EXHIBIT 99.1
EXECUTION VERSION
FELCOR LODGING TRUST INCORPORATED
(a Maryland corporation)
PLACEMENT AGENCY AGREEMENT
Dated: April 1, 2002
FELCOR LODGING TRUST INCORPORATED
(a Maryland corporation)
PLACEMENT AGENCY AGREEMENT
April 1, 2002
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
FelCor Lodging Trust Incorporated, a Maryland corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch" or the "Placement Agent"),
to act as exclusive placement agent for the Company with respect to the issue
and sale by the Company to, and the purchase by, the investors named in Schedule
I hereto (the "Investors"), of a yet to be determined amount of depositary
shares (the "Depositary Shares"), each representing 1/100th of a share of 9%
Series B Cumulative Redeemable Preferred Stock of the Company, $.01 par value
per share (the "Preferred Stock").
The Depositary Shares will be issued by SunTrust Bank (formerly
SunTrust Bank, Atlanta), as Depositary (the "Depositary"), under a Deposit
Agreement dated as of April 30, 1998, among the Company (formerly FelCor Suite
Hotels, Inc.), the Depositary and the holders from time to time of the
Depositary Receipts issued thereunder, as amended by the Supplement and
Amendment to Deposit Agreement dated as of April 1, 2002 (as amended, the
"Deposit Agreement"). The Depositary Shares will be evidenced by Depositary
Receipts issued pursuant to the Deposit Agreement (the "Depositary Receipts").
The Preferred Stock, the Depositary Shares and the Depositary Receipts are
described in the Prospectus Supplement, which is referred to below, and are
collectively referred to herein as the "Securities."
It is contemplated that the Securities will be issued by the Company to
the Investors in an aggregate principal amount anticipated to be at least
$25,000,000. In acting as the Placement Agent, Merrill Lynch will seek to place
the securities with the Investors on a reasonable best efforts basis, acting as
the Company's agent and not as a principal in the placement of the Securities.
Merrill Lynch may separately engage, at its own expense and with the prior
approval of the Company, sub-agents as it may deem necessary or appropriate.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on Form S-3 (No. 333-46357),
including a prospectus, relating to debt securities, preferred stock, depositary
shares, common stock and common stock warrants and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit for
filing to, the Commission a prospectus supplement dated April 1, 2002 (the
"Prospectus Supplement") specifically relating to the Depositary Shares pursuant
to Rule 424(b) under the Securities Act of 1933, as amended (the "1933 Act").
Such registration statement was declared effective by the Commission in 1998.
Such registration statement, including the exhibits thereto, schedules thereto,
if any, the Basic Prospectus (as defined below) and the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, as of
the date of this Agreement, is herein called the "Registration Statement." The
term "Basic Prospectus" means the prospectus included in the Registration
Statement. The term "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement. As used herein, the terms "Basic Prospectus" and
"Prospectus" shall include in each case the documents, if any, incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form furnished to the Investors for use in connection with this offering. The
terms "supplement" and "amendment" or "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"). As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the Registration
Statement, the Prospectus, or any amendment or supplement thereto. For purposes
of this Agreement, all references to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any document under
the 1934 Act, which is incorporated by reference in the Registration Statement
or the Prospectus, as the case may be.
The Company owns, directly or indirectly, units of partnership interest
("Units") representing at least an 85% interest in FelCor Lodging Limited
Partnership, a Delaware limited partnership (the "Operating Partnership"), and
the Operating Partnership, directly or indirectly, currently owns interests in
183 hotels as described in the Prospectus (collectively, the "Hotels").
The Operating Partnership or a subsidiary thereof leases 181 of the
Hotels to FelCor TRS Holdings, L.P. or a subsidiary thereof. The Hotels are
operated and managed by third parties pursuant to separate management agreements
(collectively, the "Management Agreements").
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Section 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
represents and warrants to the Placement Agent as of the date hereof, and as of
the Closing Time referred to in Section 2(b) hereof, and agrees with the
Placement Agent, as follows:
(i) The Registration Statement, has become effective under
the 1933 Act; no order preventing or suspending the use of any
Prospectus has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission or the securities authority
of any state or other jurisdiction. No stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceeding for that purpose has been instituted or
threatened or, to the best knowledge of the Company, contemplated by
the Commission or the securities authority of any state or other
jurisdiction and any request on the part of the Commission for
additional information has been complied with.
(ii) The Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the 1933 Act, set forth in the General
Instructions to Form S-3. When the Registration Statement or any
amendment thereto was declared effective, and at the Closing Time it
(x) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the 1933 Act and the rules and
regulations of the Commission thereunder and (y) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus or Prospectus Supplement was or is filed with the
Commission pursuant to Rule 424(b) and at the Closing Time, the
Prospectus, as amended or supplemented at any such time, (x) contained
or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects
with the requirements of, the 1933 Act and the rules and regulations of
the Commission thereunder and (y) did not or will not include 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. The
representation and warranty in this paragraph (ii) does not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by or on behalf of the Placement
Agent expressly for use therein.
(iii) Each document, if any, filed or to be filed pursuant to
the 1934 Act and incorporated by reference in the Prospectus complied
or will comply when so filed in all material respects with the 1934 Act
and the applicable rules and regulations of the Commission thereunder.
(iv) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of Maryland with all requisite corporate power and authority to own and
lease its properties and to conduct its business as described in the
Prospectus. The Company has been duly qualified or registered to do
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business and is in good standing as a foreign corporation in each other
jurisdiction in which the ownership or leasing of its properties or the
nature or conduct of its business as described in the Prospectus
requires such qualification, except where the failure to do so would
not have a material adverse effect on the condition, financial or
otherwise, business, prospects, net worth or results of operations of
the Company, the Operating Partnership and the Subsidiaries (as defined
below), taken as a whole (a "Material Adverse Effect"). Except for the
entities listed on Schedule I hereto (the "Subsidiaries"), the Company
does not own, control, or have an equity interest in, directly or
indirectly, any corporation, association or other entity. The Company,
the Operating Partnership or a Subsidiary, as applicable, owns the
percentage equity interests of each of the Subsidiaries as reflected on
Schedule I. All of such equity interests have been duly and validly
authorized and issued and, except for general partnership interests,
are fully paid and non-assessable and are so owned free and clear of
any pledge, lien, charge, encumbrance, security interests, preemptive
right or other claims, except as set forth in such entity's governing
documents.
(v) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act")
with all requisite partnership power and authority to own and lease its
properties and to conduct its business as described in the Prospectus.
Each Subsidiary (other than the Operating Partnership) has been duly
formed and is validly existing as a corporation, limited partnership or
limited liability company in good standing under the laws of its
respective jurisdiction of formation, except where the failure to do so
would not have a Material Adverse Effect. Each Subsidiary has been duly
qualified or registered to do business and is in good standing as a
foreign corporation, partnership or limited liability company, as the
case may be, in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business as
now conducted requires such qualification or registration, except where
the failure to do so would not have a Material Adverse Effect. The
Company is and, at the Closing Time will be, the sole general partner
of the Operating Partnership, and at the Closing Time will own,
directly or indirectly, at least an 85% interest in the Operating
Partnership.
(vi) The Company has all requisite corporate right, power and
authority to enter into this Agreement, to execute and file articles
supplementary relating to the classification and increase in the number
of authorized shares of Preferred Stock (the "Articles Supplementary"),
to enter into the other documents to be entered into in connection with
the transactions contemplated hereby, to issue, sell and deliver the
Securities as provided in the Prospectus and to consummate the
transactions contemplated in the Prospectus.
(vii) This Agreement, the Deposit Agreement and the Articles
Supplementary have been duly authorized, executed and delivered by the
Company.
(viii) The Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, as amended (the "Partnership
Agreement"), has been duly and validly executed by the Company on
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behalf of itself and all of the other partners in the Operating
Partnership. The Subsidiaries that are parties to the Management
Agreements have the requisite power and authority to enter into the
Management Agreement and to perform their obligations thereunder. Each
such agreement has been duly authorized, executed and delivered by the
Company, the Operating Partnership and the Subsidiaries, as applicable.
(This Agreement, the Purchase Agreements by and between the Company and
the Investors dated the date hereof (the "Purchase Agreements"), the
Deposit Agreement, the Articles Supplementary, the Partnership
Agreement and the Management Agreements sometimes are hereinafter
referred to collectively as the "Operative Documents").
(ix) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization,
issuance, sale and delivery of the Securities, the execution, delivery
and performance of this Agreement, the Deposit Agreement and the
Articles Supplementary and the consummation by the Company of the
transactions contemplated hereby and thereby has been made or obtained
and is in full force and effect; provided, however, that the Articles
Supplementary has not been filed, but will be filed with the Maryland
Department of Assessments and Taxation at or before the Closing Time.
(x) Neither the issuance, sale and delivery by the Company
of the Securities, nor the execution, delivery and performance of this
Agreement, the Deposit Agreement or the Articles Supplementary and the
other documents to be entered into in connection with the transactions
contemplated hereby and thereby by the Company nor the consummation of
the transactions contemplated hereby or thereby or in the Prospectus
will conflict with or result in a breach or violation of any of the
terms and provisions of, or (with or without the giving of notice or
the passage of time or both) constitute a default under, any of the
Operative Documents, the charter (as amended by the Articles
Supplementary), articles or certificate of incorporation, bylaws,
certificate of limited partnership or partnership agreement,
certificate of formation or limited liability company agreement, as the
case may be, of the Company, the Operating Partnership or any
Subsidiary; any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any of the
Company, the Operating Partnership or any subsidiary is a party or to
which they, any of them, any of their respective properties or other
assets or any Hotel is subject, except that any violation of the
"Ownership Limit," as defined in the Company's articles of amendment
and restatement, because of the issuance of the Preferred Stock, has
been waived, or will be waived prior to the Closing Time, by the
Company's board of directors as permitted by such instrument and except
such conflicts, breaches, violations or defaults that would not have a
Material Adverse Effect; or any applicable statute, judgment, decree,
order, rule or regulation of any court or governmental agency or body
applicable to any of the foregoing or any of their respective
properties, except such breaches or violations that would not have a
Material Adverse Effect; or result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of any of
the foregoing, except such liens, charges, claims or encumbrances that
would not have a Material Adverse Effect.
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(xi) The Depositary Shares to be issued and sold to the
Investors and the Preferred Stock have been validly authorized by the
Company. When the Preferred Stock and the Depositary Receipts
evidencing the Depositary Shares representing interests in such
Preferred Stock are issued and delivered against payment therefor as
provided in the Purchase Agreements and the Deposit Agreement, the
Preferred Stock will be duly and validly issued, fully paid and
nonassessable. The deposit of the Preferred Stock by the Company with
the Depositary pursuant to the Deposit Agreement has been duly
authorized and, when the Depositary Shares are issued and delivered in
accordance with the terms of the Purchase Agreements, the Depositary
Shares will represent legal and valid interests in the Preferred Stock
as provided in the Deposit Agreement. Assuming due authorization,
execution and delivery of the Deposit Agreement by the Depositary, each
Depositary Share, if any, will represent the interest described in the
Prospectus in a validly issued, outstanding, fully paid and
nonassessable share of Preferred Stock. Assuming due execution and
delivery of the Depositary Receipts, if any, by the Depositary pursuant
to the Deposit Agreement, the Depositary Receipts will entitle the
holders thereof to the benefits provided therein and in the Deposit
Agreement. There are no statutory or other preemptive rights of
shareholders with respect to any of the Securities. No person or entity
holds a right to require or participate in the registration under the
1933 Act of the Securities pursuant to the Registration Statement other
than those persons who have expressly waived such rights. No person or
entity has a right of participation or first refusal with respect to
the sale of the Securities by the Company. The form of certificates
evidencing the Preferred Stock comply with all applicable requirements
of Maryland law. The Depositary Receipts are in due and proper form.
(xii) The Company's authorized, issued and outstanding capital
stock is as disclosed in the Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the description
of the Common Stock, the Series A Preferred Stock and the Series B
Preferred Stock, as the case may be, contained in the Prospectus. The
Securities conform to the description thereof contained in the
Prospectus. None of the issued and outstanding shares of capital stock
of the Company has been issued or is owned or held in violation of any
preemptive rights of shareholders. The Company has no other issued and
outstanding capital stock. Except as disclosed in the Prospectus, and
except for any grants of options or restricted stock made in the
ordinary course of business under the Company's restricted stock and
stock option plans, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the
Company.
(xiii) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly registered
under the 1933 Act or exempt from the registration requirements of the
1933 Act by reason of Sections 3(b), 4(2) or 4(6) thereof and were duly
registered or were issued pursuant to an available exemption from the
registration requirements of the applicable state securities or blue
sky laws.
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(xiv) All of the issued Units have been duly and validly
authorized and issued and are fully paid. None of the issued Units has
been issued or is owned or held in violation of any preemptive right.
The Units to be issued to the Company at the Closing Time have been
duly and validly authorized by the Operating Partnership. At the
Closing Time, such Units will be validly issued and fully paid. All of
the outstanding Units have been issued, offered and sold in compliance
with all applicable laws (including, without limitation, federal and
state securities laws). The Units to be issued to the Company at the
Closing Time will be issued, offered and sold in compliance with all
applicable laws (including, without limitation, federal and state
securities laws).
(xv) The financial statements included or incorporated by
reference in the Registration Statement and Prospectus together with
related schedules and notes (and any amendment or supplement thereto),
present fairly the consolidated financial position of the Company and
its consolidated Subsidiaries, as of the dates indicated, and the
results of operations, cash flows and shareholder's equity of the
Company and its consolidated Subsidiaries for the periods specified,
all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods specified. No other
financial statements or schedules are required by Form S-3 or otherwise
to be included or incorporated by reference in the Registration
Statement or the Prospectus.
(xvi) PricewaterhouseCoopers LLP, who has examined and is
reporting upon the audited financial statements and schedules relating
to the Company included or incorporated by reference in the
Registration Statement and the Prospectus, is and was, during the
periods covered by their report included or incorporated by reference
in the Registration Statement and the Prospectus, independent public
accountants within the meaning of the 1933 Act.
(xvii) Since December 31, 2001, neither the Company nor the
Operating Partnership has sustained any material loss or interference
with its business from fire, explosion, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or arbitrators' or court or governmental action, order or
decree; and, since the respective dates as of which information is
given in the Prospectus, and except as otherwise stated in the
Prospectus, there has not been (i) any material change in the capital
stock or partnership interests, as applicable, long-term debt,
obligations under capital leases or short-term borrowings of either the
Company or the Operating Partnership, (ii) any material adverse change,
or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the business, prospects,
net worth or results of operations of either the Company, the Operating
Partnership and their respective subsidiaries, taken as a whole, from
that set forth in the Prospectus, (iii) any liability or obligation,
direct or contingent, incurred or undertaken by either the Company or
the Operating Partnership which is material to the business or
condition (financial or other) of such entity, except for liabilities
or obligations incurred in the ordinary course of business, (iv) any
declaration or payment of any dividend or distribution of any kind on
or with respect to the capital stock or partnership interests, as
applicable, of either the Company or the Operating Partnership, or (v)
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any transaction that is material to either the Company or the Operating
Partnership except transactions in the ordinary course of business or
as otherwise disclosed in the Prospectus.
(xviii) The Operating Partnership and its Subsidiaries have good
and indefeasible title in fee simple to the Hotels and the improvements
thereon free and clear of all liens, encumbrances, claims, security
interests, restrictions and defects except (i) those Hotels that are
leased from third parties as identified in the Prospectus, (ii) such as
are identified in the Prospectus, (iii) such matters reflected in the
owner's title insurance policies relating to such properties and (iv)
such as do not materially adversely affect the value of the properties,
taken as a whole, or the use proposed to be made of the properties,
taken as a whole, by the Operating Partnership and its Subsidiaries.
Except as disclosed in the Prospectus, neither the Company nor the
Operating Partnership owns or leases any real property as lessee other
than pursuant to leases which individually or in the aggregate are not
material to the business, financial condition or results of operations
of the Company and the Operating Partnership. Except as disclosed in
the Prospectus, no person other than the Operating Partnership has an
option or right of first refusal to purchase all or part of any Hotel
or any interest therein other than certain options and rights of first
refusal contained in the ground lease relating to the Embassy Suites in
Kansas City, Missouri or partnership agreements to which the Operating
Partnership or its subsidiaries are parties. Each of the Hotels
complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and
laws relating to access to the Hotels), except if and to the extent
disclosed in the Prospectus and except for such failures to comply that
would not have a Material Adverse Effect. Neither the Company nor the
Operating Partnership has knowledge of any pending or threatened
condemnation proceedings, zoning change, or other proceeding or action
that will in any manner affect the size of, use of, improvements on,
construction on or access to the Hotels, except such proceedings or
actions that would not have a Material Adverse Effect.
(xix) None of the Company, the Operating Partnership or any
Subsidiary is in violation of its respective charter, articles or
certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation or limited
liability company agreement, as the case may be, except such as in the
aggregate do not now have and will not in the future have a Material
Adverse Effect; no default exists, and no event has occurred, nor state
of facts exists, which, with notice or after the lapse of time to cure
or both, would constitute a default in the due performance and
observance of any obligation, agreement, term, covenant, consideration
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which any
such entity is a party or to which any such entity or any of its
properties is subject, except such as in the aggregate do not now have
and will not in the future have a Material Adverse Effect. None of the
Company, the Operating Partnership or any Subsidiary is in violation
of, or in default with respect to, any statute, rule, regulation,
order, judgment or decree, except as may be properly described in the
Prospectus or such as in the aggregate do not now have and will not in
the future have a Material Adverse Effect.
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(xx) Except as described in the Prospectus, there is not
pending or, to the knowledge of either the Company or the Operating
Partnership, threatened, any action, suit, proceeding, inquiry or
investigation against either the Company, the Operating Partnership or
any Subsidiary or any of their respective officers and directors or to
which the properties, assets or rights of any such entity are subject,
before or brought by any court or governmental agency or body or board
of arbitrators, which could result in any material adverse change in
the condition, financial or otherwise, business, prospects, or results
of operations of any such entity or which could materially and
adversely affect the consummation of the transactions contemplated by
the Prospectus.
(xxi) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown, and
there are no contracts, leases, or other documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required. To the knowledge of the
Company and the Operating Partnership, there are no statutes or
regulations applicable to either the Company, the Operating Partnership
or any Subsidiary or certificates, permits or other authorizations from
governmental regulatory officials or bodies required to be obtained or
maintained by either the Company, the Operating Partnership or any
Subsidiary of a character required to be disclosed in the Registration
Statement or the Prospectus which have not been so disclosed and
properly described therein. All agreements between the Company, the
Operating Partnership and any Subsidiary, respectively, and third
parties expressly referenced in the Prospectus are legal, valid and
binding obligations of the Company, the Operating Partnership and such
Subsidiary, respectively, enforceable against such parties in
accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization
or other laws of general applicability relating to or affecting
creditors' rights and by general equitable principles.
(xxii) Except as described in the Prospectus, either the
Company, the Operating Partnership or a Subsidiary owns, possesses or
has obtained or has taken all necessary action to obtain (and will
obtain) all material permits, licenses, franchises, except where the
failure to obtain would not have a Material Adverse Effect,
certificates, consents, orders, approvals and other authorizations of
governmental or regulatory authorities or other entities as are
necessary to own or lease, as the case may be, and to operate its
respective properties and to carry on its business, except where the
failure to obtain would not have a Material Adverse Effect. None of the
Company, the Operating Partnership or any Subsidiary has received any
notice of proceedings relating to revocation or modification of any
such licenses, permits, franchises, certificates, consents, orders,
approvals or authorizations, except such notices that would not have a
Material Adverse Effect.
(xxiii) Except as described in the Prospectus, the Company, the
Operating Partnership and the Subsidiaries own or possess or have the
right to acquire (and will acquire) adequate licenses or other rights
to use all patents, trademarks, service marks, trade names, copyrights,
software and design licenses, trade secrets, manufacturing processes,
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other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company, the Operating
Partnership and the Subsidiaries to conduct their respective businesses
as presently conducted, and neither the Company, the Operating
Partnership nor any of the Subsidiaries has received notice of
infringement or of conflict with (and knows of no such infringement of
or conflict with) asserted rights of others with respect to any
Intangibles which could have a Material Adverse Effect.
(xxiv) The Company's, the Operating Partnership's and each
Subsidiary's system of internal accounting controls taken as a whole is
sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation
to the Company's or the Operating Partnership's financial statements;
and, to the knowledge of the Company, neither the Company nor the
Operating Partnership, nor any employee or agent thereof, has made any
payment of funds of either the Company or the Operating Partnership, as
the case may be, or received or retained any funds, and no funds of
either the Company or the Operating Partnership as the case may be,
have been set aside to be used for any payment, in each case in
violation of any law, rule or regulation.
(xxv) Each of the Company, the Operating Partnership (to the
extent not consolidated with the Company) and each Subsidiary (to the
extent not consolidated with the Company or the Operating Partnership)
has filed on a timely basis all federal, state, local and foreign tax
returns required to be filed through the date hereof and each such tax
return is true and correct in all respects, except where the failure to
so have filed would not have a Material Adverse Effect; each such
entity has timely paid all taxes due and payable through the date
hereof, whether or not shown on a tax return; and no tax deficiency has
been asserted against any such entity, nor does any such entity know of
any tax deficiency which is likely to be asserted against any such
entity and which if determined adversely to any such entity, could have
a Material Adverse Effect. All tax liabilities are adequately provided
for on the respective books of such entities.
(xxvi) The Company, the Operating Partnership, and the
Subsidiaries each maintain insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally
deemed adequate for their respective businesses and, to the knowledge
of the Company consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by the
Company, the Operating Partnership and the Subsidiaries against theft,
damage, destruction, acts of vandalism, and all other risks customarily
insured against, all of which insurance is in full force and effect.
(xxvii) To the knowledge of the Company no general labor problem
exists or is imminent with the employees of the Company. The Operating
Partnership and the Subsidiaries have no employees.
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(xxviii) Each of the Company, the Operating Partnership, and
their officers, directors or affiliates has not taken and will not
take, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in or constitute the
stabilization or manipulation of any security of the Company or to
facilitate the sale or resale of the Depositary Shares.
(xxix) The Depositary Shares are registered, or will be
registered at or before the Closing Time, pursuant to Section 12(b) of
the 1934 Act, and upon issuance the Depositary Shares will be listed on
the New York Stock Exchange.
(xxx) The Company has not incurred any liability for a fee,
commission or other compensation on account of the employment of a
broker or finder in connection with the transactions contemplated by
this Agreement other than as contemplated hereby or as described in the
Registration Statement.
(xxxi) Except as otherwise disclosed in the Prospectus, neither
the Company, the Operating Partnership, nor any Subsidiary nor, to the
knowledge of the Company any entity from whom the Operating Partnership
or applicable Subsidiary acquired the Hotels has authorized or
conducted or has knowledge of the generation, transportation, storage,
presence, use, treatment, disposal, release, or other handling of any
hazardous substance, hazardous waste, hazardous material, hazardous
constituent, toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or waste
(including crude oil or any fraction thereof), natural gas, liquefied
gas, synthetic gas or other material defined, regulated, controlled, or
subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under, or affecting any
real property currently leased or owned (or proposed to be leased or
owned) or by any means controlled by either the Company or the
Operating Partnership, including the Hotels (the "Real Property"),
except as in material compliance with applicable laws and except as
would not result in a Material Adverse Effect; to the knowledge of the
Company and the Operating Partnership, the Real Property and the
Company's and the Operating Partnership's operations with respect to
the Real Property are in compliance with all federal, state and local
laws, ordinances, rules, regulations and other governmental
requirements relating to pollution, control of chemicals, management of
waste, discharges of materials into the environment, health, safety,
natural resources, and the environment (collectively, "Environmental
Laws"), and the Company and the Operating Partnership have complied
with, and are in compliance with, all licenses, permits, registrations,
and government authorizations necessary to operate under all applicable
Environmental Laws, except where such noncompliance does not now have
and will not have in the future a Material Adverse Effect. Except as
otherwise disclosed in the Prospectus, neither the Company nor the
Operating Partnership has received any written or oral notice from any
governmental entity or any other person, and there is no pending (to
the knowledge of the Company) or threatened claim, litigation, or any
administrative agency proceeding that alleges (i) a violation of any
Environmental Laws by either the Company or the Operating Partnership;
(ii) alleges that either the Company or the Operating Partnership is a
liable party or a potentially responsible party under the Comprehensive
11
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., or any state superfund law; (iii) has resulted
in or could result in the attachment of an environmental lien on any of
the Real Property; or (iv) alleges that either the Company or the
Operating Partnership is liable for any contamination of the
environment, contamination of the Real Property, damage to natural
resources, property damage, or personal injury based on their
activities or the activities of their predecessors or third parties
(whether at the Real Property or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws, common law
principles, or other legal standards.
(xxxii) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's method of operation enables it to meet the
requirements for taxation as a real estate investment trust under the
Code. The Company has qualified and continues to qualify and has taken
all necessary action to be treated, effective beginning with the year
ended December 31, 1994, as a REIT under the Code. The Operating
Partnership has been since its formation in 1994, and continues to be,
treated as a partnership for federal income purposes and not as a
corporation or an association taxable as a corporation.
(xxxiii) Neither the Company, the Operating Partnership nor any
Subsidiary is, will become as a result of the transactions contemplated
hereby, or will conduct its respective business in a manner in which
any such entity would become, an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(xxxiv) No real estate appraisal firm which prepared appraisals
of the Hotels, nor any environmental engineering firm which prepared
Phase I environmental assessment reports with respect to the Hotels,
was employed for such purpose on a contingent basis or has any
substantial interest in either the Company, the Operating Partnership,
or any Subsidiary.
(xxxv) The Operating Partnership is not currently prohibited,
directly or indirectly, from making distributions to the Company, from
repaying to the Company any loans or advances to the Operating
Partnership, or from transferring any of the Operating Partnership's
property or assets to the Company, except as disclosed in the
Prospectus.
(xxxvi) The Company has not, directly or indirectly (i) taken
any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Depositary Shares or (ii) since
the filing of the Registration Statement sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the
Depositary Shares.
(b) Officers' Certificates. Any certificate signed by any officer of
the Company on behalf of the Company and delivered to you or to counsel for the
Placement Agent shall be deemed a representation and warranty by such person or
entity, as the case may be, to the Placement Agent as to the matters covered
thereby.
12
Section 2. Placement Agent Fees.
--------------------
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
pay Merrill Lynch a fee (the "Fee"), based upon the aggregate amount of
Depositary Shares sold, as calculated in accordance with the provisions of this
Section for its services pursuant to this Agreement. The Fee will be equal to
2.0% of the purchase price of all Depositary Shares sold to the Investors (other
than Investors identified on Schedule I as Midaro Investments, Inc. and Melinda
J. Bush) pursuant to the Purchase Agreements.
(b) On the date on which the Investors purchase the Depositary Shares
from the Company in accordance with this Agreement (the "Closing Time"), the
Company shall pay the Fee to the Placement Agent in cash by wire transfer of
immediately available funds to a bank account designated by the Placement Agent.
Section 3. Covenants of the Company. The Company covenants with the
Placement Agent as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company will notify the Placement Agent immediately, and
confirm the notice in writing, (i) when any post-effective amendment to
the Registration Statement shall become effective, or any supplement to
the Prospectus or any amended Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission, (iii) of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional
information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filing of the Prospectus Supplement pursuant to Rule 424(b) under
the 1933 Act and will take such steps as it deems necessary to
ascertain promptly whether the Prospectus Supplement transmitted for
filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such Prospectus
Supplement. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in
the Prospectus. If at any time when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Placement Agent or for
the Company, to amend the Registration Statement or amend or supplement
13
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel,
at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements,
and the Company will furnish to the Placement Agent such number of
copies of such amendment or supplement as the Placement Agent may
reasonably request.
(c) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Placement Agent, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Placement Agent may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(d) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(e) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
(f) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds."
(g) REIT Qualification. The Company will use its best efforts
to continue to meet the requirement to qualify as a "real estate
investment trust" under the Code for each of its taxable years for so
long as the board of trustees deems it in the best interests of the
Company's shareholders to remain so qualified.
14
(h) Listing. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange.
(i) No Manipulation of Market for Securities. Except for the
authorization of actions permitted to be taken by the Placement Agent
as contemplated herein or in the Prospectus, the Company will not (a)
take, directly or indirectly, any action designed to cause or to result
in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, and (b)
until the Closing Time, (i) sell, bid for or purchase the Securities or
pay any person any compensation for soliciting purchases of the
Securities or (ii) pay or agree to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.
Section 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) and each amendment thereto, (ii)
the preparation and delivery to the Placement Agent of this Agreement and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the fees and disbursements
of the Company's counsel, accountants and other advisors, (iv) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(c) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Placement Agent in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Placement Agent of copies of each
of the Prospectus and any amendments or supplements thereto, (vi) the fees and
expenses of any transfer agent or registrar for the Securities and (vii) the
fees and expenses incurred in connection with the listing of the Securities on
the New York Stock Exchange. It is understood, however, that the Placement Agent
will pay all fees and disbursements of their counsel in connection with this
Agreement.
(b) Termination of Agreement. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 5 or Section 9(a),
the Company shall reimburse the Placement Agent for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Placement Agent.
Section 5. Conditions of Placement Agent's Obligations. The obligations
of the Placement Agent hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer or authorized representative of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement
is effective and at Closing Time, no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
15
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Placement Agent.
The Prospectus Supplement shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Outside Counsel to the Company. At Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of Jenkens & Gilchrist, a Professional Corporation, outside
counsel for the Company in form and substance satisfactory to counsel for the
Placement Agent, to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the Placement Agent may reasonably request.
(c) Opinion of REIT Counsel to the Company. At Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of Hunton & Williams, REIT counsel for the Company in form and
substance satisfactory to counsel for the Placement Agent, to the effect set
forth in Exhibit B hereto and to such further effect as counsel to the Placement
Agent may reasonably request.
(d) Opinion of Counsel to the Placement Agent. At Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of Cahill Gordon & Reindel, designated Placement Agent's counsel
for the Company, with respect to such matters as the Placement Agent reasonably
may request. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Placement Agent. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company, the Operating
Partnership and the Subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, business, prospects, net worth or results of operations of the
Company, the Operating Partnership and the Subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, and the Placement
Agent shall have received a certificate of the President or a Vice President of
the Company, on behalf of the Company and as general partner of the Operating
Partnership, and of the chief financial or chief accounting officer of the
Company, on behalf of the Company and as general partner of the Operating
Partnership, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Placement Agent shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Placement Agent, containing statements and information of the type ordinarily
16
included in accountants' "comfort letters" with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(g) Bring Down Comfort Letter. At Closing Time, the Placement Agent
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (f) of this Section 5, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(h) Approval of Listing. At Closing Time, the Depositary Shares shall
have been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(i) Filing of Articles Supplementary. At or before to the Closing Time,
the Company shall have filed the Articles Supplementary with the Department of
Assessments and Taxation.
(j) Waiver of Articles. At or before the Closing Time, the board of
directors of the Company shall have approved a resolution of the board of
directors that waives any violation of the "Ownership Limit," as defined in the
Company's articles of amendment and restatement, because of the issuance of the
Preferred Stock.
(k) Additional Documents. At Closing Time counsel for the Placement
Agent shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Placement Agent
and counsel for the Placement Agent.
(l) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Placement Agent by notice to the Company
at any time at or prior to Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 12 shall survive any such termination and
remain in full force and effect.
Section 6. Indemnification.
---------------
(a) Indemnification of Placement Agent. The Company agrees to indemnify
and hold harmless the Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, and any director, officer, employee or affiliate thereof as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
17
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Placement Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto), or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of the Company, Directors and Officers. The
Placement Agent severally agrees to indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, and any officer, director,
trustee, employee or affiliate thereof, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Placement Agent expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Placement Agent,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
18
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
Section 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agent on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) 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 Company on the one hand and of the
Placement Agent on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Placement Agent on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Fee received by the Placement Agent.
The relative fault of the Company on the one hand and the Placement
Agent on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Placement Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
19
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Placement Agent
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities placed by it exceeds the amount of any
damages which the Placement Agent has otherwise been required to pay by reason
of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Placement
Agent, and each director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent, or by or on behalf of
the Company, and shall survive delivery of the Securities to the Investors.
Section 9. Termination of Agreement.
------------------------
(a) Terminating General. The Placement Agent may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, the Operating
Partnership and any of the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Placement Agent,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
20
the New York Stock Exchange or in The Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 12 shall survive such termination and remain in full force and
effect.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to the Placement Agent at North Tower, World Financial
Center, New York, New York 10281-1201, attention of Alexander Rubin (with copy
to William M. Hartnett, Cahill Gordon & Reindel, 80 Pine Street, New York, New
York 10005); notices to the Company and the Operating Partnership shall be
directed to it at 545 East John Carpenter Freeway, Suite 1300, Irving, Texas
75062, attention: Lawrence Robinson (with copy to Robert Dockery, Jenkens &
Gilchrist, P.C., 1445 Ross Avenue, Suite 3200, Dallas, Texas 75202).
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Placement Agent, the Company and its successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Placement Agent and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 6 and 7 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Placement Agent and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Placement Agent shall be deemed
to be a successor by reason merely of such purchase.
Section 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 13. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Placement Agent and the Company in accordance with its terms.
Very truly yours,
FELCOR LODGING TRUST INCORPORATED
By:
--------------------------------------
Name: Lawrence Robinson
Title: Executive Vice President &
General Counsel
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------------------------
Authorized Signatory
SCHEDULE I
Amount of
Depositary Shares
to be Purchased
Investors
Cohen & Steers Quality Income
Realty Fund, Inc......................................................... 1,001,700
Midaro Investments, Inc.,
a corporation controlled by Michael D. Rose.............................. 20,000
Melinda J. Bush.......................................................... 4,100
==================
Total...................................... 1,025,800
==================
SCHEDULE II
List of the Subsidiaries and Unconsolidated Entities
of FelCor Lodging Trust Incorporated
- --------------------------------------- ------------------------------------ ------------------------------------
State and Form of Organization
Name Ownership Interest
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Nevada Holdings, L.L.C. Nevada; Limited Liability Company 100% owned by FelCor
("FelCor Nevada")
- --------------------------------------- ------------------------------------ ------------------------------------
Special Remote I, Inc. Delaware; Corporation 100% owned by FelCor
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Lodging Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor;
("FelCor LP") 86% LP interest owned by FelCor
Nevada
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CSS Hotels, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
("FelCor/CSS Hotels")
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CSS Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/CSS
Hotels; 99% LP interest owned by
FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/St. Paul Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/CSS
Hotels; 99% LP interest owned by
FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/Charlotte Hotel, L.L.C. Delaware; Limited Liability Company 50% owned by FelCor/CSS Hotels
("FelCor/Charlotte")
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/Indianapolis Hotel, L.L.C. Delaware; Limited Liability Company 50% owned by FelCor/CSS Hotels
("FelCor/Indianapolis")
- --------------------------------------- ------------------------------------ ------------------------------------
E.S. Charlotte Limited Partnership Minnesota; Limited Partnership 2% GP interest owned by
FelCor/Charlotte; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
E.S. North, an Indiana Limited Indiana; Limited Partnership 2% GP interest owned by
Partnership FelCor/Indianapolis; 49% LP
interest owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/PSH, L.P. Pennsylvania; Limited Partnership 1% GP interest owned by FelCor/CSS
Hotels; 99% LP interest owned by
FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Lodging Holding Company, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP; special
0% interest owned by Special
Remote I, Inc.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Lodging Company, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor Lodging
Holding Company, L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotel Operating Company, Delaware; Limited Liability Company 100% owned by FelCor LP
L.L.C. ("FHOC")
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Pennsylvania Company, L.L.C. Delaware; Limited Liability Company 100% owned by FHOC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hospitality Holding Company, Delaware; Limited Liability Company 100% owned by FHOC
L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hospitality Company, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor Hospitality
Holding Company, L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotel Asset Company, L.L.C. Delaware; Limited Liability 100% owned by FelCor LP
("FHAC") Company
- --------------------------------------- ------------------------------------ ------------------------------------
FHAC Nevada Holdings, L.L.C. Nevada; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FHAC Texas Holdings, L.P. Texas; Limited Partnership 1% GP interest owned by FHAC and
99% LP interest owned by FHAC
Nevada Holdings, L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor HHCL Company, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
("FelCor HHCL")
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels GenPar, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor HHCL
("FelCor GenPar")
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels LimPar, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor HHCL
("FelCor LimPar")
- --------------------------------------- ------------------------------------ ------------------------------------
HHHC GenPar, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor
GenPar, and 99% LP interest owned
by FelCor LimPar
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotel Company, Ltd. Texas; Limited Partnership 87% GP interest owned by HHHC
("FelCor Hotel Company") GenPar, L.P. and 13% LP interest
owned by FelCor LimPar
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels GenPar II, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor Hotel Company
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotel Company II, Ltd. Texas; Limited Partnership 1% GP interest owned by FelCor
Hotels GenPar II, L.L.C. and 99%
LP interest owned by FelCor Hotel
Company
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Chat-Lem, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
HI Chat-Lem/Iowa - New Orleans Louisiana; General Partnership 50% owned by FelCor Chat-Lem, L.L.C.
Venture
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Philadelphia Center, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Marshall Motels, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
Center City Hotel Associates Pennsylvania; Limited Partnership 1% GP interest owned by FelCor
Philadelphia Center, L.L.C. and
99% LP interest owned by FelCor
Marshall Motels, L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels Financing II, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels Financing I, L.L.C. Delaware; Limited Liability Company 100% owned
by FelCor Hotels ("FelCor Financing I") Financing II, L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels Investments I, Ltd. Texas; Limited Partnership 1% GP interest owned by FelCor
Financing I and 99% LP interest
owned by FelCor Hotel Company
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Hotels Investments II, Ltd. Texas; Limited Partnership 1% GP interest owned by FelCor
Financing I and 99% LP interest
owned by FelCor Hotel Company
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Salt Lake, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor St. Louis Company, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Canada Holding GP, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Canada Holding, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor
Canada Holding GP, L.L.C. and 99%
LP interest owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Canada Co. Nova Scotia; Unlimited Liability 100% owned by FelCor Canada
Company Holding, L.P.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Omaha Hotel Company, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
("FelCor Omaha")
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Country Villa Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor Omaha
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Moline Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor Omaha
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Eight Hotels, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
("FelCor Eight Hotels")
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Meadowlands Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Kansas City Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT San Antonio Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
("EPT San Antonio") Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Austin Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
("EPT Austin") Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Overland Park Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
("EPT Overland Park") Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Atlanta - Perimeter Center Delaware; Limited Partnership 1% GP interest owned by FelCor
Limited Partnership Eight Hotels; 49% LP interest
("EPT Atlanta") owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Raleigh Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
("EPT Raleigh") Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
EPT Covina Limited Partnership Delaware; Limited Partnership 1% GP interest owned by FelCor
("EPT Covina") Eight Hotels; 49% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FCH Condominium Company, L.L.C. Delaware; Limited Liability Company 50% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FCH Development Company, L.L.C. Delaware; Limited Liability Company 50% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FelCor San Antonio Venture Texas; General Partnership 50% GP interest owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FelCor Parsippany Venture New Jersey; General Partnership 50% GP interest owned by FelCor LP
("Parsippany JV")
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
MHV Joint Venture Texas; General Partnership 50% GP interest owned by FelCor LP
("MHV JV")
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FelCor Lombard Venture Illinois; General Partnership 50% GP interest owned by FelCor LP
("Lombard JV")
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FelCor Hotels, L.L.C. Delaware; Limited Liability Company 1% owned by Promus/FelCor Manager,
Inc.; 99% owned by EPT Atlanta,
EPT Austin, EPT Covina, EPT
Overland Park, EPT Raleigh, EPT
San Antonio, Lombard JV, MHV JV
and Parsippany JV
- --------------------------------------- ------------------------------------ ------------------------------------
Kingston Plantation Development Delaware; Corporation 100% owned by FelCor LP
Corp. ("KPDC")
- --------------------------------------- ------------------------------------ ------------------------------------
Promus/FelCor Manager, Inc. Delaware; Corporation 50% owned by KPDC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/New Orleans Annex, L.L.C. Delaware; Limited Liability Company 100% owned by KPDC
- --------------------------------------- ------------------------------------ ------------------------------------
Brighton at Kingston Plantation, Delaware; Limited Liability Company 50% owned by KPDC
L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
Margate Towers at Kingston Delaware; Limited Liability Company 100% owned by KPDC
Plantation, L.L.C.
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/DT Hotels, L.L.C. Delaware; Limited Liability Company 90% owned by FelCor LP
("FCH/DT Hotels")
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/DT Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/DT
Hotels; 89.1% LP interest owned by
FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/DT BWI Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/DT
Hotels; 99% LP interest owned by
FCH/DT Holdings, LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/LAX Hotels, L.L.C. Delaware; Limited Liability 100% owned by FelCor LP
("FelCor/LAX Hotels") Company
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/LAX Holdings, L.P. Delaware; Limited Partnership 1% GP Interest owned by FelCor/LAX
Hotels; 99% LP interest owned by
FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
Los Angeles International Airport Texas; Limited Partnership 50% GP interest owned by
Hotel Associates, a Texas limited FelCor/LAX Holdings, L.P. and 48%
partnership LP interest owned by FelCor/LAX
Hotels
- --------------------------------------- ------------------------------------ ------------------------------------
Park Central Joint Venture Texas; General Partnership 60% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor Airport Utilities, L.L.C. Delaware; Limited Liability Company 100% owned by FHAC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/MM Hotels, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/MM Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/MM
Hotels, L.L.C. and 99% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
Tysons Corner Hotel Company, L.L.C. Delaware; Limited Liability Company 50% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/MM S-7 Hotels, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/MM S-7 Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/MM
S-7 Hotels, L.L.C. and 99% LP
interest owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Buckhead Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Corpus Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Corpus Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/CMB
Corpus Hotel, L.L.C. and 99% LP
interest owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Deerfield Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Marlborough Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB New Orleans Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Orsouth Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Orsouth Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/CMB
Orsouth Hotel, L.L.C. and 99% LP
interest owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB Piscataway Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB SSF Hotel, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor/CSS Holdings,
L.P.
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor/CMB SSF Holdings, L.P. Delaware; Limited Partnership 1% GP interest owned by FelCor/CMB
SSF Hotel, L.L.C. and 99% LP
interest owned by FelCor/CSS
Holdings, L.P.
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Hotels, L.P. ("FCH/IHC") Delaware; Limited Partnership 0.5% GP interest owned by FHAC and
49.5% LP interest owned by FelCor
LP
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Dallas Holdings, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Dallas Hotels, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/IHC
Dallas Holdings, L.L.C. and 99% LP
interest owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC I-10 Holdings, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC I-10 Hotels, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/IHC
I-10 Holdings, L.L.C. and 99% LP
interest owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Atlanta Hotels, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Scottsdale Hotels, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Houston Holdings, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Houston Hotels, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/IHC
Houston Holdings, L.L.C. and 99%
LP interest owned by FCH/IHC
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor TRS I, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor TRS Holdings, L.P. ("FelCor Delaware; Limited Partnership 1% GP interest owned by FelCor TRS
TRS") I, L.L.C. and 99% LP interest
owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
FelCor TRS II, Inc. Delaware; Corporation 100% owned by FelCor LP
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT Operations, L.L.C. ("DJONT") Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT Leasing, L.L.C. Delaware; Limited Liability Company 100% voting interest owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/EPT Manager, Inc. Delaware; Corporation 100% owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/EPT Leasing, L.L.C. Delaware; Limited Liability Company 1% owned by DJONT/EPT Manager,
Inc. and 99% owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/DT Leasing, L.L.C. Delaware; Limited Liability Company 100% voting interest and 50%
economic interest owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/DT Leasing II, L.L.C. Delaware; Limited Liability Company 100% voting interest and 50%
economic interest owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/SH Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/SH Leasing II, L.L.C. Delaware; Limited Liability Company 100% voting interest and 50%
economic interest owned by DJONT
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB Buckhead Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB FCOAM, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB Deerfield Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB Corpus Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB SSF Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB Orsouth Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB New Orleans Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
DJONT/CMB Piscataway Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Operations, L.L.C. ("BHR") Delaware; Limited Liability Company 100% owned by FelCor TRS
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/JVEIGHT Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Leasing, L.P. ("FCH/IHC Delaware; Limited Partnership 0.5% GP interest owned by
Leasing") FCH/JVEIGHT Leasing, L.L.C. and
49.5% LP interest owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Atlanta Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Scottsdale Leasing, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC I-10 Leasing GP, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC I-10 Leasing, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/IHC
I-10 Leasing GP, L.L.C. and 99% LP
interest owned by FCH/IHC Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Houston Leasing GP, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Houston Leasing, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/IHC
Houston Leasing GP, L.L.C. and 99%
LP interest owned by FCH/IHC
Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Dallas Leasing GP, L.L.C. Delaware; Limited Liability Company 100% owned by FCH/IHC Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
FCH/IHC Dallas Leasing, L.P. Delaware; Limited Partnership 1% GP interest owned by FCH/IHC
Dallas Leasing GP, L.L.C. and 99%
LP interest owned by FCH/IHC
Leasing
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Hotels Finance, Inc. Delaware; Corporation 100% owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Dallas Tenant Company, L.P. Delaware; Limited Partnership 1% GP interest owned by BHR Hotels
Finance, Inc.; 99% LP interest
owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Plano Tenant Company, L.P. Delaware; Limited Partnership 1% GP interest owned by BHR Hotels
Finance, Inc.; 99% LP interest
owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Lodging Tenant Company Delaware; Corporation 100% owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Canada Tenant Company Nova Scotia; Unlimited Liability 100% owned by BHR
Company
- --------------------------------------- ------------------------------------ ------------------------------------
BHR Salt Lake Tenant Company, L.L.C. Delaware; Limited Liability Company 100% owned by BHR
- --------------------------------------- ------------------------------------ ------------------------------------
EXHIBIT A
[Intentionally omitted]
EXHIBIT B
[Intentionally omitted]