whether or not the Company has a class of securities
registered under the Securities Exchange Act of 1934, as amended (the "1934
Act"), the annual reports, quarterly reports and other documents that the
Company would be required to file if it were subject to Section 13 or Section 15
of the 1934 Act. For so long as you are making a market in the Securities, but
in no event, more than five years from the date hereof, the Company will furnish
to you copies of all such reports and information, together with such other
documents, reports and information as shall be furnished by the Company to the
holders of the Securities, and such other information concerning the Company and
its subsidiaries as you reasonably may request.
(k) So long as the Securities are outstanding, the Company will
furnish to you as soon as available copies of all reports or other
communications furnished to its security holders or furnished to or filed with
the Commission and such other publicly available information concerning it and
its subsidiaries as you may reasonably request.
(l) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, it will pay and be responsible for
all costs, expenses, fees and taxes in connection with or incident to (i) the
printing, processing,
6
<PAGE>
filing and distribution of the Registration Statement, the Prospectus, the
preliminary prospectus and the Prospectus and all amendments or supplements
thereto (but not including, however, legal fees and expenses of your counsel
incurred in connection therewith), including such copies as may be reasonably
requested by you,
(ii) the issuance, transfer and delivery of the Securities to you, including any
transfer or other taxes payable thereon, (iii) the registration or qualification
of the Securities for offer and sale under the securities or Blue Sky laws of
the jurisdictions referred to in paragraph 5(h) above (including, in each case,
any filing fees and fees and expenses of counsel to the Underwriters incurred in
connection therewith), (iv) the rating of the Securities by investment rating
agencies, (v) the approval of the Securities by DTC for "book-entry" transfer
and (vi) the performance by each of the Company and the Guarantors of its other
obligations under this Agreement, including (without limitation) the fees of the
Trustee, the cost of its personnel and other internal costs, the cost of
printing and engraving the certificates representing the Securities, and all
expenses and taxes incident to the sale and delivery of the Securities to you
(but not including, however, legal fees and expenses of your counsel incurred in
connection therewith).
(m) It will use the proceeds from the sale of the Securities in the
manner described in the Prospectus under the caption "Use of Proceeds."
(n) It will not voluntarily claim and will actively resist any
attempts to claim the benefit of any usury laws against the holders of the
Securities.
(o) It will do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and will
use its reasonable best efforts to satisfy all conditions precedent on its part
to the delivery of the Securities.
(p) It will not, so long as the Securities are outstanding, be or
become an open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act of 1940, as amended (the "'40 Act").
(q) Each of the Guarantors and the Company (with the exception of
Marriott Financial Services, Inc.) will execute and deliver, file and record all
instruments and documents, and will do all such acts and other things as are
necessary to subject the Collateral (as defined in the Indenture) to the
security interests intended to be created by the Pledge and Security Agreement
(as defined in the Indenture) and as are reasonably necessary or advisable to
perfect the security interests intended to be created thereby.
7
<PAGE>
(r) During the period beginning on the date hereof and continuing to
and including the Closing Date, it will not offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
Guarantor or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Company or any Guarantor substantially similar to the
Securities and the Guarantees (other than (i) the Securities and the Guarantees,
(ii) commercial paper issued in the ordinary course of business, and (iii) debt
to be issued or acquired as part of the transactions comprising the REIT
Conversion, without the prior written consent of the Underwriters.
6. Representations and Warranties. Each of the Company and the
Guarantors, jointly and severally, represents and warrants to each of you that:
(a) (i) The Registration Statement has become effective under the
Act, and 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, (ii) each part of the Registration Statement,
when such part became effective, did not contain and, as amended through the
Closing Date, if applicable, will not contain any untrue statement of a material
fact or omit to state any 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 (in the case of the
Prospectus) supplemented, if applicable, will comply in all material respects
with the Act and (iv) the Prospectus as of its date does not contain and the
Prospectus, as amended or supplemented, if applicable, as of the Closing Date
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Registration Statement or the Prospectus
(or any supplement or amendment thereto) made in reliance upon and in conformity
with information relating to you furnished to the Company or its agents in
writing by you expressly for use therein. The Company acknowledges for all
purposes under this Agreement that the statements with respect to price and
discount and the third, sixth (to the extent relating to a representation or
agreement of the Underwrit ers), seventh (but only the first sentence thereof as
it relates to actions by or inactions of the Underwriters), and eighth
paragraphs appearing under the caption "Underwriting" in the Prospectus (or any
amendment or supplement thereto) constitute the only written information
furnished to the Company by any of the Underwriters expressly for use in the
Prospectus (or any amendment or supplement thereto) and that you shall not be
deemed to have provided any other information (and therefore are not responsible
for any such statement or omission).
8
<PAGE>
(b) Each Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto and filed pursuant to Rule
424 under the Act, complied when so filed in all material respects with the Act.
(c) Each of the Company, the Guarantors and their respective
subsidiaries has been duly organized, is validly existing as a corporation (or
other entity) in good standing under the laws of its jurisdiction of
organization and has the requisite corporate (or other organizational) power and
authority to carry on its business as it is currently being conducted, and to
own, lease and operate its properties; and, as applicable, has the requisite
power and authority to authorize the offering of the Securities, to execute,
deliver and perform this Agreement and to issue, sell and deliver the
Securities; and each of the Company, the Guarantors and their respective
subsidiaries is duly qualified and is in good standing as a foreign corporation
(or other entity) authorized to do business in each jurisdiction where the
operation, ownership or leasing of property or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not, singly or in the aggregate, have a material adverse effect on the
properties, business, results of operations, condition (financial or otherwise),
business affairs or prospects of the Company, the Guarantors and their
respective subsidiaries taken as a whole (a "Material Adverse Effect").
(d) All of the issued and outstanding shares of capital stock of, or
other ownership interests in, each subsidiary of the Company have been duly and
validly authorized and issued, and all of the shares of capital stock of, or
other ownership interests in, each such subsidiary other than the subsidiaries
set forth on Schedule C (which subsidiaries are so owned in the amounts listed
----------
thereon) is owned, directly or through subsidiaries, by the Company. All such
shares of capital stock are fully paid and nonassessable, and are owned free and
clear of any security interest, mortgage, pledge, claim, lien or encumbrance
(each, a "Lien"), except for security interests in shares of certain
subsidiaries of the Company pursuant to the Pledge and Security Agreement
relating to the Company's 9 1/2% Senior Secured Notes due 2005, 9% Senior Notes
due 2007, 8 7/8% Senior Notes due 2007, 7 7/8% Series A Senior Notes due 2005
and 7 7/8% Series B Senior Notes due 2008 (collectively, the "Existing Senior
Notes"), the Credit Facility and from and after the Closing Date, the
Securities. There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, any subsidiary of the Company.
(e) The Indenture will have been duly authorized on or prior to the
date hereof and on the Closing Date, and on the Closing Date the Indenture will
be validly executed and delivered by the Company and the Guarantors and, when
duly
9
<PAGE>
executed and delivered in accordance with its terms, will be a valid and legally
binding agreement of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its terms (assuming the due
execution and delivery thereof by the Trustee) subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar types of
laws of general applicability relating to or affecting creditors' rights and to
general equity principles; and will conform in all material respects to the
descriptions thereof in the Prospectus.
(f) The Securities will have been duly authorized for issuance and
sale to you pursuant to this Agreement by the Company and the Guarantors on or
prior to the date hereof and on the Closing Date, and the Securities and the
Indenture on the Closing Date will have been duly executed by the Company and
the Guarantors and will conform in all material respects to the descriptions
thereof in the Prospectus. When the Securities are issued, authenticated and
delivered in accordance with the Indenture and paid for in accordance with the
terms of this Agreement, the Securities will constitute valid and legally
binding obligations of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with their terms
and entitled to the benefits of the Indenture subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar types of laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(g) [intentionally omitted]
(h) Neither the Company, the Guarantors nor any of their subsidiaries
has received from any governmental authority notice of any condemnation of or
zoning change affecting their respective properties or any part thereof or of
any violation of any municipal, state or federal law, rule or regulation
concerning its properties or any part thereof which has not heretofore been
cured or which would have a Material Adverse Effect, or which could reasonably
be expected to have a Material Adverse Effect, and neither the Company, the
Guarantors nor any of their respective subsidiaries knows of any such
condemnation or zoning change which is threatened on any of their properties or
any such violation. Neither the Company, the Guarantors nor any of their
respective subsidiaries is in violation of its respective charter or bylaws or
in default in the performance of any bond, debenture, note or any other evidence
of indebtedness or any indenture, mortgage, deed of trust or other contract,
lease or other instrument to which any of the Company, the Guarantors or any of
their respective subsidiaries is a party or by which any of them is bound, or to
which any of the property or assets of any of the Company, the Guarantors or any
of their respective subsidiaries is subject, except for such violations or
defaults which would neither have a Material
10
<PAGE>
Adverse Effect nor reasonably be expected materially and adversely to affect the
consummation of this Agreement or the transactions contemplated hereby.
(i) This Agreement has been duly authorized and validly executed and
delivered by the Company and each of the Guarantors and constitutes a valid and
legally binding agreement of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its terms
(assuming the due execution and delivery hereof by you of this Agreement)
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(j) The execution and delivery of this Agreement and the Indenture by
the Company and each of the Guarantors, the issuance and sale of the Securities,
the performance of this Agreement and the Indenture and the transactions
contemplated hereby and thereby will not (i) conflict with or result in a breach
or violation of any of the respective charter or bylaws of the Company, the
Guarantors or any of their respective subsidiaries or any of the terms or
provisions thereof, (ii) result in the suspension, termination or revocation of
any Authorization (as defined below) of the Company, the Guarantors or any of
their respective subsidiaries or other impairment of the rights of the holder of
any such Authorization, (iii) constitute a default or cause an acceleration of
any obligation under or result in the imposition or creation of (or the
obligation to create or impose) a Lien with respect to, any bond, note,
debenture or other evidence of indebtedness or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company, the Guarantors or
any of their respective subsidiaries is a party or by which it or any of them is
bound, or to which any properties of the Company, the Guarantors or any of their
respective subsidiaries is or may be subject except for Liens in respect of the
Securities or (iv) contravene any order of any court or governmental agency or
body having jurisdiction over the Company, the Guarantors or any of their
respective subsidiaries or any of their properties, or violate or conflict with
any statute, rule or regulation or administrative or court decree applicable to
the Company, the Guarantors or any of their respective subsidiaries, or any of
their respective properties except in the case of clauses (iii) or (iv) above,
for such conflicts or violations which would neither have a Material Adverse
Effect nor reasonably be expected materially and adversely to affect the
consummation of this Agreement or the transactions contemplated hereby.
(k) Except as may be described in the Prospectus, there is no action,
suit or proceeding before or by any court or governmental agency or body,
domestic or foreign, pending against or affecting the Company, the Guarantors or
any
11
<PAGE>
of their respective subsidiaries, or their respective properties, which is
required to be disclosed in the Registration Statement or Prospectus and are not
so described, or which would result, singly or in the aggregate, in a Material
Adverse Effect or which could reasonably be expected to materially and adversely
affect the consummation of this Agreement or the transactions contemplated
hereby, and to the best of the Company's knowledge, no such proceedings are
contemplated or threatened. No contract or document of a character required to
be described in the Registration Statement or Prospectus or to be filed as an
exhibit (other than this Agreement, which will be so filed on or prior to the
Closing Date) to the Registration Statement, is not so described or filed as
required.
(l) To the best knowledge of the Company and each of the Guarantors,
(A) no action has been taken and no statute, rule or regulation or order has
been enacted, adopted or issued by any governmental agency or body which
prevents the issuance of the Securities, prevents or suspends the use of the
Prospectus or suspends the sale of the Securities in any jurisdiction referred
to in Section 5(h) hereof and (B) no injunction, restraining order or order of
any nature by a Federal or state court of competent jurisdiction has been issued
with respect to the Company, the Guarantors or any of their respective
subsidiaries which would prevent or suspend the issuance or sale of the
Securities or the use of the Prospectus in any jurisdiction referred to in
Section 5(h) hereof. Every request of any securities authority or agency of any
jurisdiction for additional information (to be included in the Prospectus) has
been complied with in all material respects.
(m) Except as would not, singly or in the aggregate, have a Material
Adverse Effect, neither the Company, the Guarantors nor any of their respective
subsidiaries is in violation of any environmental, safety or similar law or
regulation applicable to its business relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), lacks any permits, licenses
or other approvals required of them under applicable Environmental Laws or is
violating any terms and conditions of any such permit, license or approval.
(n) The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, manufacturers or
contractors, or of Marriott International, which would have a Material Adverse
Effect.
(o) Except with respect to the Hotel Trades Council and Hotel
Association Pension Fund and the Host International, Inc. Cleveland Retirement
Benefit Plan, neither the Company, the Guarantors nor any of their respective
subsidiaries has
12
<PAGE>
sponsored, maintained or contributed to, directly or indirectly, within the last
five years, any employee benefit plan subject to Title IV of ERISA, including
without limitation "multiemployer plans" (as defined in Section 4001(a)(3) of
ERISA).
(p) Neither the Company, the Guarantors nor any of their respective
subsidiaries has violated any provisions of the Foreign Corrupt Practices Act or
the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a Material Adverse Effect.
(q) (i) Each of the Company, the Guarantors and their respective
subsidiaries have good and marketable and insurable title, free and clear of all
Liens, to all property and assets described in the Prospectus as being owned by
it, except for Liens described or reflected in the Prospectus (including all
Liens relating to mortgages reflected on the financial statements or described
in the notes thereto included in or incorporated by reference into the
Prospectus) and Liens imposed pursuant to the Pledge and Security Agreement or
by the indentures relating to the Existing Senior Notes and the Credit Facility
or Liens that would not have a Material Adverse Effect and (ii) all liens,
charges, encumbrances, claims or restrictions on or affecting the properties and
assets of the Company, the Guarantors or their respective subsidiaries that are
required to be disclosed in the Registration Statement are disclosed in the
Prospectus and preliminary prospectus.
(r) The firm of accountants that has certified or shall certify the
financial statements and supporting schedules included in or incorporated by
reference into the Prospectus and preliminary prospectus are independent public
accountants with respect to the Company, the Guarantors and their subsidiaries,
as required by the Act for financial statements included in a registration
statement on Form S-3 under the Act. The historical financial statements,
together with related schedules or notes, incorporated by reference into the
Prospectus, fairly present the combined consolidated financial position or, as
appropriate, the consoldiated financial position, of the entities whose such
position they purport so to present at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods. The pro forma financial
statements, together with related schedules or notes, set forth in the documents
incorporated by reference into the Prospectus and under the caption "Pro Forma
Consolidated Financial Data of HMH Properties" in the Prospectus have been
prepared on a basis consistent with such historical statements, except for the
pro forma adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly the transactions reflected thereby as
indicated in the Prospectus and this Agreement and
13
<PAGE>
comply as to form in all material respects with the applicable accounting
requirements of rule 11-02 of Regulation S-X and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of those
statements. The other financial and statistical information and data concerning
the Company, the Guarantors and the Subsidiary Guarantors included in or
incorporated by reference in the Prospectus, historical and pro forma, are, in
all material respects, accurately presented and prepared on a basis consistent
with the respective financial statements and the books and records of such
entities.
(s) Except as disclosed in the Prospectus (excluding any supplement or
amendment after the date hereof), subsequent to the respective dates as of which
information is given in such Prospectus and up to the Closing Date, neither the
Company, the Guarantors nor any of their respective subsidiaries has incurred
any liabilities or obligations, direct or contingent, which are material to the
Company, the Guarantors and their respective subsidiaries taken as a whole, nor
entered into any transaction not in the ordinary course of business and there
has not been, singly or in the aggregate, any material adverse change, or any
development which would involve a material adverse change, in the properties,
business, results of operations, condition (financial or otherwise), business
affairs or prospects of the Company, the Guarantors and their respective
subsidiaries taken as a whole (a "Material Adverse Change").
(t) No authorization, approval or consent or order of, or filing with,
any court or governmental body or agency is necessary in connection with the
transactions contemplated by this Agreement, except such as have been obtained
and made under state securities or Blue Sky laws or regulations. Neither the
Company, the Guarantors nor any of their affiliates is presently doing business
with the government of Cuba or with any person or affiliate located in Cuba.
(u) (i) Each of the Company, the Guarantors and their respective
subsidiaries has all certificates, consents, exemptions, orders, permits,
licenses, authorizations or other approvals (each, an "Authorization") of and
from, and has made all declarations and filings with, all Federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, necessary or required to own, lease, license and use
its properties and assets and to conduct its business in the manner described in
the Prospectus and all such Authorizations are in full force and effect, except
to the extent that the failure to obtain or file or cause to remain in effect
would not, singly or in the aggregate, have a Material Adverse Effect, (ii) the
Company, the Guarantors and their respective subsidiaries are in compliance in
all material respects with the terms and conditions of all such Authorizations
and with the rules and regulations of the regulatory authorities and governing
bodies having
14
<PAGE>
jurisdiction with respect thereto and (iii) neither the Company, the Guarantors
nor their respective subsidiaries has received any notice of proceedings
relating to the revocation or modification of any Authorization, which singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
(v) Neither the Company, the Guarantors nor their respective
subsidiaries is, and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Prospectus, will be, an "investment company" or a company "controlled" by an
investment company within the meaning of the '40 Act.
(w) Each certificate signed by any officer of the Company or any of
the Guarantors and delivered to the Underwriters or counsel for the Underwriters
pursuant to Section 9 shall be deemed to be a representation and warranty by the
Company or such Guarantor, as the case may be, to each Underwriter as to the
matters covered thereby.
(x) The Company, the Guarantors and each of their consolidated
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) Other than the Existing Senior Notes and the guarantees thereof,
there are no securities of the Company or any of its subsidiaries registered
under the Exchange Act, or listed on a national securities exchange or quoted in
a U.S. automated inter-dealer quotation system.
(z) Other than the Pledge and Security Agreement, pursuant to which,
among other things, the Holders of the Securities will be granted a security
interest in the Collateral (the "Pledge and Security Agreement") and with
respect to those of Host Marriott or certain of its subsidiaries (other than the
Company and its subsidiaries) as may be required in connection with the REIT
Conversion, there are no contracts, agreements or understandings between the
Company or any of the Guarantors and any person granting such person the right
to require the Company or any of the Guarantors to file a registration statement
under the Act with respect to any securities
15
<PAGE>
of such company or to require such company to include such securities with the
Securities registered pursuant to the Registration Statement.
(aa) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has indicated
to the Company or any of the Guarantors that it is considering (i) the
downgrading, suspension or withdrawal of, or any review for a possible change
that does not indicate the direction of the possible change in, any rating
assigned to the Company or any of the Guarantors or any securities of any of the
Company and the Guarantors or (ii) any change in the outlook for any rating of
the Company or any of the Guarantors or any securities of the Company or any of
the Guarantors.
(ab) Neither the Company, the Guarantors nor any of their respective
subsidiaries is in violation of any statute, law, ordinance, governmental rule
or regulation or any judgment, decree, rule or order of any court or
governmental agency or authority applicable to the Company, the Guarantors or
their respective subsidiaries or any of their respective properties or assets or
any applicable zoning laws, ordinances and regulations, except such violations
as would not, singly or in the aggregate, have a Material Adverse Effect.
(ac) The leases under which the Company, the Guarantors or their
respective subsidiaries holds or uses real property or other material assets as
a lessee ("Leases") are in full force and effect; and each of the Company, the
Guarantors and their respective subsidiaries has complied with its obligations
under the Leases, the Management Agreements, the Residence Inn Agreements and
its franchise agreements; and neither the Company, the Guarantors nor any of
their respective subsidiaries knows of any default by any other party to the
Leases, the Management Agreements, the Residence Inn Agreements and its
franchise agreements which, alone or together with other such defaults, would
have a Material Adverse Effect.
(ad) Immediately after giving effect to the Offering and the use of
proceeds therefrom, with respect to the Company and each Guarantor, (i) the
present fair salable value of its assets shall be more than the amount that will
be required to pay its debts (including contingent and unliquidated debts) as
they become absolute and matured, (ii) its assets, at a fair valuation, shall be
greater than the sum of its debts (including contingent and unliquidated debts),
(iii) it shall not be engaged in a business or transaction for which its
remaining assets are unreasonably small in relation to such business or
transaction and (iv) it shall not intend to incur or believe that it will incur
debts beyond its ability to pay as such debts become absolute and matured.
16
<PAGE>
(ae) The Indenture, as of the date hereof and at the Closing Date,
will conform in all material respects to the requirements of the Trust Indenture
Act of 1939, as amended, and the rules and regulations thereunder (collectively,
the "TIA") applicable to an indenture which is qualified under the TIA.
(af) Neither the Company nor any of its subsidiaries owns any "margin
securities" as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board"), and none of the
proceeds of the sale of the Securities will be used, directly or indirectly, for
the purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause any of
the Securities to be considered a "purpose credit" within the meanings of
Regulations T, U or X of the Federal Reserve Board.
(ag) Upon the issuance of the Securities as contemplated hereunder and
under the Indenture, the Pledge and Security Agreement will create a valid and
(assuming the certificates representing the Pledged Shares accompanied by stock
powers endorsed in blank were delivered to the Pledgee in New York and are held
by the Pledgee in New York) perfected security interest in the Pledged Shares
required to be subject to the Lien of the Indenture and the Pledge and Security
Agreement in favor of the Pledgee (as defined in the Pledge and Security
Agreement) for the benefit of holders of the Securities (on an equal and ratable
basis with the Existing Senior Notes and the Credit Facility), subject only to a
Lien in favor of the Pledgee, as security for the obligations purported to be
secured thereby.
(ah) The Company (i) has not offered or sold and, prior to the date
six months after the Closing Date will not offer or sell, any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which do not constitute an offer to the public in the United
Kingdom for the purposes of the Public Offers of Securities Regulations 1995;
(ii) has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom and (iii) has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue or sale of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
(as amended) or is a person to whom the document may otherwise lawfully be
issued or passed on.
17
<PAGE>
7. Indemnification.
(a) Each of the Company and the Guarantors, jointly and severally
agrees to indemnify and hold harmless (i) each of the Underwriters, (ii) each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) any of the Underwriters (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any of the Underwriters or any controlling person
(any person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "Indemnified Person") to the fullest extent lawful, from and against
any and all losses, claims, damages, liabilities, judgments, actions and
expenses (including without limitation, and as incurred, reimbursement of all
reasonable costs of investigating, preparing, pursuing or defending any claim,
action, investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Indemnified Person) directly or indirectly caused by, related to, based
upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (with respect to the Prospectus, or any amendment thereto, in
light of the circumstances under which they were made), not misleading;
provided, however, that this indemnity agreement shall not apply to such losses,
- -------- -------
claims, damages, liabilities or expenses caused by an untrue statement or
omission or alleged untrue statement or omission that is made in reliance upon
and in conformity with information relating to any of the Underwriters furnished
in writing to the Company by any of the Underwriters expressly for use in the
Registration Statement, Prospectus or any amendment thereto. The Company and the
Guarantors shall notify you promptly of the institution, threat or assertion of
any claim, proceeding (including any governmental investigation) or litigation
in connection with the matters addressed by this Agreement which involves the
Company, any Guarantor or an Indemnified Person.
(b) In case any action or proceeding (including any governmental
investigation) shall be brought or asserted against any of the Indemnified
Persons with respect to which indemnity may be sought against the Company or any
Guarantor, the applicable Underwriter with respect to such Indemnified Person
shall promptly notify the Company in writing (provided that the failure to give
--------
such notice shall not relieve the Company or any Guarantor of its obligations
pursuant to this Agreement unless and only to the extent that such omission
results in the loss or compromise of any material rights or defenses by the
Company, as determined by a court
18
<PAGE>
of competent jurisdiction by final judgment) and the Company shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Persons and payment of all fees and expenses in connection
therewith. Such Indemnified Person shall have the right to employ its own
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person, unless: (i) the employment of such counsel has been specifically
authorized in writing by the Company or the Guarantors; (ii) the Company has
failed promptly to assume the defense and employ counsel reasonably satisfactory
to the Indemnified Person or (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Person and the
Company or any Guarantor, or any affiliate of the Company or such Guarantor and
such Indemnified Person shall have been reasonably advised by counsel that
either (x) there may be one or more legal defenses available to it which are
different from or additional to those available to the Company or any Guarantor
or such affiliate of the Company or such Guarantor or (y) a conflict may exist
between such Indemnified Person and the Company or any Guarantor or such
affiliate of the Company or such Guarantor (in which case the Company shall not
have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Company and the
Guarantors shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Indemnified Persons, which firm shall be designated in
writing by the Underwriters and that all such fees and expenses shall be
reimbursed as they are incurred). The Company and Guarantors shall not be liable
for any settlement of any such action or proceeding effected without the
Company's prior written consent, and each of the Company and the Guarantors
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss, claim, damage, liability or expense by reason of any settlement of any
action effected with the written consent of the Company or a Guarantor. Neither
the Company nor any Guarantor shall, without the prior written consent of each
Indemnified Person affected thereby (which consent shall not unreasonably be
withheld), settle or compromise or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, claim, litigation
or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Person is a party thereto), unless
such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Person affected thereby from all liability arising
out of such action, claim, litigation or proceeding.
(c) Each of the Underwriters agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Guarantors and their respective
19
<PAGE>
directors, officers and any person controlling (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Company, the Guarantors and
the officers, directors, partners, employees, representatives and agents of each
such person, to the same extent as the foregoing indemnity from the Company and
the Guarantors to each of the Indemnified Persons, but only with respect to
claims and actions based on information relating to such Underwriter in the
Prospectus that is in conformity with information furnished in writing by such
Underwriter expressly for use in the Prospectus. In case any action or
proceeding (including any governmental investigation) shall be brought or
asserted against the Company, the Guarantors or any of their respective
directors or officers, or any such controlling person based on the Prospectus in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing sentence, such Underwriter shall have the rights and duties given to
the Company and the Guarantors by Section 7(b) above (except that if the Company
shall have assumed the defense thereof, such Underwriter may, but shall not be
required to, employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter), and the Company, the Guarantors, their directors, any such
officers and each such controlling person shall have the rights and duties given
to the Indemnified Person by Section 7(b) above.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party or is insufficient to hold an indemnified
party harmless in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause (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 (i) above but also the relative fault of
the indemnifying parties and the indemnified party, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantors, on the one hand, and any of the Underwriters, on the other
hand, shall be deemed to be in the same proportion as the total proceeds from
the offering (net of discounts and commissions but before deducting expenses)
received by the Company bear to the total discounts and commissions received by
such Underwriter, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Company and the Guarantors and the
Underwriters 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 related to information supplied by the
Company, the Guarantors or the Underwriters and the
20
<PAGE>
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The indemnity and contribution
obligations set forth herein shall be in addition to any liability or obligation
such party may otherwise have to any indemnified party.
The Company, the Guarantors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to Section 7(d) 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 which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses 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, none of the
Underwriters (and its related Indemnified Persons) shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total underwriting discount applicable to the Securities purchased by such
Underwriter exceeds the amount of any damages which 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
Section 7(d) are several in proportion to the respective principal amount of
Securities purchased by each of the Underwriters hereunder and not joint.
8. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Securities under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the date
hereof and on the Closing Date with the same force and effect as if made on and
as of the date hereof. The Company and the Guarantors shall have performed or
complied with all of their obligations and agreements herein contained and
required to be performed or complied with at or prior to the Closing Date.
(b) The Prospectus shall have been printed and copies distributed to
the Underwriters as promptly as practicable following the date of this Agreement
or at such other date and time as to which you may agree; and no stop order
21
<PAGE>
suspending the sale of the Securities in any jurisdiction referred to in Section
5(h) shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Securities; and
no injunction, restraining order or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Securities and on the Closing Date, no
action, suit or proceeding shall be pending against, or, to the knowledge of the
Company or the Guarantors, threatened against the Company, the Guarantors or
their respective subsidiaries before any court or arbitrator or any governmental
body, agency or official which, if adversely determined, would interfere with or
adversely affect the issuance of the Securities or would have a Material Adverse
Effect.
(d) (i) Since the date hereof, there shall not have been any Material
Adverse Change and (ii) except as set forth in the Prospectus, since the date of
the latest balance sheet for the Company included in the Prospectus, there shall
not have been any material change in the capital stock or long-term debt, or
material increase in short-term debt of the Company and of its consolidated
subsidiaries taken as a whole.
(e) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and you shall have received counterparts, conformed as
executed, thereof.
(f) You shall have received certificates from the Company and each of
the Guarantors, dated the Closing Date, executed on behalf of the Company and
each of the Guarantors, by the President or any Vice President, and a principal
financial or accounting officer of the Company and each of the Guarantors,
confirming, as of the Closing Date, the matters set forth in paragraphs (a)
through (d) and (n) of this Section 8.
(g) The Company and the Guarantors shall have executed and delivered,
filed and recorded all instruments and documents, and have done all such acts
and other things as are necessary to subject the Collateral (as defined in the
Indenture) to the security interests intended to be created by the Pledge and
Security Agreement and as are reasonably necessary or advisable to perfect the
security interests intended to be created thereby.
22
<PAGE>
(h) The Securities shall have received a rating of BB and Ba2 from
Standard & Poor's Corporation and Moody's Investors Service, Inc., respectively.
(i) On the Closing Date, you shall have received:
(1) an opinion (in a form reasonably satisfactory to you and
your counsel), dated the Closing Date, of Latham & Watkins ("L&W"), counsel for
the Company and the Guarantors, to the effect that:
a) (I) based solely on certificates of public officials,
the Company and each of the Guarantors that is a Delaware corporation is a
validly existing corporation in good standing under the laws of its jurisdiction
of incorporation and (II) each of the Company and the Guarantors that is a
Delaware corporation has the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as described in and
incorporated by reference into the Registration Statement and the Prospectus;
b) each of the Company and the Guarantors that is a
Delaware corporation has the full corporate power and authority to execute,
deliver and perform this Agreement and the Indenture and to issue, deliver and
sell the Securities as contemplated by this Agreement;
and binding obligations of the Company and the Guarantors, enforceable against
the Company and the Guarantors in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity) and except to the extent that a waiver of
rights under any usury laws may be unenforceable;
d) the Indenture, assuming due authorization, execution
and delivery thereof by the Trustee, constitutes the legally valid and binding
agreement of the Company and the Guarantors, enforceable against the Company and
the Guarantors in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity) and except to the extent that a waiver of rights under any usury laws
may be unenforceable;
23
<PAGE>
e) the Securities and the Indenture conform in all
material respects to the description thereof under the captions "Description of
Notes" and "Description of HMH Senior Notes" in the Prospectus;
f) the Indenture has been qualified under the Trust
Indenture Act.
g) the provisions of the Pledge and Security Agreement
are effective to create a valid security interest in favor of the Pledgee (as
defined in the Pledge and Security Agreement) in the certificates representing
the capital stock described in the Pledge and Security Agreement and listed on
Annex A to the Pledge and Security Agreement (the "Pledged Stock") as security
for the payment, to the extent set forth therein, of all Obligations (as defined
in the Pledge and Security Agreement); upon (I) authentication and execution of
the Securities in accordance with the terms of the Indenture and (II) delivery
of the certificates representing the Securities against payment therefore in
accordance with the terms of this Agreement, the security interest in favor of
the Pledgee in the Pledged Stock will be perfected free of any adverse claim;
h) assuming the accuracy of the Company's representation
in Section 6(af) neither the consummation of the transactions contem plated by
this Agreement nor the sale, issuance, execution or delivery of the Securities
will violate Regulations T, U or X of the Board of Governors of the Federal
Reserve System;
i) the Registration Statement has been declared
effective under the Act. Any required filing of the Prospectus pursuant to Rule
424(b) under the Act has been made in the manner and within the time period
required by Rule 424(b). To the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued under
the Act and, to the best of such counsel's knowledge, no proceedings for that
purpose have been initiated or are pending or threatened by the Commission; and
j) the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial statements
and notes thereto, schedules and other financial data included or incorporated
by reference therein or omitted therefrom), complied as to form in all material
respects with the requirements of the Act and the regulations of the Commission
promulgated pursuant thereto for Registration Statements on Form S-3 under the
Act.
24
<PAGE>
(2) an opinion (satisfactory to you and your counsel) dated the
Closing Date, of Christopher G. Townsend, Senior Vice President and General
Counsel of Host Marriott, to the effect that:
a) the Company and each of the Guarantors is a duly
organized and validly existing corporation (or other entity) in good standing
under the laws of its jurisdiction of incorporation (or organization), has the
requisite corporate (or organizational) power and authority to own, lease and
operate its properties and to conduct its business as described in or
incorporated by reference into the Prospectus and to execute, deliver and
perform this Agreement, and based solely on certificates of public officials is
duly qualified as a foreign corporation (or other entity) and in good standing
in each jurisdiction where the ownership, leasing or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not have, singly or in the aggregate, a
Material Adverse Effect;
b) all of the issued and outstanding shares of capital
stock of, or other ownership interests in, each Subsidiary Guarantor have been
duly and validly authorized, where applicable, and issued, and the shares of
capital stock of, or other ownership interests in, each Subsidiary Guarantor
owned, directly or through subsidiaries, by the Company, are, where applicable,
fully paid and nonassessable, and to the best knowledge of such counsel, are
owned free and clear of any Lien, except for Liens relating to the Existing
Senior Notes, Credit Facility and the Securities or as otherwise disclosed in or
incorporated by reference into the Prospectus;
c) to the best knowledge of such counsel, there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or Liens related to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of, or other
ownership interest in any Subsidiary Guarantors;
d) neither the Company nor any of the Guarantors is, and
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus, will be, an
"investment company" or a company "controlled" by an investment company within
the meaning of the '40 Act;
e) no authorization, approval, consent or order of, or
filing with, any court or governmental body or agency is required for the
25
<PAGE>
issuance and sale of the Securities pursuant to this Agreement, except such as
have been obtained and made under state securities or Blue Sky laws or
regulations;
f) the execution and delivery of this Agreement and the
Indenture (collectively, the "Applicable Agreements"), the issuance and sale of
the Securities, and the performance of the Applicable Agreements will not (I)
result in a default, breach or violation of or conflict with, as applicable, (A)
any of the charter or by-laws of the Company or any of the Guarantors, (B) to
the best knowledge of such counsel, any document filed as an exhibit to the
Registration Statement or to any document incorporated by reference into the
Registration Statement, or (C) to the best knowledge of such counsel, any order
of any court or governmental agency or body having jurisdiction over the Company
or any of the Guarantors or any of their properties which conflict, breach or
default in each of the cases described in clauses (B) and (C) would have a
Material Adverse Effect or (II) cause the creation of any security interest or
lien (other than the liens permitted under the Indenture) upon any of the
property of the Company or any of the Guarantors; to the best knowledge of such
counsel, each document that is required to be filed as an exhibit to the
Registration Statement, and each document required to be filed as an exhibit to
each document incorporated by reference into the Registration Statement, was so
filed in compliance with the requirements of the Act.
g) to the best knowledge of such counsel, (I) there are
no material franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments to which the Company or any of the Guarantors
is a party or by which any of them may be bound that is not described in or
incorporated by reference into the Prospectus, (II) no default exists in the due
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument so described, except for defaults which would not have a
Material Adverse Effect, (III) the statements under the captions "Relationship
with HM Services," "Relationship with Marriott International; Marriott
International Distribution," and "The REIT Conversion" contained in the Proxy
Statement of Host Marriott, dated November 23, 1998, incorporated by reference
into the Prospectus, insofar as such statements constitute a summary of legal
matters, documents or proceedings referred to therein, are accurate in all
material respects and (IV) neither the Company nor any of the Guarantors is in
violation of its respective charter or by-laws;
26
<PAGE>
h) each of this Agreement, the Securities and the
Indenture has been duly authorized, executed and delivered by the Company and
each of the Guarantors;
i) to the best knowledge of such counsel, the
descriptions of current or pending legal or governmental actions, suits or
proceedings which appear under the captions "Legal Proceedings" in the Proxy
Statement of Host Marriott, dated November 23, 1998, incorporated by reference
into the Prospectus, are accurate in all material respects; and
j) the Registration Statement has become effective under
the Act, and no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's knowledge after
due inquiry, pending before or contemplated by the Commission;
In addition, Latham & Watkins and Christopher G. Townsend shall 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 your representatives, at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed, and although 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 (except to the extent expressly referred to in clauses 1(e), 2(g) and
2(i) above) and has not made any independent check or verification thereof,
during the course of such participation, no facts have come to the attention of
such counsel that cause it 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 the statements therein not misleading, or that the Prospectus as of its
date, or as of the date hereof, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; it being
understood that such counsel need not express any belief with respect to the
financial statements, schedules and other financial data included or
incorporated by reference in, or omitted from, the Registration Statement or the
Prospectus or with respect to the Form T-1.
In rendering such opinions, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on oral or written statements and
representa tions of officers and other representations of the Company and
others, on certificates of and assurances from public officials and on
certificates or other written statements of
27
<PAGE>
officers of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company and the
Guarantors.
(j) You shall have received an opinion, as to certain of
the matters set forth above, dated the Closing Date, of Skadden, Arps, Slate,
Meagher & Flom LLP ("Skadden Arps"), your counsel, in form and substance
reasonably satisfactory to you.
(k) You shall have received letters on and as of the
date hereof as well as on and as of the Closing Date (in the latter case
constituting an affirmation of the statements set forth in the former, in form
and substance satisfactory to you) from Arthur Andersen, LLP, independent public
accountants, with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Registration
Statement and Prospectus.
(l) Skadden Arps shall have been furnished with such
documents and opinions, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(m) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents as you may
reasonably request.
(n) Neither the Company nor any of the Guarantors shall
have failed at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by it
at or prior to the Closing Date.
(o) On or prior to the Closing Date, the Company shall
have received effective consents of the lenders as required, if applicable,
under the Credit Facility to the transactions contemplated by this Agreement.
(p) [intentionally omitted]
(q) [intentionally omitted]
28
<PAGE>
(r) As of the Closing Date, Congress shall not have
enacted legislation, or proposed legislation with a reasonable possibility of
being enacted, that would have the effect of substantially impairing the ability
of Host REIT to qualify as a REIT or the Operating Partnership to qualify as a
partnership or substantially increasing the federal income tax liabilities of
Host REIT or other reductions in the expected benefits resulting from the REIT
Conversion, which determination will be made by the Underwriters, in their
discretion.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company and the Guarantors will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you. The Company and the Guarantors will furnish the
Underwriters with such conformed copies of such opinions, certificates, letters
and other documents as they shall reasonably request.
9. Defaults. If on the Closing Date, any of the Underwriters shall
fail or refuse to purchase Securities which it has agreed to purchase hereunder
on such date, and the aggregate principal amount of such Securities that such
defaulting Underwriter(s) agreed but failed or refused to purchase does not
exceed 10% of the total principal amount of such Securities that all of the
Underwriters are obligated to purchase on such Closing Date, each non-defaulting
Underwriter shall be obligated to purchase the amount of the Securities that
such defaulting Underwriter(s) agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Securities that any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Securities, without the written consent of such Underwriter. If, on the Closing
Date, any of the Underwriters shall fail or refuse to purchase Securities in an
aggregate principal amount that exceeds 10% of such total principal amount of
the Securities and arrangements satisfactory to the other Underwriter(s) and the
Company for the purchase of such Securities are not made within 48 hours after
such default, this Agreement shall terminate without liability on the part of
the non-defaulting Underwriter(s), the Company or the Guarantors, except as
otherwise provided in Section 10. In any such case that does not result in
termination of this Agreement, the Underwriters and the Company may agree to
postpone the Closing Date for not longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve a defaulting Underwriter from liability in respect
of any default by such Underwriter under this Agreement.
29
<PAGE>
10. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by you by notice to the Company if any of the following has
occurred: (i) subsequent to the date of this Agreement, any Material Adverse
Change occurs, which, in DLJ's and BT's judgment, makes it impracticable or
inadvisable to market the Securities or to enforce contracts for sale of the
Securities, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or material adverse change in the financial
markets of the United States or elsewhere, or any other substantial national or
international calamity or emergency if the effect of such outbreak, escalation,
calamity, crisis or emergency would, in DLJ's and BT's judgment, make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (iii) any suspension or limitation of trading
generally in securities on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq Stock Market or in the over-the-counter markets or any
setting of minimum prices for trading on such exchange or markets, (iv) any
declaration of a general banking moratorium by Federal, New York or Maryland
authorities, (v) the taking of any action by any Federal, state or local
government or agency in respect of its monetary or fiscal affairs that in your
judgment has a material adverse effect on the financial markets in the United
States, and would, in DLJ's and BT's judgment, make it impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, (vi) the enactment, publication, decree, or other promulgation of
any Federal or state statute, regulation, rule or order of any court or other
governmental authority which would, in DLJ's and BT's judgment, have a Material
Adverse Effect or (vii) the Securities or any securities of Host Marriott shall
have been downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization, provided, that in the
case of such "watch list" placement, termination shall be permitted only if such
placement would, in the judgment of any Underwriter, make it impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities or materially impair the investment quality of the Securities.
The indemnities and contribution provisions and the other agreements,
representations and warranties of the Company, the Guarantors, their respective
officers and directors and the Underwriters set forth in or made pursuant to
this Agreement shall remain operative and in full force and effect, and will
survive delivery of and payment for the Securities, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any of the Underwriters or by or on behalf of the Company or
30
<PAGE>
any Guarantor, its officers or directors or any controlling person thereof, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters pursuant to
clauses (i) or (vii) of the second paragraph of this Section 10 or because of
the failure or refusal on the part of the Company or any Guarantor to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Company and the Guarantors agree to reimburse you for all out-of-pocket expenses
incurred by you. Notwithstanding any termination of this Agreement, the Company
and the Guarantors shall be liable for all expenses which they have agreed to
pay pursuant to Section 5(l) hereof.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Underwriters, any Indemnified Person referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The terms "successors and assigns" shall not include a purchaser of
any of the Securities from any of the Underwriters merely because of such
purchase.
11. Notices. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (a) if to the Company or any Guarantor, at 10400
Fernwood Road, Bethesda, Maryland 20817, Attention: Christopher G. Townsend with
a copy to Latham & Watkins, 1001 Pennsylvania Avenue, N.W., Suite 1300,
Washington, D.C. 20004, Attention: Bruce E. Rosenblum, Esq., and (b) if to any
Underwriter, to Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, Attention: Syndicate Department, and to BT
Alex. Brown Incorporated, 130 Liberty Street, 37th Floor, New York, New York
10006, Attention: Syndicate Department with a copy to Skadden, Arps, Slate,
Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California
90071, Attention: Nick P. Saggese, or in any case to such other address as the
person to be notified may have requested in writing.
12. Governing Law. THIS AGREEMENT SHALL BE GOV ERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and
31
<PAGE>
directors and other persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
32
<PAGE>
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Company, the Guarantors and you.
Very truly yours,
HMH PROPERTIES, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Executive Vice President
HOST MARRIOTT CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Senior Vice President
HOST MARRIOTT HOSPITALITY, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Senior Vice President
HMH RIVERS, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: President
33
<PAGE>
MARRIOTT SBM TWO CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
MARRIOTT PLP CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
HMC RETIREMENT PROPERTIES, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: President
HMH PENTAGON CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
34
<PAGE>
HMC SFO, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
HMH MARINA, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
HOST AIRPORT HOTELS, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
HOST OF HOUSTON 1979
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President of Managing Partner
35
<PAGE>
HOST OF HOUSTON, LTD.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President of Managing Partner
HOST OF BOSTON, LTD.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President of Managing Partner
MARRIOTT FINANCIAL SERVICES, INC.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
HMC CAPITAL RESOURCES CORP.
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: President
36
<PAGE>
MARRIOTT SBM ONE CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
YBG ASSOCIATES LLC
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Manager
PRM CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
MARRIOTT PARK RIDGE CORPORATION
By: /s/ Christopher G. Townsend
---------------------------------------
Name: Christopher G. Townsend
Title: Vice President
37
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Donald S. Kinsey
-----------------------------------------
Name: Donald S. Kinsey
Title: Senior Vice President
38
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
BT ALEX. BROWN INCORPORATED
By: /s/ Jacques Brand
-----------------------------------------
Name: Jacques Brand
Title: Managing Director
39
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
BARCLAYS CAPITAL INC.
By: /s/ Nicholas Dafotas
-----------------------------------------
Name: Nicholas Dafotas
Title: Managing Director
40
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
BEAR, STEARNS & CO. INC.
By: /s/ John Kifell
-----------------------------------------
Name: John Kifell
Title:
41
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT LYONNAIS SECURITIES (USA) INC.
By: /s/ Paul H. Panella
-----------------------------------------
Name: Paul H. Panella
Title: Managing Director
42
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ Andreas Neumeier
-----------------------------------------
Name: Andreas Neumeier
Title: Vice President
43
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Jon Kline
-----------------------------------------
Name: Jon Kline
Title: Vice President
44
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ Sam A. Wilkins, III
-----------------------------------------
Name: Sam A. Wilkins, III
Title: Senior Managing Director
45
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
SALOMON SMITH BARNEY INC.
By: /s/ Josh Gallo
-----------------------------------------
Name: Josh Gallo
Title: Managing Director
46
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
SG Cowen Securities Corporation
By: /s/ Ian Hardington
-----------------------------------------
Name: Ian Hardington
Title: Managing Director
47
<PAGE>
SCHEDULE A
Subsidiary Guarantors
- ---------------------
HMH Rivers, Inc.
Marriott SBM Two Corporation
Marriott PLP Corporation
HMC Retirement Properties, Inc.
HMH Pentagon Corporation
HMC SFO, Inc.
HMH Marina, Inc.
Host Airport Hotels, Inc.
Host of Houston 1979
Host of Houston, Ltd.
Host of Boston, Ltd.
Marriott Financial Services, Inc.
HMC Capital Resources Corp.
Marriott SBM One Corporation
YBG Associates LLC
PRM Corporation
Marriott Park Ridge Corporation
48
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Principal Amount
of Series C Notes
-----------------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation $175,000,000
BT Alex. Brown Incorporated 150,000,000
Barclays Capital Inc. 25,000,000
Bear, Stearns & Co. Inc. 16,667,000
Credit Lyonnais Securities (USA) Inc. 25,000,000
Deutsche Bank Securities, Inc. 16,666,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated 16,667,000
NationsBanc Montgomery Securities LLC 25,000,000
Salomon Smith Barney Inc. 25,000,000
SG Cowen Securities Corporation 25,000,000
------------
Total $500,000,000
</TABLE>
49
<PAGE>
SCHEDULE C
SUBSIDIARIES NOT WHOLLY OWNED
BY
HMH PROPERTIES, INC.
--------------------
HMH PROPERTIES
OWNERSHIP
PERCENTAGE
-------------------
HMC/Interstate Manhattan Beach, LP 75%
HMH Norfolk, LP 90%
IHP Holdings Partnership, LP 47%
HMC/Interstate Ontario, LP 90%
Host/Interstate Partnership, LP 95%
Desert Springs Marriott, LP 1%
Marriott DSM LLC (1)
DS Hotel LLC (2)
Atlanta Marriott Marquis II, LP 59.68%
Ivy Street Hotel, LP (3)
HMA GP, Inc. (4)
HMA Realty, LP (5)
__________________
(1) Wholly owned by Desert Springs Marriott, LP
(2) Wholly owned by Marriott DSM LLC
(3) 80% owned by Atlanta Marriott Marquis II, LP
(4) Wholly owned by Ivy Street Hotel, LP
(5) Wholly owned by Ivy Street Hotel, LP and HMA GP, Inc.
50
<PAGE>
Exhibit 4.2
SECOND SUPPLEMENTAL INDENTURE TO
AMENDED AND RESTATED INDENTURE
SECOND SUPPLEMENTAL INDENTURE, dated as of December 11, 1998, among HMH
PROPERTIES, INC., a Delaware corporation (the "Company"), the Guarantors and
Subsidiary Guarantors named in the Amended and Restated Indenture, dated as of
August 5, 1998 (the "Indenture"), and MARINE MIDLAND BANK, as Trustee (the
"Trustee").
RECITALS
WHEREAS, the Company, the Guarantors, the Subsidiary Guarantors and the
Trustee executed and delivered the Amended and Restated Indenture, dated as of
August 5, 1998, amending and restating the form of Indenture previously filed as
Exhibit 4.1 to the Registration Statement (No. 333-50729) filed with the
Securities and Exchange Commission ("Commission") on Form S-3 by the Company,
the Guarantors and the Subsidiary Guarantors;
WHEREAS, the Company, the Guarantors and the Subsidiary Guarantors desire
to create a series of Securities to be issued under the Indenture, as hereby
supplemented, to be known as the 8.45% Series C Senior Notes due 2008 and
Guarantees thereof of the Guarantors and Subsidiary Guarantees thereof of the
Subsidiary Guarantors (hereinafter, the "Series C Notes");
WHEREAS, Section 9.1.(e) of the Indenture provides that the Company, the
Guarantors, the Subsidiary Guarantors and the Trustee may amend or supplement
the Indenture without the written consent of the Holders of the outstanding
Securities to provide for the issuance of and establish the form and terms and
conditions of Securities of any Series as permitted by the Indenture;
WHEREAS, Section 9.1(a) of the Indenture provides that the Company, the
Guarantors, the Subsidiary Guarantors and the Trustee may amend or supplement
the Indenture without the written consent of the Holders of the outstanding
Securities to cure any ambiguity, defect or inconsistency therein;
WHEREAS, all acts and things prescribed by the Indenture, by law and by the
Certificate of Incorporation and the Bylaws of the Company, the Guarantors, the
Subsidiary Guarantors and the Trustee necessary to make this Second Supplemental
Indenture a valid instrument legally binding on the Company, the Guarantors, the
<PAGE>
Subsidiary Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed; and
WHEREAS, all conditions precedent to amend or supplement the Indenture have
been met;
NOW, THEREFORE, to comply with the provisions of the Indenture, and in
consideration of the above premises, the Company, the Guarantors, the Subsidiary
Guarantors and the Trustee covenant and agree as follows:
ARTICLE 1
Section 1.01. Nature of Supplemental Indenture. This Second Supplemental
--------------------------------
Indenture supplements the Indenture and does and shall be deemed to form a part
of, and shall be construed in connection with and as part of, the Indenture for
any and all purposes.
Section 1.02. Establishment of New Series. Pursuant to Section 2.2 of the
---------------------------
Indenture, there is hereby established the Series C Notes having the terms,
in addition to those set forth in the Indenture and this Second Supplemental
Indenture, set forth in the form of Series C Note, attached hereto as
Exhibit A, which is incorporated herein as a part hereof.
- ---------
Section 1.03. Optional Redemption. The Company will not have the right to
-------------------
redeem any Series C Notes prior to December 1, 2003. The Series C Notes will be
redeemable at the option of the Company, in whole or in part, at any time, and
from time to time, on and after December 1, 2003, upon not less than 30 days'
nor more than 60 days' notice to each Holder of such Securities to be redeemed,
at the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the 12-month period commencing December 1 of
the years indicated below, in each case (subject to the right of Holders of
record on a Record Date that is on or prior to such redemption date to receive
interest due on the corresponding Interest Payment Date), together with accrued
and unpaid interest thereon to the redemption date:
<TABLE>
<CAPTION>
SERIES C
---------
YEAR NOTES
---- ---------
<S> <C>
2003........................ 104.225%
2004........................ 102.817%
2005........................ 101.408%
2006 and thereafter......... 100.000%
</TABLE>
2
<PAGE>
In the case of a partial redemption, the Trustee shall select the
Securities or portions thereof for redemption on a pro rata basis, by lot or in
such other manner it deems appropriate and fair. The Securities may be redeemed
in part in multiples of $1,000 only.
The Series C Notes will not have the benefit of any sinking fund.
ARTICLE 2
Section 2.01. The term "Subsidiary Guarantors" means, with respect to
the Series C Notes, (A) the Initial Subsidiary Guarantors identified in the
Indenture (in the definition of "Subsidiary Guarantors" contained therein) and
(B) any Future Subsidiary Guarantors that become Subsidiary Guarantors pursuant
to the terms of the Indenture, but excluding any Persons whose Guarantees have
been released pursuant to the terms of the Indenture. The term "Guarantors"
means, with respect to the Series C Notes, Host and each other Parent of the
Company. The provisions of Article 12 will be applicable to the Series C Notes.
Section 2.02. The second sentence of the definition of "Subsidiary
Guarantee" set forth in Section 1.01 of the Indenture shall read, for purposes
of the Series C Notes, as follows: "Each Subsidiary Guarantee with respect to
the Series C Notes will be a senior obligation of the Subsidiary Guarantor and
will be full and unconditional regardless of the enforceability of the Series C
Notes, the Second Supplemental Indenture and the Indenture."
ARTICLE 3
Section 3.01. Subject to the further provisions of this Article 3, the
covenants set forth in Article 4 of the Indenture shall be applicable to the
Series C Notes.
Section 3.02. Subject to Section 3.03 below, the provisions of Section
4.9 of the Indenture shall be applicable to the Series C Notes only until (but
not including) the Conversion Date. Subject to Section 3.03 below, the
provisions of Section 4.15 of the Indenture shall be applicable to the Series C
Notes only from and after the Conversion Date.
Section 3.03. The provisions of Sections 4.8, 4.9, 4.10, 4.11, 4.12 and
4.15 of the Indenture shall be applicable to the Series C Notes only for so long
as and during any time that such Series C Notes are not rated Investment Grade.
3
<PAGE>
ARTICLE 4
Section 4.01. Section 2.03 of that First Supplemental Indenture to
Amended and Restated Indenture dated August 5, 1998 among the Company, the
Guarantors, the Subsidiary Guarantors named in the Indenture and the Trustee is
hereby amended to correct a defect therein resulting from the inadvertent
omission therefrom of a reference to the Series A Notes as well as to the Series
B Notes. As amended and replaced, Section 2.03 shall be as follows:
Section 2.03. (a) The provisions of Section 4.8, 4.9, 4.10, 4.11, 4.12
and 4.15 shall be applicable to the Series A Notes only for so long as and
during any time that such Series A Notes are not rated Investment Grade.
(b) The provisions of Section 4.8, 4.9, 4.10, 4.11, 4.12
and 4.15 shall be applicable to the Series B Notes only for so long as and
during any time that such Series B Notes are not rated Investment Grade.
Section 4.02. The definition of "Host REIT" in the Indenture is hereby
amended to clarify that the entity into which Host will merge as part of the
REIT Conversion may be a Maryland corporation or any other entity that elects to
be treated as a real estate investment trust for purposes of Federal tax laws
and which will be the sole general partner of the Operating Partnership
following the REIT Conversion and the successor to Host in the Host REIT Merger.
As amended, the definition of "Host REIT" shall be as follows:
"Host REIT" means HMC Merger Corporation, a Maryland corporation, or any
other entity that elects to be treated as a real estate investment trust
for purposes of Federal tax laws and which will be the sole general
partner of the Operating Partnership following the REIT Conversion and the
successor to Host, and its successors and assigns.
ARTICLE 5
Section 5.01. Except as specifically modified herein, the Indenture is
in all respects ratified and confirmed and shall remain in full force and effect
in accordance with its terms.
Section 5.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed or shall be construed to be assumed
by the Trustee by reason of this Second Supplemental Indenture. This Second
Supplemental
4
<PAGE>
Indenture is executed and accepted by the Trustee subject to all the terms and
conditions set forth in the Indenture with the same force and effect as if those
terms and conditions were repeated at length herein and made applicable to the
Trustee with respect hereto.
Section 5.03. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the recitals contained herein, all of which
recitals are made solely by the Company, the Guarantors and the Subsidiary
Guarantors.
Section 5.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK
CIVIL PRACTICE LAWS AND RULES 327(B). EACH OF THE COMPANY, THE GUARANTORS AND
THE SUBSIDIARY GUARANTORS HEREBY IRREVOCA BLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE COMPANY, THE GUARANTORS AND THE SUBSIDIARY GUARANTORS
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY, THE GUARANTORS AND THE SUBSIDIARY GUARANTORS IN ANY OTHER
JURISDICTION.
Section 5.05. The parties may sign any number of copies of this Second
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
5
<PAGE>
Section 5.06. All capitalized terms used in this Second Supplemental
Indenture which are not otherwise defined herein, shall have the respective
meanings specified in the Indenture, unless the context otherwise requires.
Section 5.07. The Series C Notes shall be issued in whole or in part in
the form of one or more Global Securities, registered in the name of Cede & Co.,
as nominee of the Depository Trust Company ("DTC").
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, all as of the date first written
above.
COMPANY
-------
HMH PROPERTIES, INC.,
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Executive Vice President
and Corporate Secretary
GUARANTORS
----------
HOST MARRIOTT CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Senior Vice President
and Corporate Secretary
HOST MARRIOTT HOSPITALITY
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Senior Vice President
and Corporate Secretary
SUBSIDIARY GUARANTORS
---------------------
HMH RIVERS, INC.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: President and Corporate
Secretary
7
<PAGE>
MARRIOTT SBM TWO CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Corporate Secretary
MARRIOTT PLP CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
HMC RETIREMENT PROPERTIES, INC.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: President and Secretary
HMH PENTAGON CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
HMC SFO, INC.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
8
<PAGE>
HMH MARINA, INC.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
HOST AIRPORT HOTELS, INC.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
HOST OF HOUSTON 1979
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary of
Managing Partner
HOST OF HOUSTON, LTD.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary of
Managing Partner
HOST OF BOSTON, LTD.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary of
Managing Partner
9
<PAGE>
MARRIOTT FINANCIAL SERVICES, INC.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
HMC CAPITAL RESOURCES CORP.
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
MARRIOTT SBM ONE CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
YBG ASSOCIATES LLC
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Manager and Secretary
PRM CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
10
<PAGE>
MARRIOTT PARK RIDGE CORPORATION
By: /s/ Christopher G. Townsend
------------------------------
Name: Christopher G. Townsend
Title: Vice President and Secretary
MARINE MIDLAND BANK,
as Trustee
By: /s/ Frank J. Godino
------------------------------
Name: Frank J. Godino
Title: Vice President
11
<PAGE>
EXHIBIT A
FORM OF 8.45% SERIES C SENIOR NOTE
Unless and until it is exchanged in whole or in part for Series C
Notes in definitive form, this Security may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein./1/
HMH PROPERTIES, INC.
8.45% SERIES C SENIOR NOTE DUE 2008
CUSIP No. 40423QAG2
No. $
HMH Properties, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), for value received, hereby promises to pay to __________, or
registered assigns, the principal sum of $____________, on December 1, 2008.
This Security is one of the 8.45% Series C Senior Notes due 2008 referred to in
such Indenture (hereinafter referred to for purposes of this Series C Senior
Note collectively as the "Securities").
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
- -----------
/1/ To be used only if the Security is issued as a Global Security.
A-1
<PAGE>
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed.
Dated:
HMH PROPERTIES, INC.,
a Delaware corporation
By:__________________________
Name:
Title:
Attest:__________________________
Name:
Title:
<PAGE>
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein
referred to in the within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:______________________________
Authorized Signatory
<PAGE>
HMH PROPERTIES, INC.
8.45% SERIES C SENIOR NOTE DUE 2008
1. Interest.
--------
HMH Properties, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of 8.45% per annum from December 11, 1998 until maturity. To the
extent it is lawful, the Company promises to pay interest on any interest
payment due but unpaid on such principal amount at a rate of 8.45% per annum
compounded semi-annually.
The Company will pay interest semi-annually on March 15 and September
15 of each year (each, an "Interest Payment Date"), commencing March 15, 1999.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
the date of the original issuance. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months.
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders
must surrender Securities to a Paying Agent to collect principal payments.
Principal of, premium, if any, and interest on the Securities will be payable in
United States Dollars at the office or agency of the Company maintained for such
purpose, in the Borough of Manhattan, The City of New York or at the option of
the Company, payment of interest may be made by check mailed to the Holders of
the Securities at the addresses set forth upon the registry books of the
Company; provided, however, Holders of Global Securities will be entitled to
receive interest payments (other than at maturity) by wire transfer of
immediately available funds, if appropriate wire transfer instructions have been
received in writing by the Trustee not fewer than 15 days prior to the
applicable Interest Payment Date. Such wire instructions, upon receipt by the
Trustee, shall remain in effect until revoked by such Holder. No service charge
will be made for any registration of transfer or exchange of Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
3. Paying Agent and Registrar.
--------------------------
A-4
<PAGE>
Initially, Marine Midland Bank will act as Paying Agent and Registrar.
The Company may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders. The Company or any of its Subsidiaries may, subject to
certain exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
---------
The Company issued the Securities and the Guarantors and Subsidiary
Guarantors issued their Guarantees under an Amended and Restated Indenture,
dated as of August 5, 1998, as supplemented (the "Indenture"), between the
Company, the Guarantors, the Subsidiary Guarantors and the Trustee. Capitalized
terms herein are used as defined in the Indenture unless otherwise defined
herein. The Securities are limited in aggregate principal amount to
$500,000,000. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as in effect on the date of the Indenture. The Securities are subject to
all such terms, and Holders of Securities are referred to the Indenture and said
Act for a statement of them. The Securities are senior, general obligations of
the Company, secured initially by a pledge of Capital Stock of certain
Subsidiaries of the Company, which pledge is shared equally and ratably with the
Credit Facility, the Existing Senior Notes, the Series A Notes, the Series B
Notes and certain future Indebtedness of the Company ranking pari passu with
the Securities. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by the provisions of the Indenture, (b) authorizes and
directs the Trustee on his behalf to take such action as may be provided in the
Indenture and (c) appoints the Trustee his attorney-in-fact for such purpose.
5. Redemption.
----------
Except as provided in this Paragraph 5 or in Article 3 of the
Indenture, the Company shall not have the right to redeem any Security. The
Securities may be redeemed in whole or from time to time in part at any time on
and after December 1, 2003, at the option of the Company, at the Redemption
Price (expressed as a percentage of principal amount) set forth below with
respect to the indicated Redemption Date, in each case (subject to the right of
Holders of record on a Record Date that is on or prior to such Redemption Date
to receive interest due on the Interest Payment Date to which such Record Date
relates), plus any accrued but unpaid interest to the Redemption Date.
A-5
<PAGE>
If redeemed during
the 12-month period
commencing December 1, Redemption Price
---------------------- -----------------
2003 . . . . . . . . . 104.225%
2004 . . . . . . . . . 102.817%
2005 . . . . . . . . . 101.408%
2006 and thereafter. . 100.000%
Any such redemption will comply with Article 3 of the Indenture.
6. Notice of Redemption.
--------------------
Notice of redemption will be sent by first class mail, at least
30 days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in denomina
tions of $1,000 and integral multiples of $1,000. A Holder may register the
transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities (a) selected for redemption except the unredeemed
portion of any Security being redeemed in part or (b) for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase or
redemption and ending at the close of business on the day of such mailing.
8. Persons Deemed Owners.
---------------------
The registered Holder of a Security may be treated as the owner of it
for all purposes.
A-6
<PAGE>
9. Unclaimed Money.
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
Except as set forth in the Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, U.S. legal
tender, U.S. Government Obligations or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on such Securities on the stated date for payment thereof or on the
redemption date of such principal or installment of principal of, premium, if
any, or interest on such Securities, the Company will be discharged from certain
provisions of the Indenture and the Securities (including the restrictive
covenants described in paragraph 12 below, but excluding its obligation to pay
the principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in the Indenture, the
Company may elect to have its obligations and the obligations of the Guarantors
and Subsidiary Guarantors discharged with respect to outstanding Securities.
11. Amendment; Supplement; Waiver.
-----------------------------
The Company, the Guarantors, the Subsidiary Guarantors and the Trustee may
enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. Subject to certain exceptions, the Indenture or the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may under certain
circumstances amend or supplement the Indenture or the Securities to, among
other things, cure any ambiguity, defect or inconsistency, or make any other
change that does not adversely affect the rights of any Holder of a Security.
12. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the
Company, the Subsidiary Guarantors and any of their respective Restricted
Subsidiaries to, among other things, incur additional Indebtedness and issue
A-7
<PAGE>
Disqualified Stock, pay dividends or make certain other Restricted Payments,
enter into certain transactions with Affiliates, incur Liens, sell assets and
subsidiary stock, merge or consolidate with any other Person or transfer (by
lease, assignment or otherwise) substantially all of the properties and assets
of the Company. The limitations are subject to a number of important
qualifications and exceptions and certain restrictive covenants will cease to be
applicable under certain circumstances. The Company must periodically report to
the Trustee on compliance with such limitations.
13. Repurchase at Option of Holder.
------------------------------
(a) If there is a Change of Control Triggering Event, the Company
shall be required to offer irrevocably to purchase on the Change of Control
Purchase Date all outstanding Securities at a purchase price equal to 101% of
the principal amount thereof, plus (subject to the right of Holders of record on
a Record Date that is on or prior to such Change of Control Purchase Date to
receive interest due on the Interest Payment Date to which such Record Date
relates) accrued and unpaid interest, if any, to the Change of Control Purchase
Date. Holders of Securities will receive a Change of Control Offer from the
Company prior to any related Change of Control Purchase Date and may elect to
have such Securities purchased by completing the form entitled "Option of Holder
to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of the
Company, the Subsidiary Guarantors or any of their respective Restricted
Subsidiaries to sell assets and subsidiary stock. In the event the Net Cash
Proceeds from a permitted Asset Sale exceed certain amounts, as specified in the
Indenture, the Company will be required either to reinvest the proceeds of such
Asset Sale in a Related Business or other permitted investments, repay certain
Indebtedness or to make an offer to purchase each Holder's Securities at 100% of
the principal amount thereof, plus accrued interest, if any, to the purchase
date. The limitations and the Company's obligations with respect to the use of
proceeds from an Asset Sale are subject to a number of important qualifications
and exceptions and will cease to be applicable under certain circumstances.
14. Notation of Guarantee.
---------------------
As set forth more fully in the Indenture, the Persons constituting
Guarantors and Subsidiary Guarantors from time to time, in accordance with the
provisions of the Indenture, irrevocably and unconditionally and jointly and
severally guarantee, in accordance with Section 12.1 of the Indenture, to the
Holders and to the Trustee and its successors and assigns, that (i) the
principal of and interest on the Securities will be paid, whether at the Stated
Maturity or Interest Payment Dates, by acceleration, call for redemption or
otherwise, and all other obligations of the
A-8
<PAGE>
Company to the Holders or the Trustee under the Indenture or this Security will
be promptly paid in full or performed, all in accordance with the terms of the
Indenture and this Security, and (ii) in the case of any extension of payment or
renewal of this Security or any of such other obligations, they will be paid in
full when due or performed in accordance with the terms of such extension or
renewal, whether at the Stated Maturity, as so extended, by acceleration or
otherwise. Such Guarantees shall cease to apply, and shall be null and void,
with respect to any such guarantor who, pursuant to Article 12 of the Indenture,
is released from its Guarantees, or whose Guarantees otherwise cease to be
applicable pursuant to the terms of the Indenture.
15. Successor
---------
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
16. Defaults and Remedies.
---------------------
If an Event of Default with respect to the Securities occurs and is
continuing (other than an Event of Default relating to bankruptcy, insolvency or
reorganization of the Company), then either the Trustee or the Holders of 25% in
aggregate principal amount of the Securities then outstanding may declare all
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities, except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Securities may direct the Trustee in its exercise of any trust
or power with respect to such Securities. The Trustee may withhold from Holders
of Securities notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.
17. Trustee and Agent Dealings with Company.
---------------------------------------
The Trustee and each Agent under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company, any Guarantor or Subsidiary Guarantor or any of their
Subsidiaries or any of their respective Affiliates, and may otherwise deal with
such Persons as if it were not the Trustee or such agent.
18. No Recourse Against Others.
--------------------------
No recourse for the payment of the principal of, premium, if any, or
interest
A-9
<PAGE>
on the Securities or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company, the Guarantors, or the Subsidiary Guarantors in the Indenture, or
in the Securities or because of the creation of any Indebtedness represented
thereby, shall be had against any incorporator, partner, stockholder, officer,
director, employee or controlling Person of the Company, the Guarantors or the
Subsidiary Guarantors or of any successor Person thereof, except as an obligor
or Guarantor of the Securities pursuant to the Indenture. Each Holder, by
accepting the Securities, waives and releases all such liability.
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
20. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Governing Law.
-------------
THE INDENTURE AND THE SECURITIES SHALL BE GOV ERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B).
A-10
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_______________________________
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: _______________ Signed:
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee/**/
- -----------
/**/ NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medal lion Program (SEMP); or (iv) in such other guarantee
program acceptable to the Trustee.
B-1
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.12 or Article 10 of the Indenture, check the appropriate
box:
[_] Section 4.12
[_] Article 10.
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.12 or Article 10 of the Indenture, as the case
may be, state the amount you want to be purchased: $________.
Date: ________________ Signature:
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee/***/
- -----------
/***/ NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medal lion Program (SEMP); or (iv) in such other guarantee
program acceptable to the Trustee.
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer of
Principal Amount Principal Amount Security following Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Security increase) Custodian
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
Exhibit 25.1
CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
-----------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
-----------
MARINE MIDLAND BANK
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, NY 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Warren L. Tischler
Senior Vice President
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-5167
(Name, address and telephone number of agent for service)
HMH PROPERTIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 52-1822042
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10400 Fernwood Road
Bethesda, Maryland 20817
(301) 380-9000 (Zip Code)
(Address of principal executive offices)
8.45% SERIES C SENIOR NOTES DUE 2008
(Title of Indenture Securities)
<PAGE>
General
Item 1. General Information.
--------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
--------------------------
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None
<PAGE>
Item 16. List of Exhibits.
-----------------
Exhibit
- -------
T1A(i) * - Copy of the Organization Certificate of
Marine Midland Bank.
T1A(ii) * - Certificate of the State of New York
Banking Department dated December 31,
1993 as to the authority of Marine Midland
Bank to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of Marine
Midland Bank as adopted on January 20,
1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank required
by Section 321(b) of the Trust Indenture
Act of 1939.
T1A(vii) - Copy of the latest report of condition of
the trustee (September 30, 1998),
published pursuant to law or the
requirement of its supervisory or
examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
* Exhibits previously filed with the Securities and Exchange Commission with
Registration No. 33-53693 and incorporated herein by reference thereto.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York on the 11th day of December, 1998.
MARINE MIDLAND BANK
By: /s/ Frank J. Godino
--------------------
Frank J. Godino
Vice President
<PAGE>
EXHIBIT T1A (VII)
<TABLE>
<S> <C>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 2000
- ----------------------------------------------------------------------------------------------------------------
Please refer to page i,
Table of Contents, for [1]
the required disclosure
of estimated burden.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS SEPTEMBER 30,
1998
This report is required by law;
12 U.S.C. (S)324 (State member banks);
12 U.S.C. (S) 1817 (State nonmember
banks); and 12 U.S.C. (S)161
(National banks).
NOTE: The Reports of Condition and Income must be signed by
an authorized officer and the Report of Condition must be attested to
by not less than two directors (trustees) for State nonmember banks
and three directors for State member and National Banks.
I, Gerald A. Ronning, Executive VP & Controller
---------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of
Condition and Income (including the supporting schedules) have
been prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and are true to the best of
my knowledge and believe.
/s/ Gerald A. Ronning
- ----------------------------------------------
Signature of Officer Authorized to Sign Report
10/26/98
- ----------------------------------------------
Date of Signature
SUBMISSION OF REPORTS
Each Bank must prepare its Reports of Condition and Income
either:
(a) in automated formand then file the computer data file directly
with the banking agencies' collection agent, Electronic Data
System Corporation (EDS), by modem or computer diskette; or
(19980930)
---------------
(RCRI 9999)
This report form is to be filed by banks with branches and
consolidated subsidiaries in U.S. territories and possessions, Edge
or Agreement subsidiaries, foreign branches, consoli-dated foreign
subsidiaries, or International Banking Facilities.
The Reports of Condition and Income are to be prepared in
accordance with Federal regulatory authority instructions.
We, the undersigned directors (trustees), attest to the correctness
of this Report of Condition (including the supporting schedules) and
declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority
and is true and correct.
/s/ Bernard J. Kennedy
- -------------------------------------
Director (Trustee)
/s/ Sal H. Alfiero
- -------------------------------------
Director (Trustee)
/s/ Malcolm Burnett
- -------------------------------------
Director (Trustee)
(b) in hard-copy (paper) form and arrange for another party to
convert the paper report to automated for. That party (if other
than EDS) must transmit the bank's computer data file to EDS
To fulfill the signature and attestation requirement for the Reports of
Condition and Income for this report date, attach this signature page
to the hard-copy of the completed report that the bank places in its
files.
- ----------------------------------------------------------------------------
FDIC Certificate Number 0 0 5 8 9
---------
(RCRI 9030)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo
Name of Bank City
in the state of New York, at the close of business
September 30, 1998
ASSETS
Thousands
of dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin............................... $ 937,647
Interest-bearing balances....................... 3,764,738
Held-to-maturity securities..................... 0
Available-for-sale securities................... 3,998,450
Federal funds sold and securities purchased
under agreements to resell...................... 1,634,540
Loans and lease financing receivables:
Loans and leases net of unearned
income.......................................... 21,024,990
LESS: Allowance for loan and lease
losses.......................................... 400,676
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve.................. 20,624,314
Trading assets.................................. 894,111
Premises and fixed assets (including
capitalized leases)............................. 207,944
Other real estate owned............................ 13,083
Investments in unconsolidated
subsidiaries and associated companies.............. 0
Customers' liability to this bank on
acceptances outstanding............................ 57,309
Intangible assets.................................. 469,741
Other assets....................................... 572,948
Total assets....................................... 33,174,825
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES
Deposits:
In domestic offices............................. 20,579,926
Noninterest-bearing............................. 3,726,544
Interest-bearing................................ 16,853,382
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs............................. 5,954,449
Noninterest-bearing............................. 0
Interest-bearing................................ 5,954,449
Federal funds purchased and securities sold
under agreements to repurchase.................. 1,025,621
Demand notes issued to the U.S. Treasury 86,890
Trading Liabilities................................ 172,910
Other borrowed money:
With a remaining maturity of one year
or less......................................... 1,340,056
With a remaining maturity of more than
one year through three years.................... 84,661
With a remaining maturity of more than
three years..................................... 38,489
Bank's liability on acceptances
executed and outstanding........................... 57,309
Subordinated notes and debentures.................. 697,963
Other liabilities.................................. 805,684
Total liabilities.................................. 30,843,958
EQUITY CAPITAL
Perpetual preferred stock and related
surplus............................................ 0
Common Stock....................................... 205,000
Surplus............................................ 1,985,665
Undivided profits and capital reserves............. 78,723
Net unrealized holding gains (losses)
on available-for-sale securities................... 61,479
Cumulative foreign currency translation
adjustments........................................ 0
Total equity capital............................... 2,330,867
Total liabilities, limited-life
preferred stock, and equity capital................ 33,174,825
</TABLE>
