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
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BT ALEX. BROWN INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXXX, XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
HMH Properties, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ"),
BT Xxxx. Xxxxx Incorporated ("BT"), Bear, Xxxxxxx & Co. Inc., Xxxxxxx, Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and NationsBanc
Xxxxxxxxxx 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
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 Xxxxxxxx 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
Xxxxxx & Xxxxxxx at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 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 Xxxxx 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
13
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
14
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
15
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
16
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
17
(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
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
19
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
20
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
21
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
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 Xxxxx'x 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 Xxxxxx & Xxxxxxx ("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
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
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 Xxxxxxxxxxx X. Xxxxxxxx, Senior Vice President and General Counsel of
Host Xxxxxxxx, 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
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
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, Xxxxxx & Xxxxxxx and Xxxxxxxxxxx X. Xxxxxxxx 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
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 Xxxxxxx, Arps, Slate,
Xxxxxxx & Xxxx LLP ("Xxxxxxx Xxxx"), 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 Xxxxxx Xxxxxxxx, 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) Xxxxxxx Xxxx 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
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
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
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
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 00000
Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxxxx with
a copy to Xxxxxx & Xxxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx X. Xxxxxxxxx, Esq., and (b) if to any
Underwriter, to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, and to BT
Xxxx. Xxxxx Incorporated, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department with a copy to Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxx X. Xxxxxxx, 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
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:
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:
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:
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:
MARRIOTT PARK RIDGE CORPORATION
By:
-----------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
-----------------------------
Name:
Title:
BT ALEX. BROWN INCORPORATED
By:
-----------------------------
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By:
-----------------------------
Name:
Title:
XXXXXXX, XXXXX & CO.
By:
-----------------------------
Name:
Title:
XXXXXXX LYNCH, XXXXXX, XXXXXX
& XXXXX INCORPORATED
By:
-----------------------------
Name:
Title:
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
By:
-----------------------------
Name:
Title:
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
SCHEDULE B
Principal Amount Principal Amount
of Series A Notes of Series B Notes
----------------- -----------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation $226,500,000 $543,600,000
BT Xxxx. Xxxxx Incorporated 176,000,000 422,400,000
Bear, Xxxxxxx & Co. Inc. 24,375,000 58,500,000
Xxxxxxx, Xxxxx & Co. 24,375,000 58,500,000
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx
& Xxxxx Incorporated 24,375,000 58,500,000
NationsBanc Xxxxxxxxxx
Securities LLC 24,375,000 58,500,000
------------ --------------
Total $500,000,000 $1,200,000,000
============ ==============
