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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): July 29, 1998
HMH PROPERTIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 33-95058 52-1822042
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(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION OF FILE NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
10400 FERNWOOD ROAD, BETHESDA, MARYLAND 20817
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP)CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (301) 380-9000
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ITEM 5. OTHER EVENTS
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1. SENIOR NOTES OFFERING
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On July 29, 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,
Bear Stearns & Co. Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Nationsbanc Montgomery Securities LLC (collectively, the
"Underwriters"). Subject to the terms and conditions contained in the
Underwriting Agreement, the Company agreed to issue and sell to the Underwriters
an aggregate of $500,000,000 7 7/8% Series A Senior Notes due 2005 ("Series A
Notes") and $1,200,000 7 7/8% Series B Notes due 2008 ("Series B Notes"). The
Series A Notes and the Series B 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 A Notes and the Series B Notes was 99.972%
and 99.352%, respectively, with underwriting discounts and commissions in each
case of 2.00% of the principal amount at maturity, generating expected net
proceeds to the Company (after deducting estimated expenses of the offering) of
approximately $1,655,084,000. The Series A Notes and Series B Notes were sold
pursuant to a Registrations Statement on Form S-3 (File No. 333-50729) filed on
April 22, 1998 and effective as of June 17, 1998.
2. OFFER TO PURCHASE AND CONSENT SOLICITATION
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The Company announced on August 6, 1998 that it has successfully completed its
offers to purchase any and all of its 9 1/2% Senior Secured Notes due 2005 (the
"9 1/2% Senior Notes"), 8 7/8% Senior Notes due 2007 (the "8 7/8% Senior Notes")
and the 9% Senior Notes due 2007 (the "9% Senior Notes") and the related
solicitations of consents to the applicable Indentures pursuant to which the
aforementioned securities were issued.
As of 5:00 p.m. on August 4, 1998, New York City time, the scheduled
expiration time and date, the Company had received valid tenders of, and duly
executed consents to proposed indenture amendments with respect to, (i)
$579,331,000 aggregate principal amount of its 9 1/2% Senior Notes (representing
approximately 96.56% of the outstanding 9 1/2% Senior Notes); (ii) $599,950,000
aggregate principal amount of its 8 7/8% Senior Notes (representing
approximately 99.99% of its outstanding 8 7/8% Senior Notes) and (iii)
$349,900,000 aggregate principal amount of its 9% Senior Notes (representing
approximately 99.97% of the outstanding 9% Senior Notes). Following the
expiration of the Offers, the Company has accepted for payment all 9 1/2% Senior
Notes, 8 7/8% Senior Notes and 9% Senior Notes validly tendered in the Offers.
In addition, the Company amended its consent solicitations such that holders
of 9 1/2% Senior Notes, 8 7/8% Senior Notes and 9% Senior Notes who validly
tendered their securities and delivered consents to the proposed Indenture
amendments prior to 5:00 p.m., New York City time, on August 4, 1998 will
receive a consent payment equal to $20.00 for each $1,000 principal amount of
securities to which such consent relates.
3. NEW CREDIT FACILITY
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The Company announced on August 6, 1998 that it expanded its borrowing
capacity by replacing its existing $500 million bank facility with a new $1.25
billion credit facility. The $1.25 billion credit facility is comprised of a
$350 million term loan and a $900 million revolver and will bear interest at a
floating rate. The credit facility is led by Bankers Trust Company with Wells
Fargo Bank, The Bank of Nova Scotia and Credit Lyonnais acting as co-agents.
Commitments have been received from approximately 20 additional institutions.
The term loan may be increased by up to $250 million. The credit line will
initially have a three-year term with two one-year extension options.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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7(c). EXHIBITS
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*1.1 Underwriting Agreement dated July 29, 1998 among HMH Properties,
certain guarantors signatories thereto, Donaldson, Lufkin & Jenrette Securities
Corporation, BT Alex Brown Incorporated, Bear Stearns & Co., Inc., Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Nationsbanc
Montgomery Securities LLC.
*4.1 Amended and Restated Indenture dated as of August 5, 1998, by and
among HMH Properties, Inc., the Guarantors (as defined therein), the Subsidiary
Guarantors (as defined therein) and Marine Midland Bank, as Trustee.
*4.2 First Supplemental Indenture to Amended and Restated Indenture dated
as of August 5, 1998 (including the form of 7 7/8% Series A Senior Notes due
2005 and form of 7 7/8% Series B Notes due 2008).
*25.1 Statement of Eligibility and Qualifications on Form T-1 of Marine
Midland Bank, as Trustee, under the Indenture.
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* Filed herewith
HMH Properties, Inc.
/s/ Christopher G. Townsend
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August 6, 1998 Christopher G. Townsend
Senior Vice President and
General Counsel
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EXHIBIT 1.1
HMH PROPERTIES, INC.
7-7/8% Series A Senior Notes due 2005
7-7/8% Series B Senior Notes due 2008
Payment of Principal and Interest Unconditionally
Guaranteed by the Guarantors Thereof
UNDERWRITING AGREEMENT
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July 29, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
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"), Bear, Stearns & Co. Inc., Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and NationsBanc
Montgomery Securities LLC (collectively, the "Underwriters") an aggregate of
$500,000,000 principal amount of 7-7/8% Series A Senior Notes due 2005 (the
"Series A Notes") and an aggregate of $1,200,000,000 principal amount of 7-7/8%
Series B Senior Notes due 2008 (the "Series B Notes"), which notes are fully and
unconditionally guaranteed by Host Marriott Corporation, a Delaware corporation
("Host Marriott"), Host Marriott Hospitality, Inc., a Delaware corporation
("Hospitality"), and the
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Subsidiary Guarantors listed on Schedule A hereto (the "Subsidiary Guarantors,"
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and together with Host Marriott and Hospitality, the "Guarantors"). The
Securities are to be issued pursuant to the provisions of an Indenture, dated as
of August 5, 1998, substantially in the form of the Indenture filed with the
Securities and Exchange Commission (the "Commission") as Exhibit 4.1 to the
Registration Statement (as defined below), as amended and restated (the "Base
Indenture") and the First Supplemental Indenture ("First Supplemental
Indenture," together with the Base Indenture, the "Indenture") to be dated as of
August 5, 1998, by and among the Company, the Guarantors and Marine Midland
Bank, as Trustee (the "Trustee").
For purposes of this agreement, the term "Securities" means the
$1,700,000,000 aggregate principal amount of the Series A Notes and the Series B
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.
1. Registration Statement and Prospectus. Host Marriott has prepared and
filed with 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 so amended) 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 it 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 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.
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2. Agreements to Sell and Purchase. On the basis of the representations
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 97.972% of the principal amount of the Series A Notes and 97.352% of
the principal amount of the Series B Notes (the "Purchase Price"), in the
respective principal amount set forth opposite their names on Schedule B hereto.
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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 fifth 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 each of the Series A Notes and the Series B 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 A Notes and the
Series B 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.
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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, (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, the Guarantors and the Subsidiary 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.
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(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
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 seven 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
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with applicable law, and will furnish to you without charge such number of
copies thereof as you may reasonably request.
(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.
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(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, 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 (vii) 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
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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.
(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 purchaser 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
and (ii) commercial paper issued in the ordinary course of business), 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 last paragraph on the cover page of the Prospectus Supplement
and the third, the sixth (to the extent relating to a representation or
agreement of the Underwriters), seventh (but only the first sentence thereof as
it relates to actions by or inactions of the Underwriters), eighth and ninth
paragraphs and the third sentence of the fifth paragraph
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appearing under the caption "Underwriting" in the preliminary prospectus and 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 preliminary prospectus and 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).
(b) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or 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 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 on the
date hereof for (i) security interests in shares of certain subsidiaries of the
Company relating to the Company's 9 1/2% Senior Secured Notes due 2005, 9%
Senior Notes due 2007 and 8 7/8% Senior Notes due 2007 (collectively, the
"Existing Senior Notes") and (ii) at the Closing Date, Liens relating to the
Securities, the Credit Agreement and the Existing Senior Notes. There are no
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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
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
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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 Adverse Effect nor reasonably be expected to materially
and adversely 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
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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 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
exhibits (other than the Form T-1 and this Agreement, both of 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 preliminary
prospectus or 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 preliminary
prospectus or 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 preliminary prospectus or 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
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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 sponsored, maintained or contributed to, directly or
indirectly, within the last five years, any employee benefit plan subject to
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 and preliminary
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 preliminary prospectus and the Prospectus) and Liens imposed
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
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or notes, set forth in or incorporated by reference into the Prospectus and the
preliminary prospectus, together with related schedules and notes, fairly
present the combined consolidated 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 under the
captions "Pro Forma Condensed Combined Consolidated Financial Data of the
Company" and "The REIT Conversion - Pro Forma Financial Data" in the preliminary
prospectus and 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 preliminary prospectus and
the Prospectus and this Agreement and 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 included in or incorporated by reference in the Prospectus
or the preliminary prospectus, historical and pro forma, are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(s) Except as disclosed in the preliminary prospectus or the Prospectus
(excluding any supplement or amendment after the date hereof), subsequent to the
respective dates as of which information is given in such preliminary prospectus
or 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
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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 preliminary 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 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
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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 to be dated the Closing
Date, 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 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
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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 and after giving effect to the Offering, 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.
(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) At the time the Company and the Guarantors deliver to the
Collateral Agent the certificates representing the Pledged Shares required to be
subject to the Lien of the Indenture and the Pledge and Security Agreement in
favor of the Collateral Agent (as defined in the Pledge and Security Agreement)
for the benefit of holders of the Securities, accompanied by stock powers
endorsed in blank, the Pledge and Security Agreement will create a valid and
perfected security interest in such shares
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(on an equal and ratable basis with the Existing Senior Notes and the Credit
Facility), subject only to a Lien in favor of the Collateral Agent, 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.
7. Indemnification.
(a) Each of the Company and the Guarantors, jointly and severally agrees to
indemnify and hold harmless (i) each of the Underwriters and (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 or action, or any
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 preliminary prospectus or any omission
or alleged omission to state therein a material
18
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fact required to be stated therein or necessary to make the statements therein
(with respect to the Prospectus or the preliminary 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 preliminary
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 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
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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
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 any preliminary
prospectus or 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 do so, but may 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
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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 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
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Section 8, 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
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
22
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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.
(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
23
<PAGE>
validly existing corporation (or other entity) 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 authorize, issue, deliver and
sell the Securities as contemplated by this Agreement;
c) when authenticated in accordance with the terms of the
Indenture and delivered to and paid for by you in accordance with the terms of
this Agreement, the Securities will constitute valid and legally binding
obligations of the Company and the Guarantors, enforceable against the Company
and the Guarantors in accordance with their terms and entitled to the benefits
of the Indenture, 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 a valid and legally 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;
e) the Securities and the Indenture conform in all material
respects to the description thereof under the caption "Description of Senior
Notes" in the Prospectus;
f) the Indenture has been qualified under the Trust Indenture
Act.
24
<PAGE>
g) upon (I) authentication and execution of the Securities in
accordance with the terms of the Indenture, (II) delivery of the certificates
representing the Securities against payment therefore in accordance with the
terms of this Agreement and (III) delivery pursuant to the Pledge and Security
Agreement to the Collateral Agent in New York of the certificates representing
the Pledged Shares accompanied by stock powers endorsed in blank, and assuming
that the Collateral Agent at all time holds the Pledged Shares in the State of
New York and that the Collateral Agent is taking possession of the Pledged
Shares in good faith and without notice of any adverse claim, the Indenture and
the Pledge and Security Agreement create a valid and perfected security interest
in the Pledged Shares, subject to no other equal or prior consensual security
interest, in favor of the Collateral Agent for the benefit of holders of the
Securities, the lenders under the Credit Facility and holders of Existing Senior
Notes. No filings or recordings are required in order to perfect the security
interest created under the Indenture in the Pledged Shares; and
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;
(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
25
<PAGE>
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 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; the
execution and delivery of this Agreement, the Indenture and Pledge and Security
Agreement, the issuance and sale of the Securities, and the performance of this
Agreement, the Indenture and Pledge and Security Agreement will not result in a
breach or violation of (I) any of the charter or by-laws of the Company or any
of the Guarantors or (II) to the best knowledge of such counsel, constitute a
default under, any statute, rule or regulation to which the Company or any of
the Guarantors is bound or to which any of their properties is subject, or (III)
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 (II) and (III) would have a Material Adverse Effect;
f) 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
26
<PAGE>
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 in the Prospectus under the captions "Relationship with
Host Marriott," "Relationship with Marriott International," "The REIT
Conversion" and "The Offers to Purchase and Consent Solicitations" 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;
g) each of this Agreement, the Securities and the Indenture has
been duly authorized, executed and delivered by the Company and each of the
Guarantors;
h) to the best knowledge of such counsel, the descriptions of
current or pending legal or governmental actions, suits or proceedings which
appear in the Prospectus under the captions "Business and Properties-Legal
Proceedings" and "The REIT Conversion-Legal Proceedings" are accurate in all
material respects;
i) the Registration Statement has become effective under the
Act; 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 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(f) and 2(h) 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
27
<PAGE>
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, and on certificates of and assurances from public officials, and
certificates or other written statements of 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
28
<PAGE>
herein contained and required to be performed or complied with by it at or prior
to the Closing Date.
(o) The Offer to Purchase and Consent Solicitations of the
Company, dated June 26, 1998, as amended (the "Offer"), will be consummated and
pursuant thereto (i) the Company will receive and accept consents to the
Proposed Amendments (as defined in the Offer) from holders of greater than two-
thirds of each series of Existing Senior Notes, (ii) the Proposed Amendments
will become effective and (iii) the Company will receive and accept greater than
two-thirds of each series of Existing Senior Notes, in each case prior to or
contemporaneously with the Closing of the sale of the Securities.
(p) The merger of HMC Capital Resources Holdings Corporation
with and into the Company has become effective as set forth in the Prospectus.
(q) The Credit Facility has been executed and has become
effective on terms substantially similar to those described in the Prospectus.
(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
29
<PAGE>
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.
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 either 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
30
<PAGE>
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 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.
31
<PAGE>
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 GOVERNED 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 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:
-----------------------------
Name:
Title:
HOST MARRIOTT CORPORATION
By:
-----------------------------
Name:
Title:
HOST MARRIOTT HOSPITALITY, INC.
By:
-----------------------------
Name:
Title:
HMH RIVERS, INC.
By:
-----------------------------
Name:
Title:
<PAGE>
MARRIOTT SBM TWO CORPORATION
By:
-----------------------------
Name:
Title:
MARRIOTT PLP CORPORATION
By:
-----------------------------
Name:
Title:
HMC RETIREMENT PROPERTIES, INC.
By:
-----------------------------
Name:
Title:
HMH PENTAGON CORPORATION
By:
-----------------------------
Name:
Title:
<PAGE>
HMC SFO, INC.
By:
-----------------------------
Name:
Title:
HMH MARINA, INC.
By:
-----------------------------
Name:
Title:
HOST AIRPORT HOTELS, INC.
By:
-----------------------------
Name:
Title:
HOST OF HOUSTON 1979
By:
-----------------------------
Name:
Title:
<PAGE>
HOST OF HOUSTON, LTD.
By:
-----------------------------
Name:
Title:
HOST OF BOSTON, LTD.
By:
-----------------------------
Name:
Title:
MARRIOTT FINANCIAL SERVICES, INC.
By:
-----------------------------
Name:
Title:
HMC CAPITAL RESOURCES CORP.
By:
-----------------------------
Name:
Title:
<PAGE>
MARRIOTT SBM ONE CORPORATION
By:
-----------------------------
Name:
Title:
YBG ASSOCIATES LLC
By:
-----------------------------
Name:
Title:
PRM CORPORATION
By:
-----------------------------
Name:
Title:
MARRIOTT PARK RIDGE CORPORATION
By:
-----------------------------
Name:
Title:
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
-----------------------------
Name:
Title:
BT ALEX. BROWN INCORPORATED
By:
-----------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
-----------------------------
Name:
Title:
GOLDMAN, SACHS & CO.
By:
-----------------------------
Name:
Title:
<PAGE>
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:
-----------------------------
Name:
Title:
NATIONSBANC MONTGOMERY
SECURITIES LLC
By:
-----------------------------
Name:
Title:
<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
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Principal Amount Principal Amount
of Series A Notes of Series B Notes
----------------- -----------------
<S> <C> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation $226,500,000 $543,600,000
BT Alex. Brown Incorporated 176,000,000 422,400,000
Bear, Stearns & Co. Inc. 24,375,000 58,500,000
Goldman, Sachs & Co. 24,375,000 58,500,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated 24,375,000 58,500,000
NationsBanc Montgomery
Securities LLC 24,375,000 58,500,000
------------ --------------
Total $500,000,000 $1,200,000,000
============ ==============
</TABLE>
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
HMH PROPERTIES, INC.,
ISSUER
AND
THE GUARANTORS AND SUBSIDIARY GUARANTORS
NAMED HEREIN
MARINE MIDLAND BANK,
AS TRUSTEE
------------------------------------
AMENDED AND RESTATED
INDENTURE/1/
DATED AS OF AUGUST 5, 1998
- --------------------------------------------------------------------------------
- ---------------------
/1/ Amendment and Restatement of the previously qualified Indenture filed as
Exhibit 4.1 to the Registration Statement (No. 333-50729) filed on Form
S-3 by HMH Properties, Inc.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.1 Definitions............................................ 1
Section 1.2 Other Definitions...................................... 34
Section 1.3 Incorporation by Reference of Trust Indenture Act...... 35
Section 1.4 Rules of Construction.................................. 36
ARTICLE 2
THE SECURITIES
Section 2.1 Issuable in Series..................................... 36
Section 2.2 Establishment of Terms of Series of Securities......... 37
Section 2.3 Execution and Authentication........................... 40
Section 2.4 Registrar and Paying Agent............................. 41
Section 2.5 Paying Agent to Hold Money in Trust.................... 42
Section 2.6 Securityholder Lists................................... 43
Section 2.7 Transfer and Exchange.................................. 43
Section 2.8 Mutilated, Destroyed, Lost and Stolen Securities....... 43
Section 2.9 Outstanding Securities................................. 44
Section 2.10 Treasury Securities.................................... 45
Section 2.11 Temporary Securities................................... 45
Section 2.12 Cancellation........................................... 46
Section 2.13 Defaulted Interest..................................... 46
Section 2.14 Global Securities...................................... 46
Section 2.15 CUSIP Numbers.......................................... 48
ARTICLE 3
REDEMPTION
Section 3.1 Notice to Trustee...................................... 48
Section 3.2 Selection of Securities to be Redeemed................. 49
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 3.3 Notice of Redemption................................... 49
Section 3.4 Effect of Notice of Redemption......................... 50
Section 3.5 Deposit of Redemption Price............................ 50
Section 3.6 Securities Redeemed in Part............................ 50
ARTICLE 4
COVENANTS
Section 4.1 Payment of Principal and Interest...................... 50
Section 4.2 Reports................................................ 51
Section 4.3 Compliance Certificate................................. 51
Section 4.4 Stay, Extension and Usury Laws......................... 52
Section 4.5 Corporate Existence.................................... 52
Section 4.6 Taxes.................................................. 53
Section 4.7 Limitation on Incurrences of Indebtedness and
Issuance of Disqualified Stock......................... 53
Section 4.8 Limitations on Liens................................... 56
Section 4.9 Limitation on Restricted Payments Prior to the REIT
Conversion............................................. 56
Section 4.10 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiary Guarantors........................ 57
Section 4.11 Limitation on Transactions with Affiliates............. 59
Section 4.12 Limitation on Asset Sales.............................. 60
Section 4.13 Limitation on Merger of Subsidiary Guarantors and
Release of Subsidiary Guarantors....................... 65
Section 4.14 Limitation on Status as Investment Company............. 65
Section 4.15 Limitation on Restricted Payments On and After REIT
Conversion............................................. 65
ARTICLE 5
SUCCESSORS
Section 5.1 When Company May Merge, Etc............................ 68
Section 5.2 Successor Person Substituted........................... 68
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE 6
DEFAULTS AND REMEDIES
<S> <C> <C>
Section 6.1 Events of Default...................................... 69
Section 6.2 Acceleration of Maturity; Rescission and Annulment..... 71
Section 6.3 Collection of Indebtedness and Suits for Enforcement
by Trustee............................................. 72
Section 6.4 Trustee May File Proofs of Claim....................... 73
Section 6.5 Trustee May Enforce Claims Without Possession of
Securities............................................. 74
Section 6.6 Application of Money Collected......................... 74
Section 6.7 Limitation on Suits.................................... 75
Section 6.8 Unconditional Right of Holders to Receive Principal
and Interest........................................... 76
Section 6.9 Restoration of Rights and Remedies..................... 76
Section 6.10 Rights and Remedies Cumulative......................... 76
Section 6.11 Delay or Omission Not Waiver........................... 77
Section 6.12 Control by Holders..................................... 77
Section 6.13 Waiver of Past Defaults................................ 77
Section 6.14 Undertaking for Costs.................................. 78
ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee...................................... 79
Section 7.2 Rights of Trustee...................................... 80
Section 7.3 Individual Rights of Trustee........................... 82
Section 7.4 Trustee's Disclaimer................................... 82
Section 7.5 Notice of Defaults..................................... 82
Section 7.6 Reports by Trustee to Holders.......................... 83
Section 7.7 Compensation and Indemnity............................. 83
Section 7.8 Replacement of Trustee................................. 84
Section 7.9 Successor Trustee by Merger, etc. ..................... 85
Section 7.10 Eligibility; Disqualification.......................... 85
Section 7.11 Preferential Collection of Claims Against Company...... 86
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE 8
SATISFACTION AND DISCHARGE; DEFEASANCE
<S> <C> <C>
Section 8.1 Satisfaction and Discharge of Indenture................ 86
Section 8.2 Application of Trust Funds; Indemnification............ 87
Section 8.3 Legal Defeasance of Securities of any Series........... 88
Section 8.4 Covenant Defeasance.................................... 90
Section 8.5 Repayment to Company................................... 91
Section 8.6 Reinstatement.......................................... 91
ARTICLE 9
AMENDMENTS AND SUPPLEMENTS
Section 9.1 Without Consent of Holders............................. 92
Section 9.2 With Consent of Holders................................ 93
Section 9.3 Limitations............................................ 93
Section 9.4 Compliance with Trust Indenture Act.................... 94
Section 9.5 Revocation and Effect of Consents...................... 94
Section 9.6 Notation on or Exchange of Securities.................. 95
Section 9.7 Trustee Protected...................................... 95
ARTICLE 10
RIGHT TO REQUIRE REPURCHASE
Section 10.1 Repurchase of Securities at the Option of the Holder
Upon a Change of Control Triggering Event.............. 96
Section 10.2 Applicability.......................................... 99
ARTICLE 11
SECURITY
Section 11.1 Pledge of the Collateral............................... 99
Section 11.2 Payment of Expenses.................................... 101
Section 11.3 Suits to Protect the Collateral........................ 101
Section 11.4 Trustee's Duties....................................... 102
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 11.5 Certificates of the Company............................ 102
Section 11.6 Authorization of Receipt of Funds by the Trustee
Under the Pledge and Security Agreement................ 103
ARTICLE 12
GUARANTY
Section 12.1 Guaranty............................................... 103
Section 12.2 Execution and Delivery of Guaranty..................... 106
Section 12.3 Future Subsidiary Guarantors........................... 106
Section 12.4 Release of Guarantors; Conduct of Business of
Guarantors after Release; Release of Subsidiary
Guarantors............................................. 107
Section 12.5 Certain Bankruptcy Events.............................. 108
ARTICLE 13
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls........................... 109
Section 13.2 Notices................................................ 109
Section 13.3 Communication by Holders with Other Holders............ 110
Section 13.4 Certificate and Opinion as to Conditions Precedent..... 110
Section 13.5 Statements Required in Certificate or Opinion.......... 110
Section 13.6 Rules by Trustee and Agents............................ 111
Section 13.7 Legal Holidays......................................... 111
Section 13.8 No Recourse Against Others............................. 111
Section 13.9 Counterparts........................................... 111
Section 13.10 Governing Laws......................................... 111
Section 13.11 No Adverse Interpretation of Other Agreements.......... 112
Section 13.12 Successors............................................. 112
Section 13.13 Severability........................................... 113
Section 13.14 Table of Contents, Headings, Etc. ..................... 113
Section 13.15 Securities in a Foreign Currency or in ECU............. 113
Section 13.16 Judgment Currency...................................... 114
ARTICLE 14
SINKING FUNDS
Section 14.1 Applicability of Article............................... 115
Section 14.2 Satisfaction of Sinking Fund Payments with Securities.. 115
Section 14.3 Redemption of Securities for Sinking Fund.............. 116
</TABLE>
v
<PAGE>
Reconciliation and tie between the Trust Indenture Act of 1939, as amended and
the Indenture, dated as of August 5, 1998.
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
--------------- -----------------
<S> <C>
(S)310(a)(1).................................................... 7.10
(a)(2)........................................................ 7.10
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(a)(5)........................................................ 7.10
(b).......................................................... 7.10
(S)311(a)....................................................... 7.11
(b).......................................................... 7.11
(c)................................................ Not Applicable
(S)312(a)....................................................... 2.6
(b).......................................................... 13.3
(c).......................................................... 13.3
(S)313(a)....................................................... 7.6
(b)(1)........................................................ 7.6
(b)(2)........................................................ 7.6
(c)(1)........................................................ 7.6
(d).......................................................... 7.6
(S)314(a).................................................. 4.2, 13.5
(b).......................................................... 11.1
(c)(1)........................................................ 13.4
(c)(2)........................................................ 13.4
(c)(3)...............................................Not Applicable
(d).......................................................... 11.5
(e).......................................................... 13.5
(f).................................................Not Applicable
(S)315(a)........................................................ 7.1
(b)........................................................... 7.5
(c)........................................................... 7.1
(d)........................................................... 7.1
(e).......................................................... 6.14
(S)316(a)....................................................... 2.10
(a)(1)(A)....................................................... 6.12
(a)(1)(B)....................................................... 6.13
</TABLE>
vi
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(b)........................................................... 6.8
(S)317(a)(1)..................................................... 6.3
(a)(2)......................................................... 6.4
(b)........................................................... 2.5
(S)318(a)....................................................... 13.1
</TABLE>
Note: This reconciliation and tie shall not, for any purposes, be deemed to be
part of this Indenture.
vii
<PAGE>
Amended and Restated Indenture, dated as of August 5, 1998 (the
"Indenture"), by and among HMH Properties, a Delaware corporation (the
"Company"), the Guarantors (as defined herein), the Subsidiary Guarantors (as
defined herein) and Marine Midland Bank, as Trustee ("Trustee").
The Company has duly authorized the execution and delivery of this
Indenture and hereby amends and restates the Indenture dated of even date
herewith, by and among the Company, the Guarantors, the Subsidiary Guarantors
and the Trustee, the form of which was filed with the SEC as an exhibit to the
Registration Statement, to provide for the issuance from time to time of the
Securities (as defined below), as herein provided, up to such principal amount
as may from time to time be authorized in or pursuant to one or more resolution
of the Board or by supplemental indenture.
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
-----------
"Acquired Indebtedness" means Indebtedness or Disqualified Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary of the
Company or assumed in connection with an Asset Acquisition and not incurred in
connection with or in contemplation or anticipation of such event, provided that
Indebtedness of such Person which is redeemed, defeased (including the deposit
of funds in a valid trust for the exclusive benefit of holders and the trustee
thereof, sufficient to repay such Indebtedness in accordance with its terms),
retired or otherwise repaid at the time of or immediately upon consummation of
the transactions by which such Person becomes a Restricted Subsidiary or such
Asset Acquisition shall not be Acquired Indebtedness.
"Accreted Value" means, as of any date of determination prior to the
maturity date, the sum of (a) the initial offering price of each Security and
(b) the portion of the excess of the principal amount of each Security over such
initial offering price, which shall have been accreted thereon through such
date, such amount to be so
<PAGE>
accreted at a certain rate per annum, to be determined by the Board Resolution,
Officers' Certificate or supplemental indenture providing for such Series of
Securities, of the initial offering price of the Securities, compounded semi-
annually, from the date of issuance of the Securities through the date of
determination. On and after the maturity date the Accreted Value of the
Securities shall be equal to the principal amount thereof.
"Adjusted Total Assets' means, for any Person, the Total Assets for such
Person and its Restricted Subsidiaries as of any Transaction Date, as adjusted
to reflect the application of the proceeds of the Incurrence of Indebtedness and
issuance of Disqualified Stock on the Transaction Date.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise; provided that a beneficial owner of 10% or more of the total
voting power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control; provided, further, that (i) the right to designate a member of the
Board of a Person or a Parent of that Person will not, by itself, be deemed to
constitute control and (ii) Marriott International and its Subsidiaries shall
not be deemed to be Affiliates of the Company or its Parent or Restricted
Subsidiaries.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged or consolidated into or with
the Company or any of its Restricted Subsidiaries or (ii) an acquisition by the
Company or any of its Restricted Subsidiaries from any other Person that
constitutes all or substantially all of a division or line of business, or one
or more real estate properties, of such Person.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any
<PAGE>
of the Capital Stock of any Restricted Subsidiary (including by issuance of such
Capital Stock), (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries,
or (iii) any other property and assets of the Company or any of its Restricted
Subsidiaries (other than Capital Stock of a Person which is not a Restricted
Subsidiary) outside the ordinary course of business of the Company or such
Restricted Subsidiary and, in each case, that is not governed by Article 5,
provided that "Asset Sale" shall not include (a) sales or other dispositions of
inventory, receivables and other current assets, (b) sales, transfers or other
dispositions of assets with a fair market value not in excess of $10 million in
any transaction or series of related transactions, (c) leases of real estate
assets, (d) Permitted Investments (other than Investments in Cash Equivalents)
or Restricted Investments made in accordance with Section 4.9 or Section 4.15
(as applicable), (e) any transaction comprising part of the REIT Conversion, and
(f) any transactions that, pursuant to Section 4.12, are defined not to be an
"Asset Sale."
"Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Average Life" means at any date of determination with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (a)
the number of years (calculated to the nearest one-twelfth) from such date of
determination to the date of each successive scheduled principal (or redemption)
payment of such debt security and (b) the amount of such principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bearer" means anyone in possession from time to time of a Bearer Security.
"Bearer Security" means any Security, including any interest coupon
appertaining thereto, that does not provide for the identification of the Holder
thereof.
"Blackstone Acquisition" means the acquisition by the Operating Partnership
from The Blackstone Group, a Delaware limited partnership, and a series of funds
<PAGE>
controlled by Blackstone Real Estate Partners, a Delaware limited partnership,
of certain hotel properties, mortgage loans and other assets together with the
assumption of related Indebtedness.
"Board" means (i) with respect to any corporation, the board of directors
of such corporation or any committee of the board of directors of such
corporation authorized, with respect to any particular matter, to exercise the
power of the board of directors of such corporation, (ii) with respect to any
partnership, any partner (including, without limitation, in the case of any
partner that is a corporation, the board of directors of such corporation or any
authorized committee thereof) with the authority to cause the partnership to act
with respect to the matter at issue, (iii) in the case of a trust, any trustee
or board of trustees with the authority to cause the trust to act with respect
to the matter at issue, (iv) in the case of a limited liability company (a
"LLC"), the managing member, management committee or other Person or group with
the authority to cause the LLC to act with respect to the matter at issue, and
(v) with respect to any other entity, the Person or group exercising functions
similar to a board of directors of a corporation.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary or equivalent authorized person of the Company to have
been duly adopted by the Board or pursuant to authorization by the Board and to
be in full force and effect on the date of the certificate (and delivered to the
Trustee, if appropriate).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Contribution" means any contribution to the equity of the Company
for which no consideration is given, or if given, consists only of the issuance
of Qualified Capital Stock (or, if other consideration is given, only the value
of the contribution in excess of such other consideration).
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, or other equivalents (however designated, whether
voting or non-voting), including partnership interests, whether general or
limited, in the equity of such Person, whether outstanding on the Closing Date
or issued thereafter, including, without limitation, all Common Stock, Preferred
Stock and Units.
<PAGE>
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease as reflected on the balance sheet
of such Person in accordance with GAAP.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United State of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America are pledged in support thereof), or (ii) time deposits,
bankers acceptances and certificates of deposit and commercial paper issued by
the Parent of any domestic commercial bank of recognized standing having capital
and surplus in excess of $500 million and commercial paper issued by others
rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the
equivalent thereof by Moody's, (iii) marketable direct obligations issued by the
District of Columbia or any state of the United States of America or any
political subdivision or public instrumentality thereof bearing (at the time of
investment therein) one of the two highest ratings obtainable from either S&P or
Moody's and (iv) liquid investments in money market funds substantially all of
the assets of which are securities of the type described in clauses (i) through
(iii) inclusive; provided that the securities described in clauses (i) through
(iii) inclusive have a maturity of one year or less after the date of
acquisition.
"Change of Control" means (i) any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Company or Host or Host REIT (for so long as Host or Host REIT is a Parent of
the Company immediately prior to such transaction or series of related
transactions), on a consolidated basis, in one transaction or a series of
related transactions, if, immediately after giving effect to such transaction,
any "person" or "group" (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable) other than an Excluded
Person is or becomes the "beneficial owner," directly or indirectly, of more
than 50% of the total voting power in the aggregate normally entitled to vote in
the election of directors, managers, or trustees, as applicable, of the
transferee, (ii) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) other
than an Excluded Person is or becomes the "beneficial owner," directly or
indirectly, of more than 50% of the total voting power in the aggregate of
<PAGE>
all classes of Capital Stock of the Company (or Host or Host REIT for so long as
Host or Host REIT is a Parent of the Company immediately prior to such
transaction or series of related transactions) then outstanding normally
entitled to vote in elections of directors, managers or trustees, as applicable,
(iii) during any period of 12 consecutive months after the Issue Date (for so
long as Host or Host REIT is a Parent of the Company immediately prior to such
transaction or series of related transactions), Persons who at the beginning of
such 12-month period constituted the Board of Host or Host REIT (together with
any new Persons whose election was approved by a vote of a majority of the
Persons then still comprising the Board who were either members of the Board at
the beginning of such period or whose election, designation or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Host or Host REIT, as applicable, then in office, or
(iv) (a) prior to the consummation of the REIT Conversion, the Company is no
longer consolidated with Host for Federal income tax reporting purposes or (b)
on or after the REIT Conversion, Host REIT ceases to be a general partner of the
Operating Partnership or ceases to control the Company; provided, however, that
neither (x) the pro rata distribution by Host to its shareholders of shares of
the Company or shares of any of Host's or Host REIT's other Subsidiaries, nor
(y) the REIT Conversion (or any element thereof) shall, in and of itself,
constitute a Change of Control for purposes of this definition.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Closing Date" means August 5, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning set forth in the Pledge and Security
Agreement.
"Collateral Agent" shall have the meaning set forth in the Pledge and
Security Agreement.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting), which have no preference on liquidation or with respect
to distributions over any other class of Capital Stock, including partnership
interests, whether general or limited, of such Person's equity, whether
outstanding on the Closing Date or
<PAGE>
issued thereafter, including, without limitation, all series and classes of
common stock.
"Company" means HMH Properties and its successors and assigns, including,
without limitation, the Operating Partnership upon the consummation of the
Merger.
"Company Order" means a written order signed in the name of the Company by
two Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the Company
by its Chairman of the Board, a President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated" or "consolidated" means, with respect to any Person, the
consolidation of the accounts of the Restricted Subsidiaries (including those of
the Non-Consolidated Restricted Entities) of such Person with those of such
Person; provided that (i) "consolidation" will not include consolidation of the
accounts of any other Person other than a Restricted Subsidiary of such Person
with such Person and (ii) "consolidation" will include consolidation of the
accounts of any Non-Consolidated Restricted Entities, whether or not such
consolidation would be required or permitted under GAAP (it being understood
that the accounts of such Person's Consolidated Subsidiaries shall be
consolidated only to the extent of such Person's proportionate interest
therein). The terms "consolidated" and "consolidating" have correlative meanings
to the foregoing.
"Consolidated Coverage Ratio" of any Person on any Transaction Date means
the ratio, on a pro forma basis, of (a) the aggregate amount of Consolidated
EBITDA of such Person attributable to continuing operations and businesses
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of) for the Reference Period to (b) the aggregate
Consolidated Interest Expense of such Person (exclusive of amounts attributable
to operations and businesses permanently discontinued or disposed of, but only
to the extent that the obligations giving rise to such Consolidated Interest
Expense would no longer be obligations contributing to such Person's
Consolidated Interest Expense subsequent to the Transaction Date) during the
Reference Period; provided that for purposes of such calculation, (i)
acquisitions of operations, businesses or other income-producing assets
(including any reinvestment of disposition proceeds in
<PAGE>
income-producing assets held as of and not disposed on the Transaction Date)
which occurred during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date shall be assumed to have occurred on the
first day of the Reference Period, (ii) transactions giving rise to the need to
calculate the Consolidated Coverage Ratio shall be assumed to have occurred on
the first day of the Reference Period, (iii) the incurrence of any Indebtedness
or issuance of any Disqualified Stock during the Reference Period or subsequent
to the Reference Period and on or prior to the Transaction Date (and the
application of the proceeds therefrom to the extent used to refinance or retire
other Indebtedness or invested in income-producing assets held as of and not
disposed on the Transaction Date) shall be assumed to have occurred on the first
day of such Reference Period, and (iv) the Consolidated Interest Expense of such
Person attributable to interest on any Indebtedness or dividends on any
Disqualified Stock bearing a floating interest (or dividend) rate shall be
computed on a pro forma basis as if the average rate in effect from the
beginning of the Reference Period to the Transaction Date had been the
applicable rate for the entire period, unless such Person or any of its
Subsidiaries is a party to an Interest Swap or Hedging Obligation (which shall
remain in effect for the 12-month period immediately following the Transaction
Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used.
"Consolidated EBITDA" means, for any Person and for any period, the
Consolidated Net Income of such Person for such period adjusted to add thereto
(to the extent deducted from net revenues in determining Consolidated Net
Income), without duplication, (A) the sum of (i) Consolidated Interest Expense,
(ii) provisions for taxes based on income (to the extent of such Person's
proportionate interest therein), (iii) depreciation and amortization expense (to
the extent of such Person's proportionate interest therein), (iv) any other
noncash items reducing the Consolidated Net Income of such Person for such
period (to the extent of such Person's proportionate interest therein), (v) any
dividends or distributions during such period to such Person or a Consolidated
Subsidiary (to the extent of such Person's proportionate interest therein) of
such Person from any other Person which is not a Restricted Subsidiary of such
Person or which is accounted for by such Person by the equity method of
accounting (other than a Non-Consolidated Restricted Entity), to the extent that
(a) such dividends or distributions are not included in the Consolidated Net
Income of such Person for such period and (b) (1) the sum of such dividends and
distributions, plus the aggregate amount of dividends or distributions from such
other Person since the Issue Date that have been included in Consolidated EBITDA
pursuant to this clause (v), do not exceed (2) the
<PAGE>
cumulative net income of such other Person attributable to the equity interests
of the Person (or Restricted Subsidiary of the Person) whose Consolidated EBITDA
is being determined, (vi) any cash receipts of such Person or a Consolidated
Subsidiary of such Person (to the extent of such Person's proportionate interest
therein) during such period that represent items included in Consolidated Net
Income of such Person for a prior period which were excluded from Consolidated
EBITDA of such Person for such prior period by virtue of clause (B) of this
definition, and (vii) any nonrecurring expenses incurred in connection with the
REIT Conversion, minus (B) the sum of (I) all non-cash items increasing the
Consolidated Net Income of such Person (to the extent of such Person's
proportionate interest therein) for such period and (II) any cash expenditures
of such Person (to the extent of such Person's proportionate interest therein)
during such period to the extent such cash expenditures (a) did not reduce the
Consolidated Net Income of such Person for such period and (b) were applied
against reserves or accruals that constituted noncash items reducing the
Consolidated Net Income of such Person (to the extent of such Person's
proportionate interest therein) when reserved or accrued; all as determined on a
consolidated basis for such Person and its Consolidated Subsidiaries (it being
understood that the accounts of such Person's Consolidated Subsidiaries shall be
consolidated only to the extent of such Person's proportionate interest
therein).
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate amount (without duplication and determined in each case on a
consolidated basis) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations but excluding
the amortization of fees or expenses incurred in order to consummate the sale of
the Securities as described herein or to establish the Credit Facility) of such
Person and its Consolidated Subsidiaries during such period, including (i)
original issue discount and noncash interest payments or accruals on any
Indebtedness, (ii) the interest portion of all deferred payment obligations, and
(iii) all commissions, discounts and other fees and charges owed with respect to
bankers' acceptances and letters of credit financings and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, and
(b) dividends accrued or payable by such Person or any of its Consolidated
Subsidiaries in respect of Disqualified Stock (other than by Restricted
Subsidiaries of such Person to such Person or, to the extent of such Person's
proportionate interest therein, such Person's Restricted Subsidiaries);
provided, however, that any such interest, dividends or other payments or
accruals (referenced in clauses (a) or (b)) of a Consolidated Subsidiary that is
not Wholly Owned shall be included only to the extent of the proportionate
interest of the
<PAGE>
referent Person in such Consolidated Subsidiary. For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP and (y) interest expense attributable to any Indebtedness represented by
the guaranty by such Person or a Restricted Subsidiary of such Person of an
obligation of another Person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.
"Consolidated Net Income" means, with respect to any Person for any period,
the net income (or loss) of such Person and its Consolidated Subsidiaries for
such period, determined on a consolidated basis (it being understood that the
net income of Consolidated Subsidiaries shall be consolidated with that of a
Person only to the extent of the proportionate interest of such Person in such
Consolidated Subsidiaries); provided that (i) net income (or loss) of any other
Person which is not a Restricted Subsidiary of the Person, or that is accounted
for by such specified Person by the equity method of accounting (other than a
Non-Consolidated Restricted Entity), shall be included only to the extent of the
amount of dividends or distributions paid to the specified Person or a
Restricted Subsidiary of such Person, (ii) the net income (or loss) of any other
Person acquired by such specified Person or a Restricted Subsidiary of such
Person in a pooling of interests transaction for any period prior to the date of
such acquisition shall be excluded, (iii) all gains and losses which are either
extraordinary (as determined in accordance with GAAP) or are either unusual or
nonrecurring (including any gain from the sale or other disposition of assets or
from the issuance or sale of any Capital Stock) shall be excluded, and (iv) the
net income, if positive, of any of such Person's Consolidated Subsidiaries other
than Consolidated Subsidiaries that are not Subsidiary Guarantors to the extent
that the declaration or payment of dividends or similar distributions is not at
the time permitted by operation of the terms of its charter or bylaws or any
other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary shall be
excluded; provided, however, in the case of exclusions from Consolidated Net
Income set forth in clauses (ii), (iii) and (iv), such amounts shall be excluded
only to the extent included in computing such net income (or loss) on a
consolidated basis and without duplication.
"Consolidated Subsidiary" means, for any Person, each Restricted Subsidiary
of such Person (including each Non-Consolidated Restricted Entity).
"Conversion Date" means the effective date of the Host REIT Merger.
<PAGE>
"Corporate Trust Office" means the office of the Trustee at which any
particular time its corporate trust business shall be principally administered.
"Credit Facility" means the credit facility established pursuant to the
Credit Agreement, dated as of August 5, 1998 among the Company, Host, certain
other Subsidiaries party thereto, the lenders party thereto, Bankers Trust
Company, as Arranger and Administrative Agent, and Wells Fargo Bank, N.A., The
Bank of Nova Scotia and Credit Lyonnais New York Branch, as Co-Arrangers,
together with all other agreements, instruments and documents executed or
delivered pursuant thereto or in connection therewith, in each case as such
agreements, instruments or documents may be amended, supplemented, extended,
renewed, replaced or otherwise modified or restructured from time to time
(including by way of adding Subsidiaries of the Company as additional borrowers
or guarantors thereof), whether by the same or any other agent, lender or group
of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is or after notice or passage of time or
both would be an Event of Default.
"Depository" means, with respect to the Securities of any Series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depository for such Series by the Company, which Depository
shall be a clearing agency registered under the Exchange Act; and if at any time
there is more than one such person, "Depository" as used with respect to the
Securities of any Series shall mean the Depository with respect to the
Securities of such Series.
"Discount Security" means any Security that provides for an amount less
than the stated principal amount thereof to be due and payable upon declaration
of acceleration of the maturity thereof pursuant to Section 6.2.
"Disqualified Stock" means except as set forth below, with respect to any
Person, Capital Stock of that Person that by its terms or otherwise is (i)
required to be redeemed on or prior to the Stated Maturity of the Securities for
cash or property other than Qualified Capital Stock, (ii) redeemable for cash or
property other than Qualified Capital Stock at the option of the holder of such
class or series of Capital Stock at any time prior to the Stated Maturity of the
Securities, or (iii) convertible into or exchangeable mandatorily or at the
option of the holder for Capital Stock
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referred to in clause (i) or (ii) above or Indebtedness of the Company or a
Restricted Subsidiary having a scheduled maturity prior to the Stated Maturity
of the Securities; provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Securities shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
contained in Sections 4.12 and 10.1 and such Capital Stock specifically provides
that such Person will not repurchase or redeem any such stock pursuant to such
provision prior to the Company's repurchase of such Securities as are required
to be repurchased pursuant to Sections 4.12 and 10.1. With respect to Capital
Stock of a Restricted Subsidiary, only the amount thereof issued to Persons
(other than the Company or any of its Restricted Subsidiaries) in excess of such
Persons' Pro Rata Share of such Capital Stock shall be deemed to be Disqualified
Stock for purposes of determining the amount of Disqualified Stock of the
Company and its Restricted Subsidiaries.
Notwithstanding anything to the contrary contained in this definition, (a)
the QUIPs are not Disqualified Stock, (b) any Capital Stock issued by the
Partnership to Host REIT shall not be deemed to be Disqualified Stock solely by
reason of a right by Host REIT to require the Company to make a payment to it
sufficient to enable Host REIT to satisfy its concurrent obligation with respect
to Capital Stock of Host REIT, provided such Capital Stock of Host REIT would
not constitute Disqualified Stock, and (c) no Capital Stock shall be deemed to
be Disqualified Stock as the result of the right of the holder thereof to
request redemption thereof if the issuer of such Capital Stock (or the Parent of
such issuer) has the right to satisfy such redemption obligations by the
issuance of Qualified Capital Stock to such holder.
"Dollars" means the currency of The United States of America.
"E&P Distribution" means (a) one or more distributions to the shareholders
of Host and/or Host REIT of (i) shares of SLC and (ii) cash, securities or other
property, with a cumulative aggregate value equal to the amount estimated in
good faith by Host or Host REIT from time to time as being necessary to assure
that Host and Host REIT have distributed the accumulated earnings and profits
(as referenced in Section 857(a)(2)(B) of the Code) of Host as of the last day
of the first taxable year for which Host REIT's election to be taxed as a REIT
is effective and (b) the distributions from the Operating Partnership to (i)
Host REIT necessary to enable
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Host REIT to make the distributions described in clause (a) and (ii) holders of
Units (other than Host REIT) required as a result of or a condition to such
distributions made pursuant to clause (b)(i).
"ECU" means the European Currency Unit as determined by the Commission of
the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Excluded Person" means, in the case of the Company, Host, Host REIT or any
Wholly Owned Subsidiary of Host or Host REIT.
"Exempted Affiliate Transaction" means (i) employee compensation
arrangements approved by a majority of independent (as to such transactions)
members of the Board of the Company, (ii) payments of reasonable fees and
expenses to the members of the Board, (iii) transactions solely between the
Company and any of its Subsidiaries or solely among Subsidiaries of the Company,
(iv) Permitted Tax Payments, (v) Permitted Sharing Arrangements, (vi)
Procurement Contracts, (vii) Operating Agreements, (viii) Restricted Payments
permitted under Section 4.9 or Section 4.15 (as applicable), and (ix) any and
all elements of the REIT Conversion.
"Existing Senior Notes" means amounts outstanding from time to time of (i)
the 9 1/2% Senior Secured Notes due 2005 of the Company, (ii) the 8 7/8% Senior
Notes due 2007 of the Company, and (iii) the 9% Senior Notes due 2007 of the
Company, in each case not in excess of amounts outstanding immediately following
the Issue Date, less amounts retired from time to time.
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined (i)
in good faith by the Board of the Company or the applicable Subsidiary involved
in such transaction, or (ii) by an appraisal or valuation firm of national or
regional standing selected by the Company or such Subsidiary, with experience in
the appraisal or valuation of properties or assets of the type for which fair
market value is being determined.
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"Fifty Percent Venture" means a Person (i) in which the Company owns
(directly or indirectly) at least 50% of the aggregate economic interests; (ii)
in which the Company or a Restricted Subsidiary participates in control as a
general partner, a managing member or through similar means, and (iii) which is
not consolidated for financial reporting purposes with the Company under GAAP.
"FF&E" means furniture, fixtures and equipment, and other tangible personal
property other than real property.
"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.
"Foreign Government Obligations" means with respect to Securities of any
Series that are denominated in a Foreign Currency, (i) direct obligations of the
government that issued or caused to be issued such currency for the payment of
which obligations its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by or acting as an agency or instrumentality of
such government the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by such government, which, in either case under
clauses (i) or (ii), are not callable or redeemable at the option of the issuer
thereof.
"Funds From Operations" for any period means the Consolidated Net Income of
the Company and its Restricted Subsidiaries for such period excluding gains or
losses from debt restructurings and sales of property, plus depreciation of real
estate assets and amortization related to real estate assets and other non-cash
charges related to real estate assets, after adjustments for unconsolidated
partnerships and joint ventures plus minority interests, if applicable (it being
understood that the accounts of such Person's Consolidated Subsidiaries shall be
consolidated only to the extent of such Person's proportionate interest
therein).
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession in the United States of America.
<PAGE>
"Global Security" or "Global Securities" means a Security or Securities, as
the case may be, in the form established pursuant to Section 2.2 evidencing all
or part of a Series of Securities, issued to the Depository for such Series or
its nominee, and registered in the name of such Depository or nominee.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantors" means, with respect to Securities of any Series issued on the
Issue Date, Host and each other Parent of the Company and, with respect to
Securities of any other Series, any Person providing a Guarantee with respect to
Securities of such Series and designated a "Guarantor" in the Board Resolution,
supplemental indenture or Officers' Certificate establishing such Series.
"HMH Properties" means HMH Properties, Inc., a Delaware corporation.
"Holder" or "Securityholder" means a Person in whose name a Security is
registered or the holder of a Bearer Security.
"Hospitality" means Host Marriott Hospitality, Inc., a Delaware corporation
and the direct Parent of the Company on the Issue Date.
"Host" means Host Marriott Corporation, a Delaware corporation and the
indirect Parent of the Company on the Issue Date, and its successors and
assigns.
<PAGE>
"Host REIT" means Host Marriott Trust, a Maryland real estate investment
trust, 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.
"Host REIT Merger" means the merger of Host with and into Host REIT, with
Host REIT surviving the merger.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to (including
as a result of an acquisition), or become responsible for, the payment of,
contingently or otherwise, such Indebtedness (including Acquired Indebtedness);
provided that neither the accrual of interest nor the accretion of original
issue discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" of any Person means, without duplication, (i) all
liabilities and obligations, contingent or otherwise, of such Person, (a) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (b) evidenced
by bonds, notes, debentures or similar instruments, (c) representing the balance
deferred and unpaid of the purchase price of any property or services, except
those incurred in the ordinary course of its business that would constitute
ordinarily a trade payable to trade creditors, (d) evidenced by bankers"
acceptances, (e) for the payment of money relating to a Capitalized Lease
Obligation, or (f) evidenced by a letter of credit or a reimbursement obligation
of such Person with respect to any letter of credit; (ii) all net obligations of
such Person under Interest Swap and Hedging Obligations; and (iii) all
liabilities and obligations of others of the kind described in the preceding
clause (i) or (ii) that such Person has guaranteed or that is otherwise its
legal liability or which are secured by any assets or property of such Person.
"Indenture" means this Indenture as amended or supplemented from time to
time and shall include the form and terms of particular Series of Securities
established as contemplated hereunder.
"Indenture Obligations"means all obligations arising under this Indenture,
from time to time, with respect to the payment of principal of, premium, if any,
or interest, if any, on the Securities of any Series.
"Interest Payment Date" means, with respect to Securities of any Series,
the stated due date of an installment of interest on the Securities of that
Series.
<PAGE>
"Interest Swap and Hedging Obligation" means any obligation of any Person
pursuant to any interest rate swaps, caps, collars and similar arrangements
providing protection against fluctuations in interest rates. For purposes of
this Indenture, the amount of such obligations shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such obligation had terminated at the
end of such fiscal quarter, and in making such determination, if any agreement
relating to such obligation provides for the netting of amounts payable by and
to such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount of
such obligations shall be the net amount so determined, plus any premium due
upon default by such Person.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including without limitation by way of Guarantee or
similar arrangement, but excluding advances to customers in the ordinary course
of business that are, in conformity with GAAP, recorded as accounts receivable
on the consolidated balance sheet of the Company and its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property (tangible or intangible) to others or any payment for property or
services solely for the account or use of others, or otherwise), or any purchase
or acquisition of Capital Stock, bonds, notes, debentures or other similar
instruments issued by, such Person and shall include the designation of a
Restricted Subsidiary to be an Unrestricted Subsidiary or a Non-Consolidated
Entity. For purposes of the definition of "Unrestricted Subsidiary" and Section
4.9 or Section 4.15 (as applicable) described below, (a) "Investment" shall
include the proportionate share of the Company and its Restricted Subsidiaries
in the fair market value of the assets (net of liabilities (other than
liabilities to the Company or any of its Restricted Subsidiaries)) of any
Restricted Subsidiary at the time such Restricted Subsidiary is designated an
Unrestricted Subsidiary or Non-Consolidated Entity, (b) the proportionate share
of the Company and its Restricted Subsidiaries in the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of its
Restricted Subsidiaries)) of any Unrestricted Subsidiary or Non-Consolidated
Entity at the time that such Unrestricted Subsidiary or Non-Consolidated Entity
is designated a Restricted Subsidiary shall be considered a reduction in
outstanding Investments and (c) any property transferred to or from an
Unrestricted Subsidiary or Non-Consolidated Entity shall be valued at its fair
market value at the time of such transfer.
"Investment Grade" means a rating of the Securities by both S&P and
Moody's, each such rating being in one of such agency's four highest generic
rating
<PAGE>
categories that signifies investment grade (i.e., currently BBB- (or the
equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by Moody's);
provided in each case such ratings are publicly available; provided, further,
that in the event Moody's or S&P is no longer in existence for purposes of
determining whether the Securities are rated "Investment Grade," such
organization may be replaced by a nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) designated by the
Company, notice of which shall be given to the Trustee.
"Issue Date" means August 5, 1998.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
privilege, hypothecation, other encumbrance or charge of any kind (including,
without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof or any agreement to give any security interest) upon
or with respect to any property of any kind now owned or hereinafter acquired.
"Limited Partner Note" means an unsecured note of the Operating Partnership
which a limited partner of a Public Partnership can elect to receive at the time
of the Partnership Mergers instead of or in exchange for Units.
"Marriott International" means Marriott International, Inc., a Delaware
corporation, and its successors and assigns.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.
"Merger" means the merger of HMH Properties with and into the Operating
Partnership with the Operating Partnership as the surviving entity.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (i) with respect to any Asset Sale other than
the sale of Capital Stock of a Restricted Subsidiary, the proceeds of such Asset
Sale in the form of cash or Cash Equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or Cash
Equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any of its Restricted Subsidiaries) and proceeds from
the conversion of other property received when converted to cash or Cash
Equivalents, net of (a) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (b) provisions for all Taxes (including Taxes of Host REIT) actually
paid or payable as a result of such Asset Sale by the Company and its Restricted
Subsidiaries, taken as a whole, (c) payments made to repay Indebtedness (other
than Indebtedness subordinated in right of payment to the Securities or a
Subsidiary Guarantee) or any other obligations outstanding at the time of such
Asset Sale that either (I) is secured by a Lien on the property or assets sold
or (II) is required to be paid as a result of such sale, (d) amounts reserved by
the Company and its Restricted Subsidiaries against any liabilities associated
with such Asset Sale, including, without limitation, pension and other post-
employment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as determined on a consolidated basis in conformity with GAAP and (e)
unless Taxes thereon are paid by Host REIT as set forth in clause (b) above,
amounts required to be distributed as a result of the realization of gains from
Asset Sales in order to maintain or preserve Host REIT's status as a REIT
(provided, however, that with respect to an Asset Sale by any Person other than
the Company or a Wholly Owned Subsidiary, Net Cash Proceeds shall be the above
amount multiplied by the Company's (direct or indirect) percentage ownership
interest in such Person) and (ii) with respect to any issuance or sale of
Capital Stock, the proceeds of such issuance or sale in the form of cash or Cash
Equivalents, including payments in respect of deferred payment obligations (to
the extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or Cash Equivalents (except to
<PAGE>
the extent such obligations are financed or sold with recourse to the Company or
any of its Restricted Subsidiaries) and proceeds from the conversion of other
property received when converted to cash or Cash Equivalents, net of attorney's
fees, accountants's fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection with
such issuance or sale and net of tax paid or payable as a result thereof
(provided, however, that with respect to an issuance or sale by any Person other
than the Company or a Wholly Owned Subsidiary, Net Cash Proceeds shall be the
above amount multiplied by the Company's (direct or indirect) percentage
ownership interest in such Person).
"Net Investments" means, with respect to any referenced category or group
of Investments, (x) the aggregate amount of such Investments made by the Company
<PAGE>
and its Restricted Subsidiaries (to the extent of the Company's proportionate
interest in such Restricted Subsidiaries) on or subsequent to the Issue Date,
minus (y) the aggregate amount of any dividends, distributions, sales proceeds
or other amounts received by the Company and its Restricted Subsidiaries (to the
extent of the Company's proportionate interest in such Restricted Subsidiaries)
in respect of such Investments on or subsequent to the Issue Date; and, in the
event that any such Investments are made, or amounts are received, in property
other than cash, such amounts shall be the fair market value of such property.
"Non-Conforming Assets" means various assets (principally comprising
partnership or other interests in hotels which are not leased, certain
international hotels in which Host or its Subsidiaries own interests, and
certain FF&E relating to hotels owned by the Operating Partnership and its
Subsidiaries) which assets, if owned by the Operating Partnership, could
jeopardize Host REIT's status as a REIT.
"Non-Consolidated Entity" means a Non-Controlled Entity or a Fifty Percent
Venture which is neither a Non-Consolidated Restricted Entity nor an
Unrestricted Subsidiary.
"Non-Consolidated Restricted Entity" means a Non-Controlled Entity or a
Fifty Percent Venture which has been designated by the Company (by notice to the
Trustee) as a Restricted Subsidiary and which designation has not been revoked
(by notice to the Trustee). Revocation of a previous designation of a Non-
Controlled Entity or a Fifty Percent Venture as a Non-Consolidated Restricted
Entity shall be deemed to be a designation of such entity to be a Non-
Consolidated Entity.
"Non-Controlled Entity" means a taxable corporation in which the Operating
Partnership owns (directly or indirectly) 90% or more of the economic interest
but no more than 9.9% of the Voting Stock and whose assets consist primarily of
Non-Conforming Assets.
"Offering" means the offering of the Securities for sale by the Company.
"Officer" means the Chairman of the Board, the President, any Vice-
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company or equivalent authorized Person.
"Officers" Certificate" means a certificate signed on behalf of the
Company, a Guarantor or Subsidiary Guarantor, as applicable, by an Officer of
the Company, a
<PAGE>
Guarantor or Subsidiary Guarantor, as applicable, who must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, Guarantor or Subsidiary Guarantor,
as applicable.
"Old Notes" means the approximately $35 million aggregate principal amount
of four series of Indebtedness of Host outstanding on the Issue Date.
"Operating Agreements" means the asset or property management agreements,
franchise agreements, lease agreements and other similar agreements between the
Company, any Subsidiary Guarantor or any of their respective Restricted
Subsidiaries, on the one hand, and Marriott International, SLC or another entity
engaged in and having pertinent experience with the operation of such similar
properties, on the other, relating to the operation of the real estate
properties owned by the Company, any Subsidiary Guarantor or any of their
respective Restricted Subsidiaries, provided that the management of the Company
determines in good faith that such arrangements are fair to the Company and to
such Restricted Subsidiary.
"Operating Partnership" means Host Marriott, L.P., a Delaware limited
partnership, and, prior to the REIT Conversion, a Wholly Owned Subsidiary of
Host, and, upon consummation of the Merger, the successor obligor to the Company
under the Securities.
"Opinion of Counsel" means a written opinion of legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
"Parent" of any Person means a corporation which at the date of
determination owns, directly or indirectly, a majority of the Voting Stock of
such Person or of a Parent of such Person.
"Partnership Mergers" means the merger of one of more Subsidiaries of the
Operating Partnership into one or more of the Public Partnerships.
"Permitted Investment" means any of the following: (i) an Investment in
Cash Equivalents; (ii) Investments in a Person substantially all of whose assets
are of a type generally used in a Related Business (an "Acquired Person") if, as
a result of such Investments, (a) the Acquired Person immediately thereupon is
or becomes a Restricted Subsidiary of the Company, or (b) the Acquired Person
immediately
<PAGE>
thereupon either (I) is merged or consolidated with or into the Company or any
of its Restricted Subsidiaries and the surviving Person is the Company or a
Restricted Subsidiary of the Company or (II) transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or any of
its Restricted Subsidiaries; (iii) an Investment in a Person, provided that (A)
such Person is principally engaged in a Related Business, (B) the Company or one
or more of its Restricted Subsidiaries participates in the management of such
Person, as a general partner, member of such Person's governing board or
otherwise and (C) any such Investment shall not be a Permitted Investment if,
after giving effect thereto, the aggregate amount of Net Investments outstanding
made in reliance on this clause (iii) subsequent to the Issue Date would exceed
5% of Total Assets; (iv) Permitted Sharing Arrangement Payments; (v) securities
received in connection with an Asset Sale so long as such Asset Sale complied
with this Indenture including Section 4.12 (but, only to the extent the fair
market value of such securities and all other non-cash and non-Cash Equivalent
consideration received complies with clause (ii) of the first paragraph of
Section 4.12); (vi) Investments in the Company or in Restricted Subsidiaries of
the Company; (vii) Permitted Mortgage Investments; (viii) any Investments
constituting part of the REIT Conversion; and (ix) any Investments in a Non-
Consolidated Entity, provided that (after giving effect to such Investment) the
total assets (before depreciation and amortization) of all Non-Consolidated
Entities attributable to the Company's proportionate ownership interest therein,
plus an amount equal to the Net Investments outstanding made in reliance upon
clause (iii) above, does not exceed 20% of the total assets (before depreciation
and amortization) of the Company and its Consolidated Subsidiaries (to the
extent of the Company's proportionate ownership interest therein).
"Permitted Lien" means any of the following: (i) Liens imposed by
governmental authorities for taxes, assessments or other charges where
nonpayment thereof is not subject to penalty or which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the Company in accordance with GAAP; (ii)
statutory liens of carriers, warehousemen, mechanics, materialmen, landlords,
repairmen or other like Liens arising by operation of law in the ordinary course
of business, provided that (a) the underlying obligations are not overdue for a
period of more than 30 days, or (b) such Liens are being contested in good faith
and by appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP; (iii) Liens
securing the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the
<PAGE>
ordinary course of business; (iv) easements, rights-of-way, zoning, similar
restrictions and other similar encumbrances or title defects which, singly or in
the aggregate, do not in any case materially detract from the value of the
property, subject thereto (as such property is used by the Company or any of its
Restricted Subsidiaries) or interfere with the ordinary conduct of the business
of the Company or any of its Restricted Subsidiaries; (v) Liens arising by
operation of law in connection with judgments, only to the extent, for an amount
and for a period not resulting in an Event of Default with respect thereto; (vi)
pledges or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social security
legislation; and (vii) Liens securing on an equal and ratable basis the
Securities and any other Indebtedness.
"Permitted Mortgage Investment" means an Investment in Indebtedness secured
by real estate assets or Capital Stock of Persons (other than the Company or its
Restricted Subsidiaries) owning such real estate assets; provided that (i) the
Company is able to consolidate the operations of the real estate assets in its
GAAP financial statements, (ii) such real estate assets are owned by a
partnership, LLC or other entity which is controlled by the Company or a
Restricted Subsidiary as a general partner, managing member or through similar
means, or (iii) the aggregate amount of such Permitted Mortgage Investments
(excluding those referenced in clauses (i) and (ii) above), determined at the
time each such Investment was made, does not exceed 10% of Total Assets after
giving effect to such Investment.
"Permitted REIT Distributions" means a declaration or payment of any
dividend or the making of any distribution (i) to Host REIT that is necessary to
maintain Host REIT's status as a REIT under the Code or to satisfy the
distributions required to be made by reason of Host REIT's making of the
election provided for in Notice 88-19 (or Treasury regulations issued pursuant
thereto), if (a) the aggregate principal amount of all outstanding Indebtedness
(other than the QUIPs Debt) of the Company and its Restricted Subsidiaries on a
consolidated basis at such time is less than 80% of Adjusted Total Assets of the
Company and (b) no Default or Event of Default shall have occurred and be
continuing and (ii) to any Person in respect of any Units, which distribution is
required as a result of or a condition to the distribution or payment of such
dividend or distribution to Host REIT; provided that such Person's investment in
the Operating Partnership in consideration of which such Person received such
Units shall have been consummated in a transaction determined by the Company to
be fair to the Operating Partnership as set forth in an Officers'
<PAGE>
Certificate for Investments in an amount less than $50 million and as set forth
in a Board Resolution for Investments equal to or greater than such amount.
"Permitted REIT Payments" means, without duplication, payments to Host REIT
and its Subsidiaries that hold only Qualified Assets in an amount necessary and
sufficient to permit Host REIT and such Subsidiaries to pay all of their
operating expenses and other general corporate expenses and liabilities
(including any reasonable professional fees and expenses).
"Permitted Sharing Arrangements" means any contracts, agreements or other
arrangements between the Company and/or one or more of its Subsidiaries and a
Parent of the Company and/or one or more Subsidiaries of such Parent, pursuant
to which such Persons share centralized services, establish joint payroll
arrangements, procure goods or services jointly or otherwise make payments with
respect to goods or services on a joint basis, or allocate corporate expenses
(other than taxes based on income) (provided that (i) such Permitted Sharing
Arrangements are, in the determination of management of the Company, the
Subsidiary Guarantors, or their Restricted Subsidiaries in the best interests of
the Company, the Subsidiary Guarantors, or their Restricted Subsidiaries and
(ii) the liabilities of the Company, the Subsidiary Guarantors and their
Restricted Subsidiaries under such Permitted Sharing Arrangements are determined
in good faith and on a reasonable basis).
"Permitted Sharing Arrangements Payments" means payments under Permitted
Sharing Arrangements.
"Permitted Tax Payments" means payment of any liability of the Company,
Host, Host REIT or any of their respective Subsidiaries for Taxes.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge and Security Agreement" means the pledge and security agreement,
dated as of August 5, 1998, made by each of the Company, the Guarantors, the
Subsidiary Guarantors and the Collateral Agent as such agreement may be amended,
modified, supplemented or replaced from time to time.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated, whether
voting or
<PAGE>
non-voting), which have a preference on liquidation or with respect to
distributions over any other class of Capital Stock, including preferred
partnership interests, whether general or limited, or such Person's preferred or
preference stock, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such preferred or
preference stock.
"Private Partnership" means a partnership (other than a Public Partnership)
or limited liability company that owns one or more full service hotels and that,
prior to the REIT Conversion, is partially but not Wholly Owned by Host or one
of its Subsidiaries.
"Private Partnership Acquisition" means the acquisition by the Operating
Partnership or a Restricted Subsidiary thereof from unaffiliated partners of
certain Private Partnerships of partnership interests in such Private
Partnerships in exchange for Units or the assets of such Private Partnerships by
merger or conveyance in exchange for Units.
"Procurement Contracts" means contracts for the procurement of goods and
services entered into in the ordinary course of business and consistent with
industry practices.
"Pro Rata Share" means "PRS" where:
PRS equals CR divided by TC multiplied by OPTC
where:
CR equals the redemption value of such Capital Stock in the
issuing Restricted Subsidiary held in the aggregate by the Company and its
Restricted Subsidiaries.
TC equals the total contribution to the equity of the issuing
Restricted Subsidiary made by the Company and its Restricted Subsidiaries,
and
OPTC equals the total contribution to the equity of the issuing
Restricted Subsidiary made by other Persons.
<PAGE>
"Prospectus" means the Prospectus, dated June 17, 1998, and Prospectus
Supplement thereto, dated July 29, 1998, in the form first used to confirm sales
of the Securities.
"Public Partnerships" mean, collectively, Atlanta Marriott Marquis II
Limited Partnership, a Delaware limited partnership; Desert Springs Marriott
Limited Partnership, a Delaware limited partnership; Hanover Marriott Limited
Partnership, a Delaware limited partnership; Marriott Diversified American
Hotels, L.P., a Delaware limited partnership; Marriott Hotel Properties Limited
Partnership, a Delaware limited partnership; Marriott Hotel Properties II
Limited Partnership, a Delaware limited partnership; Mutual Benefit Chicago
Marriott Suite Hotel Partners, L.P., a Rhode Island limited partnership; Potomac
Hotel Limited Partnership, a Delaware limited partnership; and Marriott Suites
Limited Partnership; or, as the context may require, any such entity together
with its Subsidiaries, or any of such Subsidiaries.
"Qualified Assets" means (i) Capital Stock of the Company or any of its
Subsidiaries or of other Subsidiaries of the Guarantors substantially all of
whose sole assets are direct or indirect interests in Capital Stock of the
Company and (ii) other assets related to corporate operations of the Guarantors
which are de minimus in relation to those of the Guarantors and their Restricted
Subsidiaries, taken as a whole.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Stock and, when used in the definition of "Disqualified Stock,"
also includes any Capital Stock of a Restricted Subsidiary, Host REIT or any
Parent of the Company that is not Disqualified Stock.
"Qualified Exchange" means (i) any legal defeasance, redemption,
retirement, repurchase or other acquisition of then outstanding Capital Stock or
Indebtedness of the Company issued on or after the Issue Date with the Net Cash
Proceeds received by the Company from the substantially concurrent sale of
Qualified Capital Stock or (ii) any exchange of Qualified Capital Stock for any
then outstanding Capital Stock or Indebtedness issued on or after the Issue
Date.
"QUIPs" means the 6 3/4% Convertible Preferred Securities issued by Host
Financial Trust, a statutory business trust and a Subsidiary of Host.
<PAGE>
"QUIPs Debt" means the $567 million aggregate principal amount of 6 3/4%
convertible subordinated debentures due 2026 of Host, held by Host Marriott
Financial Trust, a statutory business trust.
"Rating Agencies" means (i) S&P and (ii) Moody's or (iii) if S&P or Moody's
or both shall not make a rating of all of the Securities publicly available, a
nationally recognized securities rating agency or agencies, as the case may be,
selected by the Company, which shall be substituted for S&P or Moody's or both,
as the case may be.
"Rating Category" means currently (i) with respect to S&P, any of the
following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Ba,
B, Caa, Ca, C and D (or equivalent successor categories); and (iii) the
equivalent of any such category of S&P or Moody's used in another Rating Agency.
In determining whether the rating of the Securities has decreased by one or more
gradations, gradations within Rating Categories (currently + and - for S&P, 1,2
and 3 for Moody's; or the equivalent gradations for another Rating Agency) shall
be taken into account (e.g., with respect to S&P, a decline in a rating from BB+
to BB, as well as from BB- to B+, will constitute a decrease of one gradation).
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change of Control and (ii) the first public notice of the occurrence of a Change
of Control or of the intention by the Company to effect a Change of Control.
"Rating Decline" means the occurrence, on or within 90 days after the
earliest to occur of (i) a Change of Control and (ii) the date of the first
public notice of the occurrence of a Change of Control or of the intention by
any Person to effect a Change of Control (which period shall be extended so long
as the rating of the Securities is under publicly announced consideration for
possible downgrade by any of the Rating Agencies), of (a) in the event the
Securities are rated by either Moody's or S&P on the Rating Date as Investment
Grade, a decrease in the rating of the Securities by either of such Rating
Agencies to a rating that is below Investment Grade, or (b) in the event the
Securities are rated below Investment Grade by both Rating Agencies on the
Rating Date, a decrease in the rating of the Securities by either Rating Agency
by one or more gradations (including gradations with Rating Categories as well
as between Rating Categories).
<PAGE>
"real estate assets" means real property and all FF&E associated or used in
connection therewith.
"Record Date" means, with respect to Securities of any Series, the Record
Date specified in the Securities of that Series, whether or not such Record Date
is a Business Day.
"Redemption Date" when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
means the redemption price for such redemption pursuant to the form of Security,
which shall include, without duplication, in each case, accrued and unpaid
interest to the Redemption Date (subject to the provisions of Section 3.4).
"Reference Period" with regard to any Person means the four full fiscal
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Securities or this Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Stock (i)
issued in exchange for, or the proceeds from the issuance and sale of which are
used substantially concurrently to repay, redeem, defease, refund, refinance,
discharge or otherwise retire for value, in whole or in part, or (ii)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((i) and (ii) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Stock in a principal amount or, in the case of
Disqualified Stock, liquidation preference, not to exceed the sum of (a) the
reasonable and customary fees and expenses incurred in connection with the
Refinancing plus (b) the lesser of (I) the principal amount or, in the case of
Disqualified Stock, liquidation preference, of the Indebtedness or Disqualified
Stock so refinanced and (II) if such Indebtedness being refinanced was issued
with an original issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing; provided that Refinancing
Indebtedness (other than a revolving line of credit from a commercial lender or
other Indebtedness whose proceeds are used to repay a revolving line of credit
from a commercial lender to the extent such revolving line of credit or other
Indebtedness was not put in place for purposes of evading the limitations
described in this definition) shall (A) not have an Average Life shorter than
the Indebtedness or Disqualified Stock to be so refinanced at the time of such
Refinancing and (B) be subordinated in right of payment to the rights of Holders
of the Securities if the Indebtedness or Disqualified Stock to be refinanced was
so subordinated.
"Registration Statement" means the Company's registration statement on Form
S-3 (No. 333-50729), filed with the SEC on April 22, 1998, relating to the
<PAGE>
registration of, among other securities, the Securities under the Act, together
with the exhibits thereto and all subsequent amendments.
"REIT" means a real estate investment trust as defined in Section 856 of
the Code.
"REIT Conversion" means the various transactions to be carried out in
connection with Host's conversion to a REIT, as generally described in the
Prospectus and the S-4 Registration Statement, including without limitation (i)
the contribution to the Operating Partnership and its Subsidiaries of
substantially all of the assets (excluding the assets of SLC) held by Host and
its other Subsidiaries (which shall be substantially completed on or prior to
the Conversion Date); (ii) the assumption by the Operating Partnership and/or
its Subsidiaries of substantially all of the liabilities of Host and its other
Subsidiaries (including, without limitation, the QUIPs Debt and the Old Notes);
(iii) the Partnership Mergers; (iv) the Private Partnership Acquisitions; (v)
the issuance of Limited Partner Notes in connection with the foregoing; (vi) the
Blackstone Acquisition; (vii) the contribution, prior to or substantially
concurrent with the Conversion Date, to Non-Controlled Entities of Non-
Conforming Assets; (viii) the leases to SLC or Subsidiaries of SLC of the hotels
owned by the Operating Partnership and its Subsidiaries; (ix) the Host REIT
Merger; (x) the E&P Distribution; and (xi) such other related transactions and
steps, occurring prior to or substantially concurrent with or within a
reasonable time after the Conversion Date as may be reasonably necessary to
complete the above transactions or otherwise to permit Host REIT to elect to be
treated as a REIT for Federal income tax purposes; provided that Host may in its
sole discretion exclude any one or more of the specific transactions enumerated
above in clauses (ii) through (x) hereof; provided, further, that Host shall not
have distributed to its shareholders any significant amounts of assets (other
than regular dividends and the E&P Distribution) on or prior to the Conversion
Date and subsequent to the Issue Date.
"Related Business" means the businesses conducted (or proposed to be
conducted) by the Company and its Restricted Subsidiaries as of the Closing Date
and any and all businesses that in the good faith judgment of the Board of the
Company are materially related businesses or real estate related businesses.
Without limiting the generality of the foregoing, Related Business shall include
the ownership and operation of lodging properties.
"Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office with direct responsibility for the administration of this Indenture
and
<PAGE>
also means, with respect to a particular corporate trust matter, any other
officer to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with a particular subject.
"Restricted Investment" means, in one or a series of related transactions,
any Investment, other than a Permitted Investment.
"Restricted Payment" means, with respect to any Person (but without
duplication), (i) the declaration or payment of any dividend or other
distribution in respect of Capital Stock of such Person or the Parent or any
Restricted Subsidiary of such Person, (ii) any payment on account of the
purchase, redemption or other acquisition or retirement for value of Capital
Stock of such Person or the Parent or any Restricted Subsidiary of such Person,
(iii) other than with the proceeds from the substantially concurrent sale of, or
in exchange for, Refinancing Indebtedness, any purchase, redemption, or other
acquisition or retirement for value of, any payment in respect of any amendment
of the terms of or any defeasance of, any Subordinated Indebtedness, directly or
indirectly, by such Person or the Parent or a Restricted Subsidiary of such
Person prior to the scheduled maturity, any scheduled repayment of principal, or
scheduled sinking fund payment, as the case may be, of such Indebtedness, (iv)
any Restricted Investment by such Person, and (v) the payment to any Affiliate
(other than the Company or its Restricted Subsidiaries) in respect of taxes owed
by any consolidated group of which both such Person or a Subsidiary of such
Person and such Affiliate are members; provided, however, that the term
"Restricted Payment" does not include (a) any dividend, distribution or other
payment on or with respect to Capital Stock of the Company to the extent payable
solely in shares of Qualified Capital Stock; (b) any dividend, distribution or
other payment to the Company, or to any of the Subsidiary Guarantors, by the
Company or any of its Restricted Subsidiaries; (c) Permitted Tax Payments; (d)
the declaration or payment of dividends or other distributions by any Restricted
Subsidiary of the Company, provided such distributions are made to the Company
(or a Subsidiary of the Company, as applicable) on a pro rata basis (and in like
form) with all dividends and distributions so made; (e) the retirement of Units
upon conversion of such Units to Capital Stock of Host REIT; (f) any
transactions comprising part of the REIT Conversion; (g) any payments with
respect to Disqualified Stock or Indebtedness at the stated time and amounts
pursuant to the original terms of the instruments governing such obligations;
(h) Permitted REIT Payments; and (i) payments in accordance with the existing
terms of the QUIPs; and provided, further, that any payments of bona fide
obligations of the Company or any Restricted Subsidiary shall
<PAGE>
not be deemed to be Restricted Payments solely by virtue of the fact of another
Person's co-obligation with respect thereto.
"Restricted Subsidiary" means any Subsidiary of the Company other than (i)
an Unrestricted Subsidiary or (ii) a Non-Consolidated Entity.
"S-4 Registration Statement" means the registration statement of the
Operating Partnership on Form S-4, filed with the SEC on June 2, 1998, as
amended and supplemented.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness or Disqualified Stock secured
by a Lien (other than Permitted Liens) upon the property of the Company, the
Subsidiary Guarantors or any of their respective Restricted Subsidiaries.
"Securities" means the debentures, notes or other debt instruments of the
Company of any Series authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Series" or "Series of Securities" means each series of debentures, notes
or other debt instruments of the Company created pursuant to Section 2.1 and 2.2
hereof.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1-02(w) of Regulation S-X
promulgated by the SEC as in effect as of the Issue Date.
"SLC" means HMC Senior Communities, Inc., a Delaware corporation, and its
successors and assigns.
"S&P" means Standard & Poor's Ratings Services and its successors.
"Stated Maturity" means (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest on any debt security, the
date
<PAGE>
specified in such debt security as the fixed date on which such installment is
due and payable.
"Subordinated Indebtedness" means, with respect to Securities of any
Series, Indebtedness of the Company or a Subsidiary Guarantor that is expressly
subordinated in right of payment to the Securities of such Series or a
Subsidiary Guarantee thereof, as applicable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such
Person, by such Person and one or more Subsidiaries of such Person or by one or
more Subsidiaries of such Person, or the accounts of which would be consolidated
with those of such Person in its consolidated financial statements in accordance
with GAAP, if such statements were prepared as of such date, (ii) any
partnership (a) in which such Person or one or more Subsidiaries of such Person
is, at the time, a general partner and owns alone or together with the Company a
majority of the partnership interest or (b) in which such Person or one or more
Subsidiaries of such Person is, at the time, a general partner and which is
controlled by such Person in a manner sufficient to permit its financial
statements to be consolidated with the financial statements of such Person in
conformance with GAAP and the financial statements of which are so consolidated,
(iii) any Non-Controlled Entity, and (iv) any Fifty Percent Venture.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor for
payment of principal, premium and interest on the Securities of a Series by such
Subsidiary Guarantor. Each Subsidiary Guarantee with respect to Securities of a
Series issued on the Issue Date will be a senior obligation of the Subsidiary
Guarantor with respect to such Series and will be full and unconditional
regardless of the enforceability of the Securities of such Series and this
Indenture.
"Subsidiary Guarantors" means, (i) with respect to any Series of Securities
issued on the Issue Date (A) the Initial Subsidiary Guarantors identified in the
following sentence and (B) any Future Subsidiary Guarantors that become
Subsidiary Guarantors pursuant to the terms of this Indenture and (ii) with
respect to Securities of any other Series, any Person providing a Guarantee with
respect to Securities of such Series and designated a "Subsidiary Guarantor" in
the Board Resolution, supplemental indenture or Officers' Certificate
establishing such Series, but in each case excluding any Persons whose
guarantees have been released
<PAGE>
pursuant to the terms of this Indenture. The Initial Subsidiary Guarantors are
HMH Rivers, Inc.; HMH Marina, Inc.; Marriott SBM Two Corporation; Marriott PLP
Corporation; HMC Retirement Properties, Inc.; HMH Pentagon Corporation; HMC SFO,
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; and
Marriott Park Ridge Corporation.
"Subsidiary Indebtedness" means, without duplication, all Unsecured
Indebtedness (including Guarantees (other than Guarantees by Restricted
Subsidiaries of Secured Indebtedness)) of which a Restricted Subsidiary other
than a Subsidiary Guarantor is the obligor. A release of the Guarantee of a
Subsidiary Guarantor which remains a Restricted Subsidiary shall be deemed to be
an Incurrence of Subsidiary Indebtedness in amount equal to the Company's
proportionate interest in the Unsecured Indebtedness of such Subsidiary
Guarantor.
"Tax" or "Taxes" means all Federal, state, local, and foreign taxes, and
other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto, imposed by any domestic or foreign governmental authority responsible
for the administration of any such taxes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-
77bbbb), as amended from time to time, and as in effect on the date of this
Indenture; provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act as so amended.
"Total Assets" means the sum of (i) Undepreciated Real Estate Assets and
(ii) all other assets (excluding intangibles) of the Company, the Subsidiary
Guarantors, and their respective Restricted Subsidiaries determined on a
consolidated basis (it being understood that the accounts of Restricted
Subsidiaries shall be consolidated with those of the Company only to the extent
of the Company's proportionate interest therein).
"Total Unencumbered Assets" as of any date means the sum of (i)
Undepreciated Real Estate Assets not securing any portion of Secured
Indebtedness and (ii) all other assets (but excluding intangibles and minority
interests in Persons who are obligors with respect to outstanding secured debt)
of the Company, the
<PAGE>
Subsidiary Guarantors and their respective Restricted Subsidiaries not securing
any portion of Secured Indebtedness, determined on a consolidated basis (it
being understood that the accounts of Restricted Subsidiaries shall be
consolidated with those of the Company only to the extent of the Company's
proportionate interest therein).
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness or issuance of Disqualified Stock by the Company or any of its
Restricted Subsidiaries, the date such Indebtedness is to be Incurred or such
Disqualified Stock is to be issued and, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any Series shall mean the Trustee with respect to Securities of that Series.
"Undepreciated Real Estate Assets" means, as of any date, the cost (being
the original cost to the Company, the Subsidiary Guarantors or any of their
respective Restricted Subsidiaries plus capital improvements) of real estate
assets of the Company, the Subsidiary Guarantors and their respective Restricted
Subsidiaries on such date, before depreciation and amortization of such real
estate assets, determined on a consolidated basis (it being understood that the
accounts of Restricted Subsidiaries shall be consolidated with those of the
Company only to the extent of the Company's proportionate interest therein).
"Units" means the limited partnership units of the Operating Partnership.
"Unrestricted Subsidiary" means any Subsidiary of the Company that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of the Company in the manner provided below. The Board of the Company may
designate any Subsidiary (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary, unless such
Subsidiary owns any Capital Stock of the Company, the Subsidiary Guarantors or
any of their respective Restricted Subsidiaries (other than the designated
Subsidiary and any other Subsidiary concurrently being designated as an
Unrestricted Subsidiary); provided that (a) any Guarantee by the Company, the
Subsidiary Guarantors or any of their
<PAGE>
respective Restricted Subsidiaries (other than the designated Subsidiary and any
other Subsidiary concurrently being designated as an Unrestricted Subsidiary) of
any Indebtedness of the Subsidiary being so designated shall be deemed an
"Incurrence" of such Indebtedness and an "Investment" by the Company, the
Subsidiary Guarantors or such Restricted Subsidiaries at the time of such
designation; (b) either (I) the Subsidiary to be so designated has total assets
of $1,000 or less or (II) if such Subsidiary has assets greater than $1,000,
such designation would not be prohibited under Section 4.9 or Section 4.15 (as
applicable); and (c) if applicable, the Incurrence of Indebtedness and the
Investment referred to in clause (a) of this proviso would be permitted under
Section 4.7 and Section 4.9 or Section 4.15 (as applicable). The Board of the
Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that (1) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such designation; and (2)
all Liens, Indebtedness and Disqualified Stock of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred, granted or
issued at such time, have been permitted to be Incurred, granted or issued and
shall be deemed to have been Incurred, granted or issued for all purposes of
this Indenture. Any such designation by the Board of the Company shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"Unsecured Indebtedness" means any Indebtedness or Disqualified Stock of
the Company, the Subsidiary Guarantors or any of their respective Restricted
Subsidiaries that is not Secured Indebtedness.
"U.S. Government Obligations" means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such
<PAGE>
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation evidenced by such depository receipt.
"Voting Stock" means with respect to any Person, Capital Stock of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by individuals mandated by
applicable law) by such Person and/or one or more Wholly Owned Subsidiaries of
such Person.
SECTION 1.2 OTHER DEFINITIONS.
-----------------
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
- ----------------------------- -------------------
<S> <C> <C> <C>
"Acceleration Notice" 6.2
"Affiliate Transactions" 4.11
"Asset Sale Offer" 4.12
"Bankruptcy Law" 6.1
"Change of Control Offer" 10.1
"Change of Control Offer Period" 10.1
"Change of Control Payment" 10.1
"Change of Control Payment Date" 10.1
"Change of Control Put Date" 10.1
"Custodian" 6.1
"DTC" 2.14.3
"Event of Default" 6.1
"Excess Proceeds" 4.12
"Excess Proceeds Date" 4.12
"Final Put Date" 4.12
"Future Subsidiary Guarantor" 12.3
"Guaranteed Indebtedness" 12.3
"Journal" 13.15
"Judgment Currency" 13.16
"Legal Holiday" 13.7
"mandatory sinking fund payment" 14.1
"Market Exchange Rate" 13.15
<PAGE>
"New York Banking Day" 13.16
"Offer Amount" 4.12 "Offer to Purchase" 4.12
"Offer Price" 4.12
"optional sinking fund payment" 14.1
"Paying Agent" 2.4
"Pro Rata Portion" 12.1
"Purchase Date" 4.12
"Registrar" 2.4
"Required Currency" 13.16
"Service Agent" 2.4
</TABLE>
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" "means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Securities means the Company and any successor
obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
SECTION 1.4 RULES OF CONSTRUCTION.
---------------------
Unless the context otherwise requires:
<PAGE>
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) references to "GAAP" shall mean GAAP in effect as of the time when
and for the period as to which such accounting principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.1 ISSUABLE IN SERIES.
------------------
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued
in one or more Series. All Securities of a Series shall be identical except as
may be set forth in a Board Resolution, a supplemental indenture or an Officers'
Certificate detailing the adoption of the terms thereof pursuant to the
authority granted under a Board Resolution. In the case of Securities of a
Series to be issued from time to time, the Board Resolution, Officers'
Certificate or supplemental indenture may provide for the method by which
specified terms (such as, without limitation, interest rate, maturity date,
record date or date from which interest shall accrue) are to be determined.
Securities may differ between Series in respect of any matters, provided that
all Series of Securities shall be equally and ratably entitled to the benefits
of this Indenture.
<PAGE>
SECTION 2.2 ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.
----------------------------------------------
At or prior to the issuance of any Securities within a Series, the
following shall be established by a Board Resolution, a supplemental indenture
or an Officers" Certificate pursuant to authority granted under a Board
Resolution:
2.2.1 the title of the Series (which shall distinguish the Securities
of that particular Series from the Securities of any other Series);
2.2.2 the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Securities of the Series will be issued;
2.2.3 any limit upon the aggregate principal amount of the Securities
of the Series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the Series pursuant
to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4 the date or dates on which the principal of the Securities
of the Series is payable;
2.2.5 the rate or rates (which may be fixed or variable) per annum
or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or
financial index) at which the Securities of the Series shall bear interest, if
any, the date or dates from which such interest, if any, shall accrue, the date
or dates on which such interest, if any, shall commence and be payable and any
regular record date for the interest payable on any interest payment date;
2.2.6 the place or places where the principal of, premium, if any,
and interest, if any, on the Securities of the Series shall be payable, or the
method of such payment, if by wire transfer, mail or other means;
2.2.7 if applicable, the period or periods within which, the price or
prices at which and the terms and conditions upon which the Securities of the
Series may be redeemed, in whole or in part, at the option of the Company;
2.2.8 the obligation, if any, of the Company to redeem or purchase
the Securities of the Series, in whole or in part, pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof and the period or
<PAGE>
periods within which, the price or prices at which and the terms and conditions
upon which Securities of the Series shall be redeemed or purchased, in whole or
in part, pursuant to such obligation;
2.2.9 the dates, if any, on which and the price or prices at which
the Securities of the Series will be repurchased by the Company at the option of
the Holders thereof and other detailed terms and provisions of such repurchase
obligations;
2.2.10 if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Securities of the Series shall be
issuable;
2.2.11 the forms of the Securities of the Series in bearer or fully
registered form (and, if in fully registered form, whether the Securities will
be issuable as Global Securities);
2.2.12 if other than the principal amount thereof, the portion of the
principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity date thereof pursuant to Section
6.2;
2.2.13 the currency of denomination of the Securities of the Series,
which may be Dollars or any Foreign Currency, including, but not limited to, the
ECU, and if such currency of denomination is a composite currency other than the
ECU, the agency or organization, if any, responsible for overseeing such
composite currency;
2.2.14 the designation of the currency, currencies or currency units
in which payment of the principal of, premium, if any, and interest, if any, on
the Securities of the Series will be made;
2.2.15 if payments of principal of, premium, if any, or interest, if
any, on the Securities of the Series are to be made in one or more currencies or
currency units other than that or those in which such Securities are
denominated, the manner in which the exchange rate with respect to such payments
will be determined;
2.2.16 the manner in which the amounts of payment of principal of,
premium, if any, or interest, if any, on the Securities of the Series will
<PAGE>
be determined, if such amounts may be determined by reference to an index based
on a currency or currencies other than that in which the Securities of the
Series are denominated or designated to be payable or by reference to a
commodity, commodity index, stock exchange index or financial index;
2.2.17 the provisions, if any, relating to any security provided
for the Securities of the Series;
2.2.18 any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;
2.2.19 any addition to, change in or deletion from the provisions set
forth in Articles 4 or 5 which applies to Securities of the Series;
2.2.20 the terms and condition, if any, upon which the Securities of
the Series shall be exchanged for or converted into common stock, preferred
stock or depositary shares of the Company;
2.2.21 any other terms of the Securities of the Series (which terms
may supplement, modify or delete any provision of this Indenture insofar as it
applies to such Series);
2.2.22 any depositories, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to Securities of such
Series if other than those appointed herein;
2.2.23 whether the Securities rank as senior subordinated Securities
or subordinated Securities or any combination thereof; and
2.2.24 the form and terms of any guarantee of any Securities of the
Series.
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers" Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series,
<PAGE>
unless otherwise provided in such Board Resolution, supplemental indenture or
Officers" Certificate.
SECTION 2.3 EXECUTION AND AUTHENTICATION.
----------------------------
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the related
Board Resolution, supplemental indenture hereto or Officers' Certificate, upon
receipt by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or
Officers' Certificate delivered pursuant to Section 2.2, except as provided in
Section 2.9.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series; (b) an Officers' Certificate complying with
Section 13.4; and (c) an Opinion of Counsel complying with Section 13.4.
<PAGE>
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Such an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate.
SECTION 2.4 REGISTRAR AND PAYING AGENT.
--------------------------
The Company shall maintain, with respect to each Series of Securities,
at the place or places specified with respect to such Series pursuant to Section
2.2, an office or agency where Securities of a Series may be presented or
surrendered for payment ("Paying Agent"), where Securities of such Series may be
surrendered for registration of transfer or exchange ("Registrar"), and where
notices and demands to or upon the Company in respect of the Securities of such
Series and this Indenture may be served ("Service Agent"); provided that the
Company itself shall not be permitted to act as Paying Agent with respect to an
Offer to Purchase or a Change of Control Offer for purposes of Article 8. The
Registrar shall keep a register with respect to each Series of Securities and to
their transfer and exchange. The Company will give prompt written notice to the
Trustee of the name and address, and any change in the name or address, of each
Registrar, Paying Agent or Service Agent. If at any time the Company shall fail
to maintain any such required Registrar, Paying Agent or Service Agent or shall
fail to furnish the Trustee with the name and address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more co-
registrars, additional paying agents or additional service agents and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a
<PAGE>
Registrar, Paying Agent and Service Agent in each place so specified pursuant to
Section 2.2 for Securities of any Series for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the name or address of any such co-registrar, additional
paying agent or additional service agent. The term "Registrar" includes any co-
registrar; the term "Paying Agent" includes any additional paying agent; and the
term "Service Agent" includes any additional service agent.
The Company hereby appoints the Trustee the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time Securities
of that Series are first issued.
SECTION 2.5 PAYING AGENT TO HOLD MONEY IN TRUST.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
its Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent; provided that neither the Company nor any of
its Subsidiaries shall be permitted to act as Paying Agent for purposes of any
amounts to be held by a Paying Agent pursuant to an Offer to Purchase or a
Change of Control Offer for purposes of Article 8.
SECTION 2.6 SECURITYHOLDER LISTS.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
(S)312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten days before each interest payment date and at such
other times as the
<PAGE>
Trustee may request in writing a list, in such form and as of such date as the
Trustee may reasonably require, of the names and addresses of Securityholders of
each Series of Securities.
SECTION 2.7 TRANSFER AND EXCHANGE.
---------------------
Where Securities of a Series are presented to the Registrar or a co-
registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series, the Registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. No service charge shall be
made for any registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer tax or similar governmental charge
payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).
Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
SECTION 2.8 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the
<PAGE>
Company shall execute and upon its request the Trustee shall authenticate and
make available for delivery, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.9 OUTSTANDING SECURITIES.
----------------------
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
<PAGE>
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the accreted value thereof that would be due and payable as of
the date of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.2.
SECTION 2.10 TREASURY SECURITIES.
-------------------
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any request, demand, authorization,
direction, notice, consent or waiver Securities of a Series owned by the Company
or an Affiliate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that a Responsible Officer of the Trustee knows are so
owned shall be so disregarded.
SECTION 2.11 TEMPORARY SECURITIES.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare, the Guarantors and Subsidiary Guarantors shall endorse and the Trustee
shall authenticate temporary Securities upon a Company Order. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare, the Guarantors and
Subsidiary Guarantors shall endorse and the Trustee upon request shall
authenticate definitive Securities of the same Series and date of maturity in
exchange for temporary Securities. Until so exchanged, temporary securities
shall have the same rights under this Indenture as the definitive Securities.
<PAGE>
SECTION 2.12 CANCELLATION.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the Company, unless the Company
otherwise directs. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
SECTION 2.13 DEFAULTED INTEREST.
------------------
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
SECTION 2.14 GLOBAL SECURITIES.
-----------------
2.14.1 Terms of Securities. A Board Resolution, a supplemental
-------------------
indenture hereto or an Officers' Certificate shall establish (i) whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and (ii) the Depository for such Global Security or
Securities.
2.14.2 Transfer and Exchange. Notwithstanding any provisions to the
---------------------
contrary contained in Section 2.7 of this Indenture and in addition thereto, any
Global Security shall be exchangeable pursuant to Section 2.7 of this Indenture
for Securities registered in the names of Holders other than the Depository for
such Security or its nominee only if: (i) such Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event; (ii) the Company
executes and delivers to
<PAGE>
the Trustee an Officers' Certificate to the effect that such Global Security
shall be so exchangeable; or (iii) an Event of Default with respect to the
Securities represented by such Global Security shall have happened and be
continuing. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Securities registered in such names as the
Depository shall direct in writing in an aggregate principal amount equal to the
principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3 Legend. Any Global Security issued hereunder shall bear a
------
legend in substantially the following form:
"Unless and until it is exchanged in whole or in part for Securities
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 Depositary 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 THEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
2.14.4 Acts of Holders. The Depository, as a Holder, may appoint
---------------
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under this Indenture.
2.14.5 Payments. Notwithstanding the other provisions of this
--------
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the
<PAGE>
principal of and interest, if any, on any Global Security shall be made to the
Holder thereof.
2.14.6 Consents, Declaration and Directions. Except as provided in
------------------------------------
Section 2.14.5, the Company, the Trustee and any Agent shall treat a Person as
the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depository with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.
SECTION 2.15 CUSIP NUMBERS.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE 3
REDEMPTION
SECTION 3.1 NOTICE TO TRUSTEE.
-----------------
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity
thereof at such time and on such terms as provided for in such Securities. If a
Series of Securities is redeemable and the Company wants or is obligated to
redeem prior to the Stated Maturity thereof all or part of the Series of
Securities pursuant to the terms of such Securities, it shall notify the Trustee
of the Redemption Date and the principal amount of Series of Securities to be
redeemed. The Company shall give the notice at least 45 days before the
Redemption Date (or such shorter notice as may be acceptable to the Trustee).
<PAGE>
SECTION 3.2 SELECTION OF SECURITIES TO BE REDEEMED.
--------------------------------------
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
SECTION 3.3 NOTICE OF REDEMPTION.
--------------------
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed
and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(e) that interest on Securities of the Series called for redemption
ceases to accrue on and after the Redemption Date; and
(f) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
<PAGE>
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
------------------------------
Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the Redemption Date and at the Redemption Price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall
be paid at the Redemption Price plus accrued interest to the Redemption Date.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
---------------------------
On or before the Redemption Date, the Company shall deposit with the
Paying Agent money sufficient to pay the Redemption Price of and accrued
interest, if any, on all Securities to be redeemed on that date.
SECTION 3.6 SECURITIES REDEEMED IN PART.
---------------------------
Upon surrender of a Security that is redeemed in part, the Company
shall issue, the Guarantors and Subsidiary Guarantors shall endorse and the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE 4
COVENANTS
The following covenants shall be applicable with respect to Securities
of any Series, unless in establishing such a Series in a Board Resolution,
supplemental indenture or Officers' Certificate, it is provided that such Series
shall not have the benefit of one or more of said covenants. For the purpose of
Securities of any Series issued hereunder, when used in this Article 4, the term
"Securities" shall mean Securities of that Series, and the terms "Guarantor" and
"Subsidiary Guarantor" shall mean, respectively, a Guarantor and Subsidiary
Guarantor with respect to Securities of that Series.
<PAGE>
SECTION 4.1 PAYMENT OF PRINCIPAL AND INTEREST.
----------------------------------
The Company covenants and agrees for the benefit of the Holders of
each Series of Securities that it will duly and punctually pay the principal of,
premium, if any, and interest on the Securities of that Series in accordance
with the terms of such Securities and this Indenture.
The Company shall pay interest on overdue principal and on overdue
installments of premium and interest at the rate specified in the Securities of
such Series, compounded semi-annually, to the extent lawful.
SECTION 4.2 REPORTS.
--------
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder of Securities, within 15 days after it is or would
have been required to file such with the SEC, annual and quarterly financial
statements substantially equivalent to financial statements that would have been
included in reports filed with the SEC if the Company were subject to the
requirements of Section 13 or 15(d) of the Exchange Act, including, with respect
to annual information only, a report thereon by the certified independent public
accountants of the Company, as such would be required in such reports to the
SEC, and, in each case, together with a management's discussion and analysis of
financial condition and results of operations which would be so required.
Whether or not required by the rules and regulations of the SEC, the Company
will file a copy of all such information and reports with the SEC for public
availability and will make such information available to securities analysts and
prospective investors upon request. The Company also shall comply with the other
provisions of TIA (S)314(a).
SECTION 4.3 COMPLIANCE CERTIFICATE.
-----------------------
The Company and each Guarantor and Subsidiary Guarantor shall deliver
to the Trustee, within 90 days after the end of each fiscal year of the Company,
an Officers' Certificate stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company or such Guarantor or Subsidiary Guarantor, as the case may be, has
kept,
<PAGE>
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge, the Company or such Guarantor or Subsidiary Guarantor, as
the case may be, has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he may have knowledge). The Company and each
Guarantor and Subsidiary Guarantor will, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.4 STAY, EXTENSION AND USURY LAWS.
-------------------------------
Each of the Company, the Guarantors and the Subsidiary Guarantors
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture or the Securities; and each of the Company, the Guarantors,
and the Subsidiary Guarantors (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.5 CORPORATE EXISTENCE.
--------------------
Subject to Article 5, the Company, the Guarantors and the Subsidiary
Guarantors will do or cause to be done all things necessary to preserve and keep
in full force and effect their respective corporate existence and the corporate
(or other organizational) existence in accordance with their respective
organizational documents (as the same may be amended from time to time) and the
rights (charter and statutory), and corporate or other organizational franchises
of the Company, the Guarantors and the Subsidiary Guarantors; provided, however,
that nothing in this section will prohibit the Company, any of the Guarantors or
any Subsidiary Guarantors from engaging in any transactions permitted under the
Indenture, including Sections 4.13 and 12.4 hereof, neither the Company nor any
Guarantor nor Subsidiary Guarantor shall be required to preserve any such right,
franchise or existence, if the Board shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company,
the Subsidiary Guarantors
<PAGE>
and their Subsidiaries taken as a whole and that the loss thereof is not adverse
in any material respect to the Holders of Securities.
SECTION 4.6 TAXES.
------
Except with respect to immaterial items, the Company, the Guarantors
and the Subsidiary Guarantors shall, and shall cause each of their Restricted
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all taxes, assessments and governmental
charges (including withholding taxes and any penalties, interest and additions
to taxes) levied or imposed upon the Company, any Guarantor, any Subsidiary
Guarantor or any of their Restricted Subsidiaries or any of their respective
properties and assets; and (ii) all lawful claims, whether for labor, materials,
supplies, services or anything else, which have become due and payable and which
by law have or may become a Lien upon the property and assets of the Company,
any Guarantor, any Subsidiary Guarantor or any of their Restricted Subsidiaries;
provided, however, that neither the Company, any Guarantor nor any Subsidiary
Guarantor shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which disputed amounts adequate reserves have been established in accordance
with GAAP.
SECTION 4.7 LIMITATION ON INCURRENCES OF INDEBTEDNESS AND ISSUANCE OF
---------------------------------------------------------
DISQUALIFIED STOCK.
-------------------
(a) Except as set forth below, neither the Company, the Subsidiary
Guarantors nor any of their respective Restricted Subsidiaries will, directly or
indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue
any Disqualified Stock. Notwithstanding the foregoing sentence, if, on the date
of any such Incurrence or issuance, after giving effect to, on a pro forma
basis, such Incurrence or issuance and the receipt and application of the
proceeds therefrom, (i) the aggregate amount of all outstanding Indebtedness
(other than the QUIPs Debt) and Disqualified Stock of the Company, the
Subsidiary Guarantors and their respective Restricted Subsidiaries (including
amounts of Refinancing Indebtedness outstanding pursuant to paragraph (d)(iii)
hereof or otherwise), determined on a consolidated basis (it being understood
that the amounts of Indebtedness and Disqualified Stock of Restricted
Subsidiaries shall be consolidated with that of the Company only to the extent
of the Company's proportionate interest in such Restricted Subsidiaries),
without duplication, is less than or equal to 65% of
<PAGE>
Adjusted Total Assets of the Company and (ii) the Consolidated Coverage Ratio of
the Company would be greater than or equal to 2.0 to 1, the Company and its
Restricted Subsidiaries may Incur such Indebtedness or issue such Disqualified
Stock.
(b) In addition to the foregoing limitations set forth in (a) above, except
as set forth below, the Company, the Subsidiary Guarantors and their Restricted
Subsidiaries will not Incur any Secured Indebtedness or Subsidiary Indebtedness.
Notwithstanding the foregoing sentence, if, immediately after giving effect to
the Incurrence of such additional Secured Indebtedness and/or Subsidiary
Indebtedness and the application of the proceeds thereof, the aggregate amount
of all outstanding Secured Indebtedness and Subsidiary Indebtedness of the
Company, the Subsidiary Guarantors and their Restricted Subsidiaries (including
amounts of Refinancing Indebtedness outstanding pursuant to paragraph (d)(iii)
hereof or otherwise), determined on a consolidated basis (it being understood
that the amounts of Secured Indebtedness and Subsidiary Indebtedness of
Restricted Subsidiaries shall be consolidated with that of the Company only to
the extent of the Company's proportionate interest in such Restricted
Subsidiaries), without duplication, is less than or equal to 45% of Adjusted
Total Assets of the Company, the Company and its Restricted Subsidiaries may
Incur such Secured Indebtedness and/or Subsidiary Indebtedness.
(c) In addition to the limitations set forth in (a) and (b) above, the
Company, the Subsidiary Guarantors and their Restricted Subsidiaries will
maintain at all times Total Unencumbered Assets of not less than 125% of the
aggregate outstanding amount of the Unsecured Indebtedness (other than the QUIPs
Debt) (including amounts of Refinancing Indebtedness outstanding pursuant to
paragraph (d)(iii) hereof or otherwise) determined on a consolidated basis (it
being understood that the Unsecured Indebtedness of the Restricted Subsidiaries
shall be consolidated with that of the Company only to the extent of the
Company's proportionate interest in such Restricted Subsidiaries).
(d) Notwithstanding paragraphs (a) or (b), the Company, the Subsidiary
Guarantors and their respective Restricted Subsidiaries (except as specified
below) may Incur or issue each and all of the following: (i) Indebtedness
outstanding (including Indebtedness issued to replace, refinance or refund such
Indebtedness) under the Credit Facility at any time in an aggregate principal
amount not to exceed $1.5 billion, less any amount of such Indebtedness
permanently repaid as provided under Section 4.12 (including that, in the case
of a revolver or similar arrangement,
<PAGE>
such commitment is permanently reduced by such amount); (ii) Indebtedness or
Disqualified Stock owed (A) to the Company or (B) to any Subsidiary Guarantor;
provided that any event which results in any Restricted Subsidiary holding such
Indebtedness or Disqualified Stock ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness or Disqualified Stock (other than to
the Company or a Subsidiary Guarantor) shall be deemed, in each case, to
constitute an Incurrence of such Indebtedness or issuance of Disqualified Stock
not permitted by this clause (ii); (iii) Refinancing Indebtedness with respect
to outstanding Indebtedness (other than Indebtedness Incurred under clause (i),
(ii), (iv), (vi) or (viii) of this paragraph) and any refinancings thereof; (iv)
Indebtedness (A) in respect of performance, surety or appeal bonds Incurred in
the ordinary course of business, (B) under Currency Agreements and Interest Swap
and Hedging Obligations; provided that such agreements (a) are designed solely
to protect the Company, the Subsidiary Guarantors or any of their Restricted
Subsidiaries against fluctuations in foreign currency exchange rates or interest
rates and (b) do not increase the Indebtedness of the obligor outstanding at any
time other than as a result of fluctuations in foreign currency exchange rates
or interest rates or by reason of fees, indemnities and compensation payable
thereunder, or (C) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from Guarantees or
letters of credit, surety bonds or performance bonds securing any obligations of
the Company, the Subsidiary Guarantors or any of their Restricted Subsidiaries
pursuant to such agreements, in any case Incurred in connection with the
disposition of any business, assets or Restricted Subsidiary (other than
Guarantees of Indebtedness Incurred by any Person acquiring all or any portion
of such business, assets or Restricted Subsidiary for the purpose of financing
such acquisition), in an amount not to exceed the gross proceeds actually
received by the Company, the Subsidiary Guarantors and their Restricted
Subsidiaries on a consolidated basis in connection with such disposition; (v)
Indebtedness of the Company, to the extent the net proceeds thereof are promptly
(A) used to purchase all of the Securities tendered in a Change of Control Offer
made as a result of a Change of Control or (B) deposited to defease the
Securities as described below under Sections 8.3 and 8.4; (vi) Guarantees of the
Securities and Guarantees of Indebtedness of the Company or any of the
Subsidiary Guarantors by any of their respective Restricted Subsidiaries;
provided the guarantee of such Indebtedness is permitted by and made in
accordance with the terms of this Indenture at the time of the incurrence of
such underlying Indebtedness or at the time such guarantor becomes a Restricted
Subsidiary; (vii) Indebtedness evidenced by the Securities and the Guarantees
thereof and represented by this Indenture up to the amounts issued pursuant
thereto as of the Issue Date; (viii) the QUIPs Debt; (ix) Limited Partner Notes,
and (x) Indebtedness Incurred
<PAGE>
pursuant to the Blackstone Acquisition and any Indebtedness of Host, its
Subsidiaries, a Public Partnership or a Private Partnership incurred in
connection with the REIT Conversion.
(e) For purposes of determining any particular amount of Indebtedness under
this Section 4.7, (1) Indebtedness Incurred under the Credit Facility on or
prior to the Issue Date shall be treated as Incurred pursuant to clause (i) of
paragraph (d) of this Section and (2) Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included as additional
Indebtedness. For purposes of determining compliance with this Section 4.7, in
the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described in the above clauses, the Company, in its
sole discretion, shall classify such item of Indebtedness as being Incurred
under only one of such clauses.
Indebtedness or Disqualified Stock of any Person that is not a
Restricted Subsidiary of the Company, which Indebtedness or Disqualified Stock
is outstanding at the time such Person becomes a Restricted Subsidiary of the
Company (including by designation) or is merged with or into or consolidated
with the Company or a Restricted Subsidiary of the Company, shall be deemed to
have been Incurred or issued at the time such Person becomes a Restricted
Subsidiary of the Company or is merged with or into or consolidated with the
Company, or a Restricted Subsidiary of the Company, and Indebtedness or
Disqualified Stock which is assumed at the time of the acquisition of any asset
shall be deemed to have been Incurred or issued at the time of such acquisition.
SECTION 4.8 LIMITATIONS ON LIENS.
--------------------
Neither the Company, the Subsidiary Guarantors, nor any Restricted
Subsidiary shall secure any Indebtedness under the Credit Facility by a Lien or
suffer to exist any Lien on their respective properties or assets securing
Indebtedness under the Credit Facility unless effective provision is made to
secure the Securities equally and ratably with the Lien securing such
Indebtedness for so long as Indebtedness under the Credit Facility is secured by
such Lien.
<PAGE>
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS PRIOR TO THE REIT
---------------------------------------------------
CONVERSION.
----------
Each of the Company and the Subsidiary Guarantors will not, and will
not permit any of their Restricted Subsidiaries to, directly or indirectly, make
any Restricted Payment, if (a) on the date of such Restricted Payment a Default
or an Event of Default would exist and be continuing or would occur as a
consequence of (after giving effect, on a pro forma basis, to) such Restricted
Payment or (b) immediately prior to such Restricted Payment or after giving
effect thereto, the aggregate amount of all Restricted Payments made by the
Company, the Subsidiary Guarantors and their Restricted Subsidiaries, including
such proposed Restricted Payment (if not made in cash, then the fair market
value of any property used therefor) from and after the Issue Date and on or
prior to the date of such Restricted Payment, shall exceed the sum of, without
duplication, (i) the amount determined by subtracting (x) 2.0 times the
aggregate Consolidated Interest Expense of the Company for the period (taken as
one accounting period) from the first day of the fiscal quarter in which the
Issue Date occurs to the last day of the last full fiscal quarter prior to the
date of the proposed Restricted Payment (the "Computation Period") from (y)
Consolidated EBITDA of the Company for the Computation Period, (ii) the
aggregate Net Cash Proceeds received by the Company from the sale (other than to
a Subsidiary of the Company and other than in connection with a Qualified
Exchange) of its Qualified Capital Stock or as a Capital Contribution from its
Parent, in either case, which Net Cash Proceeds are received by the Company
after the Issue Date, (iii) the fair market value of noncash tangible assets or
Capital Stock (other than that of the Company or its Parent) received by the
Company representing interests in Persons acquired in exchange for an issuance
of Qualified Capital Stock after the Issue Date, (iv) the fair market value of
noncash tangible assets or Capital Stock (other than that of the Company or its
Parent) representing interests in Persons contributed as a Capital Contribution
to the Company after the Issue Date and (v) $75 million.
Notwithstanding the foregoing, the provisions set forth in clause (b)
of the immediately preceding paragraph will not prohibit (i) the payment of any
dividend within 60 days after the date of its declaration if such dividend could
have been made on the date of its declaration in compliance with the foregoing
provisions, (ii) a Qualified Exchange, or (iii) a Permitted Sharing Arrangements
Payment; provided, however, that any amounts expended pursuant to clause (i) of
this paragraph shall be included as Restricted Payments made for purposes of
clause (b) of the immediately preceding paragraph, whereas amounts received and
expended in connection with a Qualified Exchange or a Permitted Sharing
Arrangements Payment shall neither be counted as Restricted Payments made nor be
credited as Net
<PAGE>
Cash Proceeds received for purposes of clause (b) of the immediately preceding
paragraph.
SECTION 4.10 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
-----------------------------------------------------
AFFECTING SUBSIDIARY GUARANTORS.
-------------------------------
The Company and the Subsidiary Guarantors will not create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary Guarantor to (i) pay
dividends or make any other distributions permitted by applicable law on any
Capital Stock of such Subsidiary Guarantor held by the Company or its Restricted
Subsidiaries, (ii) pay any Indebtedness owed to the Company or any Subsidiary
Guarantor, (iii) make loans or advances to the Company or any Subsidiary
Guarantor, or (iv) transfer its property or assets to the Company or any
Subsidiary Guarantor.
The foregoing provisions shall not prohibit any encumbrances or
restrictions: (i) imposed under the Securities as in existence immediately
following the Issue Date or under the Credit Facility, and any extensions,
refinancings, renewals or replacements of such agreements; provided that the
encumbrances and restrictions in any such extensions, refinancings, renewals or
replacements are no less favorable in any material respect to the Holders than
those encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced; (ii) imposed under any applicable
documents or instruments pertaining to any Secured Indebtedness (and relating
solely to assets constituting collateral thereunder or cash proceeds from or
generated by such assets); (iii) existing under or by reason of applicable law;
(iv) existing with respect to any Person or the property or assets of such
Person acquired by the Company or any Restricted Subsidiary, existing at the
time of such acquisition and not incurred in contemplation thereof, which
encumbrances or restrictions are not applicable to any Person or the property or
assets of any Person other than such Person or the property or assets of such
Person so acquired; (v) in the case of clause (iv) of the first paragraph of
this Section 4.10, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease, license,
conveyance or contract or similar property or asset, (B) existing by virtue of
any transfer of, agreement to transfer, option or right with respect to, or Lien
on, any property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture or (C) arising or agreed to in the
ordinary course of business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property or
<PAGE>
assets of the Company or any Restricted Subsidiary in any manner material to the
Company and its Restricted Subsidiaries, taken as a whole; (vi) with respect
solely to a Restricted Subsidiary and imposed pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, such Restricted Subsidiary; (vii)
contained in the terms of any Indebtedness or any agreement pursuant to which
such Indebtedness was issued if (A) the encumbrance or restriction applies only
in the event of a payment default or a default with respect to a financial
covenant contained in such Indebtedness or agreement, (B) the encumbrance or
restriction is not materially more disadvantageous to the Holders of the
Securities than is customary in comparable financings (as determined by the
Company) and (C) the Company determines that any such encumbrance or restriction
will not materially affect its ability to make principal or interest payments on
the Securities, or (viii) in connection with and pursuant to permitted
refinancings thereof, replacements of restrictions imposed pursuant to clause
(iv) of this paragraph that are not more restrictive than those being replaced
and do not apply to any other Person or assets other than those that would have
been covered by the restrictions in the Indebtedness so refinanced. Nothing
contained in this Section shall prevent the Company, the Subsidiary Guarantors
or any of their respective Restricted Subsidiaries from (1) creating, incurring,
assuming or suffering to exist any Permitted Liens or Liens not prohibited by
Section 4.8 above, or (2) restricting the sale or other disposition of property
or assets of the Company or any of its Restricted Subsidiaries that secure
Indebtedness of the Company or any of its Restricted Subsidiaries in accordance
with the terms of such Indebtedness or any related security document.
SECTION 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
------------------------------------------
Neither the Company, the Subsidiary Guarantors, nor any of their
respective Restricted Subsidiaries will be permitted to, directly or indirectly,
enter into, renew or extend any transaction or series of transactions
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any Affiliate of the
Company or any of its Restricted Subsidiaries ("Affiliate Transactions"), other
than Exempted Affiliate Transactions, except upon fair and reasonable terms no
less favorable to the Company, the Subsidiary Guarantor or such Restricted
Subsidiary than could be obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the time of the execution of
the agreement providing therefor, in a comparable arm's-length transaction with
a Person that is not an Affiliate.
<PAGE>
The foregoing limitation does not limit, and shall not apply to (i)
transactions approved by a majority of the Board of the Company; (ii) the
payment of reasonable and customary fees and expenses to members of the Board of
the Company who are not employees of the Company; (iii) any Restricted Payments
not prohibited by Section 4.9 or Section 4.15 (as applicable) or any payments
specifically exempted from the definition of Restricted Payments; and (iv)
Permitted REIT Payments. Notwithstanding the foregoing, any Affiliate
Transaction or series of related Affiliate Transactions, other than Exempted
Affiliate Transactions and any transaction or series of related transactions
specified in any of clauses (ii) through (iv) of this paragraph, (a) with an
aggregate value in excess of $10 million must first be approved pursuant to a
Board Resolution by a majority of the Board of the Company who are disinterested
in the subject matter of the transaction, and (b) with an aggregate value in
excess of $25 million, will require the Company to obtain a favorable written
opinion from an independent financial advisor of national reputation as to the
fairness from a financial point of view of such transaction to the Company, such
Subsidiary Guarantor or such Restricted Subsidiary, except that in the case of a
real estate transaction or related real estate transactions with an aggregate
value in excess of $25 million but not in excess of $50 million, an opinion may
instead be obtained from an independent, qualified real estate appraiser that
the consideration received in connection with such transaction is fair to the
Company, such Subsidiary Guarantor or such Restricted Subsidiary.
SECTION 4.12 LIMITATION ON ASSET SALES.
-------------------------
The Company and the Subsidiary Guarantors will not, and the Company
and the Subsidiary Guarantors will not permit any of their respective Restricted
Subsidiaries to, consummate any Asset Sale, unless (i) the consideration
received by the Company, the Subsidiary Guarantor or such Restricted Subsidiary
is at least equal to the fair market value of the assets sold or disposed of as
determined by the Board of the Company in good faith and (ii) at least 75% of
the consideration received consists of cash, Cash Equivalents and/or real estate
assets; provided that, with respect to the sale of one or more real estate
properties, up to 75% of the consideration may consist of indebtedness of the
purchaser of such real estate properties so long as such Indebtedness is secured
by a first priority Lien on the real estate property or properties sold; and
provided that, for purposes of this clause (ii) the amount of (A) any
Indebtedness (other than Indebtedness subordinated in right of payment to the
Securities or a Subsidiary Guarantee) that is required to be repaid or assumed
(and is either repaid or assumed by the transferee of the related assets) by
virtue of such Asset Sale and which is secured by a Lien on the property or
assets
<PAGE>
sold and (B) any securities or other obligations received by the Company, any
Subsidiary Guarantor or any such Restricted Subsidiary from such transferee that
are immediately converted by the Company, the Subsidiary Guarantor or such
Restricted Subsidiary into cash (or as to which the Company, any Subsidiary
Guarantor or such Restricted Subsidiary has received at or prior to the
consummation of the Asset Sale a commitment (which may be subject to customary
conditions) from a nationally recognized investment, merchant or commercial bank
to convert into cash within 90 days of the consummation of such Asset Sale and
which are thereafter actually converted into cash within such 90-day period)
will be deemed to be cash.
In the event that the aggregate Net Cash Proceeds received by the
Company, any Subsidiary Guarantors or such Restricted Subsidiaries from one or
more Asset Sales occurring on or after the Closing Date in any period of 12
consecutive months exceed 1% of Total Assets (determined as of the date closest
to the commencement of such 12-month period for which a consolidated balance
sheet of the Company and its Restricted Subsidiaries has been filed with the SEC
or provided to the Trustee pursuant to Section 4.2), then prior to 12-months
after the date Net Cash Proceeds so received exceeded 1% of Total Assets, the
Net Cash Proceeds may be (A) invested in or committed to be invested in,
pursuant to a binding commitment subject only to reasonable, customary closing
conditions, and providing such Net Cash Proceeds are, in fact, so invested,
within an additional 180 days, (x) fixed assets and property (other than notes,
bonds, obligations and securities) which in the good faith reasonable judgment
of the Board of the Company will immediately constitute or be part of a Related
Business of the Company, the Subsidiary Guarantor or such Restricted Subsidiary
(if it continues to be a Restricted Subsidiary) immediately following such
transaction, (y) Permitted Mortgage Investments or (z) a controlling interest in
the Capital Stock of an entity engaged in a Related Business; provided that
concurrently with an Investment specified in clause (z), such entity becomes a
Restricted Subsidiary or (B) used to repay and permanently reduce Indebtedness
outstanding under the Credit Facility (including that, in the case of a revolver
or similar arrangement, such commitment is permanently reduced by such amount).
Pending the application of any such Net Cash Proceeds as described above, the
Company may invest such Net Cash Proceeds in any manner that is not prohibited
by this Indenture. Any Net Cash Proceeds from Asset Sales that are not applied
or invested as provided in the first sentence of this paragraph (including any
Net Cash Proceeds which were committed to be invested as provided in such
sentence but which are not in fact invested within the time period provided)
will be deemed to constitute "Excess Proceeds."
<PAGE>
Notwithstanding, and without complying with, any of the foregoing
provisions:
(i) the Company, the Subsidiary Guarantors and their respective Restricted
Subsidiaries may, in the ordinary course of business, convey, sell, lease,
transfer, assign or otherwise dispose of inventory acquired and held for resale
in the ordinary course of business;
(ii) the Company, the Subsidiary Guarantors and their respective Restricted
Subsidiaries may convey, sell, lease, transfer, assign or otherwise dispose of
assets pursuant to and in accordance with Article 5 and Section 4.13 in this
Indenture;
(iii) the Company, the Subsidiary Guarantors and their respective
Restricted Subsidiaries may sell or dispose of damaged, worn out or other
obsolete property in the ordinary course of business so long as such property is
no longer necessary for the proper conduct of the business of the Company, the
Subsidiary Guarantor or such Restricted Subsidiary, as applicable; and
(iv) the Company, the Subsidiary Guarantors and their respective Restricted
Subsidiaries may exchange assets held by the Company, the Subsidiary Guarantor
or a Restricted Subsidiary for one or more real estate properties and/or one or
more Related Businesses of any Person or entity owning one or more real estate
properties and/or one or more Related Businesses; provided that the Board of the
Company has determined in good faith that the fair market value of the assets
received by the Company are approximately equal to the fair market value of the
assets exchanged by the Company.
No transaction listed in clauses (i) through (iv) inclusive shall be
deemed to be an "Asset Sale."
Within 30 days following each date (the "Excess Proceeds Date") on
which the aggregate amount of Excess Proceeds exceeds $25 million, the Company
will make an offer to purchase (an "Offer to Purchase") from the Holders and
holders of any other Indebtedness of the Company ranking pari passu with the
Securities from time to time outstanding with similar provisions requiring the
Company to make an offer to purchase or redeem such Indebtedness with the
proceeds from such Asset Sale, on a pro rata basis, an aggregate principal
amount (or accreted value, as applicable) of Securities and such other
Indebtedness equal to the Excess Proceeds
<PAGE>
on such date (the "Offer Amount"), at a purchase price in cash (the "Offer
Price") equal to 100% of the principal amount (or accreted value, as applicable)
of the Securities and such other Indebtedness, plus, in each case, accrued
interest (if any) to the date of purchase (the "Purchase Date") in accordance
with the procedures set forth in this Section 4.12. To the extent that the
aggregate amount of Securities and other senior Indebtedness tendered pursuant
to an irrevocable, unconditional offer to purchase the maximum principal amount
(an "Asset Sale Offer") is less than the Excess Proceeds, the Company may use
any remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount (or accreted value, as applicable) of Securities and such other
Indebtedness tendered pursuant to an Asset Sale Offer exceeds the amount of
Excess Proceeds, the Securities to be purchased and such other Indebtedness
shall be selected on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired). Upon completion of such Offer
to Purchase, the amount of Excess Proceeds shall be reset at zero.
Notice of an Offer to Purchase will be sent at least 20 Business Days
prior to the close of business on the earlier of (a) the third Business Day
prior to the Purchase Date and (b) the third Business Day following the
expiration of the Offer to Purchase (such earlier date being the "Final Put
Date"), by first-class mail, by the Company (or by the Registrar at the request
and expense of the Company) to each Holder at its registered address, with a
copy to the Trustee and the Paying Agent. The notice to the Holders will contain
all information, instructions and materials required by applicable law or
otherwise material to such Holders' decision to tender Securities pursuant to
the Offer to Purchase. The notice, which (to the extent consistent with this
Indenture) shall govern the terms of the Offer to Purchase, shall state:
(1) that the Offer to Purchase is being made pursuant to such notice and
this Section 4.12;
(2) the Offer Amount, the Offer Price (including the amount of accrued and
unpaid interest), the Final Put Date, and the Purchase Date, which
Purchase Date shall be on or prior to 60 Business Days following the
Excess Proceeds Date ;
(3) that any Security or portion thereof not tendered or accepted for
payment will continue to accrue interest;
<PAGE>
(4) that, unless the Company defaults in depositing cash with the Paying
Agent in accordance with the last paragraph of this Section 4.12 or
such payment is otherwise prevented, any Security, or portion thereof,
accepted for payment pursuant to the Offer to Purchase shall cease to
accrue interest after the Purchase Date;
(5) that Holders electing to have a Security, or portion thereof,
purchased pursuant to an Offer to Purchase will be required to
surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security completed, to the
Paying Agent (which may not for purposes of this Section 4.12,
notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) at the address specified in
the notice prior to the close of business on the Final Put Date;
(6) that Holders will be entitled to withdraw their elections, in whole or
in part, if the Paying Agent (which may not for purposes of this
Section 4.12, notwithstanding any other provision of this Indenture,
be the Company or any Affiliate of the Company) receives, up to the
close of business on the Final Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Securities the Holder is withdrawing and a
statement that such Holder is withdrawing his election to have such
principal amount of Securities purchased;
(7) that if Securities and other Indebtedness in a principal amount in
excess of the principal amount of Securities and other Indebtedness to
be acquired pursuant to the Offer to Purchase are tendered and not
withdrawn, the Trustee shall select the Securities to be purchased on
a pro rata basis (with such adjustments as may be deemed appropriate
by the Company so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired);
(8) that Holders whose Securities were purchased only in part will be
issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(9) a brief description of the circumstances and relevant facts regarding
such Asset Sales.
<PAGE>
Any such Offer to Purchase shall comply with all applicable provisions of
Federal and state laws, including those regulating tender offers, if applicable,
and any provisions of this Indenture that conflict with such laws shall be
deemed to be superseded by the provisions of such laws.
On or before a Purchase Date, the Company shall, to the extent lawful, (i)
accept for payment Securities or portions thereof properly tendered pursuant to
the Offer to Purchase on or before the Final Put Date (on a pro rata basis if
required pursuant to paragraph (7) hereof), (ii) deposit with the Paying Agent
cash sufficient to pay the Offer Price for all Securities or portions thereof so
tendered and accepted and (iii) deliver to the Paying Agent Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent shall on each
Purchase Date mail or deliver to Holders of Securities so accepted payment in an
amount equal to the Offer Price for such Securities, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Security equal
in principal amount to any unpurchased portion of the Security surrendered;
provided that if the Purchase Date is after a regular Record Date and on or
prior to the Interest Payment Date to which such Record Date relates, the
accrued interest shall be payable to the Holder of the purchased Securities
registered on the relevant Record Date. Any Security not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof.
SECTION 4.13 LIMITATION ON MERGER OF SUBSIDIARY GUARANTORS AND RELEASE
---------------------------------------------------------
OF SUBSIDIARY GUARANTORS.
------------------------
No Subsidiary Guarantor shall consolidate or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person) another
Person (other than the Company or another Subsidiary Guarantor), unless (i)
subject to the provisions of the following paragraph, the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor pursuant to
a supplemental indenture in form reasonably satisfactory to the Trustee,
pursuant to which such Person shall unconditionally and fully guarantee, on a
senior basis, all of such Subsidiary Guarantor's obligations under such
Subsidiary Guarantor's Guarantee under this Indenture on the terms set forth in
this Indenture; and (ii) immediately before and immediately after giving effect
to such transaction on a pro forma basis, no Default or Event of Default shall
have occurred or be continuing.
<PAGE>
Notwithstanding the foregoing, the Guarantee of a Subsidiary Guarantor
shall be automatically released upon the occurrence of certain transactions
specified in Section 12.4; and the foregoing restrictions shall not apply with
respect to any transactions that would give rise to any such release.
SECTION 4.14 LIMITATION ON STATUS AS INVESTMENT COMPANY.
------------------------------------------
The Company and its Restricted Subsidiaries are prohibited from being
required to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended).
SECTION 4.15 LIMITATION ON RESTRICTED PAYMENTS ON AND AFTER REIT
---------------------------------------------------
CONVERSION.
-----------
The Company and the Subsidiary Guarantors will not, and the Company
and the Subsidiary Guarantors will not permit any of their respective Restricted
Subsidiaries to, directly or indirectly, make a Restricted Payment if, at the
time of, and after giving effect to, the proposed Restricted Payment: (A) a
Default or Event of Default shall have occurred and be continuing, (B) the
Company could not Incur at least $1.00 of Indebtedness under paragraph (a) of
Section 4.7 or (C) the aggregate amount of all Restricted Payments (the amount,
if other than in cash, the fair market value of any property used therefor) made
on and after the Issue Date shall exceed the sum of, without duplication, (1)
95% of the aggregate amount of the Funds From Operations (or, if the Funds From
Operations is a loss, minus 100% of the amount of such loss) accrued on a
cumulative basis during the period (taken as one accounting period) beginning on
the first day of the fiscal quarter in which the Issue Date occurs and ending on
the last day of the last fiscal quarter preceding the Transaction Date, (2) 100%
of the aggregate Net Cash Proceeds received by the Company after the Issue Date
from the issuance and sale permitted by this Indenture of its Capital Stock
(other than Disqualified Stock) to a Person who is not a Subsidiary of the
Company including from an issuance to a Person who is not a Subsidiary of the
Company of any options, warrants or other rights to acquire Capital Stock of the
Company (in each case, exclusive of any Disqualified Stock or any options,
warrants or other rights that are redeemable at the option of the holder, or are
required to be redeemed, prior to the Stated Maturity of the Securities), and
the amount of any Indebtedness (other than Indebtedness subordinate in right of
payment to the Securities) of the Company that was issued and sold for cash upon
the conversion of such Indebtedness after the Issue Date into Capital Stock
(other than Disqualified Stock) of the Company, or otherwise received as Capital
Contributions,
<PAGE>
(3) an amount equal to the net reduction in Investments (other than Permitted
Investments) in any Person other than a Restricted Subsidiary after the Issue
Date resulting from payments of interest on Indebtedness, dividends, repayments
of loans or advances, or other transfers of assets, in each case to the Company
or any of its Restricted Subsidiaries or from the Net Cash Proceeds from the
sale of any such Investment (except, in each case, to the extent any such
payment or proceeds are included in the calculation of Funds From Operations) or
from designations of Unrestricted Subsidiaries or Non-Consolidated Entities as
Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments"), (4) the fair market value of noncash tangible assets or Capital
Stock (other than that of the Company or its Parent) representing interests in
Persons acquired after the Issue Date in exchange for an issuance of Qualified
Capital Stock and (5) the fair market value of noncash tangible assets or
Capital Stock (other than that of the Company or its Parent) representing
interests in Persons contributed as a Capital Contribution to the Company after
the Issue Date. Notwithstanding the foregoing, the Company may make Permitted
REIT Distributions.
SECTION 4.16 MAINTENANCE OF PROPERTIES AND INSURANCE.
----------------------------------------
The Company, the Guarantors and the Subsidiary Guarantors shall cause
all material properties used or useful to the conduct of their business and the
business of each of their Restricted Subsidiaries to be maintained and kept in
good condition, repair and working order (reasonable wear and tear and damage by
casualty excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in their reasonable judgment may be necessary, so
that the business carried on in connection therewith may be properly conducted
at all times; provided, however, that nothing in this Section 4.16 shall prevent
the Company, any Guarantors or any Subsidiary Guarantor from discontinuing any
operation or maintenance of any of such properties, or disposing of any of them,
if such discontinuance or disposal is, (a) in the judgment of the Board of the
Company, desirable in the conduct of the business of such entity and (b) not
disadvantageous in any material respect to the Holders.
The Company, the Guarantors and the Subsidiary Guarantors shall
provide, or cause to be provided, for themselves and each of their Restricted
Subsidiaries, insurance (including appropriate self insurance) against loss or
damage of the kinds that, in the reasonable, good faith opinion of the Company
is adequate
<PAGE>
and appropriate for the conduct of the business of the Company, the Guarantors,
the Subsidiary Guarantors and such Restricted Subsidiaries.
SECTION 4.17 MAINTENANCE OF OFFICE OR AGENCY.
--------------------------------
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company, the Guarantors and
the Subsidiary Guarantors shall give prompt written notice to the Trustee and
the Paying Agent of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee and the Paying Agent, if
different, with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
13.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee and the Paying Agent, if
different, of any such designation or rescission and of any change in the
location of any such other office or agency. The Company hereby initially
designates the corporate trust office of the Paying Agent as such office.
ARTICLE 5
SUCCESSORS
SECTION 5.1 WHEN COMPANY MAY MERGE, ETC.
---------------------------
The Company will not merge with or into, or sell, convey, or transfer,
or otherwise dispose of all or substantially all of its property and assets (as
an entirety or substantially as an entirety in one transaction or a series of
related
<PAGE>
transactions) to any Person or permit any Person to merge with or into the
Company, unless:
(a) either the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired such property and assets of the Company shall be an
entity organized and validly existing under the laws of the United States of
America or any state or jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company, on the Securities and under this Indenture;
(b) immediately after giving effect, on a pro forma basis, to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and
(c) the Company will have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that such consolidation, merger
or transfer and such supplemental indenture complies with this provision and
that all conditions precedent provided for herein relating to such transaction
have been complied with.
SECTION 5.2 SUCCESSOR PERSON SUBSTITUTED.
----------------------------
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company, in accordance with Section 5.1,
the successor Person formed by such consolidation or into which the Company is
merged or to which such transfer is made, shall succeed to, be substituted for,
and may exercise every right and power of the Company under this Indenture with
the same effect as if such successor Person had been named therein as the
Company and the Company shall be released from the obligations under the
Securities and this Indenture.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
-----------------
"Event of Default," wherever used herein with respect to Securities of
any Series, means any one of the following events, unless in establishing such a
<PAGE>
Series in a Board Resolution, supplemental indenture or Officers' Certificate,
it is provided that such Series shall not have the benefit of said Event of
Default:
(a) the failure by the Company to pay any installment of interest on
the Securities of that Series as and when the same becomes due and payable
and the continuance of any such failure for 30 days;
(b) the failure by the Company to pay all or any part of the principal
of, or premium, if any, on, the Securities of that Series when and as the
same becomes due and payable at maturity, redemption, by acceleration or
otherwise;
(c) the failure by the Company, a Guarantor or any Subsidiary
Guarantor to observe or perform any other covenant or agreement contained
in the Securities of that series or this Indenture with respect to that
Series of Securities and the continuance of such failure for a period of 30
days after written notice is given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities of that Series outstanding;
(d) a default in (I) Secured Indebtedness of the Company or any of its
Restricted Subsidiaries with an aggregate principal amount in excess of 5%
of Total Assets, or (II) other Indebtedness of the Company or any of its
Restricted Subsidiaries with an aggregate principal amount in excess of $50
million, in either case, (a) resulting from the failure to pay principal or
interest when due (after giving effect to any applicable extensions or
grace or cure periods) or (b) as a result of which the maturity of such
Indebtedness has been accelerated prior to its final Stated Maturity;
(e) final unsatisfied judgments not covered by insurance aggregating
in excess of 0.5% of Total Assets, at any one time rendered against the
Company or any of its Significant Subsidiaries and not stayed, bonded or
discharged within 60 days;
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
<PAGE>
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(iv) makes a general assignment for the benefit of its
creditors;
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case;
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of its
property; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries and the order or decree remains
unstayed and in effect for 60 days; or
(i) any other Event of Default provided with respect to Securities of
that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate, in accordance with Section
2.2.18.
The term "Bankruptcy Law" means title 11 of the U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 6.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
--------------------------------------------------
If an Event of Default with respect to the Securities of any Series at
the time outstanding occurs and is continuing (other than an Event of Default
specified in Section 6.1(f) or (g), above, relating to the Company), then either
the
<PAGE>
Trustee or the Holders of 25% in aggregate principal amount of the Securities of
that Series then outstanding, by notice in writing to the Company (and to the
Trustee if given by Holders) (an "Acceleration Notice"), may declare all
principal (or, if any Securities of that Series are Discount Securities the
Accreted Value), and accrued interest thereon to be due and payable immediately.
If an Event of Default specified in Section 6.1(f) or (g) shall occur
as to the Company, the principal amount (or specified amount) of and accrued and
unpaid interest, if any, on all outstanding Securities of that Series shall ipso
----
facto become and be immediately due and payable without any declaration or other
- -----
act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article 6 the
Holders of a majority (or such greater amount if the Event of Default resulting
in such acceleration related to a Default in a provision of this Indenture that
may not be amended without the consent of a greater amount) in principal amount
of the outstanding Securities of that Series, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue interest, if any, on all Securities of that
Series;
(ii) the principal and premium, if any, of any Securities of that
Series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor
in such Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon any overdue principal and premium, if any, and overdue
interest at the rate or rates prescribed therefor in such Securities; and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements
<PAGE>
and advances of the Trustee, its agents and counsel and any other amounts
due the Trustee under Section 7.7; and
(b) all Events of Default with respect to Securities of that
Series, other than the non-payment of the principal of Securities of that
Series which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 6.13.
No such rescission shall effect any subsequent Default or impair any
right consequent thereon.
SECTION 6.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
-------------------------------------------------------
TRUSTEE.
-------
The Company covenants that if:
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days;
(b) default is made in the payment of principal or premium, if any, of
any Security at the Maturity thereof; or
(c) default is made in the deposit of any sinking fund payment
when and as due by the terms of a Security, then, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal and premium, if any, and interest and, to the extent that payment
of such interest shall be legally enforceable, interest on any overdue
principal and premium, if any, or any overdue interest, at the rate or
rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any
other amounts due the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute
<PAGE>
such proceeding to judgment or final decree and may enforce the same against the
Company or any other obligor upon such Securities and collect the moneys
adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to any Securities of any Series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
Series by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel and any other amounts due the Trustee under Section 7.7)
and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the
<PAGE>
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
------------------------------------------------
SECURITIES.
----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 6.6 APPLICATION OF MONEY COLLECTED.
------------------------------
Any money collected by the Trustee pursuant to this Article 6 shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
7.7; and
Second: To the payment of the amounts then due and unpaid for principal of
and premium, if any, and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal, premium and interest, respectively; and
<PAGE>
Third: To the Company.
SECTION 6.7 LIMITATION ON SUITS.
-------------------
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
Series;
(b) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Securities of that Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
<PAGE>
SECTION 6.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
-------------------------------------------------------
INTEREST.
--------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and interest, if any, on
such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 6.9 RESTORATION OF RIGHTS AND REMEDIES.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 6.10 RIGHTS AND REMEDIES CUMULATIVE.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.11 DELAY OR OMISSION NOT WAIVER.
----------------------------
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an
79
<PAGE>
acquiescence therein. Every right and remedy given by this Article 6 or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 6.12 CONTROL BY HOLDERS.
------------------
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
SECTION 6.13 WAIVER OF PAST DEFAULTS.
-----------------------
The Holders of a majority in aggregate principal amount of the
Securities of a Series at the time outstanding may waive on behalf of all the
Holders any Default with respect to such Series and its consequences, except a
Default with respect to any provision requiring supermajority approval to amend,
which Default may only be waived by such a supermajority with respect to such
Series, and except a default in the payment of principal of or interest on any
Security of that Series not yet cured or a Default with respect to any covenant
or provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security of that Series affected, provided, however,
that pursuant to Section 6.2 hereof, Holders of a majority or a supermajority
(as the case may be) in aggregate principal amount of the Securities of any
Series may rescind an acceleration and its consequences including any payment
default that resulted from such acceleration. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this
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Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Subject to the provisions of this Indenture relating to the duties of
the Trustee, the Trustee will be under no obligation to exercise any of its
rights or powers under this Indenture at the request, order or direction of any
of the Holders, unless such Holders have offered to the Trustee reasonable
security or indemnity. Subject to all provisions of this Indenture and
applicable law, the Holders of a majority in aggregate principal amount of the
Security of any Series at the time outstanding will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to such Series.
SECTION 6.14 UNDERTAKING FOR COSTS.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date).
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and
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use the same degree of care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others;
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon Officers' Certificates or Opinions of
Counsel furnished to the Trustee and conforming to the requirements of this
Indenture; however, in the case of any such Officers' Certificates or
Opinions of Counsel which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
Officers' Certificates and Opinions of Counsel to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it with respect to Securities of
any Series in good faith in accordance with the direction of the Holders of
a majority in principal amount of the outstanding Securities of such Series
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the
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Trustee, under this Indenture with respect to the Securities of such
Series.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds except
to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the performance
of any of its duties, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent
shall be entitled to the protections, immunities and standard of care as
are set forth in paragraphs (a), (b) and (c) of this Section and Section
7.2 with respect to the Trustee.
SECTION 7.2 RIGHTS OF TRUSTEE.
-----------------
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
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(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care. No
Depository shall be deemed an agent of the Trustee and the Trustee shall
not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as duties.
(j) The Trustee shall not be charged with knowledge of any Default or
Event of Default, of the identity of any Restricted Subsidiary or the
existence of any Change of Control or Asset Sale unless either (i) a
Responsible Officer shall have actual knowledge thereof or (ii) the Trustee
shall have received written notice thereof from the Company or any Holder.
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SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
--------------------
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Securities, the
Guarantees, or the Subsidiary Guarantees it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or the Securities
other than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
------------------
If a Default or Event of Default occurs and is continuing with respect
to the Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Securityholder of the Securities of
that Series and, if any Bearer Securities are outstanding, publish on one
occasion in an Authorized Newspaper, notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the
Trustee has knowledge of such Default or Event of Default. Except in the case
of a Default or Event of Default in payment of principal of or interest on any
Security of any Series, the Trustee may withhold the notice if and so long as
its corporate trust committee or a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of
Securityholders of that Series.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
-----------------------------
Within 60 days after May 15 in each year, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear on the
register kept by the Registrar and, if any Bearer Securities are outstanding,
publish in an Authorized Newspaper, a brief report dated as of such May 15, in
accordance with, and to the extent required under, TIA (S)313.
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A copy of each report at the time of its mailing to Securityholders of
any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it
(including in the enforcement of this Section 7.7) except as set forth in the
next paragraph arising out of or in connection with the acceptance or
administration of this trust or in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
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compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may
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petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S)310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
-------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated.
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ARTICLE 8
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.1 SATISFACTION AND DISCHARGE OF INDENTURE.
---------------------------------------
This Indenture shall upon Company Order cease to be of further effect
(except as hereinafter provided in this Section 8.1) with respect to any Series
of Securities, and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging such satisfaction and discharge of this
Indenture with respect to such Series, when:
(a) either:
(i) all Securities of such Series theretofore authenticated and
delivered (other than Securities of such Series that have been destroyed,
lost or stolen and that have been replaced or paid) have been delivered to
the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation:
(1) have become due and payable; or
(2) will become due and payable at their Stated Maturity within
one year; or
(3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company; or
(4) are deemed paid and discharged pursuant to Section 8.3, as
applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited (in U.S. legal tender, U.S. Government Obligations or Foreign
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Government Obligation or a combination thereof) with the Trustee as trust funds
in trust an amount sufficient for the purpose of paying and discharging the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal, premium, if any, and interest to the date of
such deposit (in the case of Securities which have become due and payable on or
prior to the date of such deposit) or to the Stated Maturity or Redemption Date,
as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company, the Guarantors and the Subsidiary Guarantors to the
Trustee under Section 7.7, and, if money shall have been deposited with the
Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.4,
2.7, 2.8, 2.11, 7.1, 8.1 8.2 and 8.5 shall survive.
SECTION 8.2 APPLICATION OF TRUST FUNDS; INDEMNIFICATION.
-------------------------------------------
(a) Subject to the provisions of Section 8.5, all money and U.S. Government
Obligations or Foreign Government Obligations deposited with the Trustee
pursuant to Sections 8.1, 8.3 or 8.4 and all money received by the Trustee in
respect of U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Sections 8.1, 8.3 or 8.4, shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with or received by the Trustee or
to make mandatory sinking fund payments or analogous payments as contemplated by
Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against U.S. Government Obligations
or Foreign Government Obligations deposited pursuant to Sections 8.1, 8.3 or 8.4
or
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the interest and principal received in respect of such obligations other than
any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time upon
Company Request any U.S. Government Obligations or Foreign Government
Obligations or money held by it as provided in Sections 8.1, 8.3 or 8.4 which,
in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have been
required to be deposited for the purpose for which such U.S. Government
Obligations or Foreign Government Obligations or money were deposited or
received. This provision shall not authorize the sale by the Trustee of any
U.S. Government Obligations or Foreign Government Obligations held under this
Indenture.
SECTION 8.3 LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES.
--------------------------------------------
Unless this Section 8.3 is otherwise specified pursuant to Section
2.2.21 to be inapplicable to Securities of any Series, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the
deposit referred to below, and the provisions of this Indenture, as it relates
to such outstanding Securities of such Series, shall no longer be in effect (and
the Trustee, at the expense of the Company, shall, at Company Request, execute
proper instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities of such Series to receive,
from the trust funds described below, (i) payment of the principal of and
each installment of principal of and interest on the outstanding Securities
of such Series on the Stated Maturity of such principal or installment of
principal or interest and (ii) the benefit of any mandatory sinking fund
payments applicable to the Securities of such Series on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and the Securities of such Series;
(b) the provisions of Sections 2.5, 2.7, 2.8, 2.11, 4.17 and this
Article 8; and
(c) the rights, powers, trust and immunities of the Trustee hereunder;
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provided that, the following conditions shall have been satisfied:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Securities of such Series, (A)
in the case of Securities of such Series denominated in Dollars, U.S.
Government Obligations, or any combination thereof, or (B) in the case of
Securities of such Series denominated in a Foreign Currency (other than a
composite currency), money, Foreign Government Obligations, or a
combination thereof, in each case, 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 Securities of such Series;
(ii) the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to Trustee confirming
that (A) the Company has received from, or there has been published by the
Internal Revenue Service, a ruling or (B) since the date of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion of counsel shall
confirm that, the Holders of the Securities of such Series will not
recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(iii) no Default or Event of Default shall have occurred with
respect to such Series and be continuing on the date of such deposit or
insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date
of deposit;
(iv) such defeasance shall not result in a breach or violation of,
or constitute a default under this Indenture or any other material
agreement or instrument to which the Company or any of its
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Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(v) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of such Securities over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others; and
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the conditions precedent provided for have been
complied with.
SECTION 8.4 COVENANT DEFEASANCE.
-------------------
Unless this Section 8.4 is otherwise specified pursuant to Section
2.2.21 to be inapplicable to Securities of any Series, on and after the 91st day
after the date of the deposit referred to in subparagraph (a) hereof, the
Company may omit to comply with any term, provision or condition set forth under
Sections 4.2, 4.3, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15
and 4.16 and Articles 5, 10, 11 and 12 (and the failure to comply with any such
covenants shall not constitute a Default or Event of Default under Section 6.1)
with respect to the Securities of such Series, provided that the following
conditions shall have been satisfied:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Securities of such Series, (A) in the
case of Securities of such Series denominated in Dollars, U.S. Government
Obligations, or any combination thereof, or (B) in the case of Securities
of such Series denominated in a Foreign Currency (other than a composite
currency), money, Foreign Government Obligations, or a combination thereof,
in each case, 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 Securities
of such Series;
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(b) the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to such Trustee
confirming that the Holders of the Securities of such Series will not
recognize income, gain or loss for Federal income tax purposes as a result
of the defeasance contemplated by this Section 8.4 and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(d) no Default or Event of Default shall have occurred with respect
to such Series and be continuing on the date of such deposit or insofar as
Events of Default from bankruptcy or insolvency events are concerned, at
any time in the period ending on the 91st day after the date of deposit;
(e) such defeasance shall not result in a breach or violation of, or
constitute a default under this Indenture or any other material agreement
or instrument to which the Company or any of its Restricted Subsidiaries is
a party or by which the Company or any of its Restricted Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others; and
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the conditions precedent provided for have been
complied with.
SECTION 8.5 REPAYMENT TO COMPANY.
--------------------
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person.
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SECTION 8.6 REINSTATEMENT.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations or Foreign Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities and the obligations of the Guarantors and the
Subsidiary Guarantors hereunder and under their Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations or Foreign Government Obligations in accordance with
this Article 8; provided that if the Company has made any payment of interest on
or principal of or premium, if any, on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations or Foreign Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS AND SUPPLEMENTS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.
--------------------------
The Company, the Guarantors (if applicable), the Subsidiary Guarantors
(if applicable) and the Trustee may amend or supplement this Indenture or the
Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article 5;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that does not adversely affect the rights of
any Securityholder;
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(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee;
(g) to provide for additional guarantors or collateral for the
Securities of any Series;
(h) to evidence the release of any Collateral or the release of any
Guarantor or Subsidiary Guarantor hereunder;
(i) to enter into any agreements consistent with Article 11 hereof, to
further implement the provisions of Article 11 hereof; or
(j) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
SECTION 9.2 WITH CONSENT OF HOLDERS.
-----------------------
The Company, the Guarantors and the Subsidiary Guarantors with respect
to Securities of a Series and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities of each Series affected
by such supplemental indenture (including consents obtained in connection with a
tender offer or exchange offer for the Securities of such Series) (except that
any amendments to the provisions of Article 11 or Article 12, including the
definitions relating thereto, shall require the written consent of the Holders
of not less than 66 2/3% of the aggregate principal amount of the Securities of
such Series at the time outstanding), for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Securityholders of each such Series. Except as provided in
Section 6.13, the Holders of at least a majority in principal amount of the
outstanding Securities of each Series affected by such waiver by notice to the
Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by
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the Company with any provision of this Indenture or the Securities with respect
to such Series.
It shall not be necessary for the consent of the Holders of Securities
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this Section 9.2 becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
SECTION 9.3 LIMITATIONS.
-----------
Without the consent of each Securityholder affected, an amendment or
waiver may not:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security;
(b) reduce the principal amount of, or premium, if any, or interest
on, any Security;
(c) change the place of payment of principal of, or premium, if any,
or interest on, any Security;
(d) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Security;
(e) reduce the percentages of outstanding Securities the consent of
whose Holders is necessary to modify or amend this Indenture;
(f) waive a default in the payment of principal of, premium, if any,
or interest on the Securities (except a recission of acceleration of the
Securities of any Series and a waiver of the payment default that resulted
from such acceleration pursuant to Section 6.2 hereof)
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(g) alter the provisions relating to the redemption of the Securities
at the option of the Company;
(h) reduce the percentage or aggregate principal amount of outstanding
Securities of a Series the consent of whose Holders is necessary for waiver
of compliance with certain provisions of this Indenture or for waiver of
certain defaults in Section 6.8, 6.13 or 9.3(h); or
(i) make the Securities subordinate in right of payment to any other
Indebtedness.
SECTION 9.4 COMPLIANCE WITH TRUST INDENTURE ACT.
-----------------------------------
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
SECTION 9.5 REVOCATION AND EFFECT OF CONSENTS.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities of the applicable Series have consented (and not theretofore revoked
such consent) to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company, notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons ( or
their duly designated proxies), shall be entitled to revoke any consent
previously given (up to the time such consent becomes non-revocable in
accordance with such sentence), whether or not such Persons continue to be
Holders after such record date.
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Any amendment or waiver once effective shall bind every Securityholder
of each Series affected by such amendment or waiver unless it is of the type
described in any of clauses (a) through (i) of Section 9.3. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.6 NOTATION ON OR EXCHANGE OF SECURITIES.
-------------------------------------
The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver. Any failure to make any appropriate notation or to issue a
new Security of that Series shall not affect the validity of such amendment or
waiver. Any failure to make an appropriate notation or to issue a new Security
of that Series shall not affect the validity of such amendments or waiver.
SECTION 9.7 TRUSTEE PROTECTED.
-----------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article 9 or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 7.1) shall be fully protected in relying upon,
an Opinion of Counsel complying with Section 13.4(b) and stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee shall sign all supplemental indentures, except that the
Trustee need not sign any supplemental indenture that adversely affects its
rights.
ARTICLE 10
RIGHT TO REQUIRE REPURCHASE
SECTION 10. REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON
---------------------------------------------------------
A CHANGE OF CONTROL TRIGGERING EVENT.
------------------------------------
(a) Upon the occurrence of a Change of Control Triggering Event, each
Holder of Securities will have the right to require the Company to repurchase
all or
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any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to the unconditional, irrevocable offer to purchase
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon to the date of purchase (the "Change of Control Payment") on a
date that is not more than 45 Business Days after the occurrence of such Change
of Control Triggering Event (the "Change of Control Payment Date").
(b) In the event of a Change of Control Triggering Event, the Company shall
be required to commence a Change of Control Offer as follows:
(1) the Change of Control Offer shall commence within 10 Business Days
following the occurrence of the Change of Control Triggering Event;
(2) the Change of Control Offer shall remain open for at least 20
Business Days, except to the extent that a longer period is required by
applicable law, but in any case not more than 35 Business Days following
commencement (the "Change of Control Offer Period");
(3) upon the expiration of a Change of Control Offer, the Company shall
purchase all of the properly tendered Securities at the Change of
Control Payment, plus accrued interest;
(4) if the Change of Control Payment Date is on or after a Record Date
and on or before the related Interest Payment Date, any accrued interest
will be paid to the Person in whose name a Security is registered at the
close of business on such Record Date, and no additional interest will
be payable to Securityholders who tender Securities pursuant to the
Change of Control Offer;
(5) the Company shall provide the Trustee and the Paying Agent with
notice of the Change of Control Offer at least three Business Days
before the commencement of any Change of Control Offer; and
(6) on or before the commencement of any Change of Control Offer, the
Company or the Registrar (upon the request and at the expense of the
Company) shall send, by first-class mail, a notice to each of the
Holders, which (to the extent consistent with this
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Indenture) shall govern the terms of the Change of Control Offer and
shall state:
(i) that the Change of Control Offer is being made pursuant to
such notice and this Section 10.1 and that all Securities, or
portions thereof, tendered will be accepted for payment;
(ii) the Change of Control Payment (including the amount of
accrued and unpaid interest, subject to clause (b)(4) above),
the Change of Control Payment Date and the Change of Control Put
Date (as defined below);
(iii) that any Security, or portion thereof, not tendered or
accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing cash with
the Paying Agent in accordance with the last paragraph of this
Article 10 or such payment is prevented, any Security, or
portion thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent (which may not for
purposes of this Section 10.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of
the Company) at the address specified in the notice prior to the
close of business on the earlier of (a) the third Business Day
prior to the Change of Control Payment Date and (b) the third
Business Day following the expiration of the Change of Control
Offer (such earlier date being the "Change of Control Put
Date");
(vi) that Holders will be entitled to withdraw their election,
in whole or in part, if the Paying Agent (which may not for
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purposes of this Section 10.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of
the Company) receives, up to the close of business on the Change
of Control Put Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a
statement that such Holder is withdrawing his election to have
such principal amount of Securities purchased; and
(vii) a brief description of the events resulting in such Change
of Control Triggering Event.
Any Change of Control Offer will be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation l4E
under the Exchange Act and the rules thereunder and all other applicable Federal
and state securities laws.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof, properly tendered pursuant to
the Change of Control Offer on or before the Change of Control Put Date, (ii)
deposit with the Paying Agent cash sufficient to pay the Change of Control
Payment (including accrued and unpaid interest, subject to clause (b)(4) above)
for all Securities or portions thereof, so tendered and (iii) deliver to the
Registrar Securities so accepted together with an Officers' Certificate listing
the aggregate principal amount of the Securities or portions thereof, being
purchased by the Company. The Paying Agent shall on the Change of Control
Payment Date or promptly thereafter mail to Holders of Securities so accepted
payment in an amount equal to the Change of Control Payment (together with
accrued and unpaid interest) for such Securities (subject to clause (b)(4)
above), and the Trustee or its authenticating agent shall promptly authenticate
and the Registrar shall mail or deliver (or cause to be transferred by book
entry) to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; provided, however, that each
such new Security will be in a principal amount of $1,000 or an integral
multiple thereof. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the consummation thereof.
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SECTION 10. APPLICABILITY.
-------------
The provisions of this Article 10 shall be applicable with respect to
Securities of any Series, unless in establishing such a Series in a Board
Resolution, supplemental indenture or Officers' Certificate, it is provided that
such Series shall not have the benefit of this Article 10. For the purposes of
Securities of any Series issued hereunder, when used in this Article 10, the
term "Securities" shall mean Securities of that Series.
ARTICLE 11
SECURITY
SECTION 11. PLEDGE OF THE COLLATERAL.
-------------------------
(a) In order to secure the Indenture Obligations with respect to Securities
of each Series issued on the Issue Date and, unless this Article 11 is otherwise
specified pursuant to Section 2.2.21 to be inapplicable to Securities of any
other Series, Securities of any other Series, to the extent provided in the
Pledge and Security Agreement, the Pledgors (as defined in the Pledge and
Security Agreement) are pledging and granting a security interest in the
respective rights, title and interest in and to the Collateral to the Collateral
Agent pursuant to the Pledge and Security Agreement. The Trustee shall be
subject to all of the terms and provisions of the Pledge and Security Agreement
as the Pledge and Security Agreement may be amended from time to time pursuant
to the provisions thereof and hereof.
(b) The Company shall furnish to the Trustee, promptly after the execution
and delivery of this Indenture and the Pledge and Security Agreement and
promptly after the execution and delivery of any amendment thereto or any other
instrument of further assurance, an Opinion of Counsel stating that, in the
opinion of such counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (i) this Indenture, the Pledge and
Security Agreement, any such amendment and all other instruments of further
assurance have been properly
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recorded, registered and filed and all such other action has been taken to the
extent necessary to make effective valid security interests and reciting the
details of such action or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action is necessary to maintain the validity,
priority and perfection of the security interests in the Collateral.
(c) The Company shall furnish to the Trustee, within 60 days after April 1
in each year (beginning April 1, 1999), an Opinion of Counsel, dated as of such
date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions, either (i) all such action has been taken with
respect to the recording, registering, filing, rerecording and refiling of the
Indenture, all supplemental indentures, the Pledge and Security Agreement,
financing statements, continuation statements and all other instruments of
further assurance as is necessary to maintain the security interests under the
Pledge and Security Agreement and hereunder in full force and effect and
reciting the details of such action or referring to prior Opinions of Counsel in
which such details are given, and stating that all financing statements and
continuation statements have been executed and filed and such other actions
taken that are necessary fully to preserve and protect the rights of the Holders
and the Trustee hereunder and under the Pledge and Security Agreement, or (ii)
no such action is necessary to maintain the validity, of the security interests
in the Collateral.
(e) The Capital Stock of each Restricted Subsidiary that is subsequently
pledged to secure the Credit Facility will also be pledged to secure the
Securities of each Series issued on the Issue Date and, unless this Article 11
is otherwise specified pursuant to Section 2.2.21 to be inapplicable to
Securities of any other Series, Securities of any other Series, on an equal and
ratable basis with respect to Liens securing the Credit Facility and any other
pari passu Indebtedness secured by such Capital Stock in the manner set forth in
the Pledge and Security Agreement, provided, however, that any shares of the
Capital Stock of any Restricted Subsidiary will not be and will not be required
to be pledged to secure the Securities of any such Series if the pledge of or
grant of a security interest in such shares is prohibited by law or agreement.
(f) Upon the complete and unconditional release of the pledge of any
Collateral under the Pledge and Security Agreement in favor of the Credit
Facility, the pledge of such Collateral securing the Securities of any Series
shall be automatically released; provided that, should the obligations of the
Company under the Credit Facility subsequently be secured by a pledge of Capital
Stock of any Restricted Subsidiary at any time, the Company shall cause such
Capital Stock to be
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pledged ratably and with at least the same priority in favor of the Trustee for
the benefit of Holders of the Securities of any Series to which this Article 11
is applicable.
SECTION 11.2 PAYMENT OF EXPENSES
-------------------
On demand of the Trustee, the Company forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article 11, including the reasonable fees and expenses of counsel.
SECTION 11.3 SUITS TO PROTECT THE COLLATERAL.
-------------------------------
The Trustee may, in its sole discretion and without the consent of the
Holders, on behalf of the Holders, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Pledge and Security
Agreement as and to the extent provided therein and (b) collect and receive any
and all amounts payable in respect of the Indenture Obligations. Subject to
Section 11.1 of this Indenture and to the provisions of the Pledge and Security
Agreement, the Trustee shall have power to institute and to maintain such suits
and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts which may be unlawful or in violation of the Pledge and
Security Agreement or this Indenture, including the power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid or if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interests in the
Collateral in contravention of this Indenture or the Pledge and Security
Agreement or be prejudicial to the interests of the Holders or of the Trustee.
The Trustee shall give notice to the Company promptly following the institution
of any such suit or proceeding.
SECTION 11.4 TRUSTEE'S DUTIES.
----------------
The powers and duties conferred upon the Trustee by this Article 11 are
solely to protect the security interests of the Trustee in the Collateral and
shall not impose any duty upon the Trustee to exercise any such powers and
duties, except as expressly provided in this Indenture. The Trustee shall be
under no duty to the Company, any Guarantor or Subsidiary Guarantor whatsoever
to make or give any presentment, demand or performance, notice of
nonperformance, protest, notice of
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protest, notice of dishonor, or other notice for demand in connection with any
Collateral, or to take any steps necessary to preserve any rights against prior
parties except as expressly provided in this Indenture. The Trustee shall not be
liable to the Company, any Guarantor or Subsidiary Guarantor for failure to
collect or realize upon any or all of the Collateral, or for any delay in so
doing, nor shall the Trustee be under any duty to the Company, any Guarantor or
Subsidiary Guarantor to take any action whatsoever with regard thereto. The
Trustee shall have no duty to the Company, any Guarantor or Subsidiary Guarantor
to comply with any recording, filing or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of the security
interests in, or the Trustee's rights in or to, any of the Collateral.
SECTION 11.5 CERTIFICATES OF THE COMPANY.
---------------------------
The Company shall furnish to the Trustee, prior to each proposed release of
Collateral, all documents required by TIA (S) 314(d). The Trustee may accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such instruments. Any certificate or opinion required
by TIA (S) 314(d) may be made by an Officer of the Company except in cases where
TIA (S) 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other expert within the meaning of TIA (S)
314(d). The Trustee and each Holder of Securities acknowledge that a release of
Collateral in accordance with the terms of this Article 11 and the Pledge and
Security Agreement will not be deemed for any purpose to be an impairment of the
security granted under the Indenture and the Pledge and Security Agreement.
SECTION 11.6 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER
------------------------------------------------------
THE PLEDGE AND SECURITY AGREEMENT.
---------------------------------
The Trustee is authorized to receive any funds for the benefit of the
Holders of Securities of each Series to which this Article 11 is applicable,
distributed under the Pledge and Security Agreement, and to make further
distributions of such funds to such Holders according to the provisions of this
Indenture and the Pledge and Security Agreement.
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ARTICLE 12
GUARANTY
SECTION 12. GUARANTY.
---------
(a) Each of the Guarantors and Subsidiary Guarantors, with respect to each
Series of Securities to which this Article 12 is made applicable, irrevocably
and unconditionally Guarantees, jointly and severally, to each Holder of a
Security of such Series authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities of such Series or the
obligations of the Company under this Indenture or the Securities of such
Series, that: (w) the principal of and premium, if any, and interest on the
Securities of such Series will be paid in full when due, whether at the Stated
Maturity or Interest Payment Date, by acceleration, call for redemption, upon a
Change of Control Offer, Offer to Purchase, or otherwise; (x) all other
obligations of the Company to the Holders of such Series or the Trustee under
this Indenture or the Securities of such Series will be promptly paid in full or
performed, all in accordance with the terms of this Indenture and the Securities
of such Series; and (y) in case of any extension of time of payment or renewal
of any Securities of such Series or any of such other obligations thereunder,
they will be paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at maturity, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Offer to Purchase or
otherwise. Failing payment when due of any amount so Guaranteed for whatever
reason, each Guarantor and Subsidiary Guarantor shall be jointly and severally
obligated to pay the same before failure so to pay becomes an Event of Default
with respect to Securities of any Series. If the Company defaults in the
payment of the principal of, premium, if any, or interest on, the Securities of
a Series so Guaranteed when and as the same shall become due, whether upon
maturity, acceleration, call for redemption, upon a Change of Control Offer,
Offer to Purchase or otherwise, without the necessity of action by the Trustee
or any Holder, each Guarantor and Subsidiary Guarantor with respect to such
Series shall be required, jointly and severally, to promptly make such payment
in full.
(b) Each Guarantor and Subsidiary Guarantor with respect to Securities of
any Series agrees that its obligations with regard to this Guarantee shall be
full and unconditional, irrespective of the validity, regularity or
enforceability of the Securities of such Series or this Indenture, the absence
of any action to enforce the same, any delays in obtaining or realizing upon or
failures to obtain or realize upon
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collateral, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstances that might otherwise constitute a
legal or equitable discharge or defense of a guarantor (except as provided in
Sections 12.4 and 12.5). Each Guarantor and Subsidiary Guarantor with respect to
Securities of any Series hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company or
right to require the prior disposition of the assets of the Company to meet its
obligations, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged (except to the extent released pursuant to
Section 12.4 or 12.5) except by complete performance of the obligations
contained in the Securities of such Series and this Indenture as it relates to
such Series of Securities.
(c) If any Holder of Securities of a Series or the Trustee is required by
any court or otherwise to return to either the Company or any Guarantor or
Subsidiary Guarantor with respect to Securities of that Series, or any
Custodian, trustee, or similar official acting in relation to either the Company
or such Guarantor or Subsidiary Guarantor, any amount paid by either the Company
or such Guarantor or Subsidiary Guarantor to the Trustee or such Holder with
respect to Securities of that Series, the Guarantee with respect to Securities
of that Series, to the extent theretofore discharged, shall be reinstated in
full force and effect (except to the extent released pursuant to Section 12.4 or
12.5). Each Guarantor and Subsidiary Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders of Securities of
a Series in respect of any obligations Guaranteed hereby until payment in full
of all obligations of Securities of such Series Guaranteed. Each Guarantor and
Subsidiary Guarantor further agrees that, as between such Guarantor or
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (i) the maturity of the obligations Guaranteed hereby may be
accelerated as provided in Section 6.2 for the purposes of a Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Company of the obligations so Guaranteed, and (ii) in the
event of any declaration of acceleration of those obligations as provided in
Section 6.2, those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors with respect to Securities of a
Series and Subsidiary Guarantors for the purpose of such Guarantee.
(d) Each Guarantor and Subsidiary Guarantor and by its acceptance of a
Security issued hereunder each Holder hereby confirms that it is the intention
of all such parties that the Guarantee by such guarantor set forth in Section
12.1(a) not
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constitute a fraudulent transfer or conveyance for purpose of any Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor or Subsidiary Guarantor hereby irrevocably agree that
the obligations of such guarantor under its Guarantee set forth in Section
12.1(a) shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor or Subsidiary Guarantor in respect of the obligations of such other
Guarantor or Subsidiary Guarantor under its Guarantee or pursuant to the
following paragraph of this Section 12.1(d), result in the obligations of such
guarantor under such Guarantee not constituting such a fraudulent transfer or
conveyance.
Each Guarantor and Subsidiary Guarantor that makes any payment or
distribution under Section 12.1(a) shall be entitled to a contribution from each
other Guarantor and Subsidiary Guarantor equal to its Pro Rata Portion of such
payment or distribution. For purposes of the foregoing, the "Pro Rata Portion"
of any Guarantor or Subsidiary Guarantor means the percentage of the net assets
of all Guarantors and Subsidiary Guarantors held by such guarantor, determined
in accordance with GAAP.
(e) It is the intention of each Guarantor, Subsidiary Guarantor and the
Company that the obligations of each Guarantor and Subsidiary Guarantor
hereunder shall be joint and several and in, but not in excess of, the maximum
amount permitted by applicable law. Accordingly, if the obligations in respect
of the Guarantee would be annulled, avoided or subordinated to the creditors of
any Guarantor or Subsidiary Guarantor by a court of competent jurisdiction in a
proceeding actually pending before such court as a result of a determination
both that such Guarantee was made without fair consideration and, immediately
after giving effect thereto, such Guarantor or Subsidiary Guarantor was
insolvent or unable to pay its debts as they mature or left with an unreasonably
small capital, then the obligations of such Guarantor or Subsidiary Guarantor
under such Guarantee shall be reduced by such court if and to the extent such
reduction would result in the avoidance of such annulment, avoidance or
subordination; provided, however, that any reduction pursuant to this paragraph
shall be made in the smallest amount as is strictly necessary to reach such
result. For purposes of this paragraph, "fair consideration", "insolvency",
"unable to pay its debts as they mature", "unreasonably small capital" and the
effective times of reductions, if any, required by this paragraph shall be
determined in accordance with applicable law.
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(f) In the event that the obligations of a Guarantor or a Subsidiary
Guarantor are reduced pursuant to Section 12.1(d) or (e) above, such reduction
shall be applied proportionately with respect to all Securities (of whatever
Series) Guaranteed under Section 12.1, in accordance with the respective
outstanding principal amount of such Securities so Guaranteed (or, if any
Securities are Discount Securities, the Accreted Value) and being then due upon
the acceleration of the payment of such Securities.
SECTION 12.2 EXECUTION AND DELIVERY OF GUARANTY.
----------------------------------
Each Guarantor and Subsidiary Guarantor shall, by virtue of such
guarantor's execution and delivery of this Indenture or such guarantor's
execution and delivery of an indenture supplement pursuant to Section 12.3
hereof, be deemed to have signed on each Security of each Series issued
hereunder to which the provisions of this Article 12 are applicable the notation
of Guarantee set forth on the form of the Securities attached hereto as Exhibit
-------
A to the same extent as if the signature of such Guarantor or Subsidiary
- -
Guarantor appeared on such Security. The delivery of any Security of that
Series by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Guarantee set forth in Section 12.1 on behalf of
each guarantor. The notation of a Guarantee set forth on any Security shall be
null and void and of no further effect with respect to the guaranty of any
Guarantor or Subsidiary Guarantor which, pursuant to Section 12.4 or Section
12.5 or the provisions of any supplemental indenture relating to such Security
is released from such Guarantee.
SECTION 12.3 FUTURE SUBSIDIARY GUARANTORS.
-----------------------------
Unless otherwise provided in a supplemental indenture relating to the
Securities of any Series, the Company shall cause each Restricted Subsidiary
that, from and after the Issue Date, Guarantees any Indebtedness ("Guaranteed
Indebtedness") of the Company (hereinafter any such Restricted Subsidiary, a
"Future Subsidiary Guarantor") fully and unconditionally to Guarantee the
obligations of the Company with respect to payment and performance of the
Securities of each Series to which this Article 12 is made applicable and the
other obligations of the Company under this Indenture with respect to such
Series to the same extent that such obligations are Guaranteed by the other
Subsidiary Guarantors pursuant to Section 12.1, and, within 60 days of the date
of such occurrence, such Future Subsidiary Guarantor shall execute and deliver
to the Trustee a supplemental indenture making such Future Subsidiary Guarantor
a party to this Indenture for such
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purpose. If the Guaranteed Indebtedness referred to above is (A) pari passu in
right of payment with the Securities, then the Guarantee of such Guaranteed
Indebtedness shall be pari passu in right of payment with, or subordinated in
right of payment to, the Subsidiary Guarantee or (B) subordinated in right of
payment to the Securities, then the Guarantee of such Guaranteed Indebtedness
shall be subordinated in right of payment to the Subsidiary Guarantee at least
to the extent that the Guaranteed Indebtedness is subordinated in right of
payment to the Securities.
SECTION 12.4 RELEASE OF GUARANTORS; CONDUCT OF BUSINESS OF GUARANTORS
--------------------------------------------------------
AFTER RELEASE; RELEASE OF SUBSIDIARY GUARANTORS.
------------------------------------------------
(a) Without any further notice or action being required by any Person, any
Guarantor shall be fully and unconditionally released and discharged from all
obligations under its Guarantee and this Indenture, at such time as all or
substantially all of the assets of such Guarantor shall, directly or indirectly,
consist of Qualified Assets. Thereafter, the Guarantors will conduct their
business such that upon the consummation of any transaction by them, all or
substantially all of their assets will be Qualified Assets.
(b) Subject to compliance with Section 12.3, any Subsidiary Guarantee by a
Subsidiary Guarantor shall be automatically and unconditionally released upon
(i) the sale or other disposition of Capital Stock of such Subsidiary Guarantor,
if, as a result of such sale or disposition, such Subsidiary Guarantor ceases to
be a Subsidiary of the Company, (ii) the consolidation or merger of any such
Subsidiary Guarantor with any Person other than the Company or a Subsidiary of
the Company, if, as a result of such consolidation or merger, such Subsidiary
Guarantor ceases to be Subsidiary of the Company, (iii) a Legal Defeasance or
Covenant Defeasance meeting the requirements of Article 8 (subject to Section
8.6), or (iv) the unconditional and complete release of such Subsidiary
Guarantor from its Guarantee of all Guaranteed Indebtedness other than
Securities.
(c) The releases and discharges set forth in Section 12.4(a) and (b) shall
be effective (i) in the case of releases and discharges effected pursuant to
clause (i) or (ii) of Section 12.4(b) by virtue of a sale, disposition,
consolidation or merger, on the date of consummation thereof, (ii) in the case
of releases and discharges effected pursuant to clause (iii) of Section 12.4(b),
upon the date of Covenant Defeasance or Legal Defeasance, as applicable, and
(iii) in the case of releases and discharges effected pursuant to clause (iv) of
Section 12.4(b), on the date that the release and
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<PAGE>
discharge of the Guarantee of the Guaranteed Indebtedness shall be effective. At
the written request of the Company delivered to the Trustee, together with an
Officer's Certificate that such release is authorized and proper and that all
conditions precedent to such release have been satisfied, the Trustee shall
promptly execute and deliver appropriate instruments in forms reasonably
acceptable to the Company evidencing and further implementing any releases and
discharges pursuant to the foregoing provisions. If the Company desires the
instruments evidencing or implementing any releases or discharges to be executed
prior to the effectiveness of such releases and discharges as set forth above,
such instruments may be made conditional upon the occurrence of the events
necessary to cause the effectiveness of such releases and discharges, as
specified in the first sentence of this Section 12.4(c).
(d) Notwithstanding the foregoing provisions of this Article 12, (i) any
Guarantor or Subsidiary Guarantor whose Guarantee would otherwise be released
pursuant to the provisions of this Section 12.4 may elect, by written notice to
the Trustee, to maintain such Guarantee in effect notwithstanding the event or
events that otherwise would cause the release of such Guarantee (which election
to maintain such Guarantee in effect may be conditional or for a limited period
of time), and (ii) any Subsidiary of the Company which is not a Subsidiary
Guarantor may elect, by written notice to the Trustee, to become a Subsidiary
Guarantor (which election may be conditional or for a limited period of time).
SECTION 12.5 CERTAIN BANKRUPTCY EVENTS.
-------------------------
Each Guarantor and Subsidiary Guarantor hereby covenants and agrees,
to the fullest extent that it may do so under applicable law, that in the event
of the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor or Subsidiary Guarantor, as the case may be, shall not
file (or join in any filing of), or otherwise seek to participate in the filing
of, any motion or request seeking to stay or to prohibit (even temporarily)
execution on the Guarantee and hereby waives and agrees not to take the benefit
of any such stay of execution, whether under Section 362 or 105 of the
Bankruptcy Law or otherwise.
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<PAGE>
ARTICLE 13
MISCELLANEOUS
SECTION 13.1 TRUST INDENTURE ACT CONTROLS.
----------------------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
SECTION 13.2 NOTICES.
-------
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
HMH Properties, Inc.
10400 Fernwood Road
Bethesda, Maryland
Attention: General Counsel
if to the Trustee:
Marine Midland Bank
140 Broadway
12/th/ Floor
New York, New York 10005
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar and,
if any Bearer Securities are outstanding, published in an Authorized Newspaper.
Failure to mail a notice or communication to a Securityholder of any Series or
any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.
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<PAGE>
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 13.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
-------------------------------------------
Securityholders of any Series may communicate pursuant to TIA
(S)312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series or
all Series. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S)312(c).
SECTION 13.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S)314(a)(4)) shall comply with the provisions of TIA
(S)314(e) and shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
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<PAGE>
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 13.6 RULES BY TRUSTEE AND AGENTS.
---------------------------
The Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. Any Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 13.7 LEGAL HOLIDAYS.
--------------
Unless otherwise provided by Board Resolution, Officers' Certificate
or supplemental indenture for a particular Series, a "Legal Holiday" is any day
that is not a Business Day. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
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SECTION 13.8 NO RECOURSE AGAINST OTHERS.
--------------------------
No recourse for the payment of the principal of, premium, if any, or
interest 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 this
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 this Indenture.
Each Holder, by accepting the Securities, waives and releases all such
liability.
SECTION 13.9 COUNTERPARTS.
------------
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 13.10 GOVERNING LAWS.
--------------
THIS INDENTURE AND THE SECURITIES 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 OF SECURITIES OF ANY SERIES HEREBY
IRREVOCABLY 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
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<PAGE>
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 13.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 13.12 SUCCESSORS.
----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 13.13 SEVERABILITY.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.14 TABLE OF CONTENTS, HEADINGS, ETC.
--------------------------------
The Table of Contents, Reconciliation between the TIA, and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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<PAGE>
SECTION 13.15 SECURITIES IN A FOREIGN CURRENCY OR IN ECU.
------------------------------------------
Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are denominated
in a coin or currency other than Dollars (including ECUs), then the principal
amount of Securities of such Series which shall be deemed to be outstanding for
the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For purposes
of this Section 10.15, "Market Exchange Rate" shall mean the noon Dollar buying
rate in New York City for cable transfers of that currency as published by the
Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market
Exchange Rate shall mean the rate of exchange determined by the Commission of
the European Union (or any successor thereto) as published in the Official
Journal of the European Union (such publication or any successor publication,
the "Journal"). If such Market Exchange Rate is not available for any reason
with respect to such currency, the Trustee shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve Bank of New
York or, in the case of ECUs, the rate of exchange as published in the Journal,
as of the most recent available date, or quotations or, in the case of ECUs,
rates of exchange from one or more major banks in The City of New York or in the
country of issue of the currency in question or, in the case of ECUs, in
Luxembourg or such other quotations or, in the case of ECUs, rates of exchange
as the Trustee, upon consultation with the Company, shall deem appropriate. The
provisions of this paragraph shall apply in determining the equivalent principal
amount in respect of Securities of a Series denominated in currency other than
Dollars in connection with any action taken by Holders of Securities pursuant to
the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Company and all Holders.
SECTION 13.16 JUDGMENT CURRENCY.
-----------------
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it
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<PAGE>
is necessary to convert the sum due in respect of the principal of or interest
or other amount on the Securities of any Series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, any recovery pursuant to any
judgment (whether or not entered in accordance with subsection (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to close.
ARTICLE 14
SINKING FUNDS
SECTION 14.1 APPLICABILITY OF ARTICLE.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of the Securities of a Series, except as otherwise permitted
or required by any form of Security of such Series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by
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<PAGE>
the terms of Securities of any Series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 14.2. Each sinking
fund payment shall be applied to the redemption of Securities of any Series as
provided for by the terms of the Securities of such Series.
SECTION 14.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of any Series to be made pursuant to
the terms of such Securities (1) deliver outstanding Securities of such Series
to which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received by the Trustee, together with an Officers'
Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of
the delivery or credit of Securities in lieu of cash payments pursuant to this
Section 14.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such Series for redemption, except upon
receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment, provided, however, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the Company having an unpaid principal amount equal to the
cash payment required to be released to the Company.
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<PAGE>
SECTION 14.3 REDEMPTION OF SECURITIES FOR SINKING FUND.
-----------------------------------------
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 14.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
Very truly yours,
HMH PROPERTIES, INC.
By:
-------------------------------
Name:
Title:
HOST MARRIOTT CORPORATION
By:
-------------------------------
Name:
Title:
HOST MARRIOTT HOSPITALITY, INC.
By:
-------------------------------
Name:
Title:
122
<PAGE>
HMH RIVERS, INC.
By:
-------------------------------
Name:
Title:
MARRIOTT SBM TWO CORPORATION
By:
-------------------------------
Name:
Title:
MARRIOTT PLP CORPORATION
By:
-------------------------------
Name:
Title:
HMC RETIREMENT PROPERTIES, INC.
By:
-------------------------------
Name:
Title:
123
<PAGE>
HMH PENTAGON CORPORATION
By:
-------------------------------
Name:
Title:
HMC SFO, INC.
By:
-------------------------------
Name:
Title:
HMH MARINA, INC.
By:
-------------------------------
Name:
Title:
HOST AIRPORT HOTELS, INC.
By:
-------------------------------
Name:
Title:
124
<PAGE>
HOST OF HOUSTON 1979
By:
-------------------------------
Name:
Title:
HOST OF HOUSTON, LTD.
By:
-------------------------------
Name:
Title:
HOST OF BOSTON, LTD.
By:
-------------------------------
Name:
Title:
MARRIOTT FINANCIAL SERVICES, INC.
By:
-------------------------------
Name:
Title:
125
<PAGE>
HMC CAPITAL RESOURCES CORP.
By:
-------------------------------
Name:
Title:
MARRIOTT SBM ONE CORPORATION
By:
-------------------------------
Name:
Title:
YBG ASSOCIATES LLC
By:
-------------------------------
Name:
Title:
PRM CORPORATION
By:
-------------------------------
Name:
Title:
126
<PAGE>
MARRIOTT PARK RIDGE CORPORATION
By:
-------------------------------
Name:
Title:
127
<PAGE>
MARINE MIDLAND BANK
By:
-------------------------------
Name:
Its:
128
<PAGE>
EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE TO
AMENDED AND RESTATED INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of August 5, 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,
Guarantors and Subsidiary Guarantors.
WHEREAS, the Company, the Guarantors and the Subsidiary Guarantors desire
to create (i) a series of Securities to be issued under the Indenture, as hereby
supplemented, to be known as the 7 7/8% Series A Senior Notes due 2005 and
Guarantees thereof of the Guarantors and Subsidiary Guarantees thereof of the
Subsidiary Guarantors (hereinafter referred to as the "Series A Notes"), and
(ii) a series of Securities to be issued under the Indenture, as hereby
supplemented, to be known as 7 7/8% Series B Senior Notes due 2008 and
Guarantees thereof of the Guarantors and Subsidiary Guarantees thereof of the
Subsidiary Guarantors (hereinafter, the "Series B 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; and
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 First Supplemental
Indenture a valid instrument legally binding on the Company, the Guarantors, the
Subsidiary Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed; and
<PAGE>
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 First 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 A Notes and the Series B Notes
having the terms, in addition to those set forth in the Indenture and this First
Supplemental Indenture, set forth in the form of Series A Note, attached hereto
as Exhibit A, and the form of Series B Note, attached hereto as Exhibit B,
--------- ---------
respectively, each of which is incorporated herein as a part hereof.
Section 1.03. Optional Redemption.
--------------------
The Company will not have the right to redeem any Series A Notes or
Series B Notes prior to August 1, 2002. The Series A Notes and Series B 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 August 1, 2002 with respect to the
Series A Notes and August 1, 2003 with respect to the Series B Notes, 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 August 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 A SERIES B
--------- -----------
YEAR NOTES NOTES
---- --------- -----------
<S> <C> <C>
2002.................. 103.940 %
2003.................. 102.627 % 103.985 %
2004.................. 101.313 % 102.657 %
2005.................. 100.000 % 101.328 %
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 A Notes and Series B Notes will not have the benefit of any
sinking fund.
ARTICLE 2
Section 2.01. Subject to the further provisions of this Article 2, the
covenants set forth in Article 4 of the Indenture shall be applicable to the
Series A Notes and to the Series B Notes.
Section 2.02. Subject to Section 2.03 below, the provisions of Section
4.9 of the Indenture shall be applicable to the Series A Notes and the Series B
Notes only from the Issue Date until (but not including) the Conversion Date.
Subject to Section 2.03 below, the provisions of Section 4.15 of the Indenture
shall be applicable to the Series A Notes and to the Series B Notes only from
and after the Conversion Date.
Section 2.03. (a) The provisions of Sections 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.
ARTICLE 3
Section 3.01. Series A Notes.The provisions of Article 12 of the
--------------
Indenture shall be applicable to the Series A Notes, and the Guarantors and
Subsidiary Guarantors with respect to the Series A Notes shall be as stated in
the definitions of the terms "Guarantors" and "Subsidiary Guarantors" in the
Indenture.
Section 3.02. Series B Notes.The provisions of Article 12 of the
--------------
Indenture shall be applicable to the Series B Notes, and the Guarantors and
Subsidiary Guarantors with respect to the Series B Notes shall be as stated in
the definitions of the terms "Guarantors" and "Subsidiary Guarantors" in the
Indenture.
3
<PAGE>
ARTICLE 4
Section 4.01. 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 4.02. 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 First Supplemental Indenture. This First
Supplemental 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 4.03. 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 be the Company, the Guarantors and the Subsidiary
Guarantors.
Section 4.03. 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 IRREVOCABLY 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
4
<PAGE>
OTHERWISE PROCEED AGAINST THE COMPANY, THE GUARANTORS AND THE SUBSIDIARY
GUARANTORS IN ANY OTHER JURISDICTION.
Section 4.04. The parties may sign any number of copies of this First
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
Section 4.05. All capitalized terms used in this First Supplemental
Indenture which are not otherwise defined herein, shall have the respective
meanings specified in the Indenture, unless the context otherwise requires.
Section 4.06. The Series A 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").
Section 4.07. The Series B 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 DTC.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first written
above.
COMPANY
-------
HMH PROPERTIES, INC.,
By:_________________________
Name:
Title:
GUARANTORS
----------
HOST MARRIOTT CORPORATION
By:_________________________
Name:
Title:
HOST MARRIOTT HOSPITALITY
By:_________________________
Name:
Title:
SUBSIDIARY GUARANTORS
---------------------
HMH RIVERS, INC.
By:_________________________
Name:
Title:
<PAGE>
MARRIOTT SBM TWO CORPORATION
By:_________________________
Name:
Title:
MARRIOTT PLP CORPORATION
By:_________________________
Name:
Title:
HMC RETIREMENT PROPERTIES, INC.
By:_________________________
Name:
Title:
HMH PENTAGON CORPORATION
By:_________________________
Name:
Title:
HMC SFO, INC.
By:_________________________
Name:
Title:
<PAGE>
HMH MARINA, INC.
By:_________________________
Name:
Title:
HOST AIRPORT HOTELS, INC.
By:_________________________
Name:
Title:
HOST OF HOUSTON 1979
By:_________________________
Name:
Title:
HOST OF HOUSTON, LTD.
By:_________________________
Name:
Title:
HOST OF BOSTON, LTD.
By:_________________________
Name:
Title:
<PAGE>
MARRIOTT FINANCIAL SERVICES, INC.
By:_________________________
Name:
Title:
HMC CAPITAL RESOURCES CORP.
By:_________________________
Name:
Title:
MARRIOTT SBM ONE CORPORATION
By:_________________________
Name:
Title:
YBG ASSOCIATES LLC
By:_________________________
Name:
Title:
PRM CORPORATION
By:_________________________
Name:
Title:
<PAGE>
MARRIOTT PARK RIDGE CORPORATION
By:_________________________
Name:
Title:
<PAGE>
MARINE MIDLAND BANK,
as Trustee
By:_________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF 7 7/8% SERIES A SENIOR NOTE
Unless and until it is exchanged in whole or in part for Series A
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.
7 7/8% SERIES A SENIOR NOTE DUE 2005
CUSIP No. 40423QAE7
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 August 1, 2005. This
Security is one of the 7 7/8% Series A Senior Notes due 2005 referred to in such
Indenture (hereinafter referred to 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.
<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.
7 7/8% SERIES A SENIOR NOTE DUE 2005
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 7 7/8% per annum from August 5, 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 7 7/8% 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 September 15, 1998.
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 less 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.
<PAGE>
3. Paying Agent and Registrar.
--------------------------
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 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
August 1, 2002, 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.
<PAGE>
If redeemed during
the 12-month period
commencing August 1, Redemption Price
-------------------- ----------------
2002 . . . . . . . . . 103.940 %
2003 . . . . . . . . . 102.627 %
2004 . . . . . . . . . 101.313 %
2005 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 denominations 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.
<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 Disqualified
Stock,
<PAGE>
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
other wise) 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 Company to the Holders or the
Trustee under the Indenture or this Security will be promptly
<PAGE>
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 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
<PAGE>
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 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).
<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 Medallion Program (SEMP); or (iv) in such other guarantee
program acceptable to the Trustee.
<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
Medallion 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 increase in Principal Amount Signature of
decrease in Principal of this Global authorized officer
Principal Amount Amount Security following of 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>
______________
*** This Schedule should only be added of the Security is issued in global
form.
<PAGE>
EXHIBIT B
FORM OF 7 7/8% SERIES B SENIOR NOTE
Unless and until it is exchanged in whole or in part for Series B Notes in
definitive form, this Series B Note 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.
7 7/8% SERIES B SENIOR NOTE DUE 2008
CUSIP No. 40423QAF4
No. $
HMH Properties, Inc., a Delaware corporation (hereinafter called the
"Company", which term includes any successors under the Indenture hereinafter re
ferred to), for value received, hereby promises to pay to __________, or
registered assigns, the principal sum of $_______________, on August 1, 2008.
This Security is one of the 7 7/8% Series B Notes due 2008 referred to in such
Indenture,
( hereinafter referred to collectively as the "Securities.")
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
_____________
/1/ To be used only if the Security is issued as a Global Security.
<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.
<PAGE>
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.
7 7/8% SERIES B 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 re
ferred to), promises to pay interest on the principal amount of this Security at
the rate of 7 7/8% per annum from August 5, 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 7 7/8% per annum compounded
semi-annually.
The Company will pay interest semi-annually on June 15 and December 15 of
each year (each, an "Interest Payment Date"), commencing December 15, 1998.
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 Certificated Notes 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 less 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.
<PAGE>
3. Paying Agent and Registrar.
--------------------------
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
$1,200,000,000. 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 all the
Capital Stock of certain Subsidiaries of the Company, which pledge is shared
equally and ratably with the Credit Facility, the Existing Senior 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 Securities. The Securities
may be redeemed in whole or from time to time in part at any time on and after
August 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.
<PAGE>
If redeemed during
the 12-month period
commencing August, Redemption Price
------------------- ----------------
2003 . . . . . . . . . 103.985 %
2004 . . . . . . . . . 102.657 %
2005 . . . . . . . . . 101.328 %
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 denominations 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.
<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 Disqualified
Stock,
<PAGE>
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 Company to the Holders or the
Trustee under the Indenture or this Security will be promptly
<PAGE>
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 the 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 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
<PAGE>
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 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).
<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 Medallion Program (SEMP); or (iv) in such other guarantee
program acceptable to the Trustee.
<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 Medallion 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 increase in Principal Amount Signature of
decrease in Principal of this Global authorized officer
Principal Amount Amount Security following of 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>
______________
*** This Schedule should only be added of the Security is issued in global
form.
<PAGE>
EXHIBIT 25.1
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, N.Y. 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
(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)
7 7/8% SERIES A SENIOR NOTES DUE 2005
(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.
-----------------
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C> <C>
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 (March 31, 1998), published
pursuant to law or the requirement of its
supervisory or examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
</TABLE>
* 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 4th day of August, 1998.
MARINE MIDLAND BANK
By: /s/ Anthony R. Bufinsky
--------------------------------------
Anthony R. Bufinsky
Corporate Trust Officer
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT T1A (VII)
<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, [1]
Table of Contents, for
the required disclosure
of estimated burden.
- -----------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS MARCH 31, 1998
This report is required by law; 12 U.S.C. (S)324 (971231)
(State member banks); 12 U.S.C. (S) 1817 (State -----------
nonmember banks); and 12 U.S.C. (S)161 (National banks). (RCRI 9999)
NOTE: The Reports of Condition and Income must be The Reports of Condition and Income are to be prepared in
signed by an authorized officer and the Report of accordance with Federal regulatory authority instructions.
Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and We, the undersigned directors (trustees), attest to the
three directors for State member and National Banks. correctness of this Report of Condition (including the
supporting schedules) and declare that it has been examined by
I, Gerald A. Ronning, Executive VP & Controller us and to the best of our knowledge and belief has been
- ----------------------------------------------- prepared in conformance with the instructions issued by the
Name and Title of Officer Authorized to Sign Report appropriate Federal regulatory authority and is true and
correct.
of the named bank do hereby declare that these
Reports of Condition and Income (including the /s/ Malcolm Burnett
supporting schedules) have been prepared in ---------------------------------------------------------------
conformance with the instructions issued by the Director (Trustee)
appropriate Federal regulatory authority and are
true to the best of my knowledge and believe. /s/ Bernard J. Kennedy
---------------------------------------------------------------
/s/ Gerald A. Ronning Director (Trustee)
- ------------------------------------------------------
Signature of Officer Authorized to Sign Report /s/ Sal H. Alfiero
---------------------------------------------------------------
4/27/98 Director (Trustee)
- ------------------------------------------------------
Date of Signature (b) in hard-copy (paper) form and arrange for another party
to convert the paper report to automated for. That party (if
SUBMISSION OF REPORTS other than EDS) must transmit the bank's computer data file to
EDS
Each Bank must prepare its Reports of Condition and
Income either: To fulfill the signature and attestation requirement for the
Reports of Condition and Income for this report date, attach
(a) in automated formand then file the computer data this signature page to the hard-copy f the completed report
file directly with the banking agencies' collection that the bank places in its files.
agent, Electronic Data System Corporation (EDS), by
modem or computer diskette; or
- -----------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number 0 0 5 8 9
---------
(RCRI 9030)
</TABLE>
<PAGE>
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
March 31, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Thousands
of dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin............................ $ 1,256,485
Interest-bearing balances.................... 2,022,831
Held-to-maturity securities.................. 0
Available-for-sale securities................ 3,703,793
Federal funds sold and securities purchased
under agreements to resell................... 1,758,449
Loans and lease financing receivables:
Loans and leases net of unearned
income....................................... 21,468,541
LESS: Allowance for loan and lease
losses....................................... 404,696
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve............... 21,063,845
Trading assets............................... 885,006
Premises and fixed assets (including
capitalized leases).......................... 215,178
Other real estate owned......................... 13,130
Investments in unconsolidated
subsidiaries and associated companies........... 0
Customers' liability to this bank on
acceptances outstanding......................... 28,219
Intangible assets............................... 471,296
Other assets.................................... 501,251
Total assets.................................... 31,919,483
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices....................... 20,966,355
Noninterest-bearing....................... 3,689,470
Interest-bearing.......................... 17,276,885
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs....................... 4,101,409
Noninterest-bearing....................... 0
Interest-bearing.......................... 4,101,409
Federal funds purchased and securities sold
under agreements to repurchase............ 814,706
Demand notes issued to the U.S. Treasury 309,243
Trading Liabilities.......................... 143,683
Other borrowed money:
With a remaining maturity of one year
or less................................... 1,878,712
With a remaining maturity of more than
one year through three years.............. 70,086
With a remaining maturity of more than
three years............................... 54,547
Bank's liability on acceptances
executed and outstanding..................... 28,219
Subordinated notes and debentures............ 497,837
Other liabilities............................ 822,464
Total liabilities............................ 29,687,261
EQUITY CAPITAL
Perpetual preferred stock and related
surplus...................................... 0
Common Stock................................. 205,000
Surplus...................................... 1,984,728
Undivided profits and capital reserves....... 19,101
Net unrealized holding gains (losses)
on available-for-sale securities............. 23,393
Cumulative foreign currency translation
adjustments.................................. 0
Total equity capital......................... 2,232,222
Total liabilities, limited-life
preferred stock, and equity capital.......... 31,919,483
</TABLE>
<PAGE>
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, N.Y. 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
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10400 Fernwood Road
Bethesda, Maryland
(301) 380-9000 20817
(Address of principal executive offices) (Zip Code)
7 7/8% SERIES B 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.
-----------------
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C> <C>
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 (March 31, 1998), published
pursuant to law or the requirement of its
supervisory or examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
</TABLE>
* 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 4th day of August, 1998.
MARINE MIDLAND BANK
By: /s/ Anthony R. Bufinsky
--------------------------------------
Anthony R. Bufinsky
Corporate Trust Officer
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT T1A (VII)
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, [1]
Table of Contents, for
the required disclosure
of estimated burden.
- ------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS MARCH 31, 1998
This report is required by law; 12 U.S.C. (S)324 (State (971231)
member banks); 12 U.S.C. (S) 1817 (State nonmember -----------
banks); and 12 U.S.C. (S)161 (National banks). (RCRI 9999)
NOTE: The Reports of Condition and Income must be The Reports of Condition and Income are to be prepared in
signed by an authorized officer and the Report of accordance with Federal regulatory authority instructions.
Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and We, the undersigned directors (trustees), attest to the
three directors for State member and National Banks. correctness of this Report of Condition (including the
I, Gerald A. Ronning, Executive VP & Controller supporting schedules) and declare that it has been examined by
--------------------------------------------- us and to the best of our knowledge and belief has been
Name and Title of Officer Authorized to Sign Report prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true and
of the named bank do hereby declare that these correct.
Reports of Condition and Income (including the
supporting schedules) have been prepared in /s/ Malcolm Burnett
conformance with the instructions issued by the ---------------------------------------------------------------
appropriate Federal regulatory authority and are Director (Trustee)
true to the best of my knowledge and believe.
/s/ Bernard J. Kennedy
/s/ Gerald A. Ronning ---------------------------------------------------------------
- ------------------------------------------------------ Director (Trustee)
Signature of Officer Authorized to Sign Report
/s/ Sal H. Alfiero
4/27/98 ---------------------------------------------------------------
- ------------------------------------------------------ Director (Trustee)
Date of Signature
SUBMISSION OF REPORTS (b) in hard-copy (paper) form and arrange for another party
to convert the paper report to automated for. That party (if
Each Bank must prepare its Reports of Condition and other than EDS) must transmit the bank's computer data file to
Income either: EDS
(a) in automated formand then file the computer data To fulfill the signature and attestation requirement for the
file directly with the banking agencies' collection Reports of Condition and Income for this report date, attach
agent, Electronic Data System Corporation (EDS), by this signature page to the hard-copy f the completed report
modem or computer diskette; or that the bank places in its files.
- ------------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number 0 0 5 8 9
-------------
(RCRI 9030)
</TABLE>
<PAGE>
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
March 31, 1998
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<CAPTION>
ASSETS
<S> <C>
Thousands
of dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin............................ $ 1,256,485
Interest-bearing balances.................... 2,022,831
Held-to-maturity securities.................. 0
Available-for-sale securities................ 3,703,793
Federal funds sold and securities purchased
under agreements to resell................... 1,758,449
Loans and lease financing receivables:
Loans and leases net of unearned
income....................................... 21,468,541
LESS: Allowance for loan and lease
losses....................................... 404,696
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve............... 21,063,845
Trading assets............................... 885,006
Premises and fixed assets (including
capitalized leases).......................... 215,178
Other real estate owned......................... 13,130
Investments in unconsolidated
subsidiaries and associated companies........... 0
Customers' liability to this bank on
acceptances outstanding......................... 28,219
Intangible assets............................... 471,296
Other assets.................................... 501,251
Total assets.................................... 31,919,483
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices....................... 20,966,355
Noninterest-bearing....................... 3,689,470
Interest-bearing.......................... 17,276,885
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs....................... 4,101,409
Noninterest-bearing....................... 0
Interest-bearing.......................... 4,101,409
Federal funds purchased and securities sold
under agreements to repurchase............ 814,706
Demand notes issued to the U.S. Treasury 309,243
Trading Liabilities.......................... 143,683
Other borrowed money:
With a remaining maturity of one year
or less................................... 1,878,712
With a remaining maturity of more than
one year through three years.............. 70,086
With a remaining maturity of more than
three years............................... 54,547
Bank's liability on acceptances
executed and outstanding..................... 28,219
Subordinated notes and debentures............ 497,837
Other liabilities............................ 822,464
Total liabilities............................ 29,687,261
EQUITY CAPITAL
Perpetual preferred stock and related
surplus...................................... 0
Common Stock................................. 205,000
Surplus...................................... 1,984,728
Undivided profits and capital reserves....... 19,101
Net unrealized holding gains (losses)
on available-for-sale securities............. 23,393
Cumulative foreign currency translation
adjustments.................................. 0
Total equity capital......................... 2,232,222
Total liabilities, limited-life
preferred stock, and equity capital.......... 31,919,483
</TABLE>
