Exhibit 6 to
Schedule 13D
CLOSING AGREEMENT
CLOSING AGREEMENT (the "Agreement"), dated as of December 30, 1998
between HOST MARRIOTT CORPORATION, a Maryland corporation ("HMC") (as
successor by merger to Host Marriott Corporation, a Delaware
corporation), HOST MARRIOTT, L.P. (the "Operating Partnership") and the
CONTRIBUTORS (as defined below).
Preliminary Statement
A. HMC, the Operating Partnership and the contributors named
therein (collectively, the "Contributors")have entered into that certain
Contribution Agreement dated as of April 16, 1998 (as the same has been
amended from time to time, the "Contribution Agreement"). Capitalized
terms used herein without definition shall have the respective meanings
set forth in the Contribution Agreement.
B. The Closing under the Contribution Agreement is occurring
on the date of this Agreement.
C. HMC, the Operating Partnership and Contributors desire to
set forth their agreement with respect to the adjustments to the Exchange
Amount under the Contribution Agreement and certain other matters to
occur on or after the date of this Agreement.
Agreement
Accordingly, the parties hereto agree as follows:
1. Exchange Amount. The Exchange Amount, payable by HMC
Parties pursuant to Section 2.1 of the Contribution Agreement, after
application of all adjustments and credits set forth in the Contribution
Agreement, is $1,741,731,329. The Adjustments to the Exchange Amount
have been calculated by HMC Parties and Contributors as set forth on the
Closing Statement attached to this Agreement as Exhibit A (the "Closing
Statement").
2. Adjustments and Credits. (a) The Adjustments set forth
on the Closing Statement shall be subject to a final calculation in
accordance with Section 12.6 of the Contribution Agreement.
(b) The Contributors agree that the 1998 real estate tax
prorations set forth in the Closing Statement with respect to Swissotel
Atlanta, Four Seasons Atlanta and Grand Hyatt Atlanta are based on the
tax bills computed using the 1997 assessed values and 1997 tax rates.
Notwithstanding anything to the contrary contained in the Contribution
Agreement, within 10 business days of the delivery by the Operating
Partnership to the Contributors of any supplemental, revised or final
1998 tax bills with respect to those properties that results in
additional 1998 taxes being due, the relevant Contributors shall pay to
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the Operating Partnership the amount of such taxes (including any
interest and penalties thereon, but excluding interest and penalties
which would have not accrued had the Operating Partnership promptly given
the relevant Contributors copies of any supplemental, revised or final
1998 tax bills received after the Closing) and the Operating Partnership
shall pay such amount directly to the applicable taxing authorities. HMC
and the Operating Partnership shall promptly provide copies of all tax
bills and/or correspondence received by them or their affiliates after
the Closing relating to 1998 real estate taxes. Any refunds received by
HMC, the Operating Partnership or any affiliate of HMC and/or the
Operating Partnership with respect to 1998 taxes shall belong solely to
the relevant Contributors and shall be promptly paid to such Contributors
upon receipt.
3. Designations by Contributors; Delivery of Crestline
Shares and OP Units. (a) Contributors hereby designate the Persons set
forth on Schedule 7 to the Closing Statement to receive the Units and
SLSC common stock to be issued or payable by the HMC Parties at Closing.
(b) In order to effect the delivery of the SLSC common stock
due at the Closing, the Operating Partnership has delivered to Crestline
Capital Corporation (for re-delivery to The Bank of New York, as transfer
agent), stock certificate no. 5 covering a total of 1,400,000 shares of
Crestline Capital Corporation common stock and an irrevocable stock power
with respect thereto, thereby transferring such common stock to the
designees set forth on Schedule 7.
(c) The Contributors acknowledge that the Operating
Partnership is delivering 43,871,163 OP Units due at the Closing by
executing and delivering the Second Amended and Restated Agreement of
Limited Partnership of Host Marriott, L.P. dated as of December 30, 1998
(the "OP Agreement"). Upon determination of the number of additional OP
Units due under Section 2.1(b)(iii) of the Contribution Agreement, the
Operating Partnership shall execute and deliver an amendment to the OP
Agreement evidencing the issuance to the Persons designated on Schedule 7
attached to the Closing Statement of such additional OP Units.
4. Wiring Instructions. The Cash Amount and portion of the
Non-SLSC Amount to be paid to the Contributors at Closing in the
aggregate amount of $114,981,670 as shown on the Closing Statement shall
be made by wire transfer of immediately available funds to the wiring
instructions set forth on Schedule 8 to the Closing Statement. Execution
and delivery of this Agreement by the Contributors shall constitute an
acknowledgment of the receipt of such funds.
5. Swissotel 1% Interest. Pursuant to Section 2 of the
Second Amendment to the Contribution Agreement dated as of May 18, 1998,
the Swissotel Conversion has been made and the Swissotel Consent has been
obtained. Therefore, among other things, only 99% of the membership
interests in BRE/Swiss L.L.C. are being contributed by the Contributors
pursuant to the Contribution Agreement and the Exchange Amount has been
reduced in accordance with such Second Amendment to reflect the 1%
membership interest as shown on the Closing Statement. Such 1%
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membership interest is being conveyed directly to the Operating
Partnership by Swissotel Holding, Inc. for a cash purchase price pursuant
to a separate agreement.
6. Exchange Amount Allocation. Pursuant to Section 2.1(e) of
the Contribution Agreement, the Exchange Amount has been allocated among
the Property as set forth on Schedule 2.1(e) to the Contribution
Agreement. The parties hereto further agree that the Exchange Amount
shall be further allocated to the interests in Land, Improvements,
Personal Property, Mortgage Loans and Management Interest by amending
Schedule 2.1(e) by deleting it in its entirety and substituting in its
place Schedule 2.1(e) attached hereto. The Cash Amount, Units and other
consideration payable pursuant to the Contribution Agreement shall be
allocated among the Contributors as set forth on Schedule 7 to the
Closing Statement. The Cash Amount and a portion of the Non-SLSC Amount
to be received by the Contributors at Closing shall be first allocated to
capital expenditures that qualify as "pre-formation expenditures" as set
forth in Regulation 1.707-4(d) promulgated under the Code. Contributors
and the Operating Partnership agree to file all federal, state and local
tax returns consistent with the allocations set forth in this Paragraph.
7. RTZ Holdings and BRE/Ritz Boston, LLC Assignments. (a)
Pursuant to that certain Letter Agreement dated as of December 22, 1998
among Operating Partnership, HMC and the Contributors, RTZ Holdings Inc.
("RTZ") was designated as a Contributor under the Contribution Agreement.
RTZ is hereby removed as a Contributor under the Contribution Agreement.
In addition to the contributions set forth in the Contribution Agreement,
the parties hereto acknowledge and agree that RTZ Management Corp. shall
contribute to SLCS all of its right, title and interest in the common
stock of RTZ, and, in connection therewith, shall execute and deliver a
stock purchase agreement and stock power at the Closing, in forms to be
agreed upon.
(b) In addition to the other transactions under the
Contribution Agreement, BRE/Ritz Boston, LLC ("BRE/Ritz") shall execute
and deliver to HMC Ritz Management LLC at Closing that certain Assignment
and Assumption of Option Agreement dated as of the date hereof between
BRE/Ritz and HMC RTZ Management LLC.
8. Amendment of Schedules. Schedule 4.9(b) to the
Contribution Agreement is hereby deleted and replaced with Schedule
4.9(b) attached hereto.
9. Amendment to Contribution Agreement Provisions. (a)
Section 13.13(c) to the Contribution Agreement is hereby amended by
deleting the following parenthetical clause in its entirety both times
such clause appears in said subsection: "(to the extent such restrictions
are identified on Schedule 4.9(a))" and replacing it with the following
parenthetical: "(including, without limitation, restrictions contained in
an agreement, document or plan identified on Schedule 4.9(b))".
(b) Section 13.13(c) to the Contribution Agreement is hereby
amended by deleting the following parenthetical clause in its entirety:
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"(provided that this provision shall not be deemed to be violated by
reason of acquisitions of up to a cumulative total (for all Contributors)
of 500,000 Voting Securities of all HMC Parties in excess of the
preceding limits)" and substituting therefor the following parenthetical
in its place: "(provided that this provision shall not be deemed to be
violated by reason of acquisitions of up to a cumulative total (for all
Contributors) of 500,000 Voting Securities of all HMC Parties in excess
of the preceding limits so long as, but only so long as, such
acquisitions are made in compliance with clause (ii) below)".
10. Transfer Tax Filings and Payments. (a) Pursuant to a
Closing Instruction Letter with Commonwealth Title Insurance Company,
$2,530,053 is being delivered to Commonwealth Title Insurance Company
with instructions to pay the state and local transfer and sales taxes due
with respect to Closing in the jurisdictions of Georgia, Pennsylvania,
Virginia, Massachusetts and California (or the political subdivisions
thereof).
(b) As set forth on Schedule 6 to the Closing Statement, the
Contributors have received a credit in the amount of $2,549,682 on
account of New York City Real Property Transfer Taxes and New York State
Real Estate Transfer Taxes. Promptly after the Closing, the BREP II
Partnerships (as defined in the Second Amendment to Contribution
Agreement) will cause Blackstone Real Estate Associates L.P. to pay (I)
to the New York City Department of Finance, $4,489,230.59 on account of
New York City Real Property Transfer Tax and (ii) to the New York State
Department of Taxation and Finance, $684,073.23 on account of New York
State Real Estate Transfer Tax, each due in connection with the Closing.
The Operating Partnership acknowledges that the credit received by the
Contributors on account of the New York transfer taxes is $36,969 less
than one-half of the transfer taxes due and the Contributors will
therefore receive a credit in the amount of $36,969 for such amount in
connection with the final calculation of the Adjustments, unless
otherwise agreed between the parties.
(c) In accordance with Section 5.2 of the Contribution
Agreement, the applicable Contributors and the Operating Partnership
shall remain responsible and shall promptly pay one-half of any
additional real estate transfer and recordation taxes and personal
property sales and use taxes, and any interest or penalties thereon, in
each case payable with respect to the transactions consummated at the
Closing under the Closing Agreement.
11. Swiss Hotel New York Letter of Credit. Reference is
hereby made to that certain Letter of Credit Agreement dated as of
December 31, 1997 (the "LC Agreement") between BRE/Swiss L.L.C. ("BRE")
and New York Trades Council & Hotel Associates of New York City Pension
Fund (the "Fund"), pursuant to which BRE delivered to the Fund a letter
of credit, L/C No. P-275612, issued by The Chase Manhattan Bank in the
amount of $415,012.30 (the "BRE LC"). HMC and the Operating Partnership
acknowledge that they have received from NationsBank a letter of credit
in the amount of $415,012.30 (the "Host LC") for the benefit of the Fund.
HMC and the Operating Partnership agree that, within 15 days of the date
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hereof, they shall (i) deliver the Host LC to the Fund under the Letter
of Credit Agreement in substitution for the BRE LC, (ii) accept
possession of the BRE LC from the Fund, and (iii) deliver the BRE LC to
Blackstone Real Estate Advisors L.P. ("Blackstone"). HMC and the
Operating Partnership further agree that they shall promptly reimburse
Blackstone for all costs and expenses (including reimbursement
obligations) Blackstone may incur as a result of a drawing under the BRE
LC until such time as the BRE LC is returned to Blackstone.
12. FF&E Reserves. Pursuant to Section 12.1(b) of the
Contribution Agreement, the Operating Partnership shall be entitled to
retain the amount of all FF&E Reserves at Closing without any adjustment
to the Exchange Amount. The relevant Contributors shall, following the
Closing, execute such instruments as the Operating Partnership shall
reasonably request to confirm that as of the Closing the Contributors
have no further interest in the FF&E Reserves, provided that such
instruments do not create any additional cost or liability to the
Contributors that is not paid by the Operating Partnership.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such State.
14. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which may be an original or telecopy, and
all of which together shall constitute a single document. It shall not
be necessary that any counterpart be signed by all of the parties hereto.
16. Amendments. This Agreement may be amended, supplemented
or modified only by a writing signed by all of the parties hereto.
17. Survival of Obligations. Notwithstanding anything to the
contrary contained in the Contribution Agreement, the obligations of the
parties under this Agreement shall survive the Closing.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
BRE/XXXXXX WAY L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/LAFAYETTE INC.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/SWISS MANAGEMENT L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/HT L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/CAMBRIDGE L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
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BRE/RESTON L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/GRAND L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/XXXXXX PARTNERS L.P.
By: BRE/Xxxxxx L.L.C., general partner
By: /s/ Xxxxxxx X. Xxxxx
_______________________
Xxxxxxx X. Xxxxx
Vice President
BRE/XXXXXX L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
OLS HOTEL PARTNERS L.P.
By: BRE/Xxxxx Hotel Inc.
By: /s/ Xxxxxxx X. Xxxxx
_______________________
Xxxxxxx X. Xxxxx
Vice President
RTZ MANAGEMENT CORP.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BRE/RITZ BOSTON, LLC
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
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BRE/BURLINGAME II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE PARTNERS I L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE PARTNERS TWO L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
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BLACKSTONE REAL ESTATE PARTNERS THREE L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE PARTNERS IV L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE RE CAPITAL PARTNERS L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE RE CAPITAL PARTNERS II L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE RE OFFSHORE CAPITAL PARTNERS L.P.
By: Blackstone Real Estate Associates L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
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BLACKSTONE REAL ESTATE HOLDINGS L.P.
By: BREA L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE PARTNERS II L.P.
By: Blackstone Real Estate Associates II L.P.
By: Blackstone Real Estate Management
Associates II L.P.
By: BREA II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE PARTNERS II.TE.1 L.P.
By: Blackstone Real Estate Associates II L.P.
By: Blackstone Real Estate Management
Associates II L.P.
By: BREA II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
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BLACKSTONE REAL ESTATE PARTNERS II.TE.2 L.P.
By: Blackstone Real Estate Associates II L.P.
By: Blackstone Real Estate Management
Associates II L.P.
By: BREA II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE PARTNERS II.TE.3
L.P.
By: Blackstone Real Estate Associates II L.P.
By: Blackstone Real Estate Management
Associates II L.P.
By: BREA II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
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BLACKSTONE REAL ESTATE PARTNERS II.TE.4
L.P.
By: Blackstone Real Estate Associates II L.P.
By: Blackstone Real Estate Management
Associates II L.P.
By: BREA II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
BLACKSTONE REAL ESTATE HOLDINGS II L.P.
By: Blackstone Real Estate Management
Associates II L.P.
By: BREA II L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
______________________
Xxxxxxx X. Xxxxx
Vice President
RTZ HOLDINGS INC.
By: /s/ Xxxxxxx X. Xxxxx
_____________________
Xxxxxxx X. Xxxxx
Vice President
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HT-BURLINGAME LIMITED PARTNERSHIP
By: HT-Burlingame, Inc.
By: /s/ Xxxxx Xxxxxxxx
_______________________
Name: Xxxxx Xxxxxxxx
Title: Vice President
H-OP, LLC
By: /s/ Xxxxx Xxxxxxxx
_______________________
Name: Xxxxx Xxxxxxxx
Title: Vice President
HE-HM, LLC
By: /s/ Xxxxx Xxxxxxxx
_______________________
Name: Xxxxx Xxxxxxxx
Title: Vice President
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HOST MARRIOTT CORPORATION
By: /s/ Xxxxx Xxxxxxx
_______________________
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
HOST MARRIOTT, L.P.
By: Host Marriott Corporation
By: /s/ Xxxxx Xxxxxxx
_______________________
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
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Indemnification with respect to Lender Releases. HMC, the Operating
Partnership and the Contributors acknowledge that, as of the Closing, HMC
and the Operating Partnership had not obtained releases (the "Required
Releases") from the lenders of the Third Party Loans for the Four Seasons
Philadelphia hotel (the "Specified Third Party Loans") as required
pursuant to Section 7.2(h) of the Contribution Agreement. In accordance
with Section 7.2(h) of the Contribution Agreement, the Operating
Partnership hereby agrees that it shall indemnify and hold harmless the
Contributors and their affiliates, partners, members, officers, directors
and employees (the "Indemnitees") from any and all liability, loss, cost
and expense (including reasonable attorneys fees) that the Indemnitees
may incur in connection with the Specified Third Party Loans from and
after the date hereof until such time as the required releases are
obtained.
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