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Exhibit 1.1
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4,500,000 COMMON SHARES
XXXXXX LODGING COMPANY
COMMON SHARES
UNDERWRITING AGREEMENT
February __, 1998
XXXXXX BROTHERS INC.
BT ALEX. XXXXX INCORPORATED
X.X. XXXXXXX & SONS, INC.
XXXXXX XXXXXXX & CO. INCORPORATED
EVEREN SECURITIES, INC.
XxXXXXXX & COMPANY SECURITIES, INC.
As Representatives of the several
Underwriters named in Schedule I
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Lodging Company, an Ohio corporation (the "Company"), proposes
to sell 4,500,000 of the Company's common shares, without par value ("Common
Shares"). In addition, the Company proposes to grant to the Underwriters named
in Schedule I hereto (the "Underwriters") an option to purchase up to an
additional 675,000 Common Shares on the terms and for the purposes set forth in
Section 2 (the "Option Shares"). The 4,500,000 Common Shares referred to above
(the "Firm Shares") and the Option Shares, if purchased, are hereinafter
collectively called the "Shares." This is to confirm the agreement concerning
the purchase of the Shares from the Company by the Underwriters and the
agreement of Xxxxxx Hotel Properties, L.P., an Ohio limited partnership (the
"Partnership"), with respect thereto. Capitalized terms used in this Agreement
and not otherwise defined herein shall have the meanings set forth in the
Prospectus (as defined below).
The Company, the Partnership and certain affiliated parties have
executed an Agreement and Plan of Merger, dated December 30, 1997 (the "Merger
Agreement"), with Red Lion Inns Limited Partnership, a Delaware limited
partnership (together with its subsidiaries, "Red Lion") and certain affiliated
parties, pursuant to which the Company has
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agreed to acquire the Doubletree Hotels subject to certain conditions set forth
in the Merger Agreement (the "Proposed Merger").
1. Representations and Warranties. The Company and the Partnership,
jointly and severally, represent, warrant and agree with each Underwriter that:
(a) A registration statement on Form S-3 (No. 333-39369) with
respect to the Shares has (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations"), of the Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement have been
delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. The conditions for use of Form
S-3 under the Securities Act for the registrant, as set forth in the
General Instructions thereto, have been satisfied. As used in this
Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective
amendment thereto, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Registration Statement"
means such registration statement, as amended at the Effective Time,
including any documents incorporated by reference therein at such time
and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5(a) hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph
(b) of Rule 430A of the Rules and Regulations; "Base Prospectus" means
the prospectus dated November 14, 1997 included in the Registration
Statement at the Effective Time; "Preliminary Prospectus" means the
Preliminary Prospectus Supplement subject to completion dated January
30, 1998, together with the Base Prospectus, as filed with the
Commission pursuant to Rule 424(b)(5) of the Rules and Regulations; and
"Prospectus" means the Prospectus Supplement dated February __, 1998,
together with the Base Prospectus, as filed with the Commission
pursuant to Rule 424(b)(5) of the Rules and Regulations. Reference made
herein to the Registration Statement or to any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Securities Act, as of the date of such Registration
Statement, Preliminary Prospectus or Prospectus, as the case may be,
and any reference to any amendment or supplement to the Registration
Statement or to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date
of the Registration Statement or such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Registration Statement, Preliminary Prospectus or Prospectus, as the
case may be. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus
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will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects with the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with Commission, as the case
may be, will conform in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) The capitalization of the Company is as set forth in the
Prospectus under "Capitalization;" all the outstanding Common Shares of
the Company have been duly authorized and validly issued, are fully
paid and non-assessable and are free of any preemptive or similar
rights; the Shares to be issued and sold by the Company have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and non-assessable, and free of any preemptive or
similar rights; and the Common Shares of the Company conform to the
description thereof in the Registration Statement and the Prospectus.
(e) The issuance of general partnership interests by the
Partnership in exchange for the Company's contribution to the
Partnership of the net proceeds of the sale of the Shares to the
Underwriters hereunder has been duly authorized and, when issued in the
manner set forth in the Prospectus, will be validly issued, fully paid
and non-assessable. Such general partnership interests have been and
will be offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws), are
not and will not be issued in violation of or subject to any preemptive
or other rights to subscribe for or purchase securities and conform in
all material respects to the description thereof contained in the
Prospectus.
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(f) The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Ohio. The
Company has the corporate power and authority to conduct the business
in which it is engaged or proposes to engage as described in the
Registration Statement and the Prospectus and to enter into and perform
its obligations under this Agreement and the Merger Agreement. The
Company is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does
not have a material adverse effect on the condition, financial or
otherwise, business, properties, net worth or results of operations of
the Company.
(g) The Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of
the State of Ohio with partnership power and authority to own, lease
and operate its properties, to conduct the business in which it is
engaged or proposes to engage as described in the Registration
Statement and the Prospectus and to enter into and perform its
obligations under this Agreement and the Merger Agreement. The
Partnership is duly qualified or registered as a foreign partnership
and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register would not have a material
adverse effect on its condition, financial or otherwise, or its
earnings, assets, business affairs or business prospects. The Company
is the sole general partner of the Partnership and, immediately after
the First Delivery Date (after the repurchase of Units contemplated in
the Prospectus), will be the sole general partner of the Partnership
and will be the holder of all of the outstanding general partnership
interests, which represents an __% interest, in the Partnership, free
and clear of all liens, encumbrances, equities, claims, security
interests, voting trusts and charges.
(h) BMC is a duly organized and validly existing limited
liability company in good standing under the laws of the State of Ohio.
BMC has full limited liability company power to conduct its business as
described in the Registration Statement and the Prospectus. BMC is duly
registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does
not have a material adverse effect on the condition, financial or
otherwise, business, properties, net worth or results of operations of
BMC.
(i) Westboy L.L.C. ("Westboy") is a duly organized and validly
existing limited liability company in good standing under the laws of
the State of Ohio. Westboy has full limited liability company power to
conduct its business as described in the Registration Statement and the
Prospectus. Westboy is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure to so
register or qualify does not have a material adverse effect on the
condition, financial or otherwise, business,
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properties, net worth or results of operations of Westboy. All of the
outstanding interests in Westboy are owned by BMC.
(j) Each of Xxxxxx Acquisition Corporation I, Inc., an Ohio
corporation ("Xxxxxx I"), Xxxxxx Acquisition Corporation II, Inc., an
Ohio corporation ("Boykin II"), Xxxxxx Acquisition Partnership, L.P., a
Delaware limited partnership ("Xxxxxx XX"), West Doughboy L.L.C., an
Ohio limited liability company ("Doughboy"), Xxxxxx Xxxx Valley,
L.L.C., a Delaware limited liability company ("Xxxx Valley"), Shawan
Road Hotel Limited Partnership, a Maryland limited partnership
("Shawan"), Boystar Ventures, L.P., an Ohio limited partnership
("Boystar"), Xxxxxx San Diego L.L.C., an Ohio limited liability company
("Xxxxxx San Diego"), and Xxxxxx Kansas City, L.L.C. ., an Ohio limited
liability company ("Xxxxxx Kansas City" and, all such entities,
collectively, the "Subsidiaries"), has been duly organized or formed
and is validly existing or is in full force and effect as a
corporation, limited liability company or limited partnership, as the
case may be, in its appropriate jurisdiction with corporate, limited
liability company or partnership, as the case may be, power and
authority to own, lease and operate its properties and to conduct the
business in which it is engaged or proposed to engage. Each of the
operating agreements or partnership agreements, as applicable, of the
Subsidiaries having such agreements is in full force and effect.
(k) All of the outstanding capital shares of Xxxxxx I and
Boykin II are owned by the Company. All of the outstanding equity
interests in Xxxxxx XX are owned by Xxxxxx I and Boykin II. The
Partnership is the sole member and owns all of the outstanding equity
interests in Xxxx Valley. Xxxx Valley is the sole general partner and
owns a 91% general partnership interest in Shawan. The Partnership is
the sole general partner and owns a 91% general partnership interest in
Boystar and is a member owning a 100%, 91% and 80% interest in
Doughboy, Xxxxxx San Diego and Xxxxxx Kansas City, respectively. All of
such interests in the Subsidiaries have been duly and validly
authorized and issued and are fully paid and non-assessable (subject to
capital call provisions contained in the partnership agreements and
operating agreements of the Subsidiaries that are partnerships or
limited liability companies, respectively) and are owned directly or
indirectly by the Company or Partnership, as the case may be, free and
clear of all liens, encumbrances, equities, claims, security interests,
voting rights and charges. Except for the Partnership and the
Subsidiaries, the Company does not own or control, directly or
indirectly, any other corporation, partnership, limited liability
company, association or other entity.
(l) Each of the Partnership and each Subsidiary (other than
Xxxxxx I and Xxxxxx XX) has, since its formation, been properly treated
for purposes of the Internal Revenue Code of 1986, as amended (the
"Code"), and applicable state law as a partnership and not as an
association taxable as a corporation or a "publicly traded partnership"
within the meaning of Section 7704(b) of the Code. Xxxxxx I and Boykin
II are "qualified REIT subsidiaries" within the meaning of Section
856(i) of the Code. No direct or indirect owner of any lessee, and no
lessee, of any Hotel or Doubletree Hotel owns any direct or indirect
interest in the Company or the Partnership such that any rent under any
lease would not constitute "rent from real
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property" within the meaning of Section 856(d) of the Code. Each of
Xxxxxx XX, Xxxx Valley and Doughboy either (A) since its formation, has
been properly treated for purposes of the Code and applicable state law
as a partnership and not as a association taxable as a corporation or a
"publicly traded partnership" within the meaning of Section 7704(b) of
the Code or (B) is disregarded as a matter of law for federal tax
purposes.
(m) There are no legal or governmental proceedings pending or,
to the knowledge of the Company or the Partnership, threatened, against
the Company, the Partnership, any Subsidiary or Red Lion, or to which
the Company, the Partnership, any Subsidiary or Red Lion is a party, or
to which any of their properties are subject, which, if determined
adversely to the Company, the Partnership, any Subsidiary or Red Lion,
would have a material adverse effect on the condition, financial or
otherwise, business, properties, net worth or results of operation of
such entity.
(n) There are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement or the Prospectus by the Securities Act or by
the Rules and Regulations that that are not so described or filed as
exhibits or incorporated by reference therein as permitted by the Rules
and Regulations.
(o) None of the Company, the Partnership, any Subsidiary or
Red Lion, or, to the knowledge of the Company and the Partnership, any
lessee of the Hotels, is (i) in violation of its articles of
incorporation or code of regulations, limited partnership certificate
or partnership agreement, or articles of organization or operating
agreement, as the case may be, (ii) in material violation of any law,
ordinance, administrative or governmental rule or regulation applicable
to it or of any decree of any court or governmental agency or body
having jurisdiction over it or (iii) in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which it is
a party or by which it or any of its properties may be bound.
(p) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company and
the Partnership, nor the consummation by the Company and the
Partnership of the transactions contemplated hereby (i) requires any
consent, approval, authorization or other order of or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as have been
obtained or may be required for the registration of the Shares under
the Securities Act and the Exchange Act and compliance with the
securities, real estate syndication or Blue Sky laws of various
jurisdictions) or any other person (except such as have been obtained),
(ii) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, the articles of incorporation or code
of regulations, limited partnership certificate or partnership
agreement or articles of organization or operating agreement, as the
case may be, of the Company, the Partnership or any Subsidiary or (iii)
conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company, the Partnership or any Subsidiary is a
party or by which any of them or any of their
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respective properties may be bound, or violates or will violate any
statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company, the Partnership, any Subsidiary or
any of their respective properties, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Partnership or any Subsidiary pursuant to
the terms of any agreement or instrument to which it is a party or by
which it may be bound or to which any of its property or assets is
subject.
(q) The accountants, Xxxxxx Xxxxxxxx LLP, KPMG Peat Marwick
LLP, Deloitte & Touche LLP and Xxxx and Ivy, P.L.C., who have certified
or shall certify the financial statements filed or to be filed as part
of the Registration Statement or the Prospectus (or any amendment or
supplement thereto) or incorporated by reference therein are
independent public accountants as required by the Securities Act and
the Rules and Regulations.
(r) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) or incorporated by reference
therein, present fairly the consolidated financial position, results of
operations and changes in financial position of the Company, BMC, the
Hotels and Red Lion, as applicable, on the basis stated therein at the
respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein;
and the other financial and statistical information and data included
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) or incorporated by reference therein are accurately
presented in all material respects and with respect to financial and
statistical information and data relating to the Company, BMC, the
Hotels and Red Lion, as applicable, are prepared on a basis consistent
with such financial statements and the books and records of the
Company, BMC, the Hotels and Red Lion, respectively. The unaudited pro
forma selected financial statements included in the Registration
Statement and the Prospectus or incorporated by reference therein
comply in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X, and the necessary pro
forma adjustments have been properly applied to the historical amounts
in the compilation of that data. Other than the historical and pro
forma financial statements (and schedules) included or incorporated by
reference in the Prospectus, no other historical or pro forma financial
statements (or schedules) are required by the Securities Act or the
Rules and Regulations.
(s) The execution and delivery of, and the performance by the
Company and the Partnership of their respective obligations under, this
Agreement, have been duly and validly authorized by the Company and the
Partnership, respectively, and this Agreement has been duly executed
and delivered by the Company and the Partnership and constitutes the
valid and legally binding agreement of the Company and the Partnership,
enforceable against each of them in accordance with its terms, except
to the extent that (i) the enforceability hereof may be subject to
insolvency,
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reorganization, moratorium, receivership, conservatorship or other
similar laws, regulations or procedures of general applicability now or
hereafter in effect relating to or affecting creditors' or other
obligees' rights generally, and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(t) The execution and delivery of, and the performance by the
Company, the Partnership and the other Subsidiaries party thereto of
their respective obligations under, the Merger Agreement, have been
duly and validly authorized by the each such person, and the Merger
Agreement has been duly executed and delivered by each such person and
constitutes the valid and legally binding agreement of each such
person, enforceable against each of them in accordance with its terms,
except to the extent that (i) the enforceability thereof may be subject
to insolvency, reorganization, moratorium, receivership,
conservatorship or other similar laws, regulations or procedures of
general applicability now or hereafter in effect relating to or
affecting creditors' or other obligees' rights generally, and (ii) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(u) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
neither the Company, the Partnership, BMC, nor any Subsidiary has
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Company, the Partnership, BMC or any Subsidiary, as the
case may be, and there has not been any change in the capital stock, or
material increase in the short-term debt or long-term debt, or any
material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse
change, in the condition, financial or otherwise, business, properties,
net worth or results of operations of the Company, the Partnership, BMC
or any Subsidiary.
(v) The Company, the Partnership, each Subsidiary and Red Lion
have good and marketable title to all properties described in the
Prospectus as being owned by them in fee simple absolute, free and
clear of all liens, claims, security interests or other encumbrances,
except (i) such as are immaterial or are described in the Registration
Statement and the Prospectus, (ii) the condemnation action (the
"Bellevue Action") with respect to the Doubletree Hotel located in
Bellevue, Washington referred to in the Company Disclosure Letter,
dated December 30, 1997, of Red Lion delivered in connection with the
Merger Agreement (the "Disclosure Letter") and (iii) the ground leases
with respect to the Doubletree Hotels located in Omaha. Nebraska and
Springfield, Oregon referred to in the Disclosure Letter; and all the
property described in the Prospectus as being held or operated under
lease by the Partnership, Westboy and any Subsidiary, is held or
operated by it under valid, subsisting and enforceable leases.
(w) The Company, the Partnership and each Subsidiary and, to
the knowledge of the Company or the Partnership, each lessee of the
Hotels and the Doubletree Hotels, carry, or is covered by, insurance in
such amounts and covering such risks as the Company and the Partnership
believe are adequate for the conduct of their respective businesses and
the value of their respective properties and as is
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customary for companies engaged in similar businesses in similar
industries, and the Partnership and each Subsidiary carry business
interruption insurance providing loss of revenue coverage at least
equal to the projected receipts under lease for twelve months of
operation.
(x) Each of the Company, the Partnership, each Subsidiary and
Red Lion has title insurance on all real properties and improvements
thereon described in the Prospectus as owned by them in an amount at
least equal to the greater of (i) the cost of acquisition of such real
property and improvements thereon and (ii) the replacement cost of
construction of the improvements located on such properties.
(y) The Company has not distributed and, prior to the later to
occur of (i) the First Delivery Date and (ii) completion of the
distribution of the Shares, will not distribute any offering material
in connection with the offering and sale of the Shares other than the
Registration Statement, the Preliminary Prospectus, the Prospectus or
other materials, if any, permitted by the Securities Act and the Rules
and Regulations.
(z) As applicable, each of the Company, the Partnership, BMC,
Westboy, each Subsidiary, each other lessee of the Hotels and Red Lion
has such permits, licenses (including, without limitation, the liquor
licenses with respect to each of the Hotels and the Doubletree Hotels),
franchises and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct its
businesses in the manner described in the Prospectus except where the
failure to obtain such permits does not have a material adverse effect
on the condition, financial or otherwise, business, properties, net
worth, or results of operation of the Company; each of the Company, the
Partnership, BMC, Westboy, each Subsidiary, each other lessee of the
Hotels and Red Lion has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to
such qualification as may be set forth in the Prospectus; except as
described in the Prospectus, none of such permits contains any
restriction that is materially burdensome to the Company, the
Partnership, BMC, Westboy, any Subsidiary or Red Lion.
(aa) The Company, the Partnership and Red Lion maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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(bb) Neither the Company, the Partnership or any Subsidiary,
nor any director, officer, employee, agent or other person associated
with or acting on behalf of any such entity, has used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(cc) Each of the Company, the Partnership and each Subsidiary
has filed all tax returns required to be filed, which returns are
complete and correct in all material respects, and none of the Company,
the Partnership or any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments
with respect thereto.
(dd) No holder of any security of the Company has any right
that has not been satisfied or waived to require registration of any
Common Shares or any other security of the Company because of the
filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
(ee) Commencing with the Company's short taxable year ending
December 31, 1996, the Company has elected to, is qualified to and
intends to remain qualified to, be taxed as a "real estate investment
trust" pursuant to Sections 856 through 860 of the Code and the rules
and regulations thereunder, and the Company's method of operation as
described in the Registration Statement enables it to meet the
requirements for qualification and taxation as a real estate investment
trust under the Code. Upon consummation of the Proposed Merger, the
Company will remain qualified to be taxed as a real estate investment
trust under the Code and the rules and regulations thereunder and its
method of operation will continue to enable it to meet the requirements
for qualification and taxation as a real estate investment trust under
the Code.
(ff) None of the Company, the Partnership or any Subsidiary is
now, and, after sale of the Shares to be sold by the Company hereunder
and application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds," will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
thereunder.
(gg) The Company, the Partnership, the Subsidiaries and Red
Lion and, to the knowledge of the Company or the Partnership, each
lessee of the Hotels and the Doubletree Hotels, own or possess the
right to use all patents, trademarks, trademark registrations, service
marks, service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by any of them or necessary for the conduct of their
respective businesses, and neither of the Company, nor the Partnership
is aware of any claim to the contrary or
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any challenge by any other person to such rights of the Company, the
Partnership any Subsidiary, Red Lion or lessee with respect to the
foregoing.
(hh) Other than this Agreement and as set forth in the
Prospectus under the heading "Underwriting," there are no contracts,
agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter
for a brokerage commission, finder's fee or other like payment with
respect to the consummation of the transactions contemplated by this
Agreement.
(ii) Except as described in the Registration Statement and the
Prospectus, the Company, the Partnership, each Subsidiary and Red Lion
(i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment, hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals under applicable
Environmental Laws required in connection with their businesses,
properties or assets as conducted or contemplated to be conducted as
described in the Registration Statement, and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
in each case under clauses (i) - (iii) except to the extent that any
noncompliance or failure to be in receipt thereof would not be
reasonably likely to have a material adverse effect on the condition,
financial or otherwise, business, properties, net worth or results of
operation of the Company, the Partnership, any Subsidiary or Red Lion,
as applicable. Except as described in the Registration Statement and
the Prospectus, there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) that would, singly or in the aggregate,
be reasonably likely to have a material adverse effect on the Company,
the Partnership or Red Lion.
(jj) Each of the Hotels and the Doubletree Hotels complies in
all material respects with all applicable codes and zoning laws and
resolutions, and there is no pending or, to the knowledge of the
Company or the Partnership, threatened condemnation, 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 and
the Doubletree Hotels, other than the Bellevue Action. The improvements
comprising any portion of each Hotel's and Doubletree Hotel's property
(the "Improvements") are free of any and all material physical,
mechanical, structural, design and construction defects which would,
singly or in the aggregate, be reasonably likely to have a material
adverse effect on the Company, the Partnership or Red Lion, and the
mechanical, electrical and utility systems servicing the Improvements
(including, without limitation, all water, electric, sewer, plumbing,
heating, ventilation, gas and air conditioning) are in good condition
and proper working order and are free of defects (for which provision
to repair has not been made) which would, singly or in the aggregate,
be reasonably likely to have a material adverse effect on the Company,
the Partnership or Red Lion.
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(kk) The franchise agreements with respect to each of the
Hotels (other than French Lick Springs Resort), and the license
agreement with respect to the Doubletree Hotels, are in full force and
effect; and none of the Company, the Partnership, BMC, Westboy or any
Subsidiary or affiliates have received any notice of default, or have
knowledge of any event that with notice or lapse of time, or both,
would constitute a default, under any such franchise agreements, which,
if uncured, would, singly or in the aggregate, be reasonably likely to
have a material adverse affect on the Company, the Partnership or Red
Lion.
(ll) The Shares have been approved for listing on the New York
Stock Exchange, Inc. (the "NYSE"), subject to official notice of
issuance.
(mm) The Company has complied with all provisions of Florida
Statutes ss. 517.075, relating to issuers doing business with Cuba.
(nn) Except as described in the Prospectus or the Registration
Statement, pursuant to the exercise of existing options, the 1,000
Common Shares granted to an executive officer of the Company in
December 1997 and the 20,000 Common Shares sold to BMC on September 5,
1997, the Company has not sold or issued any Common Shares during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(oo) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers or
stockholders of the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(pp) No labor disturbance by the employees of the Company, the
Partnership, BMC or any Subsidiary exists or, to the knowledge of the
Company or the Partnership, is imminent which might be expected to have
a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of
the Company or the Partnership.
(qq) The Company, the Partnership, the Subsidiaries and Red
Lion are in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined
in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company, the Partnership, any Subsidiary or Red
Lion would have any material liability; neither the Company, the
Partnership, any Subsidiary or Red Lion has incurred or expects to
incur any material liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Code, including the regulations and
published interpretations thereunder; and each "pension plan" for which
the Company, the Partnership, any Subsidiary or Red Lion would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
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(rr) Except for the Proposed Merger, neither the Company, the
Partnership, nor any Subsidiary is party to or is otherwise subject to
a "probable" business combination within the meaning of Rule 3-05 of
Regulation S-X that would require the Company to file financial
statements pursuant to such rule.
Notwithstanding anything herein to the contrary, all representations
and warranties made herein by the Company or the Partnership with respect to Red
Lion or the Doubletree Hotels shall be deemed to be made only to the best
knowledge of the Company and the Partnership, respectively, after due inquiry.
Any certificate signed by any officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby agrees to issue and sell to each
Underwriter, severally and not jointly, and, upon the basis of the
representations, warranties and agreements of the Company and the Partnership
herein contained and subject to all the terms and conditions herein set forth,
each Underwriter agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $_______ per share, the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto, plus any
additional number of Firm Shares which such Underwriter has become obligated to
purchase pursuant to the provisions of Section 9 hereof.
In addition, the Company grants to the Underwriters an option to
purchase up to 675,000 Option Shares at a price of $____ per share. Such option
is granted solely for the purpose of covering over-allotments in the sale of
Firm Shares and is exercisable only as provided in Section 4 hereof. Option
Shares shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Shares set forth opposite the name of
such Underwriters in Schedule I hereto. The respective purchase obligations of
each Underwriter with respect to the Option Shares shall be adjusted by the
Representatives so that no Underwriter shall be obligated to purchase Option
Shares other than in 100 share amounts.
3. Offering of Shares by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4. Delivery and Payment for the Shares. Delivery of and payment for
the Firm Shares shall be made at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One
Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M.,
New York City time, on the fourth full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "First Delivery Date." On the First Delivery Date, the
Company shall deliver or cause to be delivered certificates representing the
Firm Shares to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer of immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each Underwriter hereunder. Upon delivery, the
Firm Shares shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First
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Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Shares, the Company shall make the certificates
representing the Firm Shares available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of Option Shares as to which the option is being exercised,
the names in which the Option Shares are to be registered, the denominations in
which the Option Shares are to be issued and the date and time, as determined by
the Representatives, when the Option Shares are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Shares are delivered are sometimes referred to as the "Second Delivery Date,"
and the First Delivery Date and the Second Delivery Date are sometimes each
referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Shares to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Shares shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Shares, the Company
shall make the certificates representing the Option Shares available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Second Delivery Date.
5. Agreements of the Company and the Partnership. Each of the Company
and the Partnership agree with the several Underwriters as follows:
(a) The Company shall prepare the Prospectus in a form
approved by the Representatives and cause the Prospectus to be filed
pursuant to Rule 424 under the Securities Act within the time
prescribed therein and to notify you promptly of such filing.
(b) The Company will advise the Representatives immediately
and if so requested by you, will confirm such advice in writing: (i)
when any amendment to the Registration Statement has become effective
or any supplement to the Prospectus has been filed; (ii) of any request
or proposed request of which the Company becomes aware by the
Commission for any
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amendment to the Registration Statement, a supplement to the Prospectus
or for additional information; (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threat of any stop order proceedings of
which the Company becomes aware; (iv) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for offering or sale in any jurisdiction or the initiation or
threat of any proceeding for such purpose of which the Company becomes
aware; and (v) within the period during which the Prospectus is
required to be delivered under the Securities Act or the Exchange Act,
of any material change in the Company's condition, financial or
otherwise, business, prospects, properties, net worth or results of
operations, or of the happening of any event which makes any statement
of a material fact made in the Registration Statement or the Prospectus
(as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a
material fact required by the Securities Act or the Rules and
Regulations thereunder to be stated therein or necessary in order to
make the statements therein not misleading, or of the necessity to
amend or supplement the Prospectus (as then amended or supplemented) to
comply with the Securities Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of
the Registration Statement or there shall be any such suspension of the
qualification of the Shares, the Company will make every reasonable
effort to obtain the withdrawal of such order or suspension at the
earliest possible time.
(c) The Company will promptly furnish to the Representatives
and their counsel, without charge, one signed copy of the Registration
Statement as originally filed with the Commission and of each amendment
thereto, including financial statements and all consents and exhibits
to the Registration Statement and all documents incorporated by
reference therein, and will also promptly furnish to the
Representatives and their counsel without charge such number of
conformed copies of the Registration Statement as originally filed and
of each amendment thereto, as the Representatives may reasonably
request.
(d) The Company will give the Representatives notice of its
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised prospectus which
the Company proposes for use by the Underwriters in connection with the
offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant
to Rule 424(b) under the Rules and Regulations), will furnish the
Representatives with copies of any such amendment or supplement within
a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment or supplement or
use any such prospectus to which the Representatives or counsel for the
Underwriters shall reasonably object.
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(e) The Company will file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or any
supplement to the Prospectus that may, in the reasonable judgment of
the Company or the Representatives, be required by the Securities Act
or requested by the Commission.
(f) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act, such number of copies of
the Prospectus (as originally filed and as amended or supplemented and
including all documents incorporated by reference therein) as such
Underwriter may reasonably request for the purposes contemplated by the
Securities Act or the Exchange Act or the respective applicable rules
and regulations of the Commission thereunder.
(g) Within the period during which the Prospectus is required
to be delivered under the Securities Act or the Exchange Act, the
Company will (i) timely file all reports and any definitive proxy or
information statements required to the filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act and (ii) comply with all requirements imposed on it by the
Securities Act and the Rules and Regulations, so far as necessary to
permit the continuance of sales of or dealings in the Shares as
contemplated in this Agreement and the Prospectus. If during such
period any event shall occur as a result of which the Prospectus as
then amended or supplemented, in the opinion of counsel for the
Underwriters, would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend the Registration Statement
or the Prospectus to comply with the Securities Act or the Rules and
Regulations, the Company will forthwith amend or supplement
Registration Statement or the Prospectus (in form and substance
satisfactory to counsel for the Underwriters and at the expense of the
Company) so as to correct such statement or omission or effect such
compliance, and the Company will furnish to the Underwriters a
reasonable number of copies of such amendment or supplement.
(h) The Company will cooperate with the Representatives and
with counsel for the Underwriters in connection with the registration
or qualification of the Shares for offering and sale by the several
Underwriters and by dealers under the securities, real estate
syndication or Blue Sky laws of such jurisdictions as you may designate
and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated
to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of
process in suits or to taxation, other than those matters arising out
of the offering or sale of the Shares, in any jurisdiction where it is
not now so subject.
(i) The Company will make generally available to its security
holders as soon as practicable but no later than 15 months after the
end of the Company's current fiscal quarter an earnings statement (in
form complying with the provisions of Section
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11(a) of the Securities Act and Rule 158 of the Rules and Regulations),
which need not be certified by independent certified public accountants
unless required by the Securities Act or the Rules and Regulations,
covering a twelve-month period commencing after the date the Prospectus
is filed pursuant to Rule 424 of the Rules and Regulations.
(j) For a period of five years following the date of this
Agreement, the Company will furnish to the Representatives copies of
all materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements furnished by
the Company to the principal national securities exchange upon which
the Common Shares may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder.
(k) For a period of five years following the date of this
Agreement, the Company will cause BMC to furnish to the Representatives
and the Company, not less than annually, audited financial statements
(and to the Company only, quarterly unaudited financial statements)
with respect to BMC, and the Company shall further include such
financial statements in the periodic reports required to be filed by
the Company pursuant to the Securities Act or the Exchange Act or the
rules promulgated thereunder, if so required by either such Act or
rules.
(l) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply
with the terms or fulfill any of the conditions of this Agreement, the
Company and the Partnership jointly and severally agree to reimburse
the Representatives for all reasonable out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred
by the Representatives in connection herewith.
(m) The Company and the Partnership will apply the net
proceeds from the sale of the Shares to be sold hereunder in accordance
with the description set forth in the Prospectus under the caption "Use
of Proceeds."
(n) For a period of 180 days after the date of the Prospectus,
neither the Company nor the Partnership, directly or indirectly, (1)
will offer for sale, sell, pledge or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the
future of) any Common Shares or Units or any securities convertible
into or exercisable or exchangeable for Common Shares or Units or grant
any options or warrants to purchase Common Shares or Units (other than
the Shares and except pursuant to the Company's Long-Term Incentive
Plan and Directors Deferred Compensation Plan, as such plans exist on
the date hereof, pursuant to the Merger Agreement or the Assignment
Agreement (as defined in the Merger Agreement) or pursuant to currently
existing Exchange Rights), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such Common
Shares or Units, whether any such transaction described in
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clause (1) or (2) above is to be settled by delivery of Common Shares,
Units or other securities, in cash or otherwise, in each case without
the prior written consent of Xxxxxx Brothers Inc.
(o) The Company has applied for the inclusion of the Shares on
the NYSE and will use its best efforts to complete that inclusion,
subject only to official notice of issuance, prior to the First
Delivery Date.
(p) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, the Company and the Partnership have not
taken, nor will take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Shares to facilitate the
sale or resale of the Shares.
(q) The Company will use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust" under
the Code.
(r) The Company and the Partnership shall take steps as shall
be necessary to ensure that none of the Company, the Partnership or any
Subsidiary or any other subsidiary shall become an "investment company"
within the meaning of the Investment Company Act and the rules and
regulations thereunder.
(s) The Company shall enforce those provisions of the
contribution agreements entered into in connection with the formation
of the Company pursuant to which the partners of the partnerships
owning the Initial Hotels contributed to the Partnership their
interests in such entities, the Partnership Agreement, and the
Alignment of Interests Agreement by and among the Company, the
Partnership, BMC, The Xxxxxx Group, Inc., Purchasing Concepts, Inc. and
Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx, dated as of November 4, 1996,
that, with respect to the individuals and entities set forth therein,
(i) prohibit either the offer or contract to sell, the pledge of or
other disposition of any Units or Common Shares or any securities
convertible into or exercisable or exchangeable for Units or Common
Shares, or the grant of any options or warrants to purchase Common
Shares or (ii) require the purchase and retention of Units or Common
Shares.
6. Indemnification and Contribution. (a) The Company and the
Partnership shall jointly and severally indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Shares), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (B) in any blue sky application or other document prepared or
executed by the
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Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Shares under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"), (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that neither the Company nor the
Partnership shall be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any act or
failure to act undertaken or omitted to be taken by any Underwriter through its
gross negligence or willful misconduct), and shall reimburse each Underwriter
and each such officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application, in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
The foregoing indemnity agreement with respect to any Preliminary
Prospectus, Prospectus or Registration Statement shall not inure to the benefit
of any Underwriter (or its officers and employees or any person who controls
such Underwriter within the meaning of the Securities Act) from whom the person
asserting any such loss, claims, damages or liabilities purchased Shares if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if such is required by law, at
or prior to the written confirmation of the sale of such Shares to such person
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability; provided, that the
Company has complied with its obligation under Section 5(f) of this Agreement to
provide copies of the Prospectus to such Underwriter.
(a)(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of its officers who signed the
Registration Statement, each of its directors, each person, if any, who controls
the Company within the meaning of the Securities Act and the Partnership from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director, officer or
controlling
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person or the Partnership may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for inclusion therein, and shall promptly
reimburse the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person or the
Partnership.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or the Partnership under this Section 6 if the
Representatives shall have been advised by their counsel that there may be one
or more legal defenses available to them which are different from or additional
to those available to the Company and the Partnership (in which case the Company
and the Partnership shall not have the right or obligation to assume the defense
of such action on behalf of such Underwriter or such controlling person, it
being understood, however, that the Company and the Partnership
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shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Underwriters and controlling persons) and in that event the fees and
expenses of such separate counsel shall be paid by the Company or the
Partnership. No indemnifying party shall (i) without the prior written consent
of the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and the Partnership on the one hand and the Underwriters on the other from the
offering of the 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 Company and the Partnership on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
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 with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (after deducting expenses) received by the Company, on the
one hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, on the
other hand, bear to the total price to public of the Shares under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Partnership or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. For purposes of the preceding two sentences,
the net proceeds deemed to be received by the Company shall be deemed to be also
for the benefit of the Partnership and the information supplied by the Company
shall also be deemed
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to have been supplied by the Partnership. The Company, the Partnership and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 6 shall be deemed to include, for
purposes of this Section 6(d), 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 6(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
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 Underwriters' obligations
to contribute as provided in this Section 6(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter,
the Company, its directors or officers, the Partnership or any person
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
trustees, directors or officers, or any person controlling the Company shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 6.
7. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Shares hereunder are subject to the accuracy,
when made and on each Delivery Date, of the representations and warranties of
the Company and the Partnership contained herein, to the performance by the
Company and the Partnership of their obligations hereunder and to each of the
following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares
may commence, such post-effective amendment shall have become effective
not later than 5:30 P.M., New York City time, on the date hereof, or at
such later date and time as shall be consented to in writing by you,
and all filings, including the filing of the Prospectus, required by
Rules 424 and 430A under the Rules and Regulations shall have been
timely made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding
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for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Representatives.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition, financial or
otherwise, business, properties, net worth, or results of operations of
the Company, the Partnership, BMC, Westboy, any Subsidiary or Red Lion
not contemplated by the Prospectus, which in the opinion of the
Representatives, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the
Company or any partner, officer, director or trustee of the Company or
the Partnership or which makes any statement of a material fact made in
the Prospectus untrue or which, in the opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of
any addition to or change in the Prospectus in order to state a
material fact required by the Securities Act or any other law to be
stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion, adversely affect the
market for the Shares.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Shares,
the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriters, and the Company
shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(d) You shall have received, on such Delivery Date, the
favorable opinion of Xxxxx & Xxxxxxxxx LLP, counsel for the Company and
the Partnership, dated such Delivery Date, in form and substance
satisfactory to counsel for the Underwriters and addressed to the
Representatives to the effect that:
(i) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State
of Ohio with full corporate power and authority to conduct its
business in which it is engaged as described in the
Registration Statement and the Prospectus (and any amendment
or supplement thereto) and to enter into and perform its
obligations under this Agreement and the Merger Agreement; the
Company is duly registered or qualified to conduct its
business and is in good standing in each jurisdiction where
the nature of its properties or the conduct of its business
requires such registration or qualification, except where the
failure so to register or qualify does not have a material
adverse effect on the condition, financial or otherwise,
business, properties, net worth or results of operations of
the Company;
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(ii) The Partnership has been duly formed and is
validly existing as a limited partnership under the laws of
the State of Ohio; the Partnership has partnership power and
authority to own, lease and operate its properties, to conduct
the business in which it is engaged or proposes to engage as
described in the Registration Statement and the Prospectus and
to enter into and perform its obligations under this Agreement
and the Merger Agreement; the Partnership is duly qualified or
registered as a foreign partnership and is in good standing in
each jurisdiction in which such qualification or registration
is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify or register would not have a material adverse
effect on the condition, financial or otherwise, or the
earnings, assets, business affairs or business prospects of
the Partnership; and the Company is the sole general partner
of the Partnership;
(iii) BMC is a duly organized and validly existing
limited liability company in good standing under the laws of
the State of Ohio. BMC has all requisite limited liability
company power and authority to conduct its business as
described in the Registration Statement and the Prospectus.
BMC is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business
requires such registration or qualification, except where the
failure to so register or qualify does not have a material
adverse effect on the condition, financial or otherwise,
business, properties, net worth or results of operations of
BMC;
(iv) Each of the Subsidiaries has been duly formed
and is validly existing or is in full force and effect as a
corporation, limited partnership or limited liability company,
as the case may be, in its appropriate jurisdiction with
corporate, partnership or limited liability company, as the
case may be, power and authority to own, lease and operate its
properties and to conduct the business in which it is engaged.
To the best knowledge of such counsel, each of the partnership
agreements or operating agreements, as applicable, of the
Subsidiaries is in full force and effect;
(v) All of the outstanding capital shares of Xxxxxx I
and Boykin II is owned by the Company; all of the outstanding
interests in Xxxxxx XX are owned by Xxxxxx I and Boykin II;
the Partnership is the sole member and owns all of the
outstanding interests in Xxxx Valley; Xxxx Valley is the sole
general partner and owns a 91% general partnership interest in
Shawan; the Partnership is the sole general partner and owns a
91% general partnership interest in Boystar and is a member
owning a 100%, 91% and 80% interest in Doughboy, Xxxxxx San
Diego and Xxxxxx Kansas City, respectively; all of such
interests in the Subsidiaries have been duly and validly
authorized and issued and are fully paid and non-assessable
(subject to capital call provisions contained in the
partnership agreements and operating agreements of the
Subsidiaries that are partnerships or limited liability
companies, respectively) and are owned directly or indirectly
by the Company or Partnership, as the case may be, free
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and clear of all liens, encumbrances, equities, claims,
security interests, voting rights and charges; except for the
Partnership and the Subsidiaries, to the best knowledge of
such counsel, the Company does not own or control, directly or
indirectly, any corporation, partnership, limited liability
company, association or other entity;
(vi) The authorized and outstanding capital shares of
the Company are as set forth under the caption
"Capitalization" in the Prospectus; and the authorized Common
Shares of the Company conform in all material respects to the
description thereof contained in the Prospectus under the
caption "Description of Common Shares;"
(vii) All the Common Shares of the Company
outstanding prior to the issuance of the Shares have been duly
authorized and validly issued and are fully paid and
nonassessable and free of any preemptive or similar rights
arising by operation of law or under the Articles of
Incorporation or Code of Regulations of the Company, or, to
the best knowledge of such counsel, any other agreement;
(viii) The Shares have been duly authorized for
issuance and sale to the Underwriters and, when issued and
delivered to the Underwriters against payment therefor in
accordance with the terms hereof will be validly issued, fully
paid and non-assessable, and free of any preemptive or similar
rights arising by operation of law or under the Articles of
Incorporation or Code of Regulations of the Company or, to the
best knowledge of such counsel, any other agreement;
(ix) The form of certificates for the Shares is in
due and proper form and complies with all applicable Ohio
statutory and NYSE requirements;
(x) The issuance of general partnership interests by
the Partnership in exchange for the Company's contribution to
the Partnership of the net proceeds of the sale of the Shares
to the Underwriters hereunder has been duly authorized and,
when such interests are issued in the manner set forth in the
Prospectus, they will be validly issued, fully paid and
non-assessable; such general partnership interests have been
and will be offered and sold in compliance with all applicable
laws (including, without limitation, federal and state
securities laws), are not and will not be issued in violation
of or subject to any preemptive or other rights to subscribe
for or purchase securities arising by operation of law or
under the Partnership Agreement or, to the best knowledge of
such counsel, any other agreement, and conform in all material
respects to the description thereof contained in the
Prospectus;
(xi) The Registration Statement and all
post-effective amendments filed on or prior to such Delivery
Date, if any, have become effective under the Securities Act,
and, to the best knowledge of such counsel, no stop order
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suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending
before or contemplated by the Commission; and the filing of
the Prospectus pursuant to Rule 424(b) under the Rules and
Regulations has been made in accordance with Rule 424(b);
(xii) This Agreement has been duly authorized,
validly executed and delivered by the Company and the
Partnership and is a legal, valid and binding agreement of the
Company and the Partnership enforceable against the Company
and the Partnership in accordance with its terms, except as
enforcement of rights to indemnity and contribution hereunder
may be limited by federal or state securities laws or
principles of public policy and subject to the qualification
that the enforceability of the Company's and the Partnership's
obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and
by general equitable principles;
(xiii) The execution and delivery of, and the
performance by the Company, the Partnership and the other
Subsidiaries party thereto of their respective obligations
under, the Merger Agreement, have been duly and validly
authorized by the each such person, and the Merger Agreement
has been duly executed and delivered by each such person and
constitutes the valid and legally binding agreement of each
such person, enforceable against each of them in accordance
with its terms, subject to the qualification that the
enforceability of each such person's obligations thereunder
may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by
general equitable principles;
(xiv) None of the Company, the Partnership or any
Subsidiary is (A) in violation of its articles of
incorporation or code of regulations, certificate of limited
partnership or partnership agreement, articles of organization
or operating agreement, as the case may be, or (B) to the best
knowledge of such counsel, in material default in the
performance of any obligation, covenant or condition contained
in any agreement or other instrument filed as an exhibit to
the Registration Statement or incorporated by reference
therein, except as may be disclosed in the Prospectus;
(xv) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this
Agreement, compliance by the Company or the Partnership with
the provisions hereof nor consummation by the Company or the
Partnership of the transactions contemplated hereby (x)
conflicts or will conflict with or constitutes or will
constitute a breach, or default under, (A) the articles of
incorporation or code of regulations, certificate of limited
partnership or partnership agreement, articles of organization
or operating agreement, as the case may be, of the Company,
the Partnership or any Subsidiary or (B) any indenture,
mortgage, deed of trust, loan agreement or other agreement or
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instrument known to such counsel to which the Company, the
Partnership or any Subsidiary is a party or by which it or any
of its properties may be bound, or (y) violates any United
States federal, state or local statute, law, regulation
(assuming compliance with all applicable state securities,
real estate syndication and Blue Sky laws) or filing or
judgment, injunction, order or decree known to such counsel
applicable to the Company, the Partnership or any Subsidiary
or any of their respective properties, or (z) will result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the Partnership or
any Subsidiary pursuant to the terms of any agreement or
instrument known to such counsel to which either of them is a
party or by which either of them may be bound or to which any
of its property or assets is subject;
(xvi) No consent, approval, authorization or other
order of, or registration or filing with, any United States
federal, state or local court, regulatory body, administrative
agency or other United States federal, state or local
governmental body, agency, or official is required on the part
of the Company (except as have been obtained under the
Securities Act and the Exchange Act or such as may be required
under state securities, real estate syndication or Blue Sky
laws governing the purchase and distribution of the Shares)
for the valid issuance and sale of the Shares to the
Underwriters as contemplated by this Agreement;
(xvii) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the
financial statements and the notes thereto and the schedules
and other financial and statistical data included therein, as
to which such counsel need not express any opinion) complies
as to form in all material respects with the requirements of
the Securities Act and the Rules and Regulations;
(xviii) Each document incorporated by reference in
the Prospectus (except for the financial statements and the
notes thereto and the schedules and other financial and
statistical data included therein, as to which such counsel
need not express any opinion) comply as to form in all
material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder;
(xix) To the best knowledge of such counsel, (A)
other than as described or contemplated in the Prospectus (or
any supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company, the
Partnership or any Subsidiary or to which the Company, the
Partnership or any Subsidiary or any of their respective
property is subject, which, if determined adversely to the
Company, the Partnership or any Subsidiary would have a
material adverse effect on the condition, financial or
otherwise, business, properties, net worth or results of
operation of such entity, and (B) there are no agreements,
contracts, indentures, leases or other
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instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement or the Prospectus by the
Securities Act or by the Rules and Regulations that that are
not so described or filed as exhibits or incorporated by
reference therein as permitted by the Rules and Regulations;
(xx) To the best knowledge of such counsel, neither
the Company, the Partnership, nor any Subsidiary is in
violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company, the
Partnership, or any Subsidiary or of any decree of any court
or governmental agency or body having jurisdiction over the
Company, the Partnership, or any Subsidiary except for any
such violation that would not have a material adverse effect
on the condition, financial or otherwise, business,
properties, net worth, or results of operation of such entity
as applicable;
(xxi) The statements in the Registration Statement
and Prospectus under the captions "Risk Factors," "The
Company," "Lessees," "Business and Properties," "Management,"
"The Partnership," "Description of Preferred Shares" and
"Description of Common Shares," and in the Form 8-K of the
Company, dated December 30, 1997, insofar as those statements
are descriptions of contracts, agreements or other legal
documents, or constitute statements of law or legal
conclusions, are accurate and present fairly the information
required to be shown in all material respects;
(xxii) Except as described in the Prospectus, there
is no duly authorized and outstanding option, warrant or other
right calling for the issuance of, nor any duly authorized
commitment, plan or arrangement to issue, any Common Shares of
the Company or any right or security directly or indirectly
convertible into or exchangeable or exercisable for any Common
Shares of the Company or for any such right or security;
(xxiii) Except as described in the Prospectus, to the
best knowledge of such counsel, there is no contractual right
duly authorized by the Company (A) to cause the Company to
sell or otherwise issue or to permit underwritten sale of the
Shares, (B) to have any Common Shares or other securities of
the Company included in the Registration Statement or (C) as a
result of the filing of the Registration Statement, to require
registration under the Securities Act of any Common Shares or
other securities of the Company;
(xxiv) There are no preemptive rights, or except as
set forth in the Prospectus, other rights to subscribe for or
to purchase, nor, except as set forth in the Prospectus or the
Company's Amended Articles of Incorporation filed as an
exhibit to the Registration Statement, are there any
restrictions upon the voting or transfer of, any Shares
pursuant to the Company's charter or by-laws or any agreement
or other instrument known to such counsel;
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(xxv) The Company has been and is organized in
conformity with the requirements for qualification as a real
estate investment trust under the Code, and the Company meets
the requirements for qualification and taxation as a "real
estate investment trust" under the Code commencing with the
Company's taxable year ending December 31, 1996; after giving
effect to the Proposed Merger, the Company will continue to
meet such requirements for qualification and taxation as a
real estate investment trust; and the description of federal
income tax matters and consequences described under "Federal
Income Tax Considerations" in the Registration Statement, as
modified and supplemented by the description under the
captions "Risk Factors -- Tax Risks" and "Certain Federal
Income Tax Considerations" in the Prospectus, is an accurate
general summary in all material aspects of the information
described therein;
(xxvi) The Partnership and each Subsidiary (other
than Xxxxxx I and Xxxxxx XX) has, since its formation, been
properly treated for purposes of the Code and applicable state
law as a partnership and not as a association taxable as a
corporation or a "publicly traded partnership" within the
meaning of Section 7704(b) of the Code; Xxxxxx I and Boykin II
are "qualified REIT subsidiaries" within the meaning of
Section 856(i) of the Code; no direct or indirect owner of any
lessee, and no lessee, of any Hotel or Doubletree Hotel owns
any direct or indirect interest in the Company or the
Partnership such that any rent under any lease would not
constitute "rent from real property" within the meaning of
Section 856(d) of the Code; each of Xxxxxx XX, Xxxx Valley and
Doughboy either (A) since its formation, has been properly
treated for purposes of the Code and applicable state law as a
partnership and not as a association taxable as a corporation
or a "publicly traded partnership" within the meaning of
Section 7704(b) of the Code or (B) is disregarded as a matter
of law for federal tax purposes; and
(xxvii) None of the Company, the Partnership, nor any
Subsidiary is now, and after sale of the Shares to be sold by
the Company hereunder and application of the net proceeds from
such sale as described in the Prospectus under the caption
"Use of Proceeds" will not be, an "investment company" within
the meaning of the Investment Company Act and the rules and
regulations thereunder.
Such counsel may rely on certificates of officers of
the Company and the Partnership and other appropriate persons
with respect to factual matters relevant to the opinions to be
rendered under items (ii), (iii), (iv), (xix), (xxv), (xxvi)
and (xxvii), above.
In addition, such counsel shall also state that,
although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and
does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement,
such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review
and discussion of the contents thereof, and nothing has come
to the attention of such counsel that has caused them to
believe (I) that the Registration Statement, at the time the
Registration Statement became effective, or the Prospectus, as
of its date and as of such Date of Delivery, as the case may
be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that any amendment or supplement to the Prospectus, as of its
respective date and as of such Date of Delivery, as the case
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may be, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading (it being
understood that such counsel need express no opinion with
respect to the financial statements and the notes thereto and
the schedules and other financial and statistical data
included in the Registration Statement or the Prospectus) or
(II) any document incorporated by reference in the Prospectus
or any further amendment or supplement to any such
incorporated document made by the Company prior to such
Delivery Date, when they were filed with the Commission,
contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that
such counsel need express no opinion with respect to the
financial statements and the notes thereto and other financial
and statistical data).
Such counsel shall also reaffirm as of such Delivery
Date their opinions filed as Exhibits 5.1 and 8.1 to the
Registration Statement.
(e) The favorable opinion of Xxxxxxx Xxxx & Xxxxxxxxx, counsel
for the Underwriters, dated such Delivery Date, with respect to the
matters referred to in clauses (xi) and (xvii) of the foregoing
paragraph (d).
(f) (i) At the time of execution of this Agreement, the
Representatives shall have received from each of Xxxxxx Xxxxxxxx LLP,
KPMG Peat Marwick LLP, Deloitte & Touche LLP and Xxxx and Ivy, P.L.C.,
a letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (x) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, and (y) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(ii) With respect to the letters of Xxxxxx Xxxxxxxx LLP, KPMG
Peat Marwick LLP, Deloitte & Touche LLP and Xxxx and Ivy, P.L.C.
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such accountants,
addressed to
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the Underwriters and dated such Delivery Date (x) confirming that they
are independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (y) stating, as of the date of the bring-down letter
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by the initial letter and (z) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the Company
or the Partnership, shall be contemplated by the Commission at or prior
to such Delivery Date; (ii) there shall not have been any change in the
Common Shares of the Company nor any material increase in the
short-term or long-term debt of the Company, the Partnership or any
Subsidiary (other than in the ordinary course of business) from that
set forth or contemplated in the Registration Statement or Prospectus
(or any amendment or supplement thereto); (iii) there shall not have
been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition,
financial or otherwise, business, prospects, properties, net worth or
results of operations of the Company, the Partnership or any
Subsidiary; (iv) the Company shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary
course of business), that are material to the Company, other than those
reflected in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); and (v) all the representations and
warranties of the Company and the Partnership contained in this
Agreement shall be true and correct on and as of the date hereof and on
and as of such Delivery Date as if made on and as of such Delivery
Date, and the Representatives shall have received a certificate, dated
the such Delivery Date and signed by the chief executive officer and
chief financial officer (or such other officers as are acceptable to
the Representatives) of the Company (as to such representations and
warranties made by the Company and the Partnership) to the effect set
forth in this Section 7(g).
(h) The Company or the Partnership shall not have failed at or
prior to such Delivery Date to have performed or complied in all
material respects with any of their agreements herein contained and
required to be performed or complied with by them hereunder at or prior
to such Delivery Date.
(i) Prior to commencement of the offering of the Shares, the
Shares shall have been approved for listing, subject to official notice
of issuance, on the NYSE.
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(j) On such Delivery Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Shares as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Shares as herein
contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and counsel for the Representatives.
Any certificate or document signed by any officer of the Company and
delivered to the Underwriters, or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Company to each Underwriter as to
the statements made therein.
8. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and all amendments or supplements to any
of them, as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the original issuance and sale of the Shares; (iv) the
printing (or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the NYSE; (vi) the registration or qualification of
the Shares for offer and sale under the securities, real estate syndication or
Blue Sky laws of the several states as provided in Section 5(h) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
Underwriters relating to the preparation, printing or reproduction, and delivery
of the preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and fees and expenses of counsel for the
Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of representatives of the Company in
connection with presentations to potential purchasers of the Shares; and (ix)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company.
9. Default by One or More of the Underwriters. If, on either Delivery
Date, any Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Shares which the
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defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Shares set opposite the name
of each remaining non-defaulting Underwriter in Schedule I hereto bears to the
total number of Firm Shares set opposite the names of all the remaining
non-defaulting Underwriters in Schedule I hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Shares on such Delivery Date if the total number of Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Shares to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of Shares which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Shares to be purchased on such Delivery
Date. If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Section 8. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule I hereto
who, pursuant to this Section 9, purchases Firm Shares which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Shares of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Representatives without liability
on the part of any Underwriter to the Company, by notice to the Company, if
prior to the First Delivery Date or any Date of Delivery (if different from the
First Delivery Date and then only as to the Option Shares), as the case may be,
(a) if there has been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, or (b) trading in securities generally on the NYSE,
the American Stock Exchange or the Nasdaq National Market or of the Common
Shares on the NYSE, shall have been suspended or materially limited, (c) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or state authorities, or (d) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or
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change in political, financial or economic conditions, the effect of which on
the financial markets of the United States is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to commence or
continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Company by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter. If this Agreement is terminated pursuant to this Section
10, such termination shall be without liability of any party to any other party
except as provided in Sections 5(l) and 8 hereof.
11. Information Furnished by the Underwriters. The Underwriters
severally confirm and the Company and the Partnership acknowledge that the
statements with respect to the public offering of the Shares by the Underwriters
set forth on the cover page of, the legend concerning over-allotments on the
inside front cover page of and the third and twelfth paragraphs appearing under
the caption "Underwriting" in, the Prospectus are correct and constitute the
only information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 6(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., Three World Xxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Company or the Partnership, shall be delivered
or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention:
Xxxxxx X. Xxxxxx, Fax: (000) 000-0000;
provided, however, that any notice to an Underwriter pursuant to Section 6(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Partnership and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and the Partnership contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Underwriter
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within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Underwriters contained in Section 6(b) of this Agreement shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 13, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Partnership and the Underwriters contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading and (b) "subsidiary" has the meaning set forth in Rule 405
of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement of the Company, the
Partnership and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
XXXXXX LODGING COMPANY
By: ------------------
Name:
Title:
XXXXXX HOTEL PROPERTIES, L.P.
By: Xxxxxx Lodging Company , its
general partner
By: ---------------
Name:
Title:
Accepted:
XXXXXX BROTHERS INC.
BT ALEX. XXXXX INCORPORATED
X.X. XXXXXXX & SONS, INC.
XXXXXX XXXXXXX & CO. INCORPORATED
EVEREN SECURITIES, INC.
XxXXXXXX & COMPANY SECURITIES, INC.
For themselves and as Representatives
of the several Underwriters named in
Schedule I hereto
By Xxxxxx Brothers Inc.
By:
----------------------
Authorized Representative
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SCHEDULE I
Number of
Underwriters Shares
------------ ------
Xxxxxx Brothers Inc...................................
BT Alex. Xxxxx Incorporated...........................
X.X. Xxxxxxx & Sons, Inc. ............................
Xxxxxx Xxxxxxx & Co. Incorporated.....................
EVEREN Securities, Inc. ..............................
XxXxxxxx & Company Securities, Inc. ..................
-----------
Total 4,500,000
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