Exhibit 1.1
5,200,000 Shares
HOST MARRIOTT CORPORATION
(a Maryland corporation)
10% Class C Cumulative Redeemable Preferred Stock
UNDERWRITING AGREEMENT
March 22, 2001
March 22, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Deutsche Banc Alex. Xxxxx Inc.
Prudential Securities Incorporated
UBS Warburg LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Host Marriott Corporation, a Maryland corporation (the "Company"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") 5,200,000 shares of its 10% Class C Cumulative Redeemable
Preferred Stock, par value $.01 per share (the "Firm Shares"). The Company also
proposes to issue and sell to the several Underwriters not more than an
additional 780,000 shares of its 10% Class C Cumulative Redeemable
Preferred Stock, par value $.01 per share (the "Additional Shares"), if and to
the extent that you, as Managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
preferred stock granted to the Underwriters in Section 2 hereof. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"Shares", and the Company's 10% Class C Cumulative Redeemable Preferred
Stock, par value $.01 per share, is hereinafter sometimes referred to as the
"Class C Preferred Stock".
The terms of the Shares will be set forth in articles supplementary (the
"Articles Supplementary") to be filed by the Company with the Maryland State
Department of Assessments and Taxation (the "SDAT"). The Company intends to
contribute or otherwise transfer the net proceeds from the sale of the Shares to
Host Marriott, L.P., a Delaware limited partnership (the "Operating
Partnership"), in exchange for Class C Preferred Units (the "Preferred Units")
in the Operating Partnership, the economic terms of which will be substantially
identical to those of the Class C Preferred Stock. The terms of the Units will
be set forth in one or more amendments (individually, an "Amendment" and,
collectively, the "Amendments") to the Operating Partnership's limited
partnership agreement, and the Company, in its capacity as general partner of
the Operating Partnership (the "General Partner"), will enter into an Amendment
each time that the Company issues Shares. The Company will list the Shares on
the New York Stock Exchange (the "NYSE").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 333-67907),
including a prospectus, relating to, among other things, the Shares. The
registration statement as amended at the time it became effective, including the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "Securities Act"), and the documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act at the
time of such effectiveness, is hereinafter referred to as the "Registration
Statement"; and the related prospectus dated December 30, 1998 (the "Base
Prospectus") and prospectus supplement relating to the Shares (the "Prospectus
Supplement"), each in the form first used to confirm sales of Shares, together
with the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act at the date of
the Prospectus Supplement, are hereinafter referred to, collectively, as the
"Prospectus". If the Company has filed an abbreviated registration statement to
register additional shares of Class C Preferred Stock pursuant to Rule 462(b)
under the Securities Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462 Registration Statement. As used in this Agreement, all references
to any "preliminary prospectus" shall mean, collectively, the Base Prospectus,
any preliminary prospectus supplement used in connection with the offering of
the Shares and the documents incorporated or deemed to be incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act. Any
references in this Agreement to the date of the Prospectus shall be deemed to
mean the date of the Prospectus Supplement.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described," "set forth" or
"stated" in the Registration Statement, the Prospectus or any preliminary
prospectus, and all other references of like import, shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated or deemed to be incorporated by reference in the Registration
Statement, the Prospectus or such preliminary prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement, the Prospectus or any preliminary prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date of this
Agreement which is deemed to be incorporated by reference in the Registration
Statement, the Prospectus or such preliminary prospectus, as the case may be.
As used herein, (i) the term "Credit Agreement" means the Amended and
Restated Credit Agreement dated as of August 5, 1998 among the Company, as
successor by merger to Host Marriott Corporation, a Delaware corporation, the
Operating Partnership, the lenders party thereto, Xxxxx Fargo Bank, National
Association, The Bank of Nova Scotia and Credit Lyonnais New York Branch, as co-
arrangers, and Bankers Trust Company, as arranger and administrative agent, as
amended, together with all promissory notes, guarantees, guaranty agreements and
pledge or other security agreements entered into by the Company, the Operating
Partnership or any of their respective subsidiaries in connection with any of
the foregoing, in each case as the same may have been or may be amended or
supplemented from time to time; (ii) the term "Senior Note Documents" means,
collectively, the 7 7/8% Series A Senior Notes due 2005, the 7 7/8% Series B
Senior Notes due 2008, the 8.45% Series C Senior Notes due 2008 and the 8 3/8%
Series E Senior Notes due 2006 of the Operating Partnership, the Amended and
Restated Indenture dated as of August 5, 1998 among the Operating Partnership,
as successor by merger to HMH Properties, Inc., a Delaware corporation, the
guarantors and subsidiary guarantors named therein, and Marine Midland Bank, as
trustee, pursuant to which the foregoing notes were issued, and all guarantees,
guaranty agreements and pledge or other security agreements entered into by the
Company, the Operating Partnership or any of their respective subsidiaries in
connection with any of the foregoing, in each case as the same may have been or
may be amended or supplemented from time to time; and (iii) all references to
any subsidiary or
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subsidiaries of the Company shall be deemed to include, without limitation, the
Operating Partnership and the Non-Controlled Subsidiaries (as defined below).
1. Representations and Warranties. The Company and the Operating
Partnership, jointly and severally, represent and warrant to and agree with each
of the Underwriters that:
(a) The Registration Statement has become effective; 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.
(b) (i) Each document filed or to be filed pursuant to the Exchange
Act and incorporated or deemed to be incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3 under the Securities Act
complied or will comply, as the case may be, when so filed in all material
respects with the requirements of the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a 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
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Maryland, has
the corporate power and authority to own and lease its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly organized, is validly
existing as a corporation, limited or general partnership or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its organization, has power and authority to own and
lease its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole; all of the issued and outstanding capital
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stock, partnership interests, limited liability company interests or other
ownership interests, as the case may be (collectively, "Ownership
Interests"), of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and (except for general partnership
interests) non-assessable; approximately 82% of the outstanding partnership
interests in the Operating Partnership are owned directly by the Company
and all of the Ownership Interests owned by the Company in each of the
Company's other subsidiaries are owned directly or indirectly by the
Company, in each case free and clear of all liens, encumbrances, claims or
equities except for liens created by the Pledge Agreement dated as of
August 5, 1998, as amended (the "Pledge Agreement") entered into by the
Company and certain of its subsidiaries in favor of Bankers Trust Company,
as collateral agent; the Company is the sole general partner of the
Operating Partnership and owns, directly, all of the outstanding general
partnership interests in the Operating Partnership.
(e) This Agreement has been duly authorized, executed and delivered by
the Company and the Operating Partnership.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus; and the
outstanding shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), the Company's Class A Cumulative Redeemable Preferred
Stock, par value $.01 per share (the "Class A Preferred Stock"), and the
Company's Class B Cumulative Preferred Stock, par value $.01 per share (the
"Class B Preferred Stock"), have been duly authorized and validly issued
and are fully paid and non-assessable and none of such shares was issued in
violation of any preemptive or similar rights.
(g) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement against payment of
the consideration specified in this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of the Shares will not be
subject to any preemptive or similar rights.
(h) The Amendments have been duly authorized by the Company in its
capacity as General Partner and, on the Closing Date and any Option Closing
Date (as such terms are defined below), an Amendment will have been duly
executed and delivered by the General Partner on behalf of the Operating
Partnership and will constitute a valid and binding agreement of the
Operating Partnership, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. The
Preferred Units have been duly authorized and, when issued and delivered by
the Operating Partnership to the Company in exchange for the Company's
contribution to the Operating Partnership of the net proceeds from the sale
of the Shares, will be validly issued, fully paid and non-assessable
limited partnership interests in the Operating Partnership, and the
issuance of the Preferred Units will not be subject to any preemptive or
similar rights.
(i) The execution and delivery by the Company and the Operating
Partnership of, and the performance by the Company and the Operating
Partnership of their
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respective obligations under, this Agreement (including, without
limitation, the issuance and sale of the Shares to the Underwriters and the
issuance and sale of the Preferred Units to the Company) will not (A)
result in a violation of any provision of the charter or bylaws of the
Company or the limited partnership agreement or certificate of limited
partnership of the Operating Partnership, (B) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, (C) result in a violation of any law,
statute, rule or regulation which is applicable to the Company or any of
its subsidiaries or (D) result in a violation of any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company or any of its subsidiaries; and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company or the Operating
Partnership of their respective obligations under this Agreement, except
(x) such as may be required by the securities or Blue Sky laws of the
various states and any foreign jurisdictions in connection with the offer
and sale of the Shares, (y) such as have been obtained under the Securities
Act and are in full force and effect and (z) such as are required under the
Exchange Act in connection with the listing of the Shares on the New York
Stock Exchange, and except for the filing of the Articles Supplementary
with the SDAT (which filing will be duly made prior to the Closing Date).
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company and the Operating Partnership, threatened to which
the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each preliminary prospectus filed pursuant to Rule 424 under the
Securities Act complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(m) Neither the Company nor the Operating Partnership is and, after
giving effect to the offering and sale of the Shares, the issuance and sale
of the Preferred Units and the application of the proceeds thereof as
described in the Prospectus, neither the Company nor the Operating
Partnership will be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
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(n) The Company and its subsidiaries and, to the knowledge of the
Company and the Operating Partnership in the case of properties leased by
the Company or any of its subsidiaries as lessors, the lessees of such
properties (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(p) There are no contracts, agreements or understandings between the
Company or any of its subsidiaries, on the one hand, and any person, on the
other hand, granting such person the right (i) to require the Company or
any of its subsidiaries to file a registration statement under the
Securities Act with respect to any securities of the Company or any of its
subsidiaries, except for the Registration Rights Agreement dated as of
December 30, 1998 among the Company and those entities specified on
Schedule 1 to the Contribution Agreement dated as of April 16, 1999 or (ii)
to require the Company or any of its subsidiaries to include such
securities with the Shares registered pursuant to the Registration
Statement or in the offering contemplated by the Prospectus.
(q) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
(r) The Company and its subsidiaries have good and marketable title in
fee simple to all land underlying the Company's hotel properties described
in the Prospectus as owned by them and good and marketable title to all
improvements thereon and to all personal property owned by them, in each
case which is material to the business of the Company and its subsidiaries
and in each case free and clear of all liens, encumbrances, claims,
equities, mortgages, security interests or pledges (each, a "Lien"), except
such as are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries;
any real property, buildings and other improvements held under a lease by
the Company or any of its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such
property
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and buildings by the Company and its subsidiaries, in each case except as
described in the Prospectus; all of the leases pursuant to which the
Company or any of its subsidiaries, as lessor, leases to a subsidiary of
HMT Lessee LLC, or a third party (each, a "Lessee") any hotels or other
real or personal property, buildings or other improvements are in full
force and effect; all of the management agreements and similar agreements
pursuant to which the Company, any of its subsidiaries or, to the best
knowledge of the Company and the Operating Partnership, any of the Lessees
has contracted with a third party to manage or operate any of the hotels or
other properties owned or leased, as lessee, by the Company or any of its
subsidiaries are in full force and effect; all franchise agreements between
the Company or any of its subsidiaries or, to the best knowledge of the
Company and the Operating Partnership, any of the Lessees, on the one hand,
and Marriott International, Inc., a Delaware corporation ("Marriott
International"), or any other hotel operating or management company (each,
a "Manager"), on the other hand, are in full force and effect; and the
Company and its subsidiaries have complied with all of their respective
obligations and agreements under the leases, management agreements and
franchise agreements referred to above and, to the best knowledge of the
Company and the Operating Partnership, no default by any other party to any
of such leases, management agreements or franchise agreements has occurred
and is continuing which, individually or in the aggregate, would have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(s) The Class C Preferred Stock will rank, with respect to the payment
of dividends and the distribution of assets upon liquidation, dissolution
or winding up of the Company, pari passu with the Class A Preferred Stock
and the Class B Preferred Stock, senior to the Common Stock and senior to
the Company's authorized but unissued Series A Junior Participating
Preferred Stock (the "Junior Participating Preferred Stock"). The
Preferred Units will rank, with respect to the payment of dividends and
distributions and the distribution of assets upon liquidation, dissolution
or winding up of the Operating Partnership, pari passu with the Operating
Partnership's Class A preferred units and Class B preferred units and will
rank, with respect to the payment of dividends and distributions and the
distribution of assets upon liquidation, dissolution or winding up of the
Operating Partnership, senior to all of the other limited and general
partnership interests in the Operating Partnership outstanding as of the
date of this Agreement, the Closing Date and, if applicable, the Option
Closing Date.
(t) The merger (the "Merger") of Host Marriott Corporation, a Delaware
corporation ("Host Delaware"), with and into the Company, with the Company
as the surviving corporation, qualified as a reorganization under Section
368 of the Internal Revenue Code of 1986, as amended (the "Code").
(u) The Company is organized in conformity with the requirements for
qualification and taxation as a "real estate investment trust" under the
Code and the Company's intended method of operation will enable it to meet
the requirements for qualification and taxation as a "real estate
investment trust" under the Code for its 2000 tax year and thereafter.
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(v) From and after December 28, 1998, the first date that the
Operating Partnership had two or more partners for federal income tax
purposes, the Operating Partnership at all times has been and will be
qualified as a partnership for federal income tax purposes and the
Operating Partnership has not and will not be treated as a publicly traded
partnership taxable as a corporation.
(w) During its taxable years ended December 31, 1999 and December 31,
2000, the Company has not been treated as owning voting securities of the
Non-Controlled Subsidiaries within the meaning of Section 856(c)(4)(B) of
the Code. Effective January 1, 2001, each Non-Controlled Subsidiary will
qualify and, together with the Company, will elect, to be treated as a
"taxable REIT subsidiary" as described in Section 856(l) of the Code.
(x) All real estate leases which the Operating Partnership owns, or in
which the Operating Partnership has an interest, as a lessor or sub-lessor,
including the Harbor Beach Resort Lease (as defined below), will be treated
as true leases for federal income tax purposes.
(y) The Company is eligible to use Form S-3 under the Securities Act,
and also meets the requirements for use of Form S-3 as in effect
immediately prior to October 21, 1992.
(z) The Class C Preferred Stock does not constitute "Voting Stock" as
defined in the Distribution Agreement dated as of September 15, 1993, as
amended (the "Distribution Agreement"), between the Company, as successor
to Marriott Corporation, a Delaware corporation, and Marriott
International, Marriott International does not and will not have any right
to acquire any Class C Preferred Stock pursuant to the Distribution
Agreement or otherwise, and no notice to or consent, approval or waiver of
Marriott International is required for the issuance and sale of the Shares
as contemplated hereby.
(aa) All of the Shares have been registered under the Company's
registration statement on Form S-3 (Registration No. 333-67907).
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the terms and
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective number of Firm Shares set forth in Schedule I
hereto opposite its name at a purchase price of $24.1875 a share (subject
to adjustment of such purchase price in the case of sales of 375,000 or more
shares to a single purchaser as provided in the second succeeding paragraph).
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 780,000 Additional
Shares at a purchase price of $24.1875 a share (subject to adjustment of
such purchase price in the case of sales of 375,000 or more shares to a single
purchaser as
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provided in the next succeeding paragraph), plus accrued dividends, if any, to
but excluding the Option Closing Date. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Notwithstanding the provisions of the two immediately preceding paragraphs,
but solely in the case of sales of 375,000 or more Shares by any Underwriter to
a single purchaser, the purchase price to be paid for such Shares to the Company
by the several Underwriters shall be $24.50 a share plus, solely in the case
of any such Shares which are Additional Shares, accrued dividends, if any, to
but excluding the Option Closing Date. For purposes of the immediately preceding
sentence, Firm Shares and any Option Shares sold by any Underwriter to a single
purchaser shall be aggregated.
The Company hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period beginning on the date of this Agreement through and including the day
which is 30 days after the date of this Agreement, (i) offer, issue, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Class C Preferred Stock or other preferred stock, any shares of any other class
or series of capital stock which is substantially similar to the Class C
Preferred Stock, any preferred securities of a subsidiary trust or similar
financing vehicle, any depositary shares or depositary receipts representing or
evidencing any of the foregoing, or any securities convertible into or
exercisable or exchangeable for any of the foregoing (other than the Shares to
be sold to the Underwriters) or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any shares of Class C Preferred Stock or other preferred stock,
any shares of any other class or series of capital stock which is substantially
similar to the Class C Preferred Stock, any preferred securities of a subsidiary
trust or similar financing vehicle, any depositary shares or depositary receipts
representing or evidencing any of the foregoing, any securities convertible into
or exercisable or exchangeable for any of the foregoing, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Class C Preferred Stock, other securities, in cash or otherwise; provided
that the provisions of this paragraph shall not prevent the issuance by the
Company of its Junior Participating Preferred Stock pursuant to its shareholder
rights plan.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the
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Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the Shares are
to be offered to the public initially at $25.00 a share (the "Public Offering
Price") plus accrued dividends, if any, and to certain dealers selected by you
at a price that represents a concession not in excess of $.50 a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $.45 a share, to any Underwriter or to
certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on March 27, 2001, or at such
other time on the same or such other date, not later than April 3, 2001, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 2 or on such other date, in any event not later than May 2, 2001, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
temporary or definitive form and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the purchase price therefor set forth in this
Agreement.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become and
shall be effective under the Securities Act prior to the date of this Agreement.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally
10
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company in his or her capacity as an executive officer of the Company
and in his or her capacity as an executive officer of the general partner
of the Operating Partnership, to the effect set forth in Section 5(a)(i)
above and to the effect that the representations and warranties of the
Company and the Operating Partnership contained in this Agreement are true
and correct as of the Closing Date and that the Company and the Operating
Partnership have complied with all of their agreements and satisfied all of
the conditions on their part to be performed or satisfied hereunder on or
before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxxxxxxx, Assistant General Counsel and Assistant
Secretary of the Company, to the effect that:
(i) the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly organized,
is validly existing as a corporation, limited or general partnership
or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, has the power
and authority to own and lease its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole;
11
(iii) the outstanding shares of Common Stock, Class A
Preferred Stock and Class B Preferred Stock have been duly authorized
and validly issued and are fully paid and non-assessable and none of
such shares was issued in violation of any preemptive or similar
rights; and, to the best of such counsel's knowledge, the issuance of
the Shares is not subject to preemptive or other similar rights
arising under any instrument or agreement to which the Company or any
of its subsidiaries is a party or by which any of them may be bound;
(iv) the outstanding Ownership Interests in each subsidiary
have been duly authorized and validly issued, are fully paid and
(except for general partnership interests) non-assessable; all of the
outstanding limited partnership interests in the Operating Partnership
are owned (except as otherwise set forth in the Prospectus) directly
by the Company, all of the outstanding general partnership interests
in the Operating Partnership are owned directly by the Company, and
all of the Company's Ownership Interests in each of the other
subsidiaries are owned directly or indirectly by the Company, in each
case free and clear of all liens, encumbrances, equities or claims,
except for liens created by the Pledge Agreement;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership;
(vi) the execution and delivery by the Company and the
Operating Partnership of, and the performance by the Company and the
Operating Partnership of their respective obligations under, this
Agreement (including the issuance and sale of the Shares to the
Underwriters and the issuance and sale of the Preferred Units to the
Company) will not (A) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, the Credit Agreement, any Senior Note Document or, to
the best of such counsel's knowledge, any other agreement or
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or (B)
result in a breach or violation of or default under any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any of its subsidiaries; and no
consent, approval, authorization or order of, or qualification with,
any Maryland or Delaware governmental body or agency having
jurisdiction over the Company or the Operating Partnership is required
under the laws of the State of Maryland or the Delaware Revised
Uniform Limited Partnership Act (the "Partnership Act") for the
offering, issuance or sale of the Shares or the application of the net
proceeds therefrom by the Company as contemplated by this Agreement or
for the issuance and sale of the Preferred Units by the Operating
Partnership to the Company as contemplated by this Agreement, except
such as may be required by Maryland securities laws and except for the
filing of the Articles Supplementary with the SDAT (which filing has
been duly made);
(vii) The Amendment being entered into on the date of such
opinion has been duly authorized by the Company in its capacity as
General Partner, has been
12
duly executed and delivered by the General Partner on behalf of the
Operating Partnership;
(viii) the statements (A) in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999 (the "1999 10-
K") under the captions "Business and Properties--Environmental and
Regulatory Matters," "Business and Properties--The Leases," "Business
and Properties--The Management Agreements" and "Business and
Properties--Non-Competition Agreements," in each case as amended and
supplemented by the information under the captions "Business" and
"Recent Developments" in the Prospectus Supplement, (B) in the 1999
10-K under the caption "Legal Proceedings," as supplemented by the
information in note (14) to the financial statements included in the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 8, 2000 and as further supplemented by the information under
the caption "Business--Legal Proceedings" in the Prospectus Supplement
and (C) in the Company's Proxy Statement dated April 17, 2000 under
the caption "Certain Relationships and Related Transactions," in each
case insofar as such statements constitute summaries of legal matters,
documents or proceedings, are accurate in all material respects;
(ix) to the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required;
(x) the Company and its subsidiaries (A) are in compliance
with any and all applicable Environmental Laws, (B) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (C) are
in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and
(xi) each document filed pursuant to the Exchange Act and
incorporated or deemed to be incorporated by reference in the
Registration Statement or the Prospectus pursuant to Item 12 of Form
S-3 under the Securities Act (except for financial statements and
schedules and other financial and statistical data, as to which such
counsel need not express any opinion) complied when so filed as to
form in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder. In passing upon
13
compliance as to form of such documents, such counsel may assume that
the statements made and incorporated by reference therein are correct
and complete.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, counsel for the Company and the Operating
Partnership, dated the Closing Date, to the effect that:
(i) the Operating Partnership is a limited partnership duly
formed and validly existing under and by virtue of the Partnership Act
and, based solely upon certificates of public officials, is in good
standing under the laws of the State of Delaware and has the
partnership power and authority to own and lease its property and to
conduct its business as described in the Prospectus;
(ii) The Preferred Units have been duly authorized by the
Operating Partnership and, when issued by the Operating Partnership to
the Company in exchange for the Company's contribution to the
Operating Partnership of the net proceeds from the sale of the Shares,
will represent valid limited partnership interests in the Operating
Partnership;
(iii) (A) the execution and delivery by the Company and the
Operating Partnership of this Agreement, the offering, issuance and
sale of the Shares and the application of the net proceeds therefrom
by the Company to acquire Preferred Units from the Operating
Partnership as contemplated by this Agreement, and the issuance and
sale of the Preferred Units by the Operating Partnership to the
Company as contemplated by this Agreement, will not (1) violate any
provision of the limited partnership agreement or certificate of
limited partnership of the Operating Partnership, (2) conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, the Senior Note Documents; or (3)
violate any federal law, statute, rule or regulation applicable to the
Company or the Operating Partnership or the Partnership Act; and (B)
no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required under federal law or
the Partnership Act for the offering, issuance or sale of the Shares
or the application of the net proceeds therefrom by the Company to
acquire Preferred Units from the Operating Partnership as contemplated
by this Agreement or for the issuance and sale of the Preferred Units
by the Operating Partnership to the Company as contemplated by this
Agreement, except (x) such as may be required under state securities
laws in connection with the offer and sale of the Shares, (y) such as
have been obtained under the Securities Act and are in full force and
effect and (z) such as are required under the Exchange Act in
connection with the listing of the Shares on the New York Stock
Exchange;
(iv) the discussion in the Prospectus Supplement under the
heading "Federal Income Tax Considerations--Taxation of Taxable U.S.
Shareholders", "Federal Income Tax Considerations--Backup
Withholding", "Federal Income Tax Considerations--Taxation of Tax-
Exempt Shareholders", "Federal Income Tax Considerations--Taxation of
Non-U.S. Shareholders" and "Federal Income Tax
14
Considerations--Other Tax Consequences", to the extent that it
describes matters of federal income tax law, is correct in all
material respects;
(v) neither the Company nor the Operating Partnership is and,
after giving effect to the offering and sale of the Shares, the
issuance and sale of the Preferred Units and the application of the
proceeds thereof as described in the Prospectus, neither the Company
nor the Operating Partnership will be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
(vi) the Registration Statement and Prospectus (except for the
documents incorporated or deemed to be incorporated by reference
therein and the financial statements and schedules and other financial
and statistical data included or incorporated by reference therein, as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder. In passing upon
compliance as to form of such documents, such counsel may assume that
the statements made and incorporated by reference therein are correct
and complete.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx & Xxxxxxx, L.L.P., counsel to the Company to the effect
that:
(i) the Company was organized and has operated in conformity
with the requirements for qualification and taxation as a real estate
investment trust (a "REIT") under the Code, effective for its taxable
years ended December 31, 1999 and December 31, 2000, and the Company's
current organization and intended method of operation will enable it
to continue to meet the requirements for qualification and taxation as
a REIT under the Code for taxable year 2001 and thereafter;
(ii) The Leases will be respected as leases for federal income
tax purposes. Such opinion will define the term "Leases" as all real
estate leases on the hotels in which the Operating Partnership has a
direct or, through a Subsidiary Partnership, an indirect interest and
pursuant to which the Operating Partnership or a Subsidiary
Partnership, as lessor or sublessor, leases a hotel to a lessee or
sublessee, respectively, and shall state that such term includes,
without limitation, the lease of the Marriott Harbor Beach Resort from
Lauderdale Beach Association to Marriott Hotel Services, Inc. (the
"Harbor Beach Resort Lease"); and will define the term "Subsidiary
Partnership" as each partnership, limited liability company or other
entity treated as a partnership for federal income tax purposes in
which either the Company or the Operating Partnership has a direct or
indirect interest;
(iii) Each of the discussions in the Prospectus Supplement
under the headings "Risk Factors--Federal income tax risks", "Federal
Income Tax Considerations--Federal income taxation of Host Marriott",
"Federal Income Tax
16
Considerations--Tax aspects of Host Marriott's ownership of interests
in the operating partnership" and "Federal Income Tax Considerations--
Other tax consequences for Host Marriott and its shareholders" to the
extent that it describes provisions of federal income tax law, is
correct in all material respects;
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, special Maryland counsel
to the Company, to the effect that:
(i) the Company has been duly incorporated and is validly
existing under the laws of the State of Maryland and is in good
standing with the SDAT; and the Company has the corporate power to
own, lease and operate its current properties and to conduct its
business as described in the Prospectus under the caption "The
Company" and to enter into and perform its obligations under this
Agreement;
(ii) the authorized stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus;
(iii) the Shares have been duly authorized by all necessary
corporate action on the part of the Company for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued, fully paid
and non-assessable; and the issuance of the Shares is not subject to
preemptive rights arising by operation of the laws of the State of
Maryland or under the charter or bylaws of the Company;
(iv) the form of certificate used to represent the Shares
complies in all material respects with the applicable requirements of
the laws of the State of Maryland and the charter and bylaws of the
Company;
(v) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
(including the issuance and sale of the Shares to the Underwriters) do
not result in any violation of the provisions of the charter or bylaws
of the Company or, so far as is known to us, any applicable provision
of any Maryland law, statute, administrative regulation or
administrative or court decree applicable to the Company;
(vi) no consent, approval, authorization or order of, or
qualification with, any Maryland state governmental authority or
agency (other than as may be required under Maryland securities or
blue sky laws) is required in connection with the authorization,
execution or delivery of this Agreement or the Articles Supplementary
or for the offering, issuance or sale of the Shares as contemplated by
this Agreement, or the application by the Company of the net proceeds
from the sale of the Shares as described in the Prospectus under the
caption "Use of Proceeds", except for the filing of the Articles
Supplementary with, and
16
acceptance thereof for record by, the SDAT (which filing has been made
with and accepted for record by the SDAT in accordance with the
Maryland General Corporation Law);
(vii) We have reviewed the information (A) in the Prospectus
Supplement under the captions "Description of the Class C Preferred
Stock" and "Description of Common Stock", (B) in the Base Prospectus
under the captions "Description of Common Stock", as supplemented by
the information under the caption "Description of Common Stock" in the
Prospectus Supplement, "Restrictions on Ownership and Transfer" and,
to the extent not superceded by the discussion under "Description of
the Class C Preferred Stock" in the Prospectus Supplement,
"Description of Preferred Stock", and (C) in the 1999 10-K under the
caption "Risk Factors--Risks of ownership of our common stock," and in
each case to the extent such information constitutes matters of
Maryland law, summaries of Maryland legal matters, summaries of
certain provisions of the Company's charter or bylaws, the Articles
Supplementary, the Shares or other instruments or agreements governed
by Maryland law, or legal conclusions with respect to matters of
Maryland law, such information is correct in all material respects.
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx & Xxxx LLP, counsel for the Underwriters, dated the
Closing Date, with respect to validity of the Shares, with respect to the
Registration Statement and the Prospectus and any amendments or supplements
thereto, with respect to the matters set forth in the immediately
succeeding paragraph, with respect to the authorization, execution and
delivery of this Agreement, and with respect to such other matters you may
reasonably request, and such counsel shall have received such documents and
information as they may reasonably request to enable them to pass upon such
matters.
In addition to the opinions set forth above in Sections 5(c) and 5(d),
respectively, Xxxxx Xxxxxxxxx and Xxxxxx & Xxxxxxx will each also 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 representatives of the Underwriters, at
which the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel may state that
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
and such counsel has not made any independent check or verification thereof
(except as set forth in Section 5(c)(viii) and 5(d)(iv), respectively),
during the course of such participation, no facts came to such counsel's
attention that have caused such counsel 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 of such opinion,
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided
17
that such counsel may state that they express no belief with respect to the
financial statements, schedules and other financial and statistical data
included or incorporated by reference in or omitted from the Registration
Statement or the Prospectus.
The opinions of Xxxxx Xxxxxxxxx, Xxxxxx & Xxxxxxx, Xxxxx & Xxxxxxx,
L.L.P. and Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP described in Sections
5(c), 5(d), 5(e) and 5(f) above shall be rendered to the Underwriters at
the request of the Company and the Operating Partnership and shall so state
therein and shall further state, solely in the case of those opinions of
counsel which refer to subsidiaries of the Company, that all references in
such opinions to "subsidiaries" of the Company include, without limitation,
the Operating Partnership and the Non-Controlled Subsidiaries. In
addition, the opinion of Xxxxx Xxxxxxxxx shall state that it covers matters
arising under the laws of the State of Maryland, the general corporation
law of the State of Delaware (the "DGCL"), the Partnership Act, the
Delaware Limited Liability Company Act and the federal laws of the United
States, and shall further state that, to the extent that the opinion set
forth in Section 5(c)(vi) relates to any instrument or agreement which is
governed by the laws of any jurisdiction other than the State of Maryland,
such counsel has assumed that the laws of such other jurisdiction are in
all relevant respects identical to the laws of the State of Maryland; the
opinion of Xxxxxx & Xxxxxxx shall state that it covers matters arising
under the laws of the State of New York, the Partnership Act and the
federal laws of the United States, and shall further state that, in
rendering the opinion set forth in Section 5(d)(iv) (which may be set forth
in a separate legal opinion), such counsel has relied upon and assumed the
accuracy of the opinion of Xxxxx & Xxxxxxx L.L.P. delivered pursuant to
Section 5(e) of this Agreement; the opinion of Xxxxx & Xxxxxxx, L.L.P.
shall state that it covers matters arising under the federal laws of the
United States and that Xxxxxx & Xxxxxxx, in rendering their legal opinion
pursuant to Section 5(d)(iv) of this Agreement, may rely upon such opinion;
and the opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP shall state that
it covers matters arising under the laws of the State of Maryland and shall
further state that Xxxxxx & Xxxxxxx and Xxxxx & Xxxx llp may rely upon such
opinion as if it were addressed to them for the purpose of delivering their
opinions pursuant to this Agreement.
(h) The Company shall have duly filed the Articles Supplementary with
the SDAT prior to the Closing Date and you shall have received evidence of
such filing satisfactory to you; the Underwriters shall have received on
the Closing Date a copy of an Amendment duly executed by the General
Partner; and, concurrently with the issuance and sale of the Shares to the
Underwriters, the Operating Partnership shall have issued and sold to the
Company Preferred Units with an aggregate liquidation preference equal to
the aggregate liquidation preference of such Shares.
(i) The Underwriters shall have received, on each of the date hereof
and on the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Xxxxxx Xxxxxxxx llp, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements of the Company, CCHP I Corporation, CCHP II
Corporation, CCHP III Corporation, CCHP IV Corporation and of the
Blackstone properties and certain
18
financial information contained and incorporated by reference in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(j) The Shares have been duly authorized for listing on the NYSE,
subject to official notice of issuance.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company and the Operating Partnership, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares (including, without limitation, updated legal opinions, comfort letters
and officers' certificates).
6. Covenants of the Company and the Operating Partnership. In further
consideration of the agreements of the Underwriters herein contained, the
Company and the Operating Partnership jointly and severally covenant with each
Underwriter as follows:
(a) To furnish to you, without charge, six signed copies of the
Registration Statement, including exhibits thereto and documents
incorporated or deemed to be incorporated by reference therein, and for
delivery to each other Underwriter a conformed copy of the Registration
Statement, without exhibits thereto but including documents incorporated or
deemed to be incorporated by reference therein, and to furnish to you in
New York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during the
period mentioned in Section 6(c) below, as many copies of the Prospectus
and any supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented
19
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending on the last day of the first fiscal quarter of the
Company's 2002 fiscal year, which earning statement satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Contemporaneously with each issuance of Shares hereunder, the
Company, in its capacity as General Partner, will enter into an appropriate
Amendment and the Company will contribute the net proceeds from the sale of
such Shares to the Operating Partnership, and, in exchange for the
contribution of such net proceeds, the Operating Partnership will issue to
the Company Preferred Units with an aggregate liquidation preference equal
to the aggregate liquidation preference of such Shares, and the terms of
such Preferred Units will be substantially equivalent to the economic terms
of such Shares purchased by the Underwriters. The Operating Partnership
will apply such net proceeds as set forth under the caption "Use of
Proceeds" in the Prospectus Supplement.
(g) To use their best efforts to effect the listing of the Shares on
the NYSE no later than March 27, 2001.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of their respective obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's and the Operating Partnership's respective counsel and
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the Shares
for offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification, if
any, of the offering of the Shares by the National Association
20
of Securities Dealers, Inc., (v) all fees and expenses in connection with
the preparation and filing of the registration statement on Form 8-A
relating to the Shares and all costs and expenses incident to listing the
Shares on the NYSE, (vi) the cost of printing certificates representing the
Shares, (vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company and the Operating
Partnership relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of
the Company, travel and lodging expenses of the representatives and
officers of the Company and the Operating Partnership and any such
consultants, and the cost of any aircraft chartered in connection with the
road show, and (ix) all other costs and expenses incident to the
performance of the obligations of the Company and the Operating Partnership
hereunder for which provision is not otherwise made in this Section.
Without limitation to the provisions of the immediately preceding sentence,
the Company will, within 24 hours after request by the Representatives, pay
expenses incurred by the Underwriters in connection with this Agreement and
the offering of the Shares in an amount not to exceed $370,000, such
payment to be made by wire transfer of immediately available funds;
provided that any expenses payable by the Company pursuant to the
immediately preceding sentence shall be excluded in determining the dollar
amount of expenses payable by the Company under this sentence; and
provided, further, that no payment shall be required by the Company
pursuant to this sentence unless the Underwriters shall have purchased the
Firm Shares. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
7. Indemnity and Contribution.
(a) The Company and the Operating Partnership jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any action or claim) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment to the Registration Statement, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein; provided, however, that the
-------- -------
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims,
21
damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto but excluding
documents incorporated or deemed to be incorporated by reference therein) was
not sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, the Operating Partnership and each person, if any, who
controls the Company or the Operating Partnership within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Operating Partnership
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to Section 7(a), and by the Company, in the case of
parties indemnified pursuant to Section 7(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is
22
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding. The obligations and agreements of the Company and the Operating
Partnership under this Section 7(c) are joint and several.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Operating Partnership on the one hand
and the Underwriters on the other hand from the offering of the Shares or (ii)
if the allocation provided by clause 7(d)(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 7(d)(i) above but also the relative
fault of the Company and the Operating Partnership on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Operating Partnership on the one hand and the Underwriters on
the other hand in connection with the offering of the Shares shall be deemed to
be in the same respective proportions as the net proceeds from the offering of
the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Company and the Operating Partnership on the one hand and the Underwriters on
the other hand 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 relates to information supplied by the
Company or the Operating Partnership or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The obligations of the Company and the
Operating Partnership to contribute pursuant to this Section 7 are joint and
several. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Shares they
have purchased hereunder, and not joint.
(e) The Company, the Operating Partnership and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this Section
7 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 that does
not take account of the equitable considerations referred to in Section 7(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities 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
23
such action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company and the Operating Partnership contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or by or on behalf of the Company, its
officers or directors or any person controlling the Company or by or on behalf
of the Operating Partnership, its partners or any person controlling the
Operating Partnership and (iii) acceptance of and payment for any of the Shares.
If any indemnified party shall suffer or incur any losses, claims, damages or
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any action or
claim) caused by any untrue statement or alleged untrue statement of a material
fact contained in any Prior Registration Statement (as defined below) or any
amendment thereto in connection with the offering of the Shares or any of the
other matters contemplated by this Agreement, or if any proceeding (including
any governmental investigation) shall be instituted involving an indemnified
party based thereon or in connection therewith, then all references to the
Registration Statement and any amendments or supplements thereto contained in
this Section 7 and in the representations and warranties of the Company and the
Operating Partnership in this Agreement and all references to the effective date
of the Registration Statement shall also be deemed to refer, respectively, to
such Prior Registration Statement (including the documents incorporated or
deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3)
and any amendments or supplements thereto and to the effective date of such
Prior Registration Statement, mutatis mutandis. As used in this Agreement, the
term "Prior Registration Statement" means any registration statement (other than
the Registration Statement) filed by the Company or Host Marriott Corporation, a
Delaware corporation, with the Commission.
8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or
together with any other such event, makes it, in
24
your judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or the Operating
Partnership to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Operating Partnership shall
be unable to perform its obligations under this Agreement, the Company and the
Operating Partnership will, jointly and severally, reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
25
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
26
Very truly yours,
HOST MARRIOTT CORPORATION
By:
------------------------------------------
Name:
Title:
HOST MARRIOTT, L.P.
By: HOST MARRIOTT CORPORATION,
its General Partner
By:
------------------------------------------
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Deutsche Banc Alex. Xxxxx Inc.
Prudential Securities Incorporated
UBS Warburg LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
------------------------------------------
Name:
Title:
SCHEDULE I
Number of Firm Shares
Underwriter To Be Purchased
----------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated.............................. 885,000
Bear, Xxxxxxx & Co. Inc........................................ 885,000
Deutsche Banc Alex. Xxxxx Inc.................................. 885,000
Prudential Securities Incorporated............................. 885,000
UBS Warburg LLC................................................ 885,000
X.X. Xxxxxxx & Sons, Inc....................................... 50,000
CIBC World Markets Corp........................................ 50,000
Credit Suisse First Boston Corporation......................... 50,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated........................... 50,000
Xxxxxx Brothers Inc............................................ 50,000
Xxxxxx Xxxxxxx Incorporated.................................... 50,000
Advest Inc..................................................... 25,000
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx....... 25,000
Xxxxxxxxxx & Co. Inc........................................... 25,000
Xxxxxx, Xxxxx Xxxxx, Inc., Incorporated........................ 25,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC.................................... 25,000
Xxxxxxxx, Lemon & Co. Incorporated............................. 25,000
Josephthal & Co. Inc........................................... 25,000
XX Xxxx & Associates, Inc...................................... 25,000
McDonald Investments Inc., a KeyCorp Company................... 25,000
Mesirow Financial, Inc......................................... 25,000
Xxxxxx/Xxxxxx Incorporated..................................... 25,000
Pershing/Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx.............. 25,000
The Xxxxxxxx-Xxxxxxxx Company, LLC............................. 25,000
Southwest Securities, Inc...................................... 25,000
Xxxxxx, Xxxxxxxx & Company Incorporated........................ 25,000
U.S. Bancorp Xxxxx Xxxxxxx Inc................................. 25,000
Wachovia Securities, Inc....................................... 25,000
Wedbush Xxxxxx Securities...................................... 25,000
Xxxxx Fargo/Xxx Xxxxxx & Co.................................... 25,000
---------
Total.......................................... 5,200,000
=========
