-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G3dxSF9InUxmvLZILHrH7QygwDE5WAGzmMp7JrNC+iPoHfK6hEQGBJkOVrcWEj4Y O7DwYfU+FoMvCPzZEt5GJw== 0000950134-98-004838.txt : 19980601 0000950134-98-004838.hdr.sgml : 19980601 ACCESSION NUMBER: 0000950134-98-004838 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19980507 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980529 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FELCOR SUITE HOTELS INC CENTRAL INDEX KEY: 0000923603 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 752541756 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14236 FILM NUMBER: 98634019 BUSINESS ADDRESS: STREET 1: 545 E JOHN CARPENTER FREEWAY STREET 2: SUITE 1300 CITY: IRVING STATE: TX ZIP: 75062 BUSINESS PHONE: 2144444900 MAIL ADDRESS: STREET 1: 545 E JOHN CARPENTER FREEWAY STREET 2: SUITE 1300 CITY: IRVING STATE: TX ZIP: 75062 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 7, 1998 FELCOR SUITE HOTELS, INC. (Exact name of registrant as specified in its charter) MARYLAND 1-14236 72-2541756 (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) 545 E. JOHN CARPENTER FREEWAY, SUITE 1300, IRVING, TEXAS 75062 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 444-4900 (NOT APPLICABLE) (Former name or former address, if changed since last report) 2 ITEM 5. OTHER EVENTS On May 7, 1998, the Company issued 5,750,000 Depositary Shares (including 750,000 shares pursuant to the exercise of an over-allotment option), each representing an 1/100 interest in a share of 9% Cumulative Redeemable Preferred Stock, par value $.01 per share ("Series B Preferred Stock"), of the Company. Each share of Series B Preferred Stock is entitled to a liquidation preference of $2,500 per share (equivalent to $25 per Depositary Share). The Depositary Shares and the Preferred Stock were issued pursuant to an Underwriting Agreement dated April 30, 1998, among the Company, FelCor Suites Limited Partnership (the "Partnership") and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Prudential Securities Incorporated and Smith Barney Inc., as representatives of the several underwriters named therein (the "Underwriters"). This report is being filed for the purpose of setting forth certain exhibits in connection with the issuance of the Depositary Shares and Series B Preferred Stock. ITEM 7(C). EXHIBITS The following exhibits are furnished in accordance with Item 601 of Regulation S-K:
Exhibit Number Description of Exhibit 1 Underwriting Agreement dated April 30, 1998, among the Company, the Partnership and the Underwriters. 3.3 Articles Supplementary of the Company designating the 9% Series B Cumulative Redeemable Preferred Stock 4.5 Form of Share Certificate representing 9% Series B Cumulative Redeemable Preferred Stock 4.6 Deposit Agreement dated April 30, 1998, between the Company and SunTrust Bank, Atlanta, as preferred share depositary 4.7 Form of Depositary Receipt evidencing the Depositary Shares 8.1 Opinion of Hunton & Williams as to certain tax matters 10.1.9 Ninth Amendment to Amended and Restated Agreement of Limited Partnership of the Partnership dated as of May 1, 1998, between the Company and all of the persons or entities who are or shall in the future become limited partners of the Partnership, adopting Addendum No. 3 to Amended and Restated Agreement of Limited Partnership dated as of May 1, 1998
2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FELCOR SUITE HOTELS INC. Date: May 28, 1998 By: /s/ Lawrence D. Robinson --------------------------------------------------------------------------- Lawrence D. Robinson Senior Vice President, General Counsel and Secretary
3 4 INDEX TO EXHIBITS
Exhibit Sequentially No. Description of Exhibit Numbered Page ------------ ------------------------------------------------------- --------------------- 1 Underwriting Agreement dated April 30, 1998, among the Company, the Partnership and the Underwriters. 3.3 Articles Supplementary of the Company designating the 9% Series B Cumulative Redeemable Preferred Stock 4.5 Form of Share Certificate representing 9% Series B Cumulative Redeemable Preferred Stock 4.6 Deposit Agreement dated April 30, 1998, between the Company and SunTrust Bank, Atlanta, as preferred share depositary 4.7 Form of Depositary Receipt evidencing the Depositary Shares 8.1 Opinion of Hunton & Williams as to certain tax matters 10.1.9 Ninth Amendment to Amended and Restated Agreement of Limited Partnership of the Partnership dated as of May 1, 1998, between the Company and all of the persons or entities who are or shall in the future become limited partners of the Partnership, adopting Addendum No. 3 to Amended and Restated Agreement of Limited Partnership dated as of May 1, 1998
4 EX-1 2 UNDERWRITING AGREEMENT 1 EXHIBIT 1 5,000,000 Depositary Shares FELCOR SUITE HOTELS, INC. EACH REPRESENTING 1/100 OF A SHARE OF 9% SERIES B CUMULATIVE REDEEMABLE PREFERRED STOCK PAR VALUE $.01 PER SHARE UNDERWRITING AGREEMENT April 30, 1998 2 April 30, 1998 Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Prudential Securities Incorporated Smith Barney Inc. c/o Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs and Mesdames: FelCor Suite Hotels, Inc., a Maryland corporation (the "Company"), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of 5,000,000 depositary shares (the "Depositary Shares"), each representing 1/100 of a share of 9% Series B Cumulative Redeemable Preferred Stock, $.01 par value per share (the "Preferred Stock") of the Company. Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Prudential Securities Incorporated and Smith Barney Inc. shall act as representatives (the "Representatives") of the several Underwriters. The Depositary Shares will be issued by SunTrust Bank, Atlanta, as Depositary (the "Depositary"), under a Deposit Agreement dated as of May 7, 1998 (the "Deposit Agreement"), among the Company, the Depositary and the holders from time to time of the Depositary Receipts issued thereunder. The Depositary Shares will be evidenced by Depositary Receipts issued pursuant to the Deposit Agreement (the "Depositary Receipts"). The Company also proposes to issue and sell to the several Underwriters not more than an additional 750,000 depositary shares (the "Additional Depositary Shares"), each representing 1/100 of a share of Preferred Stock (the "Additional Preferred Stock"), if and to the extent that the Representatives shall have determined to exercise, on behalf of the Underwriters, the right to purchase such shares granted to the Underwriters in Section 2 hereof. Such Additional Depositary Shares will be issued by the Depositary under the Deposit Agreement and will be evidenced by additional depositary receipts (the "Additional Depositary Receipts") issued pursuant to the Deposit Agreement. The Preferred Stock, the Additional Preferred Stock, the Depositary Shares, the Additional Depositary Shares, the Depositary Receipts and the Additional Depositary Receipts are described in the Prospectus Supplement, which is referred to below, and are collectively referred to herein as the "Securities." Upon consummation of the transactions contemplated hereby and upon the Company's contribution of the net proceeds from the sale of the Depositary Shares, in exchange for units of 3 partnership interest (the "Units") in FelCor Suites Limited Partnership, (the "Partnership"), a Delaware limited partnership, the Company will own an approximate 92.4% general partnership interest in the Partnership. As of April 17, 1998, the Partnership, directly or indirectly, owned interests in 76 hotels as described in the Prospectus, as defined herein (collectively, the "Current Hotels"). On March 23, 1998, the Company entered into a merger agreement (the "Merger Agreement") with Bristol Hotel Company ("Bristol") under which the owned and leased hotel assets of Bristol will be merged with and into the Company (the "Merger"). In addition, the Company has entered into an agreement (the "Acquisition Agreement") as described in the Prospectus to acquire eight additional hotels from an unaffiliated seller (such additional hotels, along with the hotels being acquired in connection with the Merger being hereinafter referred to as the "Acquisition Hotels") (the Current Hotels and the Acquisition Hotels are hereinafter referred to as the "Hotels"). The Partnership leases the Current Hotels, and upon the purchase thereof will lease eight of the Acquisition Hotels, to DJONT Operations, L.L.C. or a subsidiary thereof (collectively, the "Lessee"), pursuant to separate leases providing for the payment of certain base amounts (the "Percentage Leases"). The Current Hotels are managed pursuant to separate management agreements (collectively, the "Management Agreements"). The Partnership will lease the remaining Acquisition Hotels to an affiliate of Bristol (the "Bristol Lessee") pursuant to leases similar to the Percentage Leases (the "Bristol Leases"). The Current Hotels are operated, and the Acquisition Hotels will be operated, by the Lessee and the Bristol Lessee pursuant to the terms of the Percentage Leases and the Bristol Leases, respectively. Other capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Registration Statement (as hereinafter defined). The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, 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 (the "Prospectus Supplement") specifically relating to the Depositary Shares pursuant to Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"). The term "Registration Statement" means the registration statement, including the exhibits thereto, as amended to the date of this Agreement. The term "Basic Prospectus" means the prospectus included in the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the Prospectus Supplement. The term "Preliminary Prospectus" means a preliminary prospectus supplement specifically relating to the Depositary Shares, together with the Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and "Preliminary Prospectus" shall include in each case the documents, if any, incorporated by reference therein. 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 "Exchange Act"). As used herein, the term "Incorporated Documents" means the documents which at the time are incorporated by reference in the Registration Statement, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto. 2 4 1. REPRESENTATIONS AND WARRANTIES. The Company and the Partnership, jointly and severally, represent and warrant to and agree with each of the Underwriters that: (a) The Registration Statement has become effective; no order preventing or suspending the use of any Preliminary 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. (b) 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 Securities Act, set forth in the General Instructions to Form S-3. When any Preliminary Prospectus was filed with the Commission it (i) contained all statements required to be stated therein in accordance with, and complied in all material respects with the requirements of, the Securities Act and the rules and regulations of the Commission thereunder and (ii) did 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. When the Registration Statement or any amendment thereto was declared effective, and on the Closing Date (or the Option Closing Date, as the case may be, both as defined below) it (i) 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 Securities Act and the rules and regulations of the Commission thereunder and (ii) 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 any amendment or supplement thereto is filed with the Commission pursuant to Rule 424(b) and at the Closing Date (or the Option Closing Date, as the case may be, both as defined below), the Prospectus, as amended or supplemented at any such time, (i) 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 Securities Act and the rules and regulations of the Commission thereunder and (ii) 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 (b) 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 any Underwriter through you expressly for use therein. (c) The Incorporated Documents heretofore filed, when they were filed (or, if any amendment with respect to any such document was filed, when such amendment was filed), conformed in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, any further Incorporated Documents so filed will, when they are filed, conform in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder; no such document when it was filed (or, if an amendment with respect to any 3 5 such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. (d) 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. The Company has been duly qualified to do 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 now conducted requires such qualification, except where the failure to do so would not have a material adverse effect on the Company, the Partnership or the Hotels taken as a whole. The Company will be duly qualified (at the time of the closing of the acquisition of the Acquisition Hotels) in each jurisdiction in which the ownership or leasing of its properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the Company, the Partnership or any Hotels, taken as a whole. Except for the entities listed on Schedule II hereto (the "Subsidiaries"), the Company does not own or control, directly or indirectly, any corporation, association or other entity. The Partnership owns the percentage equity interests of each of the Subsidiaries as reflected on Schedule II. All of such equity interests have been duly and validly authorized and issued and are fully paid and are so owned free and clear of any pledge, lien, charge, encumbrance, security interests, preemptive right or other claims. (e) The 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. Each subsidiary of the 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 on the Company, the Partnership or the Hotels, taken as a whole. The Partnership and its subsidiaries have been duly qualified or registered to do business and are in good standing as foreign partnerships, corporations or limited liability companies in each other jurisdiction in which the ownership or leasing of their properties or the nature or conduct of their business as now conducted requires such qualification, except where the failure to do so would not have a material adverse effect on the Company, the Partnership or the Hotels taken as a whole. The Partnership will be duly qualified (at the time of the closing of the acquisition of the Acquisition Hotels) in each jurisdiction in which the ownership or leasing of its properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the Company, the Partnership or the Hotels, taken as a whole. The Company is the sole general partner of the Partnership, and at the Closing Date, will be the sole general partner of the Partnership and will own an approximate 92.4% interest in the Partnership. The Company owns all of the 4 6 outstanding Series A Preferred Units in the Partnership and, upon issuance of such units on the Closing Date, will own all of the outstanding Series B Preferred Units in the Partnership. (f) DJONT Operations, L.L.C. has been duly formed and is validly existing as a limited liability company in good standing under the Delaware Limited Liability Company Act. FCOAM, Inc. has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Texas. The Lessee has all requisite limited liability company or corporate power and authority to own, lease and operate its properties and conduct its business. Each subsidiary of DJONT Operations, L.L.C. (other than FCOAM, Inc.) has been duly formed, is validly existing and is in good standing under the laws of the State of Delaware. The Lessee and its subsidiaries have been duly qualified to do business and are in good standing as a foreign limited liability company or corporation in each other jurisdiction in which the ownership or leasing of their properties or the nature or conduct of their business as now conducted requires such qualification, except where the failure to do so would not have a material adverse effect on the Lessee. The Lessee will be duly qualified (at the time of the closing of the acquisition of the Acquisition Hotels) in each jurisdiction in which the ownership or leasing of its properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the Lessee or the Hotels, taken as a whole. (g) The Company has full legal right, power and authority to enter into this Agreement, the Deposit Agreement and the amendment to the articles of incorporation relating to the Preferred Stock (the "Articles Supplementary"), to issue, sell and deliver the Securities as provided herein and to consummate the transactions contemplated herein. This Agreement, the Deposit Agreement and the Articles Supplementary have been duly authorized, executed and delivered by the Company. (h) The Partnership has full legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated herein. This Agreement has been duly authorized, executed and delivered by the Partnership. (i) The Company, the Partnership, and to the knowledge of the Company and the Partnership, each of the other parties to the Amended and Restated Agreement of Limited Partnership of the Partnership, as amended (the "Partnership Agreement"), the Percentage Leases and the Management Agreements have full legal right, power and authority to enter into each such agreement and to consummate the transactions contemplated therein. Each such agreement has been duly authorized, executed and delivered by the Company, the Partnership, and to the knowledge of the Company and the Partnership, each of the other parties. (This Agreement, the Deposit Agreement, the Articles Supplementary, the Partnership Agreements, the New Percentage Leases (as defined herein) and the New Management Agreements (as defined herein) sometimes are hereinafter referred to collectively as the "Operative Documents"). (j) The Partnership and, to the knowledge of the Company and the Partnership, each of the other parties to the Acquisition Agreement and the Merger Agreement have full legal 5 7 right, power and authority to enter into such agreements and to consummate the transactions contemplated thereby. The Acquisition Agreement and the Merger Agreement have been duly authorized, executed and delivered by the Company and, to the Company's and the Partnership's knowledge, the other parties thereto and constitute valid and binding agreements, enforceable in accordance with their 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 or by general equity principles. (k) 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 and the Partnership 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 have not been filed, but will be filed with the Maryland Department of Assessments and Taxation on or before the Closing Date. (l) 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 nor the consummation of the transactions contemplated hereby or thereby 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 articles of incorporation (as amended by the Articles Supplementary), bylaws, certificate of limited partnership or partnership agreement, as the case may be, of the Company or the Partnership; any indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument to which the Company or the Partnership is a party or to which they, any of them, any of their respective properties or other assets or any Current Hotel or the Acquisition Hotels is subject; 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; or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of any of the foregoing. (m) The Depositary Shares to be issued and sold to the Underwriters hereunder 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 this Agreement 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 Agreement, 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 any 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 6 8 nonassessable share of Preferred Stock. Assuming due execution and delivery of the Depositary Receipts, if any, by the Depositary pursuant to such 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 Securities 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. (n) 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 and the Series A Preferred Stock contained in the Prospectus. The Securities conform to their description 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, 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. (o) All offers and sales of the Company's capital stock prior to the date hereof were at all relevant times duly registered under the Securities Act or exempt from the registration requirements of the Securities 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. (p) 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 Date have been duly and validly authorized by the Partnership. At the Closing Date, 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 Date will be issued, offered and sold in compliance with all applicable laws (including, without limitation, federal and state securities laws). (q) The financial statements of the Company, the Lessee and Bristol incorporated by reference in the Registration Statement and Prospectus, together with related schedules and notes (and any amendment or supplement thereto), present fairly the financial position of each entity, as of the dates indicated, and the results of operations and cash flows of such entity 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 7 9 or otherwise to be included or incorporated by reference in the Registration Statement, the Prospectus, or any Preliminary Prospectus. (r) Each of Coopers & Lybrand L.L.P., Arthur Andersen LLP and Price Waterhouse LLP, who have examined and are reporting upon the audited financial statements and schedules included or incorporated by reference in the Registration Statement, are and were, during the periods covered by their reports included in the Registration Statement and the Prospectus, independent public accountants within the meaning of the Act. (s) Since December 31, 1997, neither the Company, the Partnership, nor the Lessee 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 Registration Statement and the Prospectus, and except as otherwise stated in the Registration Statement and 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 the Company, the Partnership, or the Lessee, (ii) any material adverse change, or any development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company, the Partnership or the Lessee and their respective subsidiaries, taken as a whole, from that set forth in the Prospectus, exclusive of any amendments, or supplements thereto subsequent to the date of this Agreement, (iii) any liability or obligation, direct or contingent, incurred or undertaken by the Company, the Partnership or the Lessee 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 the Company or the Partnership, or (v) any transaction that is material to the Company, the Partnership or the Lessee, except transactions in the ordinary course of business or as otherwise disclosed in the Registration Statement and the Prospectus. (t) The Partnership has good and indefeasible title in fee simple to all real property and the improvements thereon owned by it free and clear of all liens, encumbrances, claims, security interests, restrictions and defects except (i) such as are described in the Prospectus, (ii) such matters reflected in the owner's title insurance policies relating to such properties and (iii) such as do not materially adversely affect the value of the properties or the use proposed to be made of the property by the Partnership. Upon consummation of the transactions contemplated by the Acquisition Agreement and the Merger Agreement, the Partnership will have good and indefeasible title in fee simple to the Acquisition Hotels, and all related real property, free and clear of all liens, encumbrances, claims, security interests, restrictions and defects except such as are described in the proposed title commitments for the Acquisition Hotels or which do not materially adversely affect the value of the property or the use proposed to be made of the property by the Partnership or, with respect to the Acquisition Hotels to be acquired in the Merger, such as would not have a material adverse effect on the Company, the Partnership or any Hotels, taken as a whole. Except as disclosed in the Prospectus, neither the Company nor the Partnership owns or leases any real property as lessee 8 10 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 Partnership. Except as disclosed in the Prospectus, no person other than the Partnership has an option or right of first refusal to purchase all or part of any Current 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 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 in the aggregate have a material adverse impact on the condition, financial or otherwise, or on the earnings, assets, business affairs or business prospects of the Partnership, the Company or the Hotels, taken as a whole. Neither the Company nor the 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 on the condition, financial or otherwise, or on the earnings, assets, business affairs or business prospects of or with respect to the Partnership, the Company or the Hotels, taken as a whole. (u) Neither the Company nor the Partnership is in violation of its respective articles of incorporation, bylaws, certificate of limited partnership or partnership agreement, as the case may be, and 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; provided, however, that the Merger will require consents from certain third parties which either will be obtained or the failure to obtain would not have a material adverse effect on the Company, the Partnership or the Hotels, taken as a whole. Neither the Company nor the Partnership 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 on the financial position, results of operations or business of each such entity, respectively. (v) Except as described in the Prospectus, there is not pending or, to the knowledge of the Company or the Partnership, threatened, any action, suit, proceeding, inquiry or investigation against the Company, the Partnership, the Lessee 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 business, prospects, properties, assets, results of operations or condition (financial or otherwise) of any such entity or which could adversely affect the consummation of the transactions contemplated by this Agreement or the Deposit Agreement. 9 11 (w) 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 best knowledge of the Company and the Partnership, there are no statutes or regulations applicable to the Company or the Partnership or certificates, permits or other authorizations from governmental regulatory officials or bodies required to be obtained or maintained by the Company or the Partnership 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 Partnership, the Lessee, respectively, and third parties expressly referenced in the Prospectus are legal, valid and binding obligations of the Company, the Partnership and the Lessee, 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. (x) Except as described in the Prospectus, the Company, the Partnership or the Lessee owns, possesses or has obtained or has taken all necessary action to obtain (and will obtain) all material permits, licenses, franchises (including, with respect to the Lessee, the franchises relating to the Hotels), 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, and neither the Company, the Partnership nor the Lessee has received any notice of proceedings relating to revocation or modification of any such licenses, permits, franchises, certificates, consents, orders, approvals or authorizations. (y) Except as described in the Prospectus, the Company, the Partnership, and the Lessee own or possess or have the right to acquire (and will acquire) adequate license or other rights to use all patents, trademarks, service marks, trade names, copyrights, software and design licenses, trade secrets, manufacturing processes, other intangible property rights and know-how (collectively "Intangibles") necessary to entitle the Company, the Partnership, and the Lessee to conduct their respective businesses as presently conducted, and neither the Company, the Partnership, nor the Lessee 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 materially and adversely affect the business, prospects, properties, assets, results of operation or condition (financial or otherwise) of the Company, the Partnership or the Lessee. (z) The Company's, the Partnership's and to the best of the Company's and the Partnership's knowledge, the Lessee'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, the Partnership's, or the Lessee's financial statements; and, to the best of the Company's and the Partnership's knowledge, neither the Company, the Partnership, nor the 10 12 Lessee, nor any employee or agent thereof, has made any payment of funds of the Company, the Partnership, the Lessee, as the case may be, or received or retained any funds, and no funds of the Company, the Partnership, the Lessee, 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. (aa) Each of the Company, the Partnership (to the extent not consolidated with the Company), and the Lessee has filed on a timely basis all necessary federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof and has paid all taxes shown as due thereon (except for certain tax returns, the failure of which to file will not have a material adverse effect on the Company, the Partnership or the Hotels, taken as a whole); 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 materially adversely affect the business, prospects, properties, assets, results of operations or condition (financial or otherwise) of any such entity, respectively. All tax liabilities are adequately provided for on the respective books of such entities. (bb) The Company, the Partnership, and the Lessee 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 best of the Company's and the Partnership's knowledge, 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 Partnership and the Lessee against theft, damage, destruction, acts of vandalism, and all other risks customarily insured against, all of which insurance is in full force and effect. (cc) To the best of the Company's knowledge, no general labor problem exists or is imminent with the employees of the Company or Lessee. The Partnership has no employees. (dd) Each of the Company, the 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. (ee) The Depositary Shares are registered, or will be registered on or before the Closing Date, pursuant to Section 12(b) of the Exchange Act, and the Depositary Shares will be, within 30 days of the date of this Agreement, listed on the New York Stock Exchange. (ff) 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. (gg) Except as otherwise disclosed in the Prospectus, neither the Company, the Partnership, FelCor/CSS Holdings, L.P. ("Holdings") nor, to the best knowledge of the Company and 11 13 the Partnership, any entity from whom the Partnership acquired or will acquire 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 potentially 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 the Company or the Partnership, including the Hotels (the "Real Property"), except as in material compliance with applicable laws; to the knowledge of the Company and the Partnership, the Real Property and the Company's and the 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 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 as otherwise disclosed in the Prospectus, neither the Company nor the Partnership has received any written or oral notice from any governmental entity or any other person, and there is no pending or threatened claim, litigation, or any administrative agency proceeding that alleges a violation of any Environmental Laws by the Company or the Partnership; alleges that the Company or the Partnership is a liable party or a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., or any state superfund law; has resulted in or could result in the attachment of an environmental lien on any of the Real Property; or alleges that the Company or the 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; except with respect to this representation (gg), such matters relating to certain of the Acquisition Hotels that will not have a material adverse effect on the Company, the Partnership or the Hotels, taken as a whole. (hh) The Company is organized in conformity with the requirements for qualification as a real estate investment trust 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 Partnership is treated as a partnership for federal income purposes and not as a corporation or an association taxable as a corporation. (ii) None of the Company, the Partnership, or the Lessee 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. 12 14 (jj) 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 the Company, the Partnership, the Lessee, or any selling entity. (kk) The Merger will not 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 articles of incorporation, by-laws, certificate of limited partnership or partnership agreement, as the case may be, of the Company or the Partnership; any indenture, mortgagee, deed of trust, loan agreement, note, lease or other agreement or instrument to which the Company or the Partnership is a party or to which they, any of them, any of their respective properties or other assets or any Current Hotel or the Acquisition Hotels is subject (provided, however, that such Merger will require consents from certain third parties which either will be obtained or the failure to obtain will not have a material adverse effect on the Company, the Partnership or the Hotels); 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; or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of any of the foregoing. (ll) Holdings is not currently prohibited, directly or indirectly, from making distributions to the Company, from repaying to the Company any loans or advances to Holdings, or from transferring any of Holdings' property or assets to the Company, except as disclosed in the Prospectus. (mm) 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 (A) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, the Depositary Shares or (B) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company. (nn) To the Company's knowledge, neither the Company nor any of its subsidiaries nor any employee or agent of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law, rule, or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus. Any certificate signed by any officer of the Company on behalf of the Company, or the Partnership and delivered to you or to counsel for the Underwriters shall be deemed a representation and warranty by such entity to each Underwriter as to the matters covered thereby. 13 15 2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company, the respective numbers of Depositary Shares set forth in Schedule I hereto opposite its name at U.S. $24.2125 a share (the "Purchase Price"). On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional Depositary Shares, and the Underwriters shall have a one-time right to purchase, severally and not jointly, up to 750,000 Additional Depositary Shares at the Purchase Price. If the Representatives, on behalf of the Underwriters, elect to exercise such option, the Representatives shall so notify the Company in writing not later than 30 days after the date of this Agreement, which notice shall specify the number of Additional Depositary Shares to be purchased by the Underwriters and the date on which such shares would be purchased. Such date may be the same as the Closing Date (as defined herein) but not earlier than the Closing Date nor later than 10 business days after the date of such notice. Additional Depositary Shares may be purchased as provided in Section 4 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Depositary Shares. If any Additional Depositary Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Additional Depositary Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the total number of Additional Depositary Shares to be purchased as the number of Depositary Shares set forth in Schedule 1 hereto opposite the name of such Underwriter bears to the total number of Depositary Shares. The Company hereby agrees that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during the period ending 30 days after the date of the Prospectus, directly or indirectly sell, offer to sell, grant any option for the sale of, or otherwise dispose of any Depositary Shares or any shares of Preferred Stock. The foregoing sentence shall not apply to (A) the Depositary Shares to be sold hereunder, or (B) transactions by any person other than the Company relating to Depositary Shares and/or shares of Preferred Stock or other securities acquired in open market transactions after the completion of the offering of the Depositary Shares. 3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the Underwriters propose to make a public offering of their respective portions of the Depositary Shares as soon after this Agreement has become effective as in your judgment is advisable. The Company is further advised by you that the Depositary Shares are to be offered to the public initially at U.S. $25.00 a share (the "Public Offering Price") and to certain dealers selected by you at a price that represents a concession not in excess of U.S. $.50 a share under the Public Offering Price, and that any Underwriter may allow, and such dealers may reallow, a concession, not in excess of U.S. $.40 a share, to any Underwriter or to certain other dealers. 4. PAYMENT AND DELIVERY. Payment for the Depositary Shares to be sold by the Company shall be made in Federal or other funds immediately available in New York City against 14 16 delivery of such Depositary Shares for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on May 7, 1998, or at such other time on the same or such other date, not later than May 14, 1998, as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the "Closing Date." Payment for any Additional Depositary Shares shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Additional Depositary Shares for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date specified in the notice described in Section 2 or at such other time on the same or on such other date, in any event not later than June 12, 1998, as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the "Option Closing Date." Depositary Receipts and Additional Depositary Receipts for the Depositary Shares and the Additional Depositary Shares, as applicable shall be in definitive form and registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or Option Closing Date, as applicable. The Depositary Receipts and Additional Depositary Receipts evidencing the Depositary Shares and the Additional Depositary Shares, as applicable shall be delivered to you on the Closing Date or the Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Depositary Shares and the Additional Depositary Shares to the Underwriters duly paid, against payment of the Purchase Price therefor. 5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the Company to sell the Depositary Shares to the Underwriters and the several obligations of the Underwriters to purchase and pay for the Depositary Shares on the Closing Date are subject to the following conditions: (a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date: (i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and (ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company, the Partnership and their respective subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement) that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Depositary Shares on the terms and in the manner contemplated in the Prospectus. 15 17 (b) The Underwriters shall have received on the Closing Date (i) a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in clause (a)(ii) above and (ii) a certificate, dated the Closing Date and signed by an executive officer of the Company and the general partner of the Partnership to the effect that the representations and warranties of the Company and the Partnership contained in this Agreement are true and correct as of the Closing Date and that the Company and the Partnership have complied with all of the agreements and satisfied all of the conditions on their part to be performed or satisfied hereunder on or before the Closing Date. The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (c) The Underwriters shall have received on the Closing Date, an opinion of Jenkens & Gilchrist, a Professional Corporation, counsel for the Company and the Partnership, dated the Closing Date and addressed to the Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under Maryland law with all requisite corporate power and authority to own, lease and operate its properties and to conduct its business. The Company has been duly qualified to do business and is in good standing as a foreign corporation in the states of Arizona, California, Colorado, Delaware, Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, and Texas. To such counsel's knowledge, there are no other jurisdictions in which the ownership or leasing the Company's properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the financial condition, business, prospects, net worth or results of operations of the Company and the Partnership, taken as a whole. To such counsel's knowledge, except for the entities listed on Schedule II to this Agreement, the Company does not own or control, directly or indirectly, any corporation, association or control, directly or indirectly, any corporation, association or other entity. The Partnership owns the percentage equity interests of each of the Subsidiaries as reflected on Schedule II. All of such equity interests have been duly and validly authorized and issued and are fully paid and are so owned free and clear of any pledge, lien, charge, encumbrance, security interests, preemptive right or other claims. (ii) The Partnership has been duly formed and validly existing under the Delaware Act with all requisite partnership power and authority to own, lease and operate its properties and to conduct its business. The Partnership has been duly qualified or registered to do business and is in good standing as a foreign 16 18 partnership in the states of Arizona, California, Colorado, Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee and Texas. To such counsel's knowledge, there are no other jurisdictions in which the ownership or leasing of the Partnership's properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the financial condition, business, prospects, net worth or results of operations of the Company and the Partnership, taken as a whole. The Company is the sole general partner of the Partnership and upon its delivery to the Partnership of the net proceeds from the sale of the Depositary Shares pursuant hereto, will own an approximate 92.4% general partnership interest in the Partnership. The Company owns all of the outstanding Series A Preferred Units in the Partnership and, upon issuance of such units on the Closing Date, will own all of the outstanding Series B Preferred Units in the Partnership. (iii) Holdings has been duly formed and is validly existing as a limited partnership in good standing under the Delaware Act. It has all requisite partnership power and authority to own, lease and operate its properties and conduct its business. It has been duly qualified to do business and is in good standing as a foreign partnership or corporation in the states of Alabama, Arizona, California, Florida, Louisiana, Minnesota, Ohio and Texas. To such counsel's knowledge, there are no other jurisdictions in which the ownership or leasing of its properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the financial condition, business, prospects, net worth or results of the Company and the Partnership taken as a whole. (iv) DJONT Operations, L.L.C. has been duly formed and is validly existing as a limited liability company in good standing under the Delaware Limited Liability Company Act. DJONT Operations, L.L.C. has all requisite limited liability company power and authority to own, lease and operate its properties and conduct its business. DJONT Operations, L.L.C. has been duly qualified to do business and is in good standing as a foreign limited liability company in the states of Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Kentucky, Louisiana, Minnesota, New Jersey, Ohio, Oklahoma, Tennessee and Texas. To such counsel's knowledge, there are no other jurisdictions in which the ownership or leasing of its properties or the nature or conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect on the financial condition, business, prospects, net worth or results of the Lessee. The subsidiaries of DJONT Operations, L.L.C. consist of DJONT Leasing, L.L.C., FCH/DT 17 19 Leasing, L.L.C., FCH/DT Leasing II, L.L.C., FCH/SH Leasing, L.L.C., FCH/SH Leasing II, L.L.C., and DJONT/EPT Leasing, L.L.C., each of which is a Delaware limited liability company (collectively, the "LLC Subsidiaries"), and FCOAM, Inc., a Texas corporation ("FCOAM"). Each of the LLC Subsidiaries has been duly formed and is validly existing as a limited liability company in good standing under the Delaware Limited Liability Company Act. FCOAM has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Texas. Each of the LLC Subsidiaries and FCOAM has all requisite limited liability company or corporate power and authority to own, lease and operate its properties and conduct its business. Each of the LLC Subsidiaries has been duly qualified to do business and is in good standing as a foreign limited liability company in the states indicated on Schedule III hereto. FCOAM has been duly qualified to do business and is in good standing as a foreign corporation in the state of Massachusetts. To such counsel's knowledge, there are no other jurisdictions in which the ownership or leasing of the LLC Subsidiaries, and FCOAM's respective properties or the nature or conduct of their respective business requires such qualification, except where the failure to do so would not have a material adverse effect on the financial condition, business, prospects, net worth or results of the LLC Subsidiaries, FCOAM and the Lessee taken as a whole. (v) The Company has full corporate right, power and authority to enter into, deliver and perform this Agreement, the Deposit Agreement and the Articles Supplementary, to issue, sell and deliver the Depositary Shares and the Preferred Stock as provided herein and therein and to consummate the transactions contemplated herein. This Agreement, the Deposit Agreement and the Articles Supplementary have been duly authorized, executed and delivered by the Company. (vi) The Partnership has full partnership right, power and authority to enter into this Agreement and to consummate the transactions contemplated herein. This Agreement has been duly authorized, executed and delivered by the Partnership. (vii) The Partnership has full partnership right, power and authority to enter into, either for itself or on behalf of a subsidiary, each of the Percentage Leases (the "New Percentage Leases") relating to the Current Hotels acquired since October 1, 1997. Each New Percentage Lease has been duly authorized, executed and delivered by the Partnership. Each New Percentage Lease should be construed to create a valid leasehold interest in favor of the Lessee. 18 20 (viii) The Lessee has full limited liability company right, power and authority to enter into each of the New Percentage Leases and the Management Agreements (the "New Management Agreements") relating to the Current Hotels acquired since October 1, 1997 and to consummate the transactions contemplated therein. Each such agreement relating to the Current Hotels acquired since October 1, 1997 has been duly authorized, executed and delivered by the Lessee. (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 Depositary Shares, the execution, delivery and performance of this Agreement and the consummation by the Company and the Partnership of the transactions contemplated hereby, the execution, delivery and performance of the other Operative Documents to which either the Company or the Partnership is a party and the consummation by the Company and/or the Partnership, as applicable, of the transactions contemplated thereby, including without limitation the issuance of Units, has been made or obtained and is in full force and effect, except such (i) as may be necessary under state securities or real estate syndication laws or by the NASD in connection with the purchase and distribution of the Depositary Shares by the Underwriters, as to which such counsel need express no opinion, or (ii) solely as the same may relate to the Operative Documents, the lack of which would not have a material adverse effect on the financial condition, business, prospects, net worth or results of operations of the Company and the Partnership, taken as a whole. (x) Each consent, approval, authorization, order, license, certificate, permit, registration, designation or filing by or with any governmental agency or body necessary for the execution, delivery and performance of the Operative Documents by the Lessee, and the consummation by the Lessee of the transactions contemplated thereby, has been made or obtained or filed and is in full force and effect, except such (i) as may be necessary under state securities or real estate syndication laws or by the NASD in connection with the purchase and distribution of the Depositary Shares by the Underwriters, as to which such counsel need express no opinion, or (ii) the lack of which would not have a material adverse effect on the financial condition, business, prospects, net worth or results of operations of the Lessee. (xi) Neither the issuance, sale and delivery by the Company of the Preferred Stock or the Depositary Shares, nor the execution, delivery and performance of this Agreement, the Deposit Agreement nor the Articles Supplementary by the Company and/or the Partnership, nor the consummation of the transactions contemplated hereby or thereby by the Company or the Partnership, will 19 21 violate any of the terms and provisions of, or constitute a default under, any of the Operative Documents, the articles of incorporation, bylaws, certificate of limited partnership or partnership agreement, as the case may be, of any such entity, as applicable; or, to such counsel's knowledge, under any material indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument to which the Company or the Partnership is a party or to which they, either of them, any of their respective properties or other assets or any Current Hotel owned by the Partnership or Holdings as of the date hereof is subject, except for violations or defaults under agreements or instruments which have since been terminated, cured or otherwise satisfied or such violations or defaults as would not have a material adverse effect on the financial condition, business, prospects, net worth or results of operations of the Company and the Partnership, taken as a whole; or, to such counsel's knowledge, violate any applicable statute, judgment, decree, order, rule or regulation of any court or governmental agency or body; or, to such counsel's knowledge, result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of any of the foregoing, except for liens, charges, claims or encumbrances which are created by the Operative Documents or which have since been terminated, cured or otherwise would not have a material adverse effect on the financial condition, business, prospects, net worth or results of operations of the Company and the Partnership, taken as a whole. (xii) The Depositary Shares to be issued and sold to the Underwriters hereunder 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 this Agreement 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 Agreement, 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 such Deposit Agreement, the Depositary Receipts will entitle the holders thereof to the benefits provided therein and in the Deposit Agreement. To such counsel's knowledge, no person or entity has a right of participation or first refusal with respect to the sale of the Depositary Shares by the Company. The form of 20 22 certificates evidencing the Preferred Stock comply in all material respects with all applicable requirements of Maryland law. The Depositary Receipts are in due and proper form. All offers and sales of the Company's capital stock prior to the date hereof were at all relevant times duly registered under the Securities Act or exempt from the registration requirements of the Securities Act by reason of Sections 3(b), 4(2) or 4(6) thereof, and (with the exception of shares of Common Stock and Series A Preferred Stock registered under the Securities Act, as to which such counsel need not opine) were duly registered or the subject of an available exemption from the registration requirements of the applicable state securities or blue sky laws. (xiii) 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, fully paid and nonassessable. To the knowledge of such counsel, except as disclosed in the Prospectus, 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. (xiv) All of the issued Units have been duly and validly authorized and issued and are fully paid. None of the issued Units have been issued or is owned or held in violation of any preemptive rights. The Units to be issued to the Company at the Closing Date have been duly and validly authorized by the Partnership. When issued and delivered against payment thereof as provided in the Partnership Agreement, such Units will be duly and 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) Neither the Company, the Partnership nor the Lessee is in violation of its respective articles of incorporation, bylaws, certificate of limited partnership, partnership agreement, or limited liability company agreement, as the case may be, and to the knowledge of such counsel no material default exists and no event has occurred which, with notice or after the lapse of time to cure or both, would constitute a material default in the due performance and observance of any obligation, agreement, term, covenant, or condition contained in any indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument known to such counsel to which any such entity is a party or by which any such entity or any of its properties is subject. To the knowledge of such counsel, neither the Company, the 21 23 Partnership nor the Lessee 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 on the financial position, results of operations or business of each such entity, respectively. (xvi) To such counsel's knowledge and except as described in the Prospectus, there is not pending or threatened, any action, suit, proceeding, inquiry or investigation against the Company, the Partnership, the Lessee or Holdings or any of their respective officers and directors or to which the properties, assets or rights of any such entity are subject, which, if determined adversely to any such entity, would individually or in the aggregate have a material adverse effect on the financial position, results of operations or business of the Company and the Partnership, taken as a whole. (xvii) There are no contracts, leases or other documents known to such counsel 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 such counsel's knowledge, there are no statutes or regulations applicable to the Company, the Partnership or the Lessee or certificates, permits or other authorizations from governmental regulatory officials or bodies required to be obtained or maintained by any such entity, known to such counsel, of a character required to be disclosed in the Registration Statement or the Prospectus which have not been so disclosed and properly described therein. To such counsel's knowledge, all material agreements between the Company, the Partnership or the Lessee, respectively, and third parties expressly referenced in the Prospectus, assuming due authorization, execution and delivery thereof by each other party thereto, are legal, valid and binding obligations of each such entity, respectively, enforceable against such entity in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws of general applicability relating to or affecting creditors' rights and to general equitable principles. (xviii) The Company has applied to list the Depositary Shares on the New York Stock Exchange. (xix) The Registration Statement has become effective under the Securities Act and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or is pending or contemplated under the Securities Act. Other than financial statements and other financial and 22 24 operating information data and schedules contained therein, as to which counsel need express no opinion, the Registration Statement, all Preliminary Prospectuses, the Prospectus and any amendment or supplement thereto, appear on their face to conform as to form in all material respects with the requirements of Form S-3 under the Securities Act. To such counsel's knowledge, the conditions for use of a registration statement on Form S-3 set forth in the General Instructions to Form S-3 have been satisfied with respect to the Company and the transactions contemplated by this Agreement. (xx) Such counsel has no reason to believe that the Registration Statement including the Incorporated Documents, or any further amendment thereto made prior to the Closing Date, on its effective date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus, or any amendment or supplement thereto made prior to the Closing Date, as of its issue date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that such counsel need express no belief regarding the financial statements and related schedules and other financial data contained in the Registration Statement, any amendment thereto, or the Prospectus, or any amendment or supplement thereto). (xxi) The Incorporated Documents (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they were filed with the Commission, complied on their face as to conform in all material respects with the requirements of the Exchange Act, and the rules and regulations of the Commission thereunder; and nothing has come to such counsel's attention which causes them to believe that any of such Incorporated Documents (other than the financial statements and related schedules therein, as to which such counsel need express no belief), when such Incorporated Documents were so filed, contained an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made when such documents were so filed, not misleading. (xxii) None of the Company, the Partnership or the Lessee is, or solely as a result of the consummation of the transactions contemplated hereby will become, an "investment company," or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. 23 25 (xxiii) The descriptions in or incorporated by reference in the Prospectus or the Preliminary Prospectus of statutes, regulations, legal or governmental proceedings, the Percentage Leases, and the Management Agreements therein described present fairly a summary of the information required to be shown under the Act. The descriptions in the Registration Statement and the Prospectus or the Preliminary Prospectus of the contracts, leases and other legal documents therein described present fairly the information required to be shown. In rendering their opinion as aforesaid, counsel may rely upon an opinion or opinions, each dated the Closing Date, of other counsel retained by them or the Company as to laws of any jurisdiction other than the United States and jurisdictions in which they are admitted, provided that (1) each such local counsel is acceptable to the Underwriters, (2) such reliance is expressly authorized by each opinion so relied upon and a copy of each such opinion is delivered to the Underwriters and is, in form and substance satisfactory to them and their counsel, and (3) counsel shall state in their opinion that they believe that they and the Underwriters are justified in relying thereon. In addition, in rendering the foregoing opinion, such counsel may rely on, as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company, the Partnership and the Lessee and certificates or other written statements of officers or departments of various jurisdictions, having custody of documents respecting the existence or good standing of the Company, the Partnership and the Lessee provided that copies of all such opinions, statements or certificates shall be delivered to Underwriters' counsel. The opinion of counsel for the Company shall state that the opinion of any other counsel, or certificate or written statement, on which such counsel is relying is in form satisfactory to such counsel and that you and they are justified in relying thereon. (d) The Underwriters shall have received on the Closing Date, an opinion of Hunton & Williams, tax counsel for the Company and the Partnership, dated the Closing Date and addressed to the Underwriters, to the effect that the Company is organized in conformity with the requirements for qualification as a real estate investment trust ("REIT"), pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and that the Company's proposed method of operation enables it to meet the requirements for qualification and taxation as a REIT under the Code. The Company has taken all necessary action to be treated, effective beginning with the year ended December 31, 1994, as a REIT under the Code. The Partnership will be treated as a partnership for federal income purposes and not as a corporation or an association taxable as a corporation. In rendering the foregoing opinion, such counsel may rely on, as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company, the Partnership and the Lessee and certificates or other written statements of officers or departments of various jurisdictions, having custody of documents respecting the existence or good standing of the Company, the Partnership and the Lessee provided that copies of all such opinions, statements or certificates shall be delivered to Underwriters' counsel. 24 26 (e) The Underwriters shall have received on the Closing Date an opinion of King & Spalding, counsel for the Underwriters, dated the Closing Date, covering the matters referred to in subparagraphs (v), (xii) (but only with respect to the due authorization, issuance and delivery of the Depositary Shares), (xix) and (xx) of paragraph (c) above, and to the effect that the statements in the Prospectus Supplement under the captions "Description of Series B Preferred Stock and Depositary Shares," and "Underwriting" fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein. With respect to subparagraph (xx) of paragraph (c) above, Jenkens & Gilchrist and King & Spalding may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification, except as specified. The opinions of Jenkens & Gilchrist and Hunton & Williams described in paragraphs (c) and (d) above shall be rendered to the Underwriters at the request of the Company and shall so state therein. (f) The Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from each of Coopers & Lybrand L.L.P., Arthur Andersen LLP and Price Waterhouse LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; provided that the letter delivered on the Closing Date shall use a "cut-off date" not earlier than the date hereof. The several obligations of the Underwriters to purchase Additional Depositary Shares hereunder are subject to the delivery to you on the Option Closing Date of such documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Depositary Shares and other matters related to the issuance of the Additional Depositary Shares. 6. COVENANTS OF THE COMPANY. In further consideration of the agreements of the Underwriters herein contained, the Company covenants with each Underwriter as follows: (a) To furnish to you, without charge, seven conformed copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and to furnish to you in New York City, without charge, prior to 3:00 p.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in paragraph (c) below, as many copies of the Prospectus and any supplements and amendments thereto or to the Registration Statement as you may reasonably request. 25 27 (b) Before amending or supplementing the Registration Statement or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule. (c) If, during such period after the first date of the public offering of the Depositary Shares as in the opinion of counsel for the Underwriters the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Depositary Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (d) To endeavor to qualify the Depositary Shares and the Preferred Stock for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request. (e) To make generally available to the Company's security holders and to you as soon as practicable an earning statement covering the twelve-month period ending June 30, 1999 that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. (f) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of their obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company's counsel and the Company's accountants in connection with the registration and delivery of the Depositary Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any Preliminary Prospectus, each Preliminary Prospectus Supplement, the Prospectus Supplement and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Depositary Shares to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Depositary Shares under state securities laws and all expenses in connection with the qualification of the Depositary Shares and the Preferred Stock for offer and sale under state securities laws as 26 28 provided in Section 6(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Depositary Shares by the National Association of Securities Dealers, Inc., (v) all fees and expenses in connection with the preparation and filing of the registration statement on Form 8-A relating to the Depositary Shares and all costs and expenses incident to listing the Depositary Shares on the NYSE, (vi) the cost of printing the Depositary Receipts and the certificates representing the Preferred Stock, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Depositary Shares, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show, and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 7 entitled "Indemnity and Contribution", and the last paragraph of Section 9 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Depositary Shares by them and any advertising expenses connected with any offers they may make. 7. INDEMNITY AND CONTRIBUTION. (a) The Company and the Partnership, jointly and severally, agree to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any Preliminary Prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein. (b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the Partnership, their respective directors and officers who sign the Registration Statement and each person, if any, who controls the Company or the Partnership within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused 27 29 by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any Preliminary Prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to paragraph (a) or (b) of this Section 7, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, the Partnership, their respective directors and officers who sign the Registration Statement and each person, if any, who controls the Company or the Partnership within the meaning of either such Section. In the case of any such separate firm for the Underwriters and such control persons of any Underwriters, such firm shall be designated in writing by Morgan Stanley & Co. Incorporated. In the case of any such separate firm for the Company and the Partnership, and such directors, officers and control persons of the Company and the Partnership, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have 28 30 reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Depositary Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Partnership on the one hand and the Underwriters on the other hand in connection with the offering of the Depositary Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Depositary Shares (before deducting expenses) received by the Company and the Partnership and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Depositary Shares. The relative fault of the Company and the Partnership on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Partnership or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the respective number of Depositary Shares they have purchased hereunder, and not joint. (e) The Company, the Partnership and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) of this Section 7. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any 29 31 amount in excess of the amount by which the total price at which the Depositary Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (f) The indemnity and contribution provisions contained in this Section 7 and the representations, warranties and other statements of the Company and the Partnership contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, or the Company, the Partnership, their respective officers or directors or any person controlling the Company or the Partnership and (iii) acceptance of and payment for any of the Depositary Shares. 8. TERMINATION. This Agreement shall be subject to termination by notice given by you to the Company, if (a) after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and (b) in the case of any of the events specified in clauses (a) (i) through (iv), such event, singly or together with any other such event, makes it, in your judgment, impracticable to market the Depositary Shares on the terms and in the manner contemplated in the Prospectus. 9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto. If, on the Closing Date or the Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Depositary Shares that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Depositary Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Depositary Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Depositary Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Depositary Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Depositary Shares which such defaulting Underwriter 30 32 or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Depositary Shares that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 9 by an amount in excess of one-ninth of such number of Depositary Shares without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Depositary Shares and the aggregate number of Depositary Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Depositary Shares to be purchased and arrangements satisfactory to you and the Company for the purchase of such Depositary Shares are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. If, on the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Depositary Shares and their aggregate number of Additional Depositary Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Depositary Shares to be purchased, the non- defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase Additional Depositary Shares or (ii) purchase not less than the number of Additional Depositary Shares that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder. 10. COUNTERPARTS. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 11. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 12. HEADINGS. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 31 33 Very truly yours, FELCOR SUITE HOTELS, INC. By:/s/ Randall L. Churchey Randall L. Churchey, Senior Vice President and Chief Financial Officer FELCOR SUITES LIMITED PARTNERSHIP By: FELCOR SUITE HOTELS, INC., General Partner By:/s/ Randall L. Churchey Randall L. Churchey, Senior Vice President and Chief Financial Officer 34 Accepted as of the date hereof Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Prudential Securities Incorporated Smith Barney Inc. Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto. By Morgan Stanley & Co. Incorporated By: /s/ Michael Fusco -------------------------------- Name: Michael Fusco Title: Vice President 35 SCHEDULE I Underwriters
Number of Depositary Shares Underwriter To Be Purchased ----------- ----------------- Morgan Stanley & Co. Incorporated 1,157,195 Merrill Lynch, Pierce, Fenner & Smith Incorporated 1,157,185 Prudential Securities Incorporated 1,157,185 Smith Barney Inc. 1,157,185 BT Alex Brown Incorporated 57,500 Bear, Stearns & Co. Inc. 57,500 CIBC Oppenheimer Corp. 57,500 Dain Rauscher Incorporated 57,500 A.G. Edwards & Sons, Inc. 57,500 Goldman, Sachs & Co. 57,500 Lehman Brothers Inc. 57,500 Morgan Keegan & Company, Inc. 57,500 Advest, Inc. 28,750 Robert W. Baird & Co. Incorporated 28,750 J.C. Bradford & Co. 28,750 Cowen & Company 28,750 Craigie Incorporated 28,750 Crowell, Weedon & Co. 28,750 Davenport & Company LLC 28,750 First Albany Corporation 28,750 First of Michigan Corporation 28,750 Gibraltar Securities Co. 28,750 Interstate/Johnson Lane Corporation 28,750 Janney Montgomery Scott Inc. 28,750 McDonald & Company Securities, Inc. 28,750 McGinn, Smith & Co., Inc. 28,750 H.J. Meyers & Co., Inc. 28,750 W.J. Nolan & Company Inc. 28,750 Piper Jaffray Inc. 28,750 The Robinson-Humphrey Company, LLC 28,750 Roney & Co., L.L.C. 28,750
36 Scott & Stringfellow, Inc. 28,750 Southwest Securities, Inc. 28,750 Stifel, Nicolaus & Company, Incorporated 28,750 Tucker Anthony Incorporated 28,750 --------- Total Depositary Shares 5,750,000 =========
37 SCHEDULE II Subsidiaries of FelCor Suite Hotels, Inc. THE FOLLOWING IS A TRUE AND CORRECT LIST OF THE SUBSIDIARIES OF FELCOR SUITE HOTELS, INC. ("FELCOR") AS OF APRIL 20, 1998
STATE AND FORM OF NAME ORGANIZATION OWNERSHIP INTEREST(1) ---- ------------------------- ------------------ FelCor Suites Limited Partnership Delaware; Limited 92.4% GP interest owned by FelCor ("FelCor LP") Partnership FelCor/CSS Hotels, L.L.C. ("FelCor/CSS Delaware; Limited 100% owned by FelCor LP Hotels") Liability Company FelCor/CSS Holdings, L.P. Delaware; 1% GP interest owned by Limited Partnership FelCor/CSS Hotels; 99% LP interest owned by FelCor LP FelCor/St. Paul Holdings, L.P. Delaware; 1% GP interest owned by Limited Partnership FelCor/CSS Hotels; 99% LP interest owned by FelCor LP FelCor/LAX Hotels, L.L.C. ("FelCor/LAX Delaware; Limited 100% owned by FelCor LP Hotels") Liability Company FelCor/LAX Holdings, L.P. ("FelCor/LAX Delaware; 1% GP Interest owned by Holdings") Limited Partnership FelCor/LAX Hotels; 99% LP interest owned by FelCor LP Los Angeles International Airport Hotel Texas; 50% GP interest owned by Associates, L.P. Limited Partnership FelCor/LAX Holdings and 47.2% LP interest owned by FelCor/LAX Hotels FCH/DT Hotels, L.L.C. Delaware; Limited 90% owned by FelCor LP Liability Company FCH/DT Holdings, L.P. Delaware; 1% GP interest owned by FCH/DT Limited Partnership Hotels, L.L.C.; 89.1% LP interest owned by FelCor LP
38 FCH/DT BWI Holdings, L.P. Delaware; 1% GP interest owned by FCH/DT Limited Partnership Hotels, L.L.C.; 99% LP interest owned by FCH/DT Holdings, LP FelCor/Charlotte Hotel, L.L.C. Delaware; Limited 50% owned by FelCor/CSS Hotels ("FelCor/Charlotte") Liability Company E. S. Charlotte Limited Partnership Minnesota; 2% GP interest owned by Limited Partnership FelCor/Charlotte; 49% LP interest owned by FelCor LP FelCor/Indianapolis Hotel, L.L.C. Delaware; Limited 50% owned by FelCor/CSS Hotels ("Felcor/Indianapolis") Liability Company E.S. North, an Indiana Limited Indiana; 2% GP interest owned by Partnership Limited Partnership FelCor/Indianapolis; 49% LP interest owned by FelCor LP FelCor Eight Hotels, L.L.C. Delaware; 100% owned by FelCor LP ("FelCor Eight Hotels") Limited Liability Company EPT Atlanta - Perimeter Center Limited Delaware; 1% GP interest owned by FelCor Partnership Limited Partnership Eight Hotels; 49% LP interest ("EPT Atlanta") owned by FelCor LP EPT - Austin Limited Partnership Delaware; 1% GP interest owned by FelCor ("EPT Austin") Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP EPT - Covina Limited Partnership Delaware; 1% GP interest owned by FelCor ("EPT Covina") Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP EPT - Kansas City Limited Partnership Delaware; 1% GP interest owned by FelCor Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP EPT - Meadowlands Limited Partnership Delaware; 1% GP interest owned by FelCor Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP EPT - Overland Park Limited Partnership Delaware; 1% GP interest owned by FelCor ("EPT Overland Park") Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP
39 EPT - Raleigh Limited Partnership Delaware; 1% GP interest owned by FelCor ("EPT Raleigh") Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP EPT - San Antonio Limited Partnership Delaware; 1% GP interest owned by FelCor ("EPT San Antonio") Limited Partnership Eight Hotels; 49% LP interest owned by FelCor LP Promus/FelCor Lombard Venture Illinois; 50% GP interest owned by FelCor ("Lombard JV") General Partnership LP MHV Joint Venture Texas; 50% GP interest owned by FelCor ("MHV JV") General Partnership LP Promus/FelCor Parsippany Venture New Jersey; 50% GP interest owned by FelCor ("Parsippany JV") General Partnership LP Promus/FelCor San Antonio Venture Texas; 50% GP interest owned by FelCor General Partnership LP Kingston Plantation Development Delaware; 97% non-voting Class B Corporation ("KPDC") Corporation interest owned by FelCor LP Promus/FelCor Manager, Inc. Delaware; 50% owned by KPDC Corporation Promus/FelCor Hotels, L.L.C. Delaware; Limited 1% owned by Promus/FelCor Liability Company 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 Promus/FCH Development Company, L.L.C. Delaware; 50% owned by FelCor LP Limited Liability Company Promus/FCH Condominium Company, L.L.C. Delaware; 50% owned by FelCor LP Limited Liability Company FCH/PSH, L.P. Pennsylvania; 1% GP interest owned by Limited Partnership FelCor/CSS Hotels; 99% LP interest owned by FelCor LP
40 # # # # (1) THE PERCENTAGE INTERESTS REFLECTED ABOVE REPRESENT THE PERCENTAGES OF AGGREGATE EQUITY INTEREST IN THE RESPECTIVE ENTITIES. EACH OF THE GP INTERESTS REFLECTED ABOVE REPRESENTS EITHER THE ENTIRE GENERAL PARTNER INTEREST IN SUCH ENTITY OR AN INTEREST AS THE SOLE ADMINISTRATIVE GENERAL PARTNER OF SUCH ENTITY WITH POWER TO CONTROL THE DAY-TO-DAY OPERATIONS THEREOF. 41 LESSEE QUALIFICATION STATUS
NAME OF ENTITY STATE - -------------- ----- DJONT Operations, L.L.C. Delaware* Alabama Arizona California Colorado Florida Georgia Illinois Kentucky Louisiana Minnesota New Jersey Ohio Oklahoma Tennessee Texas DJONT Leasing, L.L.C. Delaware* Arizona California Georgia Illinois Indiana Kansas Minnesota Missouri Nebraska New Jersey New York North Carolina South Carolina Texas FCH/DT Leasing, L.L.C. Delaware* Colorado Maryland Michigan New Jersey Ohio Pennsylvania Texas
42 FCH/DT Leasing II, L.L.C. Delaware* Florida North Carolina Ohio Tennessee Texas FCH/SH Leasing, L.L.C. Delaware* Arizona Florida Georgia Illinois Kentucky (pending) Pennsylvania Texas FCH/SH Leasing II, L.L.C. Delaware* Vermont DJONT/EPT Leasing, L.L.C. Delaware* California Georgia Illinois Kansas New Jersey North Carolina Texas DJONT/EPT Manager, Inc. Delaware* California Georgia Illinois Kansas New Jersey North Carolina Texas FCOAM, Inc. Texas* Massachusetts - -----------------------
* Domicile state EX-3.3 3 ARTICLES SUPPLEMENTARY OF THE CO'S PREFERRED STOCK 1 EXHIBIT 3.3 ARTICLES SUPPLEMENTARY OF FELCOR SUITE HOTELS, INC. FELCOR SUITE HOTELS, INC., a Maryland corporation (hereinafter referred to as the "Company"), hereby certifies as follows: FIRST: Under the authority set forth in Article V of the Charter of the Company, the Board of Directors of the Company on April 20, 1998, and April 30, 1998, classified 57,500 unissued shares of the Preferred Stock as "9% Series B Cumulative Redeemable Preferred Stock." SECOND: A description of the 9% Series B Cumulative Redeemable Preferred Stock, including the preferences and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set or changed by the Board of Directors of the Company is as follows: Section 1. NUMBER OF SHARES AND DESIGNATION. This series of preferred stock shall be designated as 9% Series B Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock"), and 57,500 shall be the number of shares of Preferred Stock constituting such series. Section 2. DEFINITIONS. For purposes of the Series B Preferred Stock, the following terms shall have the meanings indicated: "Board of Directors" shall mean the Board of Directors of the Company or any committee authorized by such Board of Directors to perform any of its responsibilities with respect to the Series B Preferred Stock. "Business Day" shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in Texas or New York are not required to be open. "Call Date" shall have the meaning set forth in paragraph (c) of Section 5 hereof. "Common Stock" shall mean the common stock of the Company, par value $0.01 per share. "Dividend Payment Date" shall mean the last calendar day of January, April, July and October in each year, commencing on July 31, 1998; PROVIDED, HOWEVER, that if any Dividend Payment Date falls on any day other than a Business Day, the dividend payment due on such Dividend Payment Date shall be paid on the Business Day immediately following such Dividend Payment Date. "Dividend Periods" shall mean quarterly dividend periods commencing February 1, May 1, August 1, and November 1 of each year and ending on and including the day preceding the first day of the next succeeding Dividend Period (other than the initial Dividend Period, which shall commence on May 7, 1998 and end on and include July 31, 1998). "Issue Date" shall mean the date on which the Company first issues a share of Series B Preferred Stock. 2 "Junior Stock" shall mean the Common Stock and any other class or series of shares of the Company over which the Series B Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Company. "Parity Stock" shall have the meaning set forth in paragraph (b) of Section 8 hereof. "Series A Preferred Stock" shall mean the Company's $1.95 Series A Cumulative Convertible Preferred Stock. "Series B Preferred Stock" shall have the meaning set forth in Section 1 hereof. "set apart for payment" shall be deemed to include, without any action other than the following, the recording by the Company in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to a declaration of dividends or other distribution by the Board of Directors, the allocation of funds to be so paid on any series or class of capital stock of the Company; PROVIDED, HOWEVER, that if any funds for a class or series of Junior Stock or any class or series of stock ranking on a parity with the Series B Preferred Stock as to the payment of dividends are placed in a separate account of the Company or delivered to a disbursing, paying or other similar agent, then "set apart for payment" with respect to the Series B Preferred Stock shall mean placing such funds in a separate account or delivering such funds to a disbursing, paying or other similar agent. "Transfer Agent" means SunTrust Bank, Atlanta, Georgia, or such other agent or agents of the Company as may be designated by the Board of Directors or their designee as the transfer agent for the Series B Preferred Stock. "Voting Preferred Stock" shall have the meaning set forth in Section 9(a) hereof. Section 3. DIVIDENDS. (a) The Holders of shares of the Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for that purpose, dividends payable in cash in an amount per share of Series B Preferred Stock equal to $225.00 per annum. Such dividends shall be cumulative from May 7, 1998, whether or not in any Dividend Period or Periods there shall be funds of the Company legally available for the payment of such dividends, and shall be payable quarterly, when, as and if declared by the Board of Directors, in arrears on Dividend Payment Dates, commencing on the first Dividend Payment Date after the Issue Date. Each such dividend shall be payable in arrears to the holders of record of shares of the Series B Preferred Stock, as they appear on the stock records of the Company at the close of business on such record dates, not more than 60 days preceding such Dividend Payment Dates thereof, as shall be fixed by the Board of Directors. Accrued and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any regular Dividend Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board of Directors. (b) The amount of dividends payable for each full Dividend Period for the Series B Preferred Stock shall be computed by dividing the annual dividend rate by four. The amount of - 2 - 3 dividends payable for any period shorter or longer than a full Dividend Period, on the Series B Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Holders of the Series B Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as herein provided, on the Series B Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series B Preferred Stock that may be in arrears. (c) So long as any shares of the Series B Preferred Stock are outstanding, no dividends, except as described in the immediately following sentence, shall be declared or paid or set apart for payment on any class or series of Parity Stock for any period unless full cumulative dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof set apart for such payment on the Series B Preferred Stock for all Dividend Periods terminating on or prior to the Dividend Payment Date on such class or series of Parity Stock. When dividends are not paid in full or a sum sufficient for such payment is not set apart, as aforesaid, all dividends declared upon shares of the Series B Preferred Stock and all dividends declared upon any other class or series of Parity Stock shall be declared ratably in proportion to the respective amounts of dividends accumulated and unpaid on the Series B Preferred Stock and accumulated and unpaid on such Parity Stock. (d) So long as any shares of the Series B Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Junior Stock), shall be declared or paid or set apart for payment or other distribution declared or made upon Junior Stock, nor shall Junior Stock be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of shares of Common Stock made for purposes of an employee incentive or benefit plan of the Company or any subsidiary) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Company, directly or indirectly, unless in each case (i) the full cumulative dividends on all outstanding shares of the Series B Preferred Stock and any other Parity Stock of the Company shall have been paid or set apart for payment for all past Dividend Periods with respect to the Series B Preferred Stock and all past dividend periods with respect to such Parity Stock and (ii) sufficient funds shall have been paid or set apart for the payment of the dividend for the current Dividend Period with respect to the Series B Preferred Stock and the current dividend period with respect to such Parity Stock. Notwithstanding the foregoing limitations, the Company may at any time acquire shares of its capital stock, without regard to rank, for the purpose of preserving its status as a real estate investment trust ("REIT"). Section 4. LIQUIDATION PREFERENCE. (a) In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of Junior Stock, the holders of the shares of Series B Preferred Stock shall be entitled to receive two thousand five hundred dollars ($2,500.00) per share of Series B Preferred Stock plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution to such holders, but such holders shall not be entitled to any further payment. If, upon any liquidation, dissolution or winding up of the Company, the assets of the Company, or proceeds thereof, distributable among - 3 - 4 the holders of the shares of Series B Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other shares of any class or series of Parity Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series B Preferred Stock and any such other Parity Stock ratably in accordance with the respective amounts that would be payable on such shares of Series B Preferred Stock and any such other Parity Stock if all amounts payable thereon were paid in full. For the purposes of this Section 4, (i) a consolidation or merger of the Company with one or more corporations, (ii) a sale or transfer of all or substantially all of the Company's assets, or (iii) a statutory share exchange shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Company. (b) Subject to the rights of the holders of shares of any series or class or classes of stock ranking on a parity with or prior to the Series B Preferred Stock upon liquidation, dissolution or winding up, upon any liquidation, dissolution or winding up of the Company, after payment shall have been made in full to the holders of the Series B Preferred Stock, as provided in this Section 4, any other series or class or classes of Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series B Preferred Stock shall not be entitled to share therein. Section 5. REDEMPTION AT THE OPTION OF THE COMPANY (a) The Series B Preferred Stock shall not be redeemable by the Company prior to May 7, 2003. On and after May 7, 2003, the Company, at its option, may redeem the shares of Series B Preferred Stock in whole or in part, as set forth herein, subject to the provisions described below. (b) The Series B Preferred Stock may be redeemed, in whole or in part, at the option of the Company, at any time or from time to time, upon not less than 30 nor more than 60 days' prior written notice. In order to exercise its redemption option, the Company must issue a press release announcing the redemption (the "Press Release"). The Company may not issue a Press Release prior to May 7, 2003. The Press Release shall announce the redemption and set forth the number of shares of Series B Preferred Stock which the Company intends to redeem. The Call Date shall be selected by the Company, shall be specified in the notice of redemption and, subject to the provisions of Section 5(e) below, shall be not less than 30 days or more than 60 days after the date on which the Company issues the Press Release. (c) Upon redemption of Series B Preferred Stock by the Company on the date specified in the notice to holders required under subparagraph (e) of this Section 5 (the "Call Date"), each share of Series B Preferred Stock to be redeemed shall be redeemed in cash at a price per share equal to $2,500.00 per share, plus all accrued and unpaid distributions thereon to the Call Date, without interest, to the extent that the Company has funds legally available therefor. The redemption price of the Series B Preferred Stock (other than any portion thereof consisting of accrued and unpaid distributions) must be paid solely from the sale proceeds of other capital stock of the Company and not from any other source. For purposes of the foregoing sentence, "capital stock" means any common stock, preferred stock, depositary shares, interests, participations, or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing. Dividends payable - 4 - 5 on the shares of Series B Preferred Stock for any period greater or less than a full dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Except as provided above, the Company shall make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of Series B Preferred Stock called for redemption or on the shares of capital stock issued upon such redemption. (d) If full cumulative dividends on the Series B Preferred Stock and any other class or series of Parity Stock of the Company have not been paid or declared and set apart for payment, the Series B Preferred Stock may not be redeemed in part and the Company may not purchase or acquire shares of Series B Preferred Stock, otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of shares of Series B Preferred Stock. (e) If the Company shall redeem shares of Series B Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such redemption shall be given to the beneficial holders of the Series B Preferred Stock by the Company not less than thirty Business Days before the Call Date. Such notice shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Company, or by publication in THE WALL STREET JOURNAL or THE NEW YORK TIMES, or if neither such newspaper is then being published, any other daily newspaper of national circulation. If the Company elects to provide such notice by publication, it shall also promptly mail notice of such redemption to the holders of the Series B Preferred Stock to be redeemed. Neither the failure to mail any notice required by this paragraph (e), nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed whether or not the holder receives the notice. Each such mailed or published notice shall state, as appropriate: (1) the Call Date: (2) the number of shares of Series B Preferred Stock to be redeemed from such holder; (3) the redemption price; (4) the place or places where the Series B Preferred Stock is to be surrendered for payment of the redemption price; and (5) that dividends on the shares to be redeemed shall cease to accrue on such Call Date except as otherwise provided herein. Notice having been published or mailed as aforesaid, from and after the Call Date (unless the Company shall fail to make available the amount of cash necessary to effect such redemption), (i) except as otherwise provided herein, dividends on the shares of the Series B Preferred Stock so called for redemption shall cease to accrue, (ii) said shares shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Series B Preferred Stock of the Company shall cease (except the rights to receive the cash payable upon such redemption, without interest thereon, upon surrender and endorsement of their certificates). The Company's obligation to provide cash in accordance with the preceding sentence shall be deemed fulfilled if, on or before the Call Date, the Company shall deposit with a bank or trust company (which may be an affiliate of the Company) that has an office in the Borough of Manhattan, City of New York and that has, or is an affiliate of a bank or trust company that has, a capital and surplus of at least $50,000,000, any cash necessary for such redemption, in trust, with irrevocable instructions that such cash be applied to the redemption of the shares of Series B Preferred Stock so called for redemption. At the close of business on the Call Date, each share Series B Preferred Stock to be redeemed pursuant to Section 5(c)(i) (unless the Company defaults in the delivery of the cash payable on such Call Date) shall be deemed to be no longer outstanding regardless of whether such holder has surrendered the certificates representing the Series B Preferred Stock. No interest shall - 5 - 6 accrue for the benefit of the holders of Series B Preferred Stock to be redeemed on any cash so set aside by the Company. Subject to applicable escheat laws, any such cash unclaimed at the end of two years from the Call Date (together with any interest or other earnings accrued thereon) shall revert to the general funds of the Company, after which reversion the holders of such shares so called for redemption shall look only to the general funds of the Company for the payment of such cash, and shall have no right to interest from and after the Call Date. As promptly as practicable after the surrender in accordance with said notice of the certificates for any such shares so redeemed (properly endorsed or assigned for transfer, if the Company shall so require and if the notice shall so state), such shares shall be exchanged for cash (without interest thereon) for which such shares have been redeemed. If fewer than all the outstanding shares of Series B Preferred Stock are to be redeemed, shares to be redeemed shall be selected by the Company from outstanding shares of Series B Preferred Stock not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Company in its sole discretion to be equitable. If fewer than all the shares of Series B Preferred Stock represented by any certificate are redeemed, then new certificates representing the unredeemed shares shall be issued without cost to the holder thereof. (f) Notwithstanding the foregoing, the Company may at any time acquire shares of its capital stock, without regard to rank, for the purpose of preserving its status as a REIT, for purposes of an employee benefit plan of the Company, or in accordance with the conversion or redemption provisions of any class of Preferred Stock ranking on parity with or senior to the Series B Preferred Stock. (g) The procedures for redeeming any depositary receipts evidencing fractional interests in the Series B Preferred Stock shall be the same as the procedures for redeeming the Series B Preferred Stock contained in this Section 5 except that the depositary agent that issued the depositary receipts being redeemed may act on behalf of the Company. Section 6. SHARES TO BE RETIRED. All shares of Series B Preferred Stock which shall have been issued and reacquired in any manner by the Company shall be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series. The Company may also retire any unissued shares of Series B Preferred Stock, and such shares shall then be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series. Section 7. CONVERSION. Holders of shares of Series B Preferred Stock shall have no conversion rights. Section 8. RANKING. Any class or series of stock of the Company shall be deemed to rank: (a) prior to the Series B Preferred Stock, as to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, - 6 - 7 dissolution or winding up, as the case may be, in preference or priority to the holders of Series B Preferred Stock; (b) on a parity with the Series B Preferred Stock, as to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof be different from those of the Series B Preferred Stock, if the holders of such class of stock or series and the Series B Preferred Stock shall be entitled to the receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid dividends per share or liquidation preferences, without preference or priority one over the other ("Parity Stock"); the Series A Preferred Stock shall be Parity Stock with respect to the Series B Preferred Stock; and (c) junior to the Series B Preferred Stock, as to the payment of dividends or as to the distribution of assets upon liquidation, dissolution or winding up, if such stock or series shall be Common Stock or if the holders of Series B Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of such stock or series. Section 9. VOTING. (a) If and whenever six quarterly dividends (whether or not consecutive) payable on the Series B Preferred Stock or any series or class of Parity Stock shall be in arrears (which shall, with respect to any such quarterly dividend, mean that any such dividend has not been paid in full), whether or not earned or declared, the number of directors then constituting the Board of Directors shall be increased by two (if not already increased by reason of a similar arrearage with respect to any Parity Stock) and the holders of shares of Series B Preferred Stock, together with the holders of shares of every other series of Parity Stock (any such other series, the "Voting Preferred Stock"), voting as a single class regardless of series, shall be entitled to elect the two additional directors to serve on the Board of Directors at any annual meeting of stockholders or special meeting held in place thereof, or at a special meeting of the holders of the Series B Preferred Stock and the Voting Preferred Stock called as hereinafter provided. Whenever all arrearages dividends on the Series B Preferred Stock and the Voting Preferred Stock then outstanding shall have been paid and dividends thereon for the current quarterly dividend period shall have been paid or declared and set apart for payment, then the right of the holders of the Series B Preferred Stock and the Voting Preferred Stock to elect such additional two directors shall cease (but subject always to the same provision for the vesting of such voting rights in the case of any similar future arrearages in six quarterly dividends), and the terms of office of all persons elected as directors by the holders of the Series B Preferred Stock and the Voting Preferred Stock shall forthwith terminate and the number of the Board of Directors shall be automatically reduced accordingly. At any time after such voting power shall have been so vested in the holders of shares of Series B Preferred Stock and the Voting Preferred Stock, the secretary of the Company may, and upon the written request of any holder of Series B Preferred Stock or any holder of depositary receipts evidencing a fractional interest in the Series B Preferred Stock (addressed to the secretary at the principal office of the Company) shall, call a special meeting of the holders of the Series B Preferred Stock and the Voting Preferred Stock for the election of the two directors to be elected by them as herein provided, such call to be made by notice similar to that - 7 - 8 provided in the Bylaws of the Company for a special meeting of the stockholders or as required by law. If any such special meeting required to be called as above provided shall not be called by the secretary within 20 days after receipt of any such request, then any holder of shares of Series B Preferred Stock (or depositary receipts representing shares of Series B Preferred Stock) may call such meeting, upon the notice above provided, and for that purpose shall have access to the stock books of the Company. The directors elected at any such special meeting shall hold office until the next annual meeting of the stockholders or special meeting held in lieu thereof if such office shall not have previously terminated as above provided. If any vacancy shall occur among the directors elected by the holders of the Series B Preferred Stock and the Voting Preferred Stock, a successor shall be elected by the Board of Directors, upon the nomination of the then-remaining director elected by the holders of the Series B Preferred Stock and the Voting Preferred Stock or the successor of such remaining director, to serve until the next annual meeting of the stockholders or special meeting held in place thereof if such office shall not have previously terminated as provided above. (b) So long as any shares of Series B Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Charter, as amended, the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the holders of the shares of Series B Preferred Stock and the Voting Preferred Stock, at the time outstanding, acting as a single class regardless of series, at any meeting called for the purpose, shall be necessary for effecting or validating the following: (i) Any amendment, alteration or repeal of any of the provisions of these Articles Supplementary that materially adversely affects the voting powers, rights or preferences of the holders of the Series B Preferred Stock or the Voting Preferred Stock; PROVIDED, HOWEVER, that the amendment of the provisions of the Charter so as to authorize or create, or to increase the authorized amount, of any Junior Stock or any shares of any class ranking on a parity with the Series B Preferred Stock or the Voting Preferred Stock shall not be deemed to materially adversely affect the voting powers, rights or preferences of the holders of Series B Preferred Stock, and PROVIDED, FURTHER, that if any such amendment, alteration or repeal would materially adversely affect any voting powers, rights of preferences of the Series B Preferred Stock or another series of Voting Preferred Stock that are not enjoyed by some or all of the other series which otherwise would be entitled to vote in accordance herewith, the affirmative vote of least 66 2/3% of the votes entitled to be cast by holders of all series similarly affected, similarly given, shall be required in lieu of the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the holders of the shares of Series B Preferred Stock and the Voting Preferred Stock which otherwise would be entitled to vote in accordance herewith; (ii) Enter into a share exchange that affects the Series B Preferred Stock, consolidate with or merge into another entity, or permit another entity to consolidate with or merge into the Company, unless in each such case, each share of Series B Preferred Stock remains outstanding without a material and adverse change to its terms and rights or is converted into or exchanged for a share of preferred stock of the surviving entity having preferences, rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption identical to those of a share of Series B Preferred Stock (except for changes that do not materially and adversely affect the holders of the Series B Preferred Stock); or - 8 - 9 (iii) The authorization, reclassification, or creation of, or the increase in the authorized amount of, any shares of any class or any security convertible into shares of any class ranking prior to the Series B Preferred Stock in the distribution of assets on any liquidation, dissolution or winding up of the Company or in the payment of dividends. For purposes of the foregoing provisions of this Section 9, each share of Series B Preferred Stock shall have one hundred (100) votes per share, each of which 100 votes may be directed separately by the holder thereof (or by any proxy or proxies of such holder). With respect to each share of the Series B Preferred Stock, the holder thereof may designate up to 100 proxies, with each proxy having the right to vote a whole number of votes (totaling 100 votes per share of Series B Preferred Stock). Except as otherwise required by applicable law or as set forth herein, the shares of Series B Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers other than as set forth herein, and the consent of the holders thereof shall not be required for the taking of any corporate action. Section 10. RECORD HOLDERS. The Company and the Transfer Agent may deem and treat the record holder of any shares of Series B Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Company nor the Transfer Agent shall be affected by any notice to the contrary. [Signatures On Following Page.] - 9 - 10 IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to be signed in its name and on its behalf on this 1st day of May, 1998, by its Senior Vice President who acknowledges that these Articles Supplementary are the act of the Company and that to the best of his knowledge, information and belief and under penalties for perjury all matters and facts contained in these Articles Supplementary are true in all material respects. FELCOR SUITE HOTELS, INC. By: /s/ Randall L. Churchey ------------------------------------------ Randall L. Churchey, Senior Vice President Attest: /s/ Lawrence D. Robinson ----------------------------------------------- Lawrence D. Robinson, Secretary (Corporate Seal) - 10 - EX-4.5 4 FORM OF SHARE CERTIFICATE PREFERRED STOCK 1 NUMBER INCORPORATED UNDER THE LAWS SHARES OF THE STATE OF MARYLAND PB [FELCOR LOGO] FELCOR SUITE HOTELS, INC. THIS CERTIFICATE IS TRANSFERABLE 9% SERIES B CUMULATIVE IN ATLANTA, GEORGIA and NEW YORK, REDEEMABLE PREFERRED STOCK NEW YORK CUSIP 31 5 40 0 SEE REVERSE FOR CERTAIN DEFINITIONS THIS CERTIFIES THAT IS THE OWNER OF FULLY PAID AND NONASSESSABLE SHARES OF 9% SERIES B CUMULATIVE REDEEMABLE PREFERRED STOCK, $.01 PAR VALUE AND $2,500.00 LIQUIDATION PREFERENCE PER SHARE, OF FELCOR SUITE HOTELS, INC. (the "Corporation"), a Maryland corporation. The shares represented by this Certificate are transferable only on the stock transfer books of the Corporation by the holder of record hereof in person or any duly authorized attorney or legal representative upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned and registered by the Corporation's transfer agent and registrar. In Witness Whereof, the Corporation has caused this Certificate to be executed by the facsimile seal and signature of its duly authorized officers. Dated: /s/ LAWRENCE D. ROBINSON SECRETARY [SEAL] Countersigned and Registered at: SUNTRUST BANK, ATLANTA (Atlanta, Georgia) Transfer Agent and Registrar /s/ THOMAS J. CORCORAN, JR. By Authorized Signature PRESIDENT AND CHIEF EXECUTIVE OFFICER 2 FELCOR SUITE HOTELS, INC. The shares of Equity Stock represented by this certificate are subject to restrictions on transfer for the purpose of maintaining the Corporation's status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the "Code"). No Person may at any time (1) Beneficially Own or Constructively Own shares of any class of Equity Stock in excess of 9.9% (or such other percentage as may be determined by the Board of Directors of the Corporation) of the total number of shares of such class of Equity Stock outstanding as of such time; (2) Beneficially Own Equity Stock which would result in the Corporation being "closely held" under Section 856(h) of the Code; (3) Constructively Own Equity Stock which would result in the Corporation Constructively Owning 10% or more of the ownership interest in any tenant or subtenant of the Corporation's real property (including the real property held by FelCor Suites Limited Partnership and any other partnership in which the Corporation owns an interest), within the meaning of Section 856(d)(2)(B) of the Code. Any Person who attempts to Beneficially Own or Constructively Own shares of Equity Stock in excess of the above limitations must immediately notify the Corporation in writing. If the restrictions above are violated, the shares of Equity Stock represented hereby will be transferred automatically and by operation of law to a Trust and shall be designated Shares-in-Trust. All capitalized terms in this legend have the meanings assigned to them in the Corporation's Charter, as the same may be further amended from time to time. The shares of Equity Stock represented by this certificate are subject to all of the provisions of the Charter and Bylaws of the Corporation, each as amended or supplemented from time to time, to all of which the holder, by acceptance hereof, assents. The Corporation will furnish to any stockholder, upon request and without charge, a copy of its Charter and Bylaws, and all amendments or supplements thereto, setting forth the restrictions on transfer and a statement of (i) the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the stock of each class which the Corporation is authorized to issue, (ii) the differences in the relative rights and preferences between the shares of each series of each class of the stock which the Corporation is authorized to issue to the extent they have been set by the Board of Directors and (iii) the authority of the Board of Directors to set the relative rights and preferences of subsequent series of stock of the Corporation. The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations. as tenants in common UNIF TRANSFER MIN ACT -- Custodian as tenants by the entireties ------- ------- as joint tenants with right (Cust) (Minor) of survivorship and not as tenants under Uniform Transfers to Minors in common Act ---------------- (State)
Additional abbreviations may also be used though not in the above list. For value received __________________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE [ ] _______________________________________________________________________________ _______________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE _______________________________________________________________________________ ________________________________________________________________________ shares represented by this Certificate, and do hereby irrevocably constitute and appoint ______________________________________________________________________ Attorney to transfer the said shares on the books of the Corporation with full power of substitution in the premises. Date:_____________________ ________________________________________ SIGNATURE(S) GUARANTEED:________________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ac-15. NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. EX-4.6 5 DEPOSIT AGREEMENT DATED APRIL 30, 1998 1 EXHIBIT 4.6 ================================================================================ DEPOSIT AGREEMENT AMONG FELCOR SUITE HOTELS, INC. SUNTRUST BANK AND THE HOLDERS OF THE DEPOSITARY RECEIPTS TO BE ISSUED HEREUNDER DATED AS OF APRIL 30, 1998 ================================================================================ 2 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Articles Supplementary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.3 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.4 Corporate Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.5 Deposit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.6 Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.7 Depositary Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.8 Depositary's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.9 Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.10 Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.11 Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.12 Record holder or Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.13 Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.14 Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.15 Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE II FORM OF RECEIPTS, DEPOSIT OF PREFERRED SHARES, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1 Form and Transferability of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 Deposit of Preferred Shares; Execution and Delivery of Receipts in Respect Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.3 Optional Redemption of Preferred Shares for Cash . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.4 Registration of Transfers of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.5 Combinations and Split-ups of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.6 Surrender of Receipts and Withdrawal of Preferred Shares . . . . . . . . . . . . . . . . . . . . . 7 2.7 Limitations on Execution and Delivery, Transfer, Split-up, Combination, Surrender and Exchange of Receipts . . . . . . . . . . . . . . . . . . . . . . . . 8 2.8 Lost Receipts, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.9 Cancellation and Destruction of Surrendered Receipts . . . . . . . . . . . . . . . . . . . . . . . 8 ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.1 Filing Proofs, Certificates and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.2 Payment of Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.3 Representations and Warranties as to Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . 9 3.4 Representation and Warranty as to Receipts and Depositary Shares . . . . . . . . . . . . . . . . . 9
-i- 3 ARTICLE IV THE PREFERRED SHARES; NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.1 Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.2 Distributions Other Than Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.3 Subscription Rights, Preferences or Privileges . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.4 Notice of Dividends; Fixing of Record Date for Holders of Receipts . . . . . . . . . . . . . . . 12 4.5 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.6 Changes Affecting Preferred Shares and Reclassifications, Recapitalization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.7 Inspection of Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.8 Lists of Receipt Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.9 Tax and Regulatory Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.10 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 ARTICLE V THE DEPOSITARY AND THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.1 Maintenance of Offices, Agencies and Transfer Books by the Depositary and the Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.2 Prevention or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company . . . . . . . . . . . . . . . . . . . . 15 5.3 Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 5.5 Notices, Reports and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 5.6 Indemnification by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 5.7 Fees, Charges and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ARTICLE VI AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7.1 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7.2 Exclusive Benefit of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 7.3 Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 7.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 7.5 Depositary's Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 7.6 Holders of Receipts Are Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 7.8 Inspection of Deposit Agreement and Articles Supplementary . . . . . . . . . . . . . . . . . . . 21 7.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-ii- 4 DEPOSIT AGREEMENT DEPOSIT AGREEMENT, dated as of April 30, 1998, among FelCor Suite Hotels, Inc., a Maryland corporation (the "Company") and SunTrust Bank, Atlanta, Georgia, a Georgia banking corporation, as Depositary, and all holders from time to time of Receipts (as hereinafter defined) issued hereunder. W I T N E S S E T H: WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of the Company's Preferred Shares (as hereinafter defined) with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of the Receipts evidencing Depositary Shares representing a fractional interest in the Preferred Shares deposited; and WHEREAS, the Receipts are to be substantially in the form of Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement; NOW, THEREFORE, in consideration of the premises contained herein, it is agreed by and among the parties hereto as follows: ARTICLE I DEFINITIONS The following definitions shall apply to the respective terms (in the singular and plural forms of such terms) used in this Deposit Agreement and the Receipts: SECTION 1.1 "ARTICLES SUPPLEMENTARY" shall mean the articles supplementary to the Charter filed with the Department of Assessments and Taxation of the State of Maryland establishing the Preferred Shares as a series of preferred shares of the Company. SECTION 1.2 "CHARTER" shall mean the Articles of Amendment and Restatement, as supplemented and amended from time to time, of the Company. SECTION 1.3 "COMPANY" shall mean FelCor Suite Hotels, Inc., a Maryland corporation, and its successors. SECTION 1.4 "CORPORATE OFFICE" shall mean the corporate office of the Depositary at which at any particular time its business in respect of matters governed by this Deposit Agreement shall be administered, which at the date of this Deposit Agreement is located at 58 Edgewood Avenue, N.E., Atlanta, Georgia 30303. -1- 5 SECTION 1.5 "DEPOSIT AGREEMENT" shall mean this agreement, as the same may be amended, modified or supplemented from time to time. SECTION 1.6 "DEPOSITARY" shall mean SunTrust Bank, Atlanta, Georgia, a bank having its principal office in the United States and having a combined capital and surplus of at least $50,000,000, and any successor as depositary hereunder. SECTION 1.7 "DEPOSITARY SHARE" shall mean a fractional interest of 1/100 of a Preferred Share deposited with the Depositary hereunder and the same proportionate interest in any and all other property received by the Depositary in respect of such Preferred Share and held under this Deposit Agreement, all as evidenced by the Receipts issued hereunder. Subject to the terms of this Deposit Agreement, each owner of a Depositary Share is entitled, proportionately, to all the rights, preferences and privileges of the Preferred Share represented by such Depositary Share, including the dividend, voting, redemption, conversion and liquidation rights contained in the Articles Supplementary. SECTION 1.8 "DEPOSITARY'S AGENT" shall mean an agent appointed by the Depositary as provided, and for the purposes specified, in Section 7.5. SECTION 1.9 "PREFERRED SHARES" shall mean the Company's 9% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share, heretofore validly issued, fully paid and nonassessable. SECTION 1.10 "RECEIPT" shall mean a Depositary Receipt issued hereunder to evidence one or more Depositary Shares, whether in definitive or temporary form, substantially in the form set forth as Exhibit A hereto. SECTION 1.11 "RECORD DATE" shall mean the date fixed pursuant to Section 4.4. SECTION 1.12 "RECORD HOLDER" OR "HOLDER" as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books maintained by the Depositary for such purpose. SECTION 1.13 "REGISTRAR" shall mean SunTrust Bank, Atlanta, Georgia or any bank or trust company appointed to register ownership and transfers of Receipts or the deposited Preferred Shares, as the case may be, as herein provided. SECTION 1.14 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. SECTION 1.15 "TRANSFER AGENT" shall mean SunTrust Bank, Atlanta, Georgia or any bank or trust company appointed to transfer the Receipts or the deposited Preferred Shares, as the case may be, as herein provided. -2- 6 ARTICLE II FORM OF RECEIPTS, DEPOSIT OF PREFERRED SHARES, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS SECTION 2.1 FORM AND TRANSFERABILITY OF RECEIPTS. Definitive Receipts shall be engraved or printed or lithographed with steel-engraved borders and underlying tint and shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Pending the preparation of definitive Receipts, the Depositary, upon the written order of the Company, delivered in compliance with Section 2.2, shall execute and deliver temporary Receipts which may be printed, lithographed, typewritten, mimeographed or otherwise substantially of the tenor of the definitive Receipts in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine, as evidenced by their execution of such Receipts. If temporary Receipts are issued, the Company and the Depositary will cause definitive Receipts to be prepared without unreasonable delay. After the preparation of definitive Receipts, the temporary Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at the Corporate Office or such other offices, if any, as the Depositary may designate, without charge to the holder. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary shall execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts. Such exchange shall be made at the Company's expense and without any charge therefor. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement, and with respect to the Preferred Shares deposited, as definitive Receipts. Receipts shall be executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary, PROVIDED that if a Registrar (other than the Depositary) shall have been appointed then such Receipts shall also be countersigned by manual signature of a duly authorized signatory of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed as provided in the preceding sentence. The Depositary shall record on its books each Receipt executed as provided above and delivered as hereinafter provided. Except as the Depositary may otherwise determine, Receipts shall be in denominations of any number of whole Depositary Shares. All Receipts shall be dated the date of their issuance. Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulation or with -3- 7 the rules and regulations of any securities exchange upon which the Preferred Shares, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject. Title to any Receipt (and to the Depositary Shares evidenced by such Receipt), that is properly endorsed or accompanied by a properly executed instrument of transfer or endorsement shall be transferable by delivery with the same effect as in the case of a negotiable instrument; PROVIDED, HOWEVER, that until a Receipt shall be transferred on the books of the Depositary as provided in Section 2.4, the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions, the exercise of any conversion rights or to any notice provided for in this Deposit Agreement and for all other purposes. SECTION 2.2 DEPOSIT OF PREFERRED SHARES; EXECUTION AND DELIVERY OF RECEIPTS IN RESPECT THEREOF. Concurrently with the execution of this Deposit Agreement, the Company is delivering to the Depositary a certificate or certificates, registered in the name of the Depositary and evidencing 57,500 Preferred Shares, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with (i) all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement and (ii) a written order of the Company directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the Depositary Shares representing such deposited Preferred Shares. The Depositary acknowledges receipt of the deposited Preferred Shares and related documentation and agrees to hold such deposited Preferred Shares in an account to be established by the Depositary at the Corporate Office or at such other office as the Depositary shall determine. The Company hereby appoints the Depositary as the Registrar and Transfer Agent for Preferred Shares deposited hereunder and the Depositary hereby accepts such appointment and, as such, will reflect changes in the number of shares (including any fractional shares) of deposited Preferred Shares held by it by notation, book-entry or other appropriate method. If required by the Depositary, Preferred Shares presented for deposit by the Company at any time, whether or not the register of shareholders of the Company is closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, that will provide for the prompt transfer to the Depositary or its nominee of any dividend or right to subscribe for additional Preferred Shares or to receive other property that any person in whose name the Preferred Shares is or has been registered may thereafter receive upon or in respect of such deposited Preferred Shares, or in lieu thereof such agreement of indemnity or other agreement as shall be satisfactory to the Depositary. -4- 8 Upon receipt by the Depositary of a certificate or certificates for Preferred Shares deposited hereunder, together with the other documents specified above, and upon registering such Preferred Shares in the name of the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to, or upon the order of, the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this Section 2.2, a Receipt or Receipts for the number of whole Depositary Shares representing the Preferred Shares so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipt or Receipts at the Corporate Office, except that, at the request, risk and expense of any person requesting such delivery, such delivery may be made at such other place as may be designated by such person. Other than in the case of splits, combinations or other reclassifications affecting the Preferred Shares, or in the case of dividends or other distributions of Preferred Shares, if any, there shall be deposited hereunder not more than the number of shares constituting the Preferred Shares as set forth in the Articles Supplementary, as such may be amended. The Company shall deliver to the Depositary from time to time such quantities of Receipts as the Depositary may request to enable the Depositary to perform its obligations under this Deposit Agreement. SECTION 2.3 OPTIONAL REDEMPTION OF PREFERRED SHARES FOR CASH. Whenever the Company shall elect to redeem deposited Preferred Shares for cash in accordance with the provisions of the Articles Supplementary, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary not less than 30 nor more than 60 days prior written notice of the date of such proposed redemption and of the number of such Preferred Shares held by the Depositary to be redeemed and the applicable redemption price, as set forth in the Articles Supplementary, including the amount, if any, of accrued and unpaid dividends to the date of such redemption. The Depositary shall mail, first-class postage prepaid, notice of the redemption of Preferred Shares and the proposed simultaneous redemption of the Depositary Shares representing the Preferred Shares to be redeemed, not less than 30 nor more than 60 days prior to the date fixed for redemption of such Preferred Shares and Depositary Shares (the "cash redemption date"), to the holders of record on the record date fixed for such redemption pursuant to Section 4.4 hereof of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such holders as the same appear on the records of the Depositary; but neither failure to mail any such notice to one or more such holders nor any defect in any such notice shall affect the sufficiency of the proceedings for redemption as to other holders. The Company shall provide the Depositary with such notice, and each such notice shall state: the cash redemption date; the cash redemption price; the number of deposited Preferred Shares and Depositary Shares to be redeemed; if fewer than all the Depositary Shares held by any holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed; the place or places where Receipts evidencing Depositary Shares to be redeemed are to be surrendered for payment of the cash redemption price; and that from and after the cash redemption date dividends in -5- 9 respect of the Preferred Shares represented by the Depositary Shares to be redeemed will cease to accrue. If fewer than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional Depositary Shares) or by any other equitable method determined by the Company. The Company may also cause notice of redemption to be published in the Wall Street Journal or New York Times or, if neither is being published, in any other newspaper of national circulation, prior to the cash redemption date. In the event that notice of redemption has been made as described in the immediately preceding paragraph and the Company shall then have paid in full to the Depositary the cash redemption price (determined pursuant to the Articles Supplementary) of the Preferred Shares deposited with the Depositary to be redeemed (including any accrued and unpaid dividends to the date of redemption), the Depositary shall redeem the number of Depositary Shares representing such Preferred Shares so called for redemption by the Company and from and after the cash redemption date (unless the Company shall have failed to redeem the Preferred Shares to be redeemed by it as set forth in the Company's notice provided for in the preceding paragraph), all dividends in respect of the Preferred Shares called for redemption shall cease to accrue, the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the cash redemption price and any money or other property to which holders of such Receipts were entitled upon such redemption) shall, to the extent of such Depositary Shares, cease and terminate. Upon surrender in accordance with said notice of the Receipts evidencing such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be redeemed at a cash redemption price of $25.00 per Depositary Share plus any other money and other property payable in respect of such Preferred Shares. The foregoing shall be further subject to the terms and conditions of the Articles Supplementary. If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with payment of the cash redemption price for and all other amounts payable in respect of the Depositary Shares called for redemption, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. SECTION 2.4 REGISTRATION OF TRANSFERS OF RECEIPTS. The Company hereby appoints the Depositary as the Registrar and Transfer Agent for the Receipts and the Depositary hereby accepts such appointment and, as such, shall register on its books from time to time transfers of Receipts upon any surrender thereof by the holder in person or by a duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer or endorsement, together with evidence of the payment of any transfer taxes as may be required by law. Upon such surrender, the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. -6- 10 SECTION 2.5 COMBINATIONS AND SPLIT-UPS OF RECEIPTS. Upon surrender of a Receipt or Receipts at the Corporate Office or such other office as the Depositary may designate for the purpose of effecting a split-up or combination of Receipts, subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the authorized denominations requested evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. SECTION 2.6 SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERRED SHARES. Any holder of a Receipt or Receipts may withdraw any or all of the deposited Preferred Shares represented by the Depositary Shares evidenced by such Receipt or Receipts and all money and other property, if any, represented by such Depositary Shares by surrendering such Receipt or Receipts at the Corporate Office or at such office as the Depositary may designate for such withdrawals, PROVIDED that a holder of a Receipt or Receipts may not withdraw such Preferred Shares (or money and other property, if any, represented thereby) which has previously been called for redemption. After such surrender, without unreasonable delay, the Depositary shall deliver to such holder, or to the person or persons designated by such holder as hereinafter provided, the number of whole or fractional shares of such Preferred Shares and all such money and other property, if any, represented by the Depositary Shares evidenced by the Receipt or Receipts so surrendered for withdrawal, but holders of such whole or fractional Preferred Shares will not thereafter be entitled to deposit such Preferred Shares hereunder or to receive Depositary Shares therefor. If the Receipt or Receipts delivered by the holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole or fractional shares of deposited Preferred Shares to be withdrawn, the Depositary shall at the same time, in addition to such number of whole or fractional Preferred Shares and such money and other property, if any, to be withdrawn, deliver to such holder, or (subject to Section 2.4) upon his order, a new Receipt or Receipts evidencing such excess number of Depositary Shares. Delivery of such Preferred Shares and such money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer. If the deposited Preferred Shares and the money and other property being withdrawn are to be delivered to a person or persons other than the record holder of the Receipt or Receipts being surrendered for withdrawal of Preferred Shares, such holder shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such Preferred Shares be properly endorsed in blank or accompanied by a properly executed instrument of transfer or endorsement in blank. The Depositary shall deliver the deposited Preferred Shares and the money and other property, if any, represented by the Depositary Shares evidenced by Receipts surrendered for withdrawal at the Corporate Office, except that, at the request, risk and expense of the holder -7- 11 surrendering such Receipt or Receipts and for the account of the holder thereof, such delivery may be made at such other place as may be designated by such holder. SECTION 2.7 LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SPLIT-UP, COMBINATION, SURRENDER AND EXCHANGE OF RECEIPTS. As a condition precedent to the execution and delivery, transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to the Preferred Shares being deposited or withdrawn); (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature (or the authority of any signature); and (iii) compliance with such regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement as may be required by any securities exchange upon which the deposited Preferred Shares, the Depositary Shares or the Receipts may be included for quotation or listed. The deposit of Preferred Shares may be refused, the delivery of Receipts against Preferred Shares may be suspended, the transfer of Receipts may be refused, and the transfer, split-up, combination, surrender, exchange or redemption of outstanding Receipts may be suspended (i) during any period when the register of shareholders of the Company is closed or (ii) if any such action is deemed reasonably necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under the Charter or under any provision of this Deposit Agreement. SECTION 2.8 LOST RECEIPTS, ETC. In case any Receipt shall be mutilated or destroyed or lost or stolen, the Depositary, in its discretion, may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt or in lieu of and in substitution for such destroyed, lost or stolen Receipt, PROVIDED that the holder thereof provides the Depositary with (i) evidence reasonably satisfactory to the Depositary of such destruction, loss or theft of such Receipt, of the authenticity thereof and of his ownership thereof and (ii) reasonable indemnification satisfactory to the Depositary and the Company. SECTION 2.9 CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All Receipts surrendered to the Depositary or any Depositary's Agent shall be canceled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized to destroy such Receipts so cancelled. -8- 12 ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.1 FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any person presenting Preferred Shares for deposit or any holder of a Receipt may be required from time to time to file such proof of residence or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold or delay the delivery of any Receipt, the transfer, redemption or exchange of any Receipt, the withdrawal of the deposited Preferred Shares represented by the Depositary Shares evidenced by any Receipt, the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof, until such proof or other information is filed, such certificates are executed or such representations and warranties are made. SECTION 3.2 PAYMENT OF FEES AND EXPENSES. Holders of Receipts shall be obligated to make payments to the Depositary of certain fees and expenses, as provided in Section 5.7, or provide evidence reasonably satisfactory to the Depositary that such fees and expenses have been paid. Until such payment is made, transfer of any Receipt or any withdrawal of the Preferred Shares or money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused, any dividend or other distribution may be withheld, and any part or all of the Preferred Shares or other property represented by the Depositary Shares evidenced by such Receipt may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder a reasonable number of days prior to such sale). Any dividend or other distribution so withheld and the proceeds of any such sale may be applied to any payment of such fees or expenses, the holder of such Receipt remaining liable for any deficiency. SECTION 3.3 REPRESENTATIONS AND WARRANTIES AS TO PREFERRED SHARES. In the case of the initial deposit of the Preferred Shares hereunder, the Company and, in the case of subsequent deposits thereof, each person so depositing Preferred Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that such Preferred Shares and each certificate therefor are valid and that the person making such deposit is duly authorized to do so. The Company hereby further represents and warrants that such Preferred Shares, when issued, will be validly issued, fully paid and nonassessable. Such representations and warranties shall survive the deposit of the Preferred Shares and the issuance of Receipts. SECTION 3.4 REPRESENTATION AND WARRANTY AS TO RECEIPTS AND DEPOSITARY SHARES. The Company hereby represents and warrants that the Receipts, when issued, will evidence legal and valid interests in the Depositary Shares and each Depositary Share will represent a legal and valid 1/100 fractional interest in a deposited Preferred Share. Such -9- 13 representation and warranty shall survive the deposit of the Preferred Shares and the issuance of Receipts evidencing the Depositary Shares. ARTICLE IV THE PREFERRED SHARES; NOTICES SECTION 4.1 CASH DISTRIBUTIONS. Whenever the Depositary shall receive any cash dividend or other cash distribution on the deposited Preferred Shares, including any cash received upon redemption of any Preferred Shares pursuant to Section 2.3, the Depositary shall, subject to Section 3.2, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of such sum as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; PROVIDED, HOWEVER, that in case the Company or the Depositary shall be required to and shall withhold from any cash dividend or other cash distribution in respect of the Preferred Shares represented by the Receipts held by any holder an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares represented by such Receipts subject to such withholding shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any holder of Receipts a fraction of one cent, and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. SECTION 4.2 DISTRIBUTIONS OTHER THAN CASH. Whenever the Depositary shall receive any distribution other than cash on the deposited Preferred Shares, the Depositary shall, subject to Section 3.2, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary and the Company may deem equitable and practicable for accomplishing such distribution. If, in the opinion of the Depositary after consultation with the Company, such distribution cannot be made proportionately among such record holders, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes), the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Section 3.2, be distributed or made available for distribution, as the case may be, by the Depositary to record holders of Receipts as provided by Section 4.1 in the case of a distribution received in cash. The Company shall not make any distribution of such securities or property to the holders of Receipts unless the -10- 14 Company shall have provided to the Depositary an opinion of counsel stating that such securities or property have been registered under the Securities Act or do not need to be registered. SECTION 4.3 SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the Company shall at any time offer or cause to be offered to the persons in whose names deposited Preferred Shares are registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct (including by the issue to such record holders of warrants representing such rights, preferences or privileges); PROVIDED, HOWEVER, that (a) if at the time of issue or offer of any such rights, preferences or privileges the Company determines upon advice of its legal counsel that it is not lawful or feasible to make such rights, preferences or privileges available to the holders of Receipts (by the issue of warrants or otherwise) or (b) if and to the extent instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, the Depositary shall then, if so instructed by the Company, and if applicable laws or the terms of such rights, preferences or privileges so permit, sell such rights, preferences or privileges of such holders at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Section 3.1 and Section 3.2, be distributed by the Depositary to the record holders of Receipts entitled thereto as provided by Section 4.1 in the case of a distribution received in cash. The Company shall not make any distribution of such rights, preferences or privileges, unless the Company shall have provided to the Depositary an opinion of counsel stating that such rights, preferences or privileges have been registered under the Securities Act or applicable state securities laws or do not need to be registered. If registration under the Securities Act or applicable state securities laws of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, the Company agrees that it will promptly file a registration statement pursuant to the Securities Act or applicable state securities laws with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such a registration statement shall have become effective or unless the offering and sale of such securities to such holders are exempt from registration under the provisions of the Securities Act or applicable state securities laws and the Company shall have provided to the Depositary an opinion of counsel to such effect. If any other action under the law of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees to use its best efforts -11- 15 to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. SECTION 4.4 NOTICE OF DIVIDENDS; FIXING OF RECORD DATE FOR HOLDERS OF RECEIPTS. Whenever any cash dividend or other cash distribution shall become payable, any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the deposited Preferred Shares, or whenever the Depositary shall receive notice of (i) any meeting at which holders of such Preferred Shares are entitled to vote or of which holders of such Preferred Shares are entitled to notice or (ii) any election on the part of the Company to redeem any such Preferred Shares, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Preferred Shares) for the determination of the holders of Receipts who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, to give instructions for the exercise of voting rights at any such meeting or to receive notice of such meeting or whose Depositary Shares are to be so redeemed. SECTION 4.5 VOTING RIGHTS. Upon receipt of notice of any meeting at which the holders of deposited Preferred Shares are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall be provided by the Company and which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Receipts at the close of business on a specified record date fixed pursuant to Section 4.4 will be entitled, subject to any applicable provision of law, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Preferred Shares represented by their respective Depositary Shares and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall vote or cause to be voted the amount of Preferred Shares represented by the Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. To the extent such instructions request the voting of a fractional interest of a share of deposited Preferred Shares, the Depositary shall aggregate such interest with all other fractional interests resulting from requests with the same voting instructions and shall vote the number of whole votes resulting from such aggregation in accordance with the instructions received in such requests. Each Preferred Share is entitled to 100 votes and, accordingly, each Depositary Share is entitled to one vote. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Preferred Shares or cause such Preferred Shares to be voted. In the absence of specific instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Preferred Shares represented by the Depositary Shares evidenced by such Receipt. The Depositary shall not be required to exercise discretion in voting any Preferred Shares represented by the Depositary Shares evidenced by such Receipt. -12- 16 SECTION 4.6 CHANGES AFFECTING PREFERRED SHARES AND RECLASSIFICATIONS, RECAPITALIZATION, ETC. Upon any change in par or stated value, split-up, combination or any other reclassification of Preferred Shares, or upon any recapitalization, reorganization, merger, amalgamation or consolidation affecting the Company or to which it is a party or sale of all or substantially all of the Company's assets, the Depositary shall, upon the instructions of the Company: (i) make such adjustments in (a) the fraction of an interest represented by one Depositary Share in one Preferred Share and (b) the ratio of the redemption price per Depositary Share to the redemption price of a Preferred Share, in each case as may be required by or as is consistent with the provisions of the Articles Supplementary to fully reflect the effects of such change in liquidation value, split-up, combination or other reclassification of Shares, or of such recapitalization, reorganization, merger, consolidation or sale and (ii) treat any shares or other securities or property (including cash) that shall be received by the Depositary in exchange for or upon conversion of or in respect of the Preferred Shares as new deposited property under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of holders thereof or the new deposited property so received in exchange for or upon conversion or in respect of such Preferred Shares. In any such case the Depositary may, in its discretion, with approval of the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited property. Anything to the contrary herein notwithstanding, holders of Receipts shall have the right from and after the effective date of any such change in par or stated value, split-up, combination or other reclassification of the Preferred Shares or any such recapitalization, reorganization, merger, amalgamation or consolidation or sale of substantially all the assets of the Company to surrender such Receipts to the Depositary with instructions to convert, exchange or surrender the Preferred Shares represented thereby only into or for, as the case may be, the kind and amount of shares and other securities and property and cash into which the deposited Preferred Shares evidenced by such Receipts might have been converted or for which such Preferred Shares might have been exchanged or surrendered immediately prior to the effective date of such transaction. The Company shall cause effective provision to be made in the charter of the resulting or surviving corporation (if other than the Company) for protection of such rights as may be applicable upon exchange of the deposited Preferred Shares for securities or property or cash of the surviving corporation in connection with the transactions set forth above. The Company shall cause any such surviving corporation (if other than the Company) expressly to assume the obligations of the Company hereunder. SECTION 4.7 INSPECTION OF REPORTS. The Depositary shall make available for inspection by holders of Receipts at the Corporate Office and at such other places as it may from time to time deem advisable during normal business hours any reports and communications received from the Company that are both received by the Depositary as the holder of deposited Preferred Shares and made generally available to the holders of the Preferred Shares. In addition, the Depositary shall transmit certain notices and reports to the holders of Receipts as provided in Section 5.5. -13- 17 SECTION 4.8 LISTS OF RECEIPT HOLDERS. Promptly upon request from time to time by the Company, the Depositary shall furnish to the Company a list, as of a recent date specified by the Company, of the names, addresses and holdings of Depositary Shares of all persons in whose names Receipts are registered on the books of the Depositary. SECTION 4.9 TAX AND REGULATORY COMPLIANCE. The Depositary shall be responsible for (i) preparation and mailing of form 1099's for all open and closed accounts, (ii) foreign tax withholding, (iii) withholding 31% (or any withholding as may be required at the then applicable rate) of dividends from eligible holders of Receipts if directed to do so by the Company or required to do so by applicable law, (iv) mailing W-9 forms to new holders of Receipts without a certified taxpayer identification number, (v) processing certified W-9 forms, (vi) preparation and filing of state information returns and (vii) escheatment services. SECTION 4.10 WITHHOLDING. Notwithstanding any other provision of this Deposit Agreement, in the event that the Depositary determines that any distribution in property is subject to any tax which the Depositary is obligated by law to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the holders of Receipts entitled thereto in proportion to the number of Depositary Shares held by them respectively. ARTICLE V THE DEPOSITARY AND THE COMPANY SECTION 5.1 MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER BOOKS BY THE DEPOSITARY AND THE REGISTRAR. The Depositary shall maintain at the Corporate Office facilities for the execution and delivery, transfer, surrender and exchange, split-up, combination and redemption of Receipts and deposit and withdrawal of Preferred Shares and at the offices of the Depositary's Agents, if any, facilities for the delivery, transfer, surrender and exchange, split-up, combination and redemption of Receipts and deposit and withdrawal of Preferred Shares, all in accordance with the provisions of this Deposit Agreement. The Depositary shall keep books at the Corporate Office for the registration and transfer of Receipts, which books at all reasonable times shall be open for inspection by the record holders of Receipts as provided by applicable law. The Depositary may close such books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. If the Receipts or the Depositary Shares evidenced thereby or the Preferred Shares represented by such Depositary Shares shall be listed on the New York Stock Exchange, Inc. or -14- 18 any other stock exchange, the Depositary may, with the approval of the Company, appoint a Registrar (acceptable to the Company) for registration of such Receipts or Depositary Shares in accordance with the requirements of such Exchange. Such Registrar (which may be the Depositary if so permitted by the requirements of such Exchange) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. If the Receipts, such Depositary Shares or such Preferred Shares are listed on one or more other stock exchanges, the Depositary will, at the request and expense of the Company, arrange such facilities for the delivery, transfer, surrender, redemption and exchange of such Receipts, such Depositary Shares or such Preferred Shares as may be required by law or applicable stock exchange regulations. SECTION 5.2 PREVENTION OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR OR THE COMPANY. Neither the Depositary, any Depositary's Agent, any Registrar nor the Company shall incur any liability to any holder of any Receipt, if by reason of any provision of any present or future law or regulation thereunder of the United States of America or of any other governmental authority or, in the case of the Depositary, the Depositary's Agent or the Registrar, by reason of any provision, present or future, of the Charter or the Articles Supplementary or, in the case of the Company, the Depositary, the Depositary's Agent or the Registrar, by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, the Depositary's Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, any Registrar or the Company incur any liability to any holder of a Receipt by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement provide shall or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement. SECTION 5.3 OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY. Neither the Depositary, any Depositary's Agent, any Registrar nor the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement or any Receipt to holders of Receipts other than from acts or omissions arising out of conduct constituting bad faith, negligence (in the case of any action or inaction with respect to the voting of the deposited Preferred Shares), gross negligence or willful misconduct in the performance of such duties as are specifically set forth in this Deposit Agreement. Neither the Depositary, any Depositary's Agent, any Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to the deposited Preferred Shares, Depositary Shares or Receipts that in its reasonable opinion may involve it in expense or liability unless indemnity reasonably satisfactory to it against all expense and liability be furnished as often as may be required. -15- 19 Neither the Depositary, any Depositary's Agent, any Registrar nor the Company shall be liable for any action or any failure to act by it in reliance upon the written advice of legal counsel or accountants, or information provided by any person presenting Preferred Shares for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such information. The Depositary, any Depositary's Agent, any Registrar and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. In the event the Depositary shall receive conflicting claims, requests or instructions from any holders of Receipts, on the one hand, and the Company, on the other hand, the Depositary shall be entitled to act on such claims, requests or instructions received from the Company, and shall be entitled to the full indemnification set forth in Section 5.6 hereof in connection with any action so taken. The Depositary shall not be responsible for any failure to carry out any instruction to vote any of the deposited Preferred Shares or for the manner or effect of any such vote made, as long as any such action or non-action is in good faith and does not result from negligence or willful misconduct of the Depositary. The Depositary undertakes, and any Registrar shall be required to undertake, to perform such duties and only such duties as are specifically set forth in this Deposit Agreement, and no implied covenants or obligations shall be read into this Agreement against the Depositary or any Registrar. The Depositary, its parent, affiliate, or subsidiaries, any Depositary's Agent, and any Registrar may own, buy, sell or deal in any class of securities of the Company and its affiliates and in Receipts or Depositary Shares or become pecuniarily interested in any transaction in which the Company or its affiliates may be interested or contract with or lend money to or otherwise act as fully or as freely as if it were not the Depositary or the Depositary's Agent hereunder. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates or act in any other capacity for the Company or its affiliates. It is intended that neither the Depositary nor any Depositary's Agent shall be deemed to be an "issuer" of the securities under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary and any Depositary's Agent are acting only in a ministerial capacity as Depositary for the deposited Preferred Shares; PROVIDED, HOWEVER, that the Depositary agrees to comply with all information reporting and withholding requirements applicable to it under law or this Deposit Agreement in its capacity as Depositary. The Company agrees that it will register the deposited Preferred Shares and the Depositary Shares if required by the applicable securities laws. -16- 20 SECTION 5.4 RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary hereunder by notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If a successor depositary shall not have been appointed in 60 days, the resigning Depositary may petition a court of competent jurisdiction to appoint a successor depositary. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all rights, title and interest in the deposited Preferred Shares and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the record holders of all outstanding Receipts. Any successor depositary shall promptly mail notice of its appointment to the record holders of Receipts. Any corporation into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may execute the Receipts either in the name of the predecessor depositary or in the name of the successor depositary. SECTION 5.5 NOTICES, REPORTS AND DOCUMENTS. The Company agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the record holders of Receipts, in each case at the address recorded in the Depositary's books, copies of all notices and reports (including financial statements) required by law, by the rules of any national securities exchange upon which the Preferred Shares, the Depositary Shares or the Receipts are included for quotation or listed or by the Charter and the Articles Supplementary to be furnished by the Company to holders of the deposited Preferred Shares and, if requested by the holder of any Receipt, a copy of this Deposit Agreement, the form of Receipt, the Articles Supplementary and the form of Preferred Shares. Such transmission will be at the Company's expense and the Company will provide the Depositary with such number of copies of such -17- 21 documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the record holders of Receipts at the Company's expense such other documents as may be requested by the Company. SECTION 5.6 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify the Depositary, any Depositary's Agent and any Registrar against, and hold each of them harmless from, any liability, costs and expenses (including reasonable attorneys' fees) that may arise out of, or in connection with, its acting as Depositary, Depositary's Agent or Registrar, respectively, under this Deposit Agreement and the Receipts, except for any liability arising out of the willful misconduct, gross negligence, negligence (in the case of any action or inaction with respect to the voting of the deposited Preferred Shares) or bad faith on the part of any such person or persons. The obligations of the Company set forth in this Section 5.6 shall survive any succession of any Depositary, Registrar or Depositary's Agent or termination of this Deposit Agreement. SECTION 5.7 FEES, CHARGES AND EXPENSES. No charges and expenses of the Depositary or any Depositary's Agent hereunder shall be payable by any person, except as provided in this Section 5.7. The Company shall pay all transfer and other taxes and governmental charges arising solely from the existence of this Deposit Agreement. The Company shall also pay all fees and expenses of the Depositary in connection with the initial deposit of the Preferred Shares and the initial issuance of the Depositary Shares evidenced by the Receipts, any redemption of the Preferred Shares at the option of the Company and all withdrawals of the Preferred Shares by holders of Depositary Shares. If a holder of Receipts requests the Depositary to perform duties not required under this Deposit Agreement, the Depositary shall notify the holder of the cost of the performance of such duties prior to the performance thereof. Such holder will be liable for the charges and expenses related to such performance. All other fees and expenses of the Depositary and any Depositary's Agent hereunder and of any Registrar (including, in each case, fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be promptly paid as previously agreed between the Depositary and the Company. The Depositary shall present its statement for fees and expenses to the Company every month or at such other intervals as the Company and the Depositary may agree. ARTICLE VI AMENDMENT AND TERMINATION SECTION 6.1 AMENDMENT. The form of the Receipts and any provision of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; PROVIDED, HOWEVER, that no such amendment (other than any change in the fees of any Depositary, Registrar or Transfer Agent) which (i) shall materially and adversely alter the rights -18- 22 of the holders of Receipts or (ii) would be materially and adversely inconsistent with the rights granted to the holders of the Preferred Shares pursuant to the Articles Supplementary shall be effective unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares then outstanding. In no event shall any amendment impair the right, subject to the provisions of Section 2.6 and Section 2.7 and Article III, of any holder of any Depositary Shares to surrender the Receipt evidencing such Depositary Shares with instructions to the Depositary to deliver to the holder the deposited Preferred Shares and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. Every holder of an outstanding Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by this Deposit Agreement as amended thereby. SECTION 6.2 TERMINATION. This Deposit Agreement may be terminated by the Company upon not less than 30 days' prior written notice to the Depositary if (i) such termination is necessary to preserve the Company's status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (or any successor provisions) or (ii) the holders of a majority of the Preferred Shares consent to such termination, whereupon the Depositary shall deliver or make available to each holder of a Receipt, upon surrender of the Receipt held by such holder, such number of whole or fractional shares of deposited Preferred Shares that are represented by the Depositary Shares evidenced by such Receipt, together with any other property held by the Depositary in respect of such Receipt. In the event that this Deposit Agreement is terminated pursuant to clause (i) of the immediately preceding sentence, the Company hereby agrees to use its best efforts to list the Preferred Shares issued upon surrender of the Receipt evidencing the Depositary Shares represented thereby on a national securities exchange. This Deposit Agreement will automatically terminate if (i) all outstanding Depositary Shares shall have been redeemed pursuant to Section 2.3 or (ii) there shall have been made a final distribution in respect of the deposited Preferred Shares in connection with any liquidation, dissolution or winding up of the Company and such distribution shall have been distributed to the holders of Receipts entitled thereto. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Section 5.6 and Section 5.7. ARTICLE VII MISCELLANEOUS SECTION 7.1 COUNTERPARTS. This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an -19- 23 executed counterpart of a signature page to this Deposit Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Corporate Office and the respective offices of the Depositary's Agents, if any, by any holder of a Receipt. SECTION 7.2 EXCLUSIVE BENEFIT OF PARTIES. This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. SECTION 7.3 INVALIDITY OF PROVISIONS. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.4 NOTICES. Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or facsimile transmission confirmed by letter, addressed to the Company at: FelCor Suite Hotels, Inc. 545 E. John Carpenter Freeway Suite 1300 Irving, Texas 75062 Attention: Lawrence D. Robinson Telephone No.: (972) 444-4900 or at any other address of which the Company shall have notified the Depositary in writing. Any notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the Depositary at the Corporate Office. Any notices given to any record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary or, if such holder shall have filed with the Depositary in a timely manner a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. -20- 24 Delivery of a notice sent by mail, or by telegram or telex or telecopier shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a telegram or telex or telecopier message) is deposited, postage prepaid, in a post office letter box. The Depositary or the Company may, however, act upon any telegram or telex or telecopier message received by it from the other or from any holder of a Receipt, notwithstanding that such telegram or telex or telecopier message shall not subsequently be confirmed by letter as aforesaid. SECTION 7.5 DEPOSITARY'S AGENTS. The Depositary may from time to time appoint Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary's Agents and vary or terminate the appointment of such Depositary's Agents. The Depositary will notify the Company of any such action. SECTION 7.6 HOLDERS OF RECEIPTS ARE PARTIES. The holders of Receipts from time to time shall be deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof. SECTION 7.7 GOVERNING LAW. This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the law of the State of Georgia applicable to agreements made and to be performed in said State. SECTION 7.8 INSPECTION OF DEPOSIT AGREEMENT AND ARTICLES SUPPLEMENTARY. Copies of this Deposit Agreement and the Articles Supplementary shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Corporate Office and the respective offices of the Depositary's Agents, if any, by any holder of any Receipt. SECTION 7.9 HEADINGS. The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as part of this Deposit Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. -21- 25 IN WITNESS WHEREOF, FelCor Suite Hotels, Inc. and SunTrust Bank, Atlanta, Georgia have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof. FELCOR SUITE HOTELS, INC. By: /s/ Lawrence D. Robinson -------------------------------------- Name: Lawrence D. Robinson Title: General Counsel Attest: /s/ Susan E. Mitchell ---------------------------------- Witness SUNTRUST BANK, ATLANTA, GEORGIA By: /s/ Sue Hampton ------------------------------------- Name: Sue Hampton Title: Assistant Vice President Attest: /s/ Sandra Benefield --------------------------------- Authorized Signatory -22- 26 EXHIBIT A The Depositary Shares evidenced by this Depositary Receipt are subject to restrictions on ownership and transfer for the purpose of the Company's maintenance of its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended. In order to maintain such status, the Company's Articles Supplementary imposes limitations on the number of shares of Series B Cumulative Redeemable Preferred Stock that may be owned by any single person or affiliated group. All capitalized terms in this legend have the meanings defined in the Company's Articles Supplementary for the Series B Cumulative Redeemable Preferred Stock. Transfers in violation of the restrictions described above shall be void AB INITIO. The Company will furnish to the holder hereof upon request and without charge a complete written statement of the terms and conditions of the Series B Cumulative Redeemable Preferred Shares. Requests for such statement may be directed to the Secretary of the Company. [FORM OF FACE OF RECEIPT] DR- CERTIFICATE FOR NOT MORE THAN [5,750,000] DEPOSITARY SHARES CUSIP 314305 30 1 RECEIPT FOR DEPOSITARY SHARES, EACH REPRESENTING 1/100 OF A 9% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARE FELCOR SUITE HOTELS, INC. (a Maryland corporation) SunTrust Bank, Atlanta, Georgia, as Depositary (the "Depositary"), hereby certifies that ____________________ is the registered owner of ____________ DEPOSITARY SHARES ("Depositary Shares"), each Depositary Share representing 1/100 of one share of 9% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (the "Shares"), of FelCor Suite Hotels, Inc., a Maryland corporation (the "Company"), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement dated as of April 30, 1998 (the "Deposit Agreement"), among the Company, the Depositary and the holders from time to time of Receipts for Depositary Shares. By accepting this Receipt, the holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement. This Receipt shall not be valid or obligatory for any purpose or entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized officer or, if a Registrar in respect of the Receipts (other than the Depositary) shall have been appointed, by the manual signature of a duly authorized officer of such Registrar. -A1- 27 Dated: Countersigned: By: Authorized Signatory -A2- 28 [FORM OF REVERSE RECEIPT] FELCOR SUITE HOTELS, INC. WILL FURNISH WITHOUT CHARGE TO EACH REGISTERED HOLDER OF RECEIPTS WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A COPY OF THE ARTICLES SUPPLEMENTARY WITH RESPECT TO THE 9% SERIES B CUMULATIVE REDEEMABLE PREFERRED STOCK OF FELCOR SUITE HOTELS, INC. ANY SUCH REQUEST SHALL BE ADDRESSED TO THE DEPOSITARY NAMED ON THE FACE OF THIS RECEIPT. ------------------------------------ The following abbreviations when used in the instructions on the face of this receipt shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - ________ Custodian ________ (Cust) (Minor) Under Uniform Gifts to Minors Act __________________ (State) Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, ____________ hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ------------------------------------ ------------------------------------ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE ------------------------------------ ____________ Depositary Shares represented by the within Receipt, and do hereby irrevocably constitute and appoint ____________ Attorney to transfer the said Depositary Shares on the books of the within named Depositary with full power of substitution in the premises. -A3- 29 Dated:_________ NOTICE: The signature to the assignment must correspond with the name as written upon the face of this Receipt in every particular, without alteration or enlargement or any change whatever. -A4- EX-4.7 6 FORM OF DEPOSITORY RECEIPT 1 TEMPORARY CERTIFICATE - EXCHANGEABLE FOR DEFINITIVE ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY DEPOSITARY RECEIPT FOR DEPOSITARY SHARES OF NUMBER DEPOSITARY SHARES DR- FELCOR SUITE HOTELS, INC. (a Maryland corporation) [LOGO] EACH REPRESENTING 1/100 OF A 9% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARE CUSIP 314305 30 1 THE UNDERSIGNED DEPOSITARY (THE "DEPOSITARY"), HEREBY CERTIFIES THAT: IS THE REGISTERED OWNER OF DEPOSITARY SHARES ("Depositary Shares"), each Depositary Share representing 1/100 of one share of 9% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (the "Shares"), of FelCor Suites Hotels, Inc., a Maryland corporation (the "Company"), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement dated as of April 30, 1998 (the "Deposit Agreement"), among the Company, the Depositary and the holders from time to time of Receipts for Depositary Shares. By accepting this Receipt, the holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement. This Receipt shall not be valid or obligatory for any purpose or entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized officer or, if a Registrar in respect of the Receipts (other than the Depositary) shall have been appointed, by the manual signature of a duly authorized officer of such Registrar. Dated: SUNTRUST BANK, ATLANTA /s/ LAWRENCE D. ROBINSON (Atlanta, Georgia) as Depositary SECRETARY [SEAL] By /s/ THOMAS J. CORCORAN, JR. Authorized Signatory PRESIDENT AND CHIEF EXECUTIVE OFFICER 2 FELCOR SUITE HOTELS, INC. The Depositary Shares evidenced by this Depositary Receipt are subject to restrictions on ownership and transfer for the purpose of the Company's maintenance of its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended. In order to maintain such status, the Company's Articles Supplementary imposes limitations on the number of shares of 9% Series B Cumulative Redeemable Preferred Stock that may be owned by any single person or affiliated group. All capitalized terms in this legend have the meanings defined in the Company's Articles Supplementary for the 9% Series B Cumulative Redeemable Preferred Stock. Transfers in violation of the restrictions described above shall be void AB INTIO. The Company will furnish to the holder hereof upon request and without charge a complete written statement of the terms and conditions of the 9% Series B Cumulative Redeemable Preferred Shares, as well as any other class or series of class of stock the Company has authority to issue. Requests for such statement maybe directed to the Secretary of the Company. FELCOR SUITE HOTELS, INC. WILL FURNISH WITHOUT CHARGE TO EACH REGISTERED HOLDER OF RECEIPTS WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A COPY OF THE ARTICLES SUPPLEMENTARY WITH RESPECT TO THE 9% SERIES B CUMULATIVE REDEEMABLE PREFERRED STOCK OF FELCOR SUITE HOTELS, INC. ANY SUCH REQUEST SHALL BE ADDRESSED TO THE DEPOSITARY NAMED OF THE FACE OF THIS RECEIPT. The following abbreviations, when used in the instructions on the face of this receipt shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____________ Custodian ___________ TEN ENT -- as tenants by the entireties (Cust) (Minor) JT TEN -- as joint tenants with right of survivorship under Uniform Gifts to Minors and not as tenants in common Act _______________________________ (State)
Additional abbreviations may also be used though not in the above list. For value received, ____________ hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE [____________________________________]__________________________________________ ________________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ ______________________________________________________________ Depositary Shares represented by the within Receipt, and do hereby irrevocably constitute and appoint _______________________________________________________________ Attorney to transfer the said Depositary Shares on the within named Depositary with full power of substitution in the premises. Dated: ______________________ Notice: The signature to this assignment must correspond with the name as written upon the face of this Receipt in every particular, without alteration or enlargement or any change whatever. EX-8.1 7 OPINION OF HUNTON & WILLIAMS 1 EXHIBIT 8.1 May 7, 1998 FelCor Suite Hotels, Inc. 545 E. John Carpenter Freeway, Suite 1300 Irving, Texas 75062 Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney As representatives of the Underwriters named in Schedule A of the Underwriting Agreement c/o Morgan Stanley Dean Witter 1585 Broadway New York, New York 10036 FelCor Suite Hotels, Inc. Qualification as Real Estate Investment Trust Ladies and Gentlemen: We have acted as tax counsel to FelCor Suite Hotels, Inc., a Maryland corporation (the "Company"), in connection with (i) the preparation of a Form S-3 registration statement (No. 333-46357) filed with the Securities and Exchange Commission ("SEC") on February 13, 1998, as amended through the date hereof (the "Registration Statement"), (ii) the offering and sale (the "Offering") of 5,750,000 depositary shares (the "Depositary Shares") each representing 1/100 of one share of the 9% Series B Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Company (the "Series B Preferred Stock") pursuant to a prospectus dated March 3, 1998 (the "Prospectus") and a prospectus supplement dated April 30, 1998 contained as part of the Registration Statement (the "Prospectus Supplement"), and (iii) the Company's contribution of the net proceeds of the Offering to FelCor Suites Limited Partnership, a 2 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 2 Delaware limited partnership (the "Operating Partnership"), in exchange for preferred units of partnership interest in the Operating Partnership. You have requested our opinion regarding certain U.S. federal income tax matters in connection with the Offering. The Operating Partnership currently owns, directly or indirectly, equity interests in 76 hotels and associated personal property (the "Current Hotels") through the following entities: (i) FelCor/CSS Holdings, L.P., a Delaware limited partnership, (ii) FelCor/St. Paul Holdings, L.P., a Delaware limited partnership, (iii) Los Angeles International Airport Associates, L.P., a Texas limited partnership, (iv) Promus/FelCor Lombard Joint Venture, an Illinois general partnership, (v) MHV Joint Venture, a Texas general partnership, (vi) Promus/FelCor Parsippany Joint Venture, a New Jersey general partnership, (vii) E.S. Charlotte Limited Partnership, a Minnesota limited partnership, (viii) E.S. North, an Indiana Limited Partnership, an Indiana limited partnership, (ix) FCH/DT Holdings, L.P., a Delaware limited partnership, (x) FCH/DT BWI Holdings, L.P., a Delaware limited partnership, and (xi) certain joint ventures with Promus Hotels, Inc. ("Promus") each of which holds a Current Hotel (the "Promus Joint Ventures"). The Company and/or the Operating Partnership also owns equity interests in (a) FelCor/CSS Hotels, L.L.C., a Delaware limited liability company, (b) FelCor/LAX Hotels, L.L.C., a Delaware limited liability company, (c) FelCor/LAX Holdings, L.P., a Delaware limited partnership, (d) Promus/FCH Development Company, L.L.C., a Delaware limited liability company, and (e) FCH/DT Hotels, L.L.C., a Delaware limited liability company. The entities referred to in this paragraph will be referred to collectively herein as the "Subsidiary Partnerships." The Operating Partnership or a Subsidiary Partnership, as applicable, leases each Current Hotel to DJONT Operations, L.L.C., a Delaware limited liability company, or an affiliate thereof (the "Lessee") pursuant to substantially similar operating leases (collectively, the "Leases"). Each of Promus, Coastal Hotel Group, Inc., American General Hospitality, Inc., and ITT Sheraton Corporation operates and manages certain of the Current Hotels on behalf of the Lessee pursuant to substantially similar management agreements (the "Management Agreements") with the Lessee. The Company has contracted to acquire equity interests in eight additional hotels and associated personal property (the "Starwood Hotels") from Starwood Hotels & 3 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 3 Resorts. Upon the acquisition of the Starwood Hotels, the Operating Partnership or the applicable Subsidiary Partnership plans to enter into lease agreements with the Lessee with respect to the Starwood Hotels that are substantially similar to the Leases. Six of the Starwood Hotels are expected to be operated and managed on behalf of the Lessee by Promus pursuant to management agreements that are substantially similar to the Lessee's existing Management Agreements with Promus. The remaining two Starwood Hotels are expected to be operated and managed on behalf of the Lessee by Starwood Hotels & Resorts Worldwide, Inc. pursuant to management agreements that are substantially similar to the Management Agreements. On March 23, 1998, the Company entered into an agreement (the "Merger Agreement") with Bristol Hotel Company ("Bristol") whereby Bristol will merge into the Company. As a result of the Merger, the Company will acquire 109 hotels and associated personal property (the "Bristol Hotels") currently owned by Bristol. The Company will lease the Bristol Hotels to Bristol Hotels & Resorts ("BHR") pursuant to substantially similar operating leases (the "BHR Leases"). In connection with the opinions rendered below, we have examined the following: 1. the Company's Articles of Amendment and Restatement, as duly filed with the Department of Assessments and Taxation of the State of Maryland on June 22, 1995, as amended on May 2, 1996, August 9, 1996, June 24, 1997, and November 13, 1997; 2. the Company's Bylaws; 3. the minutes of meetings of the Company's board of directors held from May 22, 1997 through May 4, 1998; 4. the Prospectus and the Prospectus Supplement; 5. the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated June 28, 1994 (the "Operating Partnership Agreement"), among the 4 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 4 Company, as general partner, and several limited partners, as amended on November 17, 1995, January 9, 1996, and January 10, 1996; 6. Addendums Number 1 (and Annexes Number 1 and 2 thereto), dated January 9, 1996, and Number 2, dated May 2, 1996, to the Operating Partnership Agreement; 7. the Amended and Restated Agreement of Limited Partnership of FelCor/CSS Holdings, L.P., dated as of September 18, 1995, between FelCor/CSS Hotels, L.L.C., as general partner, and the Operating Partnership, as limited partner, as amended on March 31, 1996; 8. the Agreement of Limited Partnership of FelCor/St. Paul Holdings, L.P., dated as of November 8, 1995, between FelCor/CSS Hotels, L.L.C., as general partner, and the Operating Partnership, as limited partner, as amended on December 29, 1995; 9. the Amended and Restated Agreement of Limited Partnership of Los Angeles International Airport Associates, L.P., dated as of January 22, 1996, between FelCor/LAX Holdings, L.P., as general partner, and several limited partners, as amended on January 22, 1996; 10. the Amended and Restated Joint Venture Agreement of Promus/FelCor Lombard Venture, f.k.a. Embassy/Shaw Lombard Venture, dated August 1, 1995, between the Operating Partnership, Promus, and Embassy Development Corporation; 11. the Amended and Restated Joint Venture Agreement of MHV Joint Venture, dated as of July 18, 1996, between the Operating Partnership and Promus; 12. the Amended and Restated Joint Venture Agreement of Promus/FelCor Parsippany Venture, dated as of July 31, 1996, between the Operating Partnership and Promus; 13. the Amended and Restated Limited Partnership Agreement of E.S. Charlotte Limited Partnership, dated as of September 16, 1996, between the Operating Partnership and other venturers; 5 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 5 14. the Amended and Restated Limited Partnership Agreement of E.S. North, an Indiana Limited Partnership, dated as of September 16, 1996, between the Operating Partnership and other venturers; 15. the Agreement of Limited Partnership of FCH/DT Holdings, L.P., dated as of February 27, 1997, among FCH/DT Hotels, L.L.C., as general partner, and the Operating Partnership and DTR Santa Clara, Inc., an Arizona corporation ("DTR Santa Clara"), as limited partners; 16. the Amended and Restated Agreement of Limited Partnership of FCH/DT BWI Holdings, L.P., dated as of March 20, 1997, between FCH/DT Hotels, L.L.C., as general partner, and FCH/DT Holdings, L.P., as limited partner; 17. the Limited Liability Company Agreement of FelCor/CSS Hotels, L.L.C., dated as of October 18, 1995, between the Company and the Operating Partnership; 18. the Limited Liability Company Agreement of FelCor/LAX Hotels, L.L.C., dated as of October 18, 1995, between the Company and the Operating Partnership; 19. the Agreement of Limited Partnership of FelCor/LAX Holdings, L.P., dated as of December 14, 1995, between FelCor/LAX Hotels, L.L.C., as general partner, and the Operating Partnership, as limited partner, as amended on April 1, 1996; 20. the Limited Liability Company Agreement of Promus/FCH Development Company, L.L.C., dated November 1996, between the Company and Promus; 21. the Limited Liability Company Agreement of FCH/DT Hotels, L.L.C., dated as of February 18, 1997, between the Company and DTR Santa Clara; 22. the Certificate of Incorporation of Kingston Plantation Development Corp. ("Kingston"), a corporation in which the Operating Partnership owns 100% of the nonvoting stock, representing 97% of the value of Kingston's outstanding stock; 23. the Leases; 6 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 6 24. the Management Agreements; 25. the tax opinions given by Bracewell & Patterson, L.L.P., dated June 26, 1996, April 30, 1996, December 20, 1995, May 18, 1995, and July 13, 1994, regarding the Company's qualification as a REIT for its taxable years ended December 31, 1994 and December 31, 1995, and the tax opinion given by Bracewell & Patterson. L.L.P., dated April 26, 1995, regarding the tax-free reorganization of the Company (the "Bracewell & Patterson Opinions"); 26. the Merger Agreement; 27. the Form of Master Hotel Agreement dated March 23, 1998 among Bristol, BHR, the Company, and the Operating Partnership; 28. the Form of BHR Lease dated as of March 23, 1998 between the Operating Partnership and BHR; and 29. such other documents as we have deemed necessary or appropriate for purposes of this opinion. In connection with the opinions rendered below, we have assumed generally that: 1. each of the documents referred to above has been duly authorized, executed, and delivered; is authentic, if an original, or is accurate, if a copy; and has not been amended; 2. during its taxable year ending December 31, 1998 and subsequent taxable years, the Company has operated and will continue to operate in such a manner that makes and will continue to make the representations contained in a certificate, dated the date hereof and executed by a duly appointed officer of the Company (the "Officer's Certificate"), true for such years; 3. the Company will not make any amendments to its organizational documents, the Operating Partnership Agreement, or the organizational documents of the Subsidiary 7 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 7 Partnerships (the "Subsidiary Partnership Agreements") after the date of this opinion that would affect its qualification as a real estate investment trust (a "REIT") for any taxable year; 4. each partner or member of the Operating Partnership and the Subsidiary Partnerships (each, a "Partner") that is a corporation or other entity has a valid legal existence; 5. each Partner has full power, authority, and legal right to enter into and to perform the terms of the Operating Partnership Agreement and the Subsidiary Partnership Agreements and the transactions contemplated thereby; and 6. no action will be taken by the Company, the Operating Partnership, the Subsidiary Partnerships, the Partners, or Kingston after the date hereof that would have the effect of altering the facts upon which the opinions set forth below are based. In connection with the opinions rendered below, we have relied upon the Bracewell & Patterson Opinions and the correctness of the representations contained in the Officer's Certificate. After reasonable inquiry, we are not aware of any facts inconsistent with the representations set forth in the Officer's Certificate. Furthermore, where such representations involve matters of law, we have explained to the Company's representatives the relevant and material sections of the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury regulations thereunder (the "Regulations"), published rulings of the Internal Revenue Service (the "Service"), and other relevant authority to which such representations relate and are satisfied that the Company's representatives understand such provisions and are capable of making such representations. Based on the documents and assumptions set forth above, the representations set forth in the Officer's Certificate, and the discussions in the Prospectus and in the Prospectus Supplement under the caption "Federal Income Tax Considerations" (which are incorporated herein by reference), we are of the opinion that: 8 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 8 (a) the Company qualified to be taxed as a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 1994 through December 31, 1997, and the Company's organization and current and proposed method of operation will enable it to continue to qualify as a REIT for its taxable year ending December 31, 1998, and in the future; (b) the descriptions of the law and the legal conclusions contained in the Prospectus and the Prospectus Supplement under the caption "Federal Income Tax Considerations" are correct in all material respects, and the discussions thereunder fairly summarize the federal income tax considerations that are likely to be material to a holder of the Depositary Shares or the Series B Preferred Stock; (c) the Leases will be treated as true leases for federal income tax purposes; and (d) the Operating Partnership and the Subsidiary Partnerships will be treated for federal income tax purposes as partnerships and not as corporations or associations taxable as corporations or as publicly traded partnerships. We will not review on a continuing basis the Company's compliance with the documents or assumptions set forth above, or the representations set forth in the Officer's Certificate. Accordingly, no assurance can be given that the actual results of the Company's operations for its 1998 and subsequent taxable years will satisfy the requirements for qualification and taxation as a REIT. The foregoing opinions are based on current provisions of the Code and the Regulations, published administrative interpretations thereof, and published court decisions. The Service has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as a REIT. 9 FelCor Suite Hotels, Inc. Morgan Stanley Dean Witter Merrill Lynch & Co. Prudential Securities Incorporated Salomon Smith Barney May 7, 1998 Page 9 We hereby consent to the references to Hunton & Williams under the captions "Federal Income Tax Considerations" and "Legal Matters" in the Prospectus and the Prospectus Supplement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the SEC. The foregoing opinions are limited to the U.S. federal income tax matters addressed herein, and no other opinions are rendered with respect to other federal tax or other matters or to any issues arising under the tax laws of any other country, or any state or locality. We undertake no obligation to update the opinions expressed herein after the date of this letter. This opinion letter is solely for the information and use of the addressees, and it may not be distributed, relied upon for any purpose by any other person, quoted in whole or in part or otherwise reproduced in any document, or filed with any governmental agency without our express written consent. Very truly yours, /s/ HUNTON & WILLIAMS EX-10.1.9 8 9TH AMENDMENT TO AMENDED & RESTATED AGMT OF LP 1 EXHIBIT 10.1.9 NINTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF FELCOR SUITES LIMITED PARTNERSHIP This Ninth Amendment to Amended and Restated Agreement of Limited Partnership of FelCor Suites Limited Partnership (the "Amendment"), is entered into as of May 6, 1998, by and between FelCor Suite Hotels, Inc., a Maryland corporation, as General Partner, and all other persons and entities who are or shall in the future become limited partners of this limited partnership in accordance with the provisions of the Partnership Agreement (as hereinafter defined). R E C I T A L S: A. The parties have previously executed and delivered that certain Amended and Restated Agreement of Limited Partnership of FelCor Suites Limited Partnership dated as of July 25, 1994, as previously amended (the "Partnership Agreement"), pursuant to which they formed a Delaware limited partnership under the name "FelCor Suites Limited Partnership" (the "Partnership"). B. Pursuant to Sections 4.6 and 1.4 of the Partnership Agreement, the General Partner is authorized to cause the Partnership to issue from time to time Partnership Securities in one or more classes, and in one or more series of any such classes, and to establish the designations, preferences, rights, powers and duties of such classes and series. C. The General Partner desires to exercise such authority by amending the Partnership Agreement as provided herein to establish a new class and series of Partnership Securities. NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows: 1. Definitions. All capitalized terms used without definition herein shall have the meanings set forth therefor in the Partnership Agreement. 2. Amendment of Partnership Agreement. The Partnership Agreement is hereby amended to add an Addendum No. 3 to the Partnership Agreement to create and provide for the authorization for issuance of a class of the Partnership Securities designated as the "Series B Cumulative Redeemable Preferred Units," having the preferences and relative, participating, optional or other special rights, powers and duties set forth in such Addendum No. 3. Such Addendum No. 3 shall be in the form of Addendum No. 3 attached to this Amendment. The Addendum No. 3 is hereby incorporated into and made a part of the Partnership Agreement for all purposes. - 1 - 2 IN WITNESS WHEREOF, the General Partner has caused this Amendment to be duly executed in its respective capacities set forth below as of the date first set forth above. GENERAL PARTNER: FELCOR SUITE HOTELS, INC., a Maryland corporation By: /s/ Lawrence D. Robinson -------------------------------------------- Name: Lawrence D. Robinson -------------------------------------------- Title: Senior Vice President & General Counsel -------------------------------------------- LIMITED PARTNERS (for all the Limited Partners now and hereafter admitted as limited partners of the Partnership, pursuant to the powers of attorney in favor of the General Partner contained in Section 1.4 of the Agreement): By: FELCOR SUITE HOTELS, INC., acting as General Partner and as duly authorized attorney-in-fact By: /s/ Lawrence D. Robinson ------------------------------------ Name: Lawrence D. Robinson ------------------------------------ Title: Sr. Vice President & General Counsel ------------------------------------ - 2 - 3 FELCOR SUITES LIMITED PARTNERSHIP _____________________ ADDENDUM NO. 3 TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP _____________________ DESIGNATION OF SERIES B CUMULATIVE REDEEMABLE PREFERRED UNITS The undersigned General Partner of FelCor Suites Limited Partnership, a Delaware limited partnership (the "PARTNERSHIP"), pursuant to the authority expressly granted to the General Partner by the Amended and Restated Agreement of Limited Partnership of FelCor Suites Limited Partnership dated as of July 25, 1994, as amended, pursuant to which the Partnership is formed (the "PARTNERSHIP AGREEMENT"), and in particular Sections 1.4 and 4.6 thereof, hereby executes and delivers this Addendum No. 3 to the Partnership Agreement (the "ADDENDUM"), which Addendum is hereby made a part of the Partnership Agreement for all purposes, to create and provide for the issue of a class of Partnership Units and to fix the designations, preferences and relative, participating, optional or other special rights, powers and duties thereof as follows: 1. DESIGNATION OF CLASS. A class of units of the Partnership is hereby authorized and designated as the "Series B Cumulative Redeemable Preferred Units" (the "SERIES B PREFERRED UNITS"). The Series B Preferred Units shall have the preferences and relative, participating, optional or other special rights, powers and duties that are set forth in this Addendum and to the extent permitted by this Addendum, established by the General Partner and set forth in any amendments to the Partnership Agreement or any amendments or annexes to this Addendum. 2. AUTHORIZED NUMBER OF SERIES B PREFERRED UNITS. The authorized number of Series B Preferred Units shall be 57,500. 3. PREFERENCES, RIGHTS, POWERS AND DUTIES. 3.1 DEFINITIONS. For purposes of the Series B Preferred Units, the following terms shall have the meanings indicated: "Addendum" shall have the meaning set forth in the preamble hereof. "Business Day" shall mean any day other than a Saturday, Sunday or a day on which state or federally- chartered banking institutions in Texas or New York are not required to be open. "Call Date" shall have the meaning set forth in Section 3.4(b). - 1 - 4 "Common Unit" shall mean the units of partnership interest of the Partnership not designated as Preferred Units. "Common Stock" shall mean the common stock, $0.01 par value per share, of the General Partner. "Distribution Payment Date" shall mean the last calendar day of January, April, July and October in each year, commencing on July 31, 1998; PROVIDED, HOWEVER, that if any Distribution Payment Date falls on any day other than a Business Day, the distribution payment due on such Distribution Payment Date shall be paid on the Business Day immediately following such Distribution Payment Date. "Distribution Period" shall mean quarterly distribution periods commencing February 1, May 1, August 1 and November 1 of each year and ending on and including the day preceding the first day of the next succeeding Distribution Period (other than the initial Distribution Period, which shall commence on May 7, 1998 and end on and include July 31, 1998). "General Partner" shall mean FelCor Suite Hotels, Inc., a Maryland corporation, which is the sole general partner of the Partnership. "Issue Date" shall mean the date on which the Partnership first issues a Series B Preferred Unit. "Junior Units" shall have the meaning set forth in Section 3.6(c). "Parity Units" shall have the meaning set forth in Section 3.6(b). "Partnership" shall have the meaning set forth in the preamble hereof. "Partnership Agreement" shall have the meaning set forth in the preamble hereof. "Preferred Units" shall mean units of partnership interest of the Partnership designated as having certain preferences to the Common Units with respect to distributions or upon liquidation of the Partnership. "Series B Preferred Stock" shall mean the 9% Series B Cumulative Redeemable Preferred Stock, $0.01 par value and $2,500.00 liquidation preference per share, of the General Partner. "Series B Preferred Units" shall have the meaning set forth in Section 1. "set apart for payment" shall be deemed to include, without any action other than the following, the recording by the Partnership in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to a declaration of dividends or other distribution by the Partnership, the allocation of funds to be so paid on any series or class - 2 - 5 of capital units of the Partnership; PROVIDED, HOWEVER, that if any funds for a class or series of Junior Units or any class or series of Parity Units are placed in a separate account of the Partnership or delivered to a disbursing, paying or other similar agent, then "set apart for payment" with respect to the Series B Preferred Units shall mean placing such funds in a separate account or delivering such funds to a disbursing, paying or other similar agent. Initially capitalized terms used without definition herein shall have the meanings set forth therefor in the Partnership Agreement. Other terms defined herein have the meanings so given them. Whenever the context requires, the gender of all words used in this Addendum shall include the masculine, feminine and neuter form of such words, and the singular form shall include the plural and vice versa. 3.2 DISTRIBUTIONS. (a) The holders of the Series B Preferred Units shall be entitled to receive, when, as and if declared by the General Partner out of funds legally available for that purpose, distributions payable in cash in an amount per Series B Preferred Unit equal to $225.00 per annum. Such distributions shall be cumulative from May 7, 1998, whether or not in any Distribution Period or Periods there shall be funds of the Partnership legally available for the payment of such distributions, and shall be payable quarterly, when, as and if declared by the General Partner, in arrears on Distribution Payment Dates, commencing on the first Distribution Payment Date after the Issue Date. Each such distribution shall be payable in arrears to the holders of record of the Series B Preferred Units, as they appear on the records of the Partnership at the close of business on such record dates, not more than sixty (60) days preceding such Distribution Payment Dates thereof, as shall be fixed by the General Partner. Accrued and unpaid distributions for any past Distribution Periods may be declared and paid at any time, without reference to any regular Distribution Payment Date, to holders of record on such date, not exceeding forty-five (45) days preceding the payment date thereof, as may be fixed by the General Partner. (b) The amount of distributions payable for each full Distribution Period for the Series B Preferred Units shall be computed by dividing the annual distribution rate by four. The amount of distributions payable for any period shorter or longer than a full Distribution Period, on the Series B Preferred Units shall be computed on the basis of a 360-day year. consisting of twelve 30-day months. Holders of the Series B Preferred Units shall not be entitled to any distributions, whether payable in cash, property or units, in excess of cumulative distributions, as herein provided, on the Series B Preferred Units. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Series B Preferred Units that may be in arrears. (c) So long as any of the Series B Preferred Units are outstanding, no distributions, except as described in the immediately following sentence, shall be declared or paid or set apart for payment on any class or series of Parity Units for any period unless full cumulative distributions have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the - 3 - 6 Series B Preferred Units for all Distribution Periods terminating on or prior to the Distribution Payment Date on such class or series of Parity Units. When distributions are not paid in full or a sum sufficient for such payment is not set apart, as aforesaid, all distributions declared upon the Series B Preferred Units and all distributions declared upon any other class or series of Parity Units shall be declared ratably in proportion to the respective amounts of distributions accumulated and unpaid on the Series B Preferred Units and accumulated and unpaid on such Parity Units. (d) So long as any of the Series B Preferred Units are outstanding, no distributions (other than dividends or distributions paid in units of, or options, warrants or rights to subscribe for or purchase units of, Junior Units), shall be declared or paid or set apart for payment or other distribution declared or made upon Junior Units, nor shall Junior Units be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Units made for purposes of an employee incentive or benefit plan of the Partnership for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Partnership, directly or indirectly), unless in each case (i) the full cumulative distributions on all outstanding Series B Preferred Units and any other Parity Units shall have been paid or set apart for payment for all past Distribution Periods with respect to the Series B Preferred Units and all past distribution periods with respect to such Parity Units and (ii) sufficient funds shall have been paid or set apart for the payment of the distribution for the current Distribution Period with respect to the Series B Preferred Units and the current Distribution Period with respect to such Parity Units. 3.3 LIQUIDATION PREFERENCE. (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether voluntary or involuntary, before any payment or distribution of the assets of the Partnership (whether capital or surplus) shall be made to or set apart for the holders of Junior Units, the holders of the Series B Preferred Units shall be entitled to receive two thousand five hundred dollars ($2,500.00) per Series B Preferred Unit plus an amount equal to all distributions (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution to such holders, but such holders shall not be entitled to any further payment. If, upon any liquidation, dissolution or winding up of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the holders of the Series B Preferred Units shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other class or series of Parity Units, then such assets, or the proceeds thereof, shall be distributed among the holders of the Series B Preferred Units and any such other Parity Units ratably in accordance with the respective amounts that would be payable on such Series B Preferred Units and any such other Parity Units if all amounts payable thereon were paid in full. For the purposes of this Section 3.3, (i) a consolidation or merger of the Partnership with one or more Persons, (ii) a sale or transfer of all or substantially all of the assets of the Partnership, or (iii) a statutory exchange of units shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Partnership. - 4 - 7 (b) Subject to the rights of the holders of any series or class or classes of Parity Units, after payment shall have been made in full to the holders of the Series B Preferred Units, as provided in this Section 3.3, any other series or class or classes of Junior Units shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series B Preferred Units shall not be entitled to share therein. 3.4 REDEMPTION. (a) The Series B Preferred Units shall be redeemable by the Partnership solely when, as, and if any share of the Series B Preferred Stock is redeemed by the General Partner and in the same proportion as shares of the Series B Preferred Stock are redeemed by the General Partner so that the number of Series B Preferred Units remaining unredeemed shall be the same as, and at all times equal to, the number of shares of Series B Preferred Stock remaining unredeemed. The Series B Preferred Stock is not redeemable by the General Partner prior to May 7, 2003, and, therefore, the Series B Preferred Units shall not be redeemable by the Partnership prior to such date. (b) Upon redemption of the Series B Preferred Units by the Partnership on the date specified in the notice to holders required under subparagraph (d) of this Section 3.4 (the "CALL DATE"), each Series B Preferred Unit called for redemption shall be redeemed in cash at a price per unit equal to $2,500.00 per unit, plus all accrued and unpaid distributions thereon to the Call Date, without interest, to the extent that the Partnership has funds legally available therefor. The redemption price of the Series B Preferred Units (other than any portion thereof consisting of accrued and unpaid distributions) must be paid solely from the sale proceeds of other equity interests of the Partnership and not from any other source. For purposes of the foregoing sentence, "equity interests" means any general partner interests, limited partner interests, preferred units, depositary shares, interests, participations, or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for partnership units) or options to purchase any of the foregoing. Distributions payable on the Series B Preferred Units for any period greater or less than a full dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Except as provided above, the Partnership shall make no payment or allowance for unpaid distributions, whether or not in arrears, on Series B Preferred Units called for redemption or on the equity interests issued upon such redemption. (c) If full cumulative distributions on the Series B Preferred Units and any other class or series of Parity Units have not been paid or declared and set apart for payment, the Series B Preferred Units may not be redeemed in part and the Partnership may not purchase or acquire Series B Preferred Units, otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of Series B Preferred Units. (d) If the Partnership shall redeem Series B Preferred Units pursuant to this Section 3.4, notice of such redemption shall be given to the holders of the Series B - 5 - 8 Preferred Units called for redemption as soon as practicable after notice of redemption of the Series B Preferred Stock is given by the General Partner. From and after the Call Date (unless the Partnership shall fail to make available the amount of cash necessary to effect such redemption), (i) except as otherwise provided herein, distributions on the Series B Preferred Units so called for redemption shall cease to accrue, (ii) such units shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Series B Preferred Units shall cease (except the rights to receive the cash payable upon such redemption, without interest thereon, upon surrender and endorsement of their certificates). As promptly as practicable after the surrender in accordance with such notice of the certificates for any such units so redeemed (properly endorsed or assigned for transfer, if the Partnership shall so require and if the notice shall so state), such units shall be exchanged for cash (without interest thereon) for which such units have been redeemed. If fewer than all the outstanding Series B Preferred Units are to be redeemed, units to be redeemed shall be selected by the Partnership from outstanding Series B Preferred Units not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Partnership in its sole discretion to be equitable. If fewer than all the Series B Preferred Units represented by any certificate are redeemed, then new certificates representing the unredeemed units shall be issued without cost to the holder thereof. 3.5 CONVERSION. Holders of Series B Preferred Units shall have no conversion rights. 3.6 RANKING. Any class or series of units of the Partnership shall be deemed to rank: (a) prior to the Series B Preferred Units, as to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or series shall be entitled to the receipt of distributions or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of Series B Preferred Units; (b) on a parity with the Series B Preferred Units, as to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether or not the distribution rates, distribution payment dates or redemption or liquidation prices per unit thereof be different from those of the Series B Preferred Units, if the holders of such class of units or series and the Series B Preferred Units shall be entitled to the receipt of distributions and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid distributions per unit or liquidation preferences, without preference or priority one over the other ("PARITY UNITS"); the Series A Cumulative Convertible Preferred Units shall be Parity Units with respect to the Series B Preferred Units; and - 6 - 9 (c) junior to the Series B Preferred Units, as to the payment of distributions or as to the distribution of assets upon liquidation, dissolution or winding up, if such units or series shall be Common Units or if the holders of the Series B Preferred Units shall be entitled to receipt of distributions or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of such units or series ("JUNIOR UNITS"). 3.7 RECORD HOLDERS. The Partnership may deem and treat the record holder of any Series B Preferred Units as the true and lawful owner thereof for all purposes, and the Partnership shall not be affected by any notice to the contrary. IN WITNESS WHEREOF, the Partnership has caused this Addendum to be executed by its General Partner, acting through its duly authorized officer, as of this 6th day of May, 1998. FELCOR SUITES LIMITED PARTNERSHIP By: FELCOR SUITE HOTELS, INC., a Maryland corporation, as its General Partner By: /s/ Lawrence D. Robinson ----------------------------------------------------- Name: Lawrence D. Robinson ------------------------------------------------------- Title: Sr.Vice President & General Counsel -----------------------------------------------------
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