Exhibit 1
STRATEGIC HOTEL CAPITAL, INC.
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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UNDERWRITING AGREEMENT
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_____________, 2004
Xxxxxxx, Xxxxx & Co.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Strategic Hotel Capital, Inc., a Maryland corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of [______] shares (the "Firm Shares") and, at the election of the Underwriters,
up to [_____] additional shares (the "Optional Shares") of common stock, par
value $0.01 per share ("Stock"), of the Company. The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares."
At the Time of Delivery (as hereinafter defined), the Company and
Strategic Hotel Funding, L.L.C., a Delaware limited liability company (the
"Operating Company"), will complete a series of transactions described in the
Prospectus (as hereinafter defined) under the captions "Prospectus
Summary-Summary of the Formation and Structuring Transactions", "Prospectus
Summary-Benefits of the Formation and Structuring Transactions" and "Formation
and Structuring Transactions" (such transactions, the "Formation Transactions").
As part of the Formation Transactions, (i) the Company will contribute the net
proceeds from the public offering of the Shares to the Operating Company in
exchange for units of interest in the Operating Company ("OC Units") and (ii)
the Operating Company will issue OC Units to the Company.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) a registration statement on Form S-11 (File No. 333-112846) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations") which
became effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the Securities Act Regulations is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Securities Act to be part of
the Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement;" and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Securities Act, is hereinafter called the
"Prospectus");
(b) no order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Securities Act and the Securities Act Regulations, and did
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,
in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Xxxxxxx, Xxxxx &
Co. expressly for use therein;
(c) the Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Securities Act and the Securities Act 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, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein;
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(d) neither the Company nor any of its subsidiaries (collectively, the
"subsidiaries" and each a "subsidiary") that are listed or that are required to
be listed pursuant to the requirements of Form S-11 in Exhibit 21 to the
Registration Statement (the "Significant Subsidiaries"), including the Operating
Company, has sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been (i) any change in the capital
stock or members' equity, as applicable, or long-term debt of the Company or any
of its subsidiaries or (ii) any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' or members' equity, as
applicable, or results of operations of the Company and its subsidiaries, taken
as a whole (a "Material Adverse Effect"), other than as set forth or
contemplated in the Prospectus;
(e) upon consummation of the Formation Transactions, the Company and
its subsidiaries will have good and marketable title in fee simple to, or a
valid leasehold interest in, all real property described in the Prospectus as
owned by them (the "Real Property"), and good and marketable title to all
personal property owned by them (or to be owned upon the consummation of the
Formation Transactions) that are material to the business of the Company, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any real
property, buildings and equipment held under lease by the Company and its
subsidiaries and described in the Prospectus are held by them under valid,
subsisting and enforceable leases (such leases, the "Company Leases") with such
exceptions as are not material and do not materially interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries;
(f) upon completion of the Formation Transactions, the Company or its
subsidiaries will have either (i) an owner's or leasehold title insurance
policy, from a nationally recognized title insurance company licensed to issue
such policy, on any Real Property located in the United States or Mexico (the
"North American Properties"), as the case may be, by the Company or its
subsidiaries, that insures the fee or leasehold interest, as the case may be, in
the North American Properties, which policies include only commercially
reasonable exceptions, and with coverages in amounts at least equal to amounts
that are generally deemed in the Company's industry to be commercially
reasonable in the markets where the Company's properties are located, or (ii)
one or more lender's title insurance policies insuring the lien of the mortgages
encumbering the North American Properties with coverages, in the aggregate,
equal to the maximum aggregate principal amount of indebtedness incurred by the
Company or its subsidiaries and secured by the North American Properties;
(g) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Maryland, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus;
(h) the Operating Company has been duly organized and is validly
existing as a limited liability company, in good standing under the laws of
Delaware, with power and authority (limited liability company and other) to own
its properties and conduct its business as described in the Prospectus;
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(i) Each of the Company and its subsidiaries has been duly qualified as
a foreign entity for the transaction of business and is in good standing under
the laws of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except to the extent that the
failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect;
(j) as of the Time of Delivery, (x) each corporate subsidiary of the
Company that is a Significant Subsidiary (a "Corporate Significant Subsidiary")
and each limited liability company in which the Company or one of its
subsidiaries is a managing member that is a Significant Subsidiary (an "LLC
Significant Subsidiary") has been duly incorporated or organized, as the case
may be, and is validly existing as a corporation or limited liability company,
as the case may be, in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be, with the power (corporate or
limited liability company, as the case may be) and authority to own its
properties and conduct its business as described in the Prospectus and (y) all
of the issued shares of capital stock of each Corporate Significant Subsidiary
and all of the membership interests in each LLC Significant Subsidiary have been
duly and validly authorized and issued, are fully paid and are non-assessable
and (except for membership interests in SHCI Santa Xxxxxx Beach Hotel, L.L.C.)
will be owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims except as described in the Prospectus or
as would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect;
(k) the Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and the Shares conform to the description of the Stock contained in the
Prospectus;
(l) the Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued and
fully paid and non-assessable and will conform to the description of the Stock
contained in the Prospectus;
(m) except as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company or any of its subsidiaries convertible
into or exchangeable for any capital stock, partnership interests, membership
interests or other equity interests, as the case may be, in the Company or any
of its Significant Subsidiaries, or (ii) obligations of the Company or any of
its subsidiaries to issue any such securities or obligations;
(n) except as disclosed in the Prospectus, there are no persons with
registration or other similar rights to have any equity or debt securities,
including securities that are convertible into or exchangeable for equity
securities, registered pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act;
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(o) the issue and sale of the Shares to be sold by the Company and
compliance by the Company with all of the provisions of this Agreement and the
agreements attached as Exhibits 10.1, 10.2, 10.5, 10.6, 10.7, 10.8, 10.9, 10.11
and 10.12 to the Registration Statement (the "Other Transaction Documents") and
the consummation of the Formation Transactions and all other transactions herein
contemplated by the Company or the Operating Company (to the extent a party
thereto) will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any Company Lease,
indenture, mortgage, deed of trust, loan agreement, operating agreement,
property management agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries are bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or bylaws of the Company, or (iii) result in any
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or its
subsidiaries or any of their properties, except in the case of clauses (i) and
(iii) for such conflicts, breaches, defaults or violations as would not,
individually or in the aggregate, reasonably be expected to (x) result in a
Material Adverse Effect, or (y) adversely affect the validity, performance or
consummation of the transactions contemplated by this Agreement;
(p) no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the registration under the
Securities Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(q) neither the Company nor any of its Significant Subsidiaries is in
(i) violation of its organizational documents, or (ii) default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any Company Lease, indenture, mortgage, deed of trust, loan
agreement, operating agreement, property management agreement or other agreement
or instrument to which it is a party or by which it or any of its properties may
be bound, except in the case of clause (ii) to the extent that such default
would not, individually or in the aggregate, reasonably be expected to (x)
result in a Material Adverse Effect, or (y) adversely affect the validity,
performance or consummation of the transactions contemplated by this Agreement;
(r) the execution, delivery and performance of the Structuring and
Contribution Agreement, dated as of February 13, 2004 (the "Contribution
Agreement"), by and among the Operating Company, Strategic Hotel Capital,
L.L.C., and the other parties thereto and the consummation of the transactions
contemplated thereby, do not and will not: (A) conflict with, or result in any
breach of, or constitute a default under nor constitute any event which (with
notice, lapse of time, or both) would constitute a breach of or default under
(i) any provisions of the charter or bylaws or other organizational documents of
Strategic Hotel Capital, L.L.C., Strategic Hotel Capital Limited Partnership or
SHCI Santa Xxxxxx Beach Hotel, L.L.C. (each, a "Transferor"), (ii) any provision
of any license, lease, indenture, mortgage, deed of trust, loan, credit,
operating agreement, property management agreement or other agreement or
instrument to which a Transferor is a party or by which any of such Transferor
or its properties or assets may be bound or affected, (iii) any law or
regulation binding upon or applicable to a Transferor any of its properties or
assets or (iv) any decree, judgment or order applicable to a Transferor; or (B)
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or assets of a Transferor, except in each case described in
clauses (A)(i) through (iv) and (B) of this sentence for such conflicts,
breaches, defaults and violations as would not, individually or in the
aggregate, reasonably be expected to (x) result in a Material Adverse Effect
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or (y) adversely affect the validity, performance or consummation of the
transactions contemplated by this Agreement; the Contribution Agreement has been
duly authorized, executed and delivered by each Transferor and is a legal, valid
and binding agreement of such Transferor enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and by general
principles of equity, and except that enforceability of the indemnification
provisions set forth therein may be limited by U.S. federal or state securities
laws or public policy considerations in respect thereof;
(s) each of the Company and the Operating Company has the power and
authority to enter into and perform this Agreement, and to the extent a party
thereto, the Other Transaction Documents and to consummate the transactions
contemplated herein and therein; this Agreement and Other Transaction Documents
have been duly authorized, executed and delivered by the Company (to the extent
a party thereto) and the Operating Company (to the extent a party thereto), and
are legal, valid and binding agreements of the Company (to the extent a party
thereto) and the Operating Company (to the extent a party thereto), enforceable
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general equitable principles, and except to
the extent that the indemnification and contribution provisions may be limited
by U.S. federal or state securities laws and public policy considerations in
respect thereof;
(t) each of the Company and its subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any U.S. federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct its business as described in the
Prospectus, except to the extent that any failure to have any such licenses,
authorizations, consents or approvals, to make any such filings or to obtain any
such authorizations, consents or approvals would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
neither the Company nor any of its subsidiaries is in violation of, in default
under, or has received any notice regarding a possible violation, default or
revocation of any such license, authorization, consent or approval or any U.S.
federal, state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any subsidiary, other than any such
violations, defaults, or revocations that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
(u) the statements set forth in the Prospectus under the caption
"Underwriting," insofar as they purport to describe the provisions of the U.S.
laws and documents referred to therein, are accurate, complete and fair in all
material respects;
(v) the statements set forth in the Prospectus under the captions "Risk
Factors - Tax and Employee Benefit Plan Risks" and "U.S. Federal Income Tax
Considerations," insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate and complete and fairly
summarize the federal income tax considerations that are likely to be material
to a holder of Shares;
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(w) the statements set forth in the Prospectus under the caption
"Description of Stock," insofar as they purport to constitute a summary of the
terms of the Stock, are accurate, complete and fair;
(x) when the Shares have been issued and duly delivered against payment
therefor as contemplated by this Agreement, the Underwriters will acquire good
and marketable title to the Shares, free and clear of any pledge, lien,
encumbrance, security interest or other claim;
(y) the issuance and sale of the Shares by the Company are not subject
to preemptive or other similar rights arising by operation of law, under the
organizational documents of the Company;
(z) other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(aa) neither the Company nor the Operating Company is and, after giving
effect to the offering and sale of the Shares, will be an "investment company,"
as such term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(bb) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the Securities Act
Regulations;
(cc) the Shares have been approved for listing on the New York Stock
Exchange (the "Exchange"), subject to official notice of issuance;
(dd) the Company has not taken, and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares in violation of applicable law;
(ee) the form of certificate used to represent the Stock complies in
all material respects with (i) all applicable statutory requirements, (ii) any
applicable requirements of the organizational documents of the Company, and
(iii) the requirements of the Exchange;
(ff) the Company will properly and timely elect to be taxed as a real
estate investment trust (a "REIT") under the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder (the
"Code") commencing with the taxable year ending December 31, 2004 and the
Company will be organized and operated in conformity with the requirements for
qualification as a REIT under the Code and the proposed method of operation of
the Company and its subsidiaries will enable the Company to meet the
requirements for qualification and taxation as a REIT under the Code; the
Operating Company is treated as a partnership for U.S. federal income tax
purposes and not as a corporation or association taxable as a corporation; and
the Company intends to continue to qualify as a REIT under the Code for all
subsequent years, and the Company does not know of any event that could
reasonably be expected to cause the Company to fail to qualify as a REIT under
the Code at any time;
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(gg) except as described in the Prospectus, there are no outstanding
loans, advances or guarantees of indebtedness by the Company or any of its
subsidiaries to or for the benefit of any of the officers or directors of the
Company or any of the officers or directors of any of its subsidiaries or any of
the members of the families of any of them;
(hh) the issuance of the OC Units described in the Prospectus has been
duly authorized and upon issuance, in accordance with the Limited Liability
Company Agreement of the Operating Company, the OC Units described in the
Prospectus will be validly issued;
(ii) upon completion of the offering of the Shares and the Formation
Transactions, the Company will be the holder of OC Units in the amount and
percentage described in the Prospectus and the Company will hold the sole
managing member interest in the Operating Company; and
(jj) the Company has obtained Phase I Environmental Audits with respect
to the North American Properties and a Building Survey Report with respect to
the Inter.Continental Prague dated June 2003 (the "Building Survey Report") and,
except as otherwise disclosed in the Prospectus or in the Phase I Environmental
Audits, the Building Survey Report and other environmental documents previously
delivered to the Underwriters (the "Audits") and except to an extent that would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect: (i) neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any other owners of the Real Property at
any time or any other party has at any time, handled, stored, treated,
transported, manufactured, spilled, leaked, or discharged, dumped, transferred
or otherwise disposed of or dealt with, Hazardous Materials (as hereinafter
defined) on, to or from any Real Property, other than by any such action taken
in material compliance with all applicable Environmental Statutes (as
hereinafter defined) or by the Company, any of its subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company or any subsidiary; (ii) the Company and its
subsidiaries do not intend to use the Real Property or any subsequently acquired
properties for the purpose of handling, storing, treating, transporting,
manufacturing, spilling, leaking, discharging, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials other than by any
such action taken in compliance with all applicable Environmental Statues or by
the Company, any of its subsidiaries or any other party in connection with the
ordinary use of residential, retail or commercial properties owned by the
Company or any subsidiary; (iii) the Company does not know of any seepage, leak,
discharge, release, emission, spill, or dumping of Hazardous Materials from the
Real Property into waters on or adjacent to the Real Property or from the Real
Property onto any real property owned or occupied by any other party, or onto
lands from which Hazardous Materials might seep, flow or drain into such waters
other than in substantial compliance with Environmental Statutes; (iv) the
Company has not received any notice of, and has no knowledge of, any occurrence
or circumstance which, with notice or passage of time or both, would give rise
to a claim under or pursuant to any U.S. federal, state or local environmental
statute or regulation or under common law, pertaining to Hazardous Materials on
or originating from any of the Real Property or arising out of the conduct of
the Company, including without limitation a claim under or pursuant to any
Environmental Statute (as hereinafter defined); and (v) neither the Real
Property is included nor, to the Company's knowledge, is proposed for inclusion
on the National Priorities List issued pursuant to CERCLA (as hereinafter
defined) by United States Environmental Protection Agency (the "EPA") or, to the
Company's knowledge, proposed for inclusion on any similar list or inventory
issued pursuant to any other Environmental Statute or issued by any other
Governmental Authority.
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As used herein, "Hazardous Materials" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, toxic substances, or related materials,
asbestos or any hazardous material as defined by any U.S. federal,
state or local environmental law, ordinance, rule or regulation
including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801-1819, the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Sections 6901-6992K, the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections
11001-11050, the Toxic Substances Control Act, 15 U.S.C. Sections
2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections
7401-7642, the Clean Water Act (Federal Water Pollution Control Act),
33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C.
Sections 300f-330j-26, and the Occupational Safety and Health Act, 29
U.S.C. Sections 651-678, as any of the above statutes may be amended
from time to time, and in the regulations promulgated pursuant to each
of the foregoing (individually, an "Environmental Statute") or by any
Governmental Authority.
2. (a) Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $ [ ], the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
(b) The Company hereby grants to the Underwriters the right to purchase
at their election up to [ ] Optional Shares, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering sales
of shares in excess of the number of Firm Shares, provided that the purchase
price per Optional Share shall be reduced by an amount per share equal to any
dividends or distributions declared by the Company and payable on the Firm
Shares but not payable on the Optional Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, no earlier
than two or later than ten business days after the date of such notice.
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3. Upon the authorization by you 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. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Xxxxxxx, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of federal
(same-day) funds to the account specified by the Company to Xxxxxxx, Xxxxx & Co.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
[ ], 2004 or such other time and date as Xxxxxxx, Xxxxx & Co. and the
Company may agree upon in writing, and, with respect to the Optional Shares,
9:30 a.m., New York time, on the date specified by Xxxxxxx, Sachs & Co. in the
written notice given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to
purchase such Optional Shares, or such other time and date as Xxxxxxx, Sachs &
Co. and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery," such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(m) hereof, will be delivered at the offices
of Xxxxxxxx & Xxxxxxxx LLP (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at such Time of Delivery. A meeting will
be held at the Closing Location at [ ] p.m., New York City time, on the New
York Business Day next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
10
5. The Company agrees with each of the Underwriters:
(a) to prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the Commission's close of business on the second New
York Business Day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment
or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof;
to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to
advise you, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus, of the
suspension of the qualification of the Shares for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic copies
of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of the Shares
and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in
order to comply with the Securities Act, to notify you and upon your
request to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many written and electronic copies as
you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Securities Act;
11
(d) to make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Securities Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Securities Act Regulations
(including, at the option of the Company, Rule 158);
(e) during the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus (the "Lock-up Period"), not to offer, sell, contract to sell
or otherwise dispose of, except as provided hereunder, any securities
of the Company that are substantially similar to the Shares, including
but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than (i) pursuant to the
2004 Incentive Plan, the Employee Stock Purchase Plan and employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the Time of
Delivery, (ii) in order to liquidate the ownership interests in
Strategic Hotel Capital, L.L.C. held by certain employees of the
Company and the Operating Company through the Xxxxxx Family Limited
Partnership, the Strategic Hotel Capital Employee Investment
Partnership or SHC Employee Blocking Corp., and (iii) the issuance of
shares of Stock in connection with any acquisition, provided that the
aggregate market value of all such shares may not exceed 10% of the
market capitalization of the Company as of the Time of Delivery, and
provided further that the holder(s) of any such shares shall not be
permitted to sell or otherwise dispose of such shares during the
Lock-up Period), without your prior written consent;
(f) to furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each
of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), to make available to its stockholders consolidated summary
financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) unless otherwise publicly available in electronic format
on the website of the Company or the Commission, during a period of
three years from the effective date of the Registration Statement, to
furnish to you copies of all reports or other communications (financial
or other) furnished to stockholders generally, and to deliver to you
(i) as soon as they are publicly available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional non-confidential
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished
to its stockholders generally or to the Commission);
12
(h) to use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds;"
(i) to use its best efforts to list, subject to notice of
issuance, the Shares on the Exchange;
(j) to file with the Commission such information on Form 10-Q
or Form 10-K as may be required by Rule 463 under the Securities Act;
(k) to continue to use its best efforts to meet the
requirements to qualify as a REIT under the Code and to cause the
Operating Company to continue to use its best efforts to meet the
requirements to qualify as a partnership under the Code, in each case
unless otherwise determined by the Company's Board of Directors; and
(l) if the Company elects to rely upon Rule 462(b), to file a
Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement, and at the time of filing to either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Securities Act.
6. The Company covenants and agrees with the several Underwriters that
(a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Securities Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey
(iv) all fees and expenses in connection with listing the Shares on the
Exchange; and (b) the Company will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer agent or
registrar and (iii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that except as provided in this
Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
13
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company are, at and as of such Time of Delivery, true and correct, the
condition that the Company and the Operating Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the Securities Act Regulations in accordance with
Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel for the
Underwriters, shall have furnished to you their written opinion and
letter, each dated such Time of Delivery, in the form attached as
Exhibit A hereto;
(c) the General Counsel of the Company shall have furnished to
you her written opinion, dated such Time of Delivery, in the form
attached as Exhibit B hereto;
(d) Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, shall
have furnished to you their written opinion and letter, each dated such
Time of Delivery, in the form attached as Exhibit C hereto;
(e) Xxxxxxx LLP, special Maryland counsel for the Company,
shall have furnished to you their written opinion, dated such Time of
Delivery, in the form attached as Exhibit D hereto;
(f) on the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Deloitte & Touche LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery
thereof, in the form attached as Exhibit E hereto;
14
(g) (i) neither the Company nor any of its Significant
Subsidiaries shall have sustained since the date of the latest audited
financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock or members'
equity, as applicable, or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' or members' equity, as applicable, or results
of operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is
in your judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(h) on or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt
securities;
(i) on or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war; or (v) the occurrence of
any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of
any such event specified in clause (iv) or (v) your judgment makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(j) the Shares at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;
(k) the National Association of Securities Dealers, Inc. shall
not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements;
(l) the Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of Prospectuses on
the New York Business Day next succeeding the date of this Agreement;
(m) the Company shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the Company
reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company, herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request,
and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (g) of
this Section;
15
(n) the Company shall have received lock-up agreements from
each officer and director, Strategic Value Investors, LLC, The
Prudential Insurance Company of America, Prudential Investment
Management, Inc., PIC Realty Corporation, Prudential Assets, LLC,
(SHC/Olayan) Redemption Vehicle, LLC, SVI (SHC/Houston) Redemption
Vehicle, LLC, Whitehall Street Real Estate Limited Partnership VII and
Whitehall Street Real Estate Limited Partnership IX in the form
attached as Exhibit F hereto, and such lock-up agreements shall be in
full force and effect; and
(o) the Company shall have obtained the written consent from
each of the owners of the following marks to use such marks in the
Prospectus to the extent such written consents are required by the
management agreements with the owners: Xxxxxxx Xxxxxx(X), Xxxx
Xxxxxxx(X), Xxxxxx(X), Xxxxx(X), Inter.Continental(R), Loews(R) and
Marriott(R).
8. (a) The Company and the Operating Company each, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim 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 or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Operating Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
16
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, 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, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material
17
fact relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include 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 subsection (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 been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Securities Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Securities Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies you that it
has so arranged for the purchase of such Shares, you or the Company shall have
the right to postpone (a) Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
18
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company in subsection (a) of Section 8 hereof, the
representations and warranties in subsections (b) and (c) of Section 1 hereof
and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company pursuant to Section 7 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by the Company of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Securities Act, shall not extend to the extent of any interest
therein of a controlling person or partner of an Underwriter who is a director,
officer or controlling person of the Company when the Registration Statement has
become effective or who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company, except in each case to
the extent that an interest of such character shall have been determined by a
court of appropriate jurisdiction as not against public policy as expressed in
the Securities Act. Unless in the opinion of counsel for the Company the matter
has been settled by controlling precedent, the Company will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question of whether such interest is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
19
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason any Shares are
not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to you as the representative in care of Xxxxxxx, Sachs
& Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company by you on request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
20
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without the Underwriters imposing any
limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us one copy for each of the Company, the Operating Company and
Xxxxxxx, Xxxxx & Co. plus one for each counsel and the custodian, if any
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of
the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters, the Operating Company and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company and the Operating Company for examination, upon request, but without
warranty on your part as to the authority of the signers thereof.
21
Very truly yours,
STRATEGIC HOTEL CAPITAL, INC.
By:_____________________________________
Name: Xxxxx Xxxxxx
Title: Vice President, Secretary and
General Counsel
STRATEGIC HOTEL FUNDING, L.L.C.
By: Strategic Hotel Capital, L.L.C.,
its sole member
By
---------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President and General
Counsel
Accepted as of the date hereof [AT _________, NEW YORK, NY]
XXXXXXX, SACHS & CO.
By:_________________________________
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
22
SCHEDULE I
NUMBER OF OPTIONAL
TOTAL NUMBER OF SHARES TO BE
FIRM SHARES TO BE PURCHASED IF MAXIMUM
PURCHASED OPTION EXERCISED
--------- ----------------
UNDERWRITER
-----------
Xxxxxxx, Sachs & Co.................................................
Deutsche Bank Securities Inc........................................
Banc of America Securities LLC......................................
Credit Suisse First Boston LLC......................................
Wachovia Capital Markets, LLC.......................................
Xxxxxxx Xxxxx & Associates, Inc.....................................
Total..................................................... --------- ----------------
========= ================
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
SOLD IF
TOTAL NUMBER OF MAXIMUM
FIRM SHARES OPTION
TO BE SOLD EXERCISED
--------------- -------------------
The Company........................................................
--------------- -------------------
Total.....................................................
=============== ===================
EXHIBIT A
[FORM OF OPINION OF XXXXXXX XXXX & XXXXXXXX LLP]
EXHIBIT B
[FORM OF OPINION OF THE GENERAL COUNSEL OF THE COMPANY]
EXHIBIT C
[FORM OF OPINION OF XXXXXXXX & XXXXXXXX LLP]
EXHIBIT D
[FORM OF OPINION OF XXXXXXX LLP]
EXHIBIT E
[FORM OF DELOITTE & TOUCHE LLP COMFORT LETTER]
EXHIBIT F
[FORM OF LOCK-UP AGREEMENT]
