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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 1998
Courtyard by Marriott II Limited Partnership
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(Exact name of registrant as specified in its charter)
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Delaware 0-16728 52-153359
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
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10400 Fernwood Road, Bethesda, MD 20817-1109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 380-2070
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
(a) On December 22, 1998, CBM Two Corporation, then a wholly owned
subsidiary of Host Marriott Corporation, a Delaware corporation ("Old Host"),
and the sole general partner of the registrant, merged with and into CBM Two
LLC, a newly formed Delaware limited liability company which was also then a
wholly owned subsidiary of Old Host. As a result of such merger, CBM Two LLC
became the sole general partner of the registrant and assumed all of the
obligations of CBM Two Corporation under the registrant's partnership agreement.
The members of the Board of Directors of CBM Two Corporation prior to its merger
into CBM Two LLC were Christopher G. Townsend and Bruce F. Stemerman, both of
whom were also executive officers of Old Host. The members of the Board of
Managers of CBM Two LLC are Mr. Townsend and Robert E. Parsons, Jr., both of
whom are also executive officers of Host Marriott Corporation, a Maryland
corporation ("Host REIT"), and Host Marriott, L.P., a Delaware limited
partnership ("Host LP").
On December 28, 1998, Old Host contributed its 100% member interest in
CBM Two LLC to Host LP. Thereafter, on December 30, 1998, Host LP contributed a
99% nonvoting member interest in CBM Two LLC to Rockledge Hotel Properties,
Inc., a Delaware corporation ("Rockledge"), in which Host LP owns 95% of the
economic interest but no voting stock. Host LP retained the 1% voting member
interest in CBM Two LLC. Pursuant to the terms of the operating agreement of CBM
Two LLC, Rockledge, as the holder of the 99% nonvoting member interest in CBM
Two LLC, has been granted the sole power to direct the exercise by CBM Two LLC
of all voting rights and other rights as owner with respect to all capital stock
of any corporation that is owned, directly or indirectly, by the registrant. The
registrant owns substantially all of its assets through Courtyard II Associates,
L.P., a Delaware limited partnership ("Courtyard Associates") in which the
registrant is a 98% limited partner and a 1% general partner, and Courtyard II
Associates Management Corporation, a Delaware corporation and wholly owned
subsidiary of the registrant ("Courtyard Management"). As a result of the
provisions of the operating agreement of CBM Two LLC, Host LP has no right to
direct the exercise by CBM Two LLC of voting or other rights with respect to the
shares of Courtyard Management and thus has no right to direct or control the
affairs of Courtyard Associates.
The members of the Board of Directors of Rockledge are Messrs. Townsend
and Parsons. The voting stock of Rockledge is held by Host Marriott Statutory
Employee/Charitable Trust, a Delaware business trust (the "Trust"). The income
beneficiaries of the Trust are another trust formed for the benefit of certain
Host Marriott employees and the J. Willard and Alice S. Marriott Foundation (the
"Marriott Foundation"). The capital beneficiary of the Trust is the Marriott
Foundation. The initial trustees of the Trust are Donald D. Olinger, who is also
an executive officer of Host REIT and Host LP, R. Theodore Ammon, who is a
member of the Board of Directors of Host REIT but not an officer or employee of
Host REIT or Host LP, and Gilbert E. DeLorme, who has no affiliation with Host
REIT. First Union Trust Company, National Association also serves as a trustee
of the Trust pursuant to certain statutory requirements.
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On December 29, 1998, Old Host merged into Host REIT and also
became the sole general partner of Host LP pursuant to a transfer to Host REIT
of the general partner interest in Host LP from a wholly owned subsidiary of
Host REIT. As of December 31, 1998, Host REIT owned approximately 75% of the
partnership interests in Host LP.
The registrant believes that a change of control occurred on December
30, 1998 when Host REIT ceased to own, directly or indirectly, all of the
outstanding equity interests of the sole general partner of the registrant.
Although such a change of control has occurred, Host REIT continues to own,
indirectly, a substantial majority of the economic interest in CBM Two LLC, the
current general partner of the registrant and, through Host LP, has certain
voting rights with respect to CBM Two LLC.
The change in control described above resulted in a "Change in Control"
under the Indenture governing the registrant's 10 3/4% Series B Senior Secured
Notes due 2008 (the "Notes"). As a result, in accordance with the terms of the
Indenture, Host LP has commenced a tender offer for the Notes which is scheduled
to expire on Friday, February 12, 1999.
The foregoing transactions did not result in any changes in the
financial condition, capitalization, or business of the registrant.
Set forth below are diagrams showing the structure of the registrant and
its general partner before and after the REIT Conversion.
PRIOR TO REIT CONVERSION
(Ownership is 100% unless otherwise indicated)
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Host Marriott
Corporation
(DE)
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CBM Two
Corporation
(DE)
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5% general partner interest
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Courtyard by
Outside Marriott II Limited ------------------------
Limited Partnership Courtyard II Associates
Partners (DE) Management
(Issuer of Notes) Corporation
------------------ (DE)
98% limited partner interest ------------------------
1% general partner interest
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Courtyard II
Associates, L.P. 1% general partner interest
(DE) (managing general partner)
(Issuer of REMIC Debt)
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Hotels
Following REIT Conversion
(Ownership is 100% unless otherwise indicated)
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Host Marriott
Corporation
(MD)
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Outside
Limited
Partners
74% limited partner interest
1% general partner interest
------------------- ---------------------
Host Marriott, L.P. Host Marriott,
(DE) Statutory Employee/
------------------- Charitable Trust
(DE)
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95% economic
interest
5% economic interest
100% voting interest
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Rockledge Hotel
Properties, Inc.
(DE) *
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1% voting interest
99% nonvoting interest
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CBM Two LLC (DE)
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Outside
Limited
Partners
5% general partner interest
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Courtyard by Marriott II
Limited Partnership
(DE)
(Issuer of Notes)
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Courtyard II Associates
Management Corporation
98% limited partner interest (DE)
1% general partner interest ------------------------
1% general partner interest
(managing general partner)
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Courtyard II Associates, L.P.
(DE)
(Issuer of REMIC Debt)
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Hotels
*Rockledge Hotel Properties, Inc. also has the right to exercise certain voting
and other rights pursuant to the operating agreement with respect to the
capital stock of Courtyard II Associates Management Corporation.
(b) The Registrant is not aware of any arrangements, including any
pledge by any person of securities of the registrant or any of its parents, the
operation of which may at a subsequent date result in a change in control of the
registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COURTYARD BY MARRIOTT II
LIMITED PARTNERSHIP
By: CBM TWO LLC
General Partner
Date: January 14, 1999
By: /s/ Christopher G. Townsend
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Christopher G. Townsend
Executive Vice President
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