DIAMONDROCK HOSPITALITY COMPANY (a Maryland corporation) 11,000,000 Shares of Common Stock PURCHASE AGREEMENT
Exhibit 1.1
(a Maryland corporation)
11,000,000 Shares of Common Stock
Dated: January 18, 2011
(a Maryland corporation)
11,000,000 Shares of Common Stock
(Par Value $0.01 Per Share)
January 18, 2011
XXXXXXX, XXXXX & CO.
Xxxxxxx, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DiamondRock Hospitality Company, a Maryland corporation (the “Company”) and
DiamondRock Hospitality Limited Partnership, a Delaware limited partnership (the
“Partnership”) confirm their respective agreements with Xxxxxxx, Xxxxx & Co. (the
“Underwriter”), with respect to (i) the sale by the Company and the purchase by the
Underwriter of 11,000,000 shares of common stock, par value $0.01 per share, of the Company
(“Common Stock”) and (ii) the grant by the Company to the Underwriter of the option
described in Section 2(b) hereof to purchase all or any part of 1,650,000 additional shares of
Common Stock. The aforesaid 11,000,000 shares of Common Stock (the “Initial Securities”) to
be purchased by the Underwriter and all or any part of the 1,650,000 shares of Common Stock subject
to the option described in Section 2(b) hereof (the “Option Securities”) are hereinafter
called, collectively, the “Securities.”
The Company understands that the Underwriter proposes to make a public offering of the
Securities as soon as the Underwriter deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the “Commission”)
an automatic shelf registration statement on Form S-3 on August 12, 2009 (No. 333-161298), which
registration statement included a related basic prospectus dated August 12, 2009 (the “Basic
Prospectus”), relating to an indeterminate aggregate offering price or number of, among other
securities, the Securities. Registration Statement 333-161298, including any amendments thereto
filed prior to the Applicable Time, became effective upon filing with the Commission under the
Securities Act of 1933, as amended (the “1933 Act”) and the rules and regulations
thereunder (the “1933 Act Regulations”). The Company has prepared and filed such
amendments thereto, if any, and such amended preliminary prospectuses, if any, as may have been
required to the date hereof. Promptly after execution and delivery of this
Agreement, the Company
will prepare and file a prospectus in accordance with the provisions of paragraph (b) of
Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations. Any information included in such
prospectus that was omitted from such registration statement at the time it became effective but
that is deemed to be part of and included in such registration statement pursuant to Rule 430B of
the 1933 Act (“Rule 430B”) is referred to as “Rule 430B Information.” Each
prospectus used in connection with the offering of Securities that omitted Rule 430B Information is
herein called a “preliminary prospectus.” Except where the context otherwise requires, Registration
Statement 333-161298, on each date and time that such registration statement and any post-effective
amendment or amendments thereto became or becomes effective (each, an “Effective Date”),
including all documents filed as part thereof or incorporated by reference thereto and the
documents included therein by the 1933 Act Regulations, including any information contained in a
Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) and
deemed part of such registration statement, collectively, are herein called the “Registration
Statement,” and the Basic Prospectus, as supplemented by the final Prospectus Supplement, in
the form first used by the Company in connection with confirmation of sales of the Securities, is
herein called the “Prospectus.” Any reference in this Agreement to the Registration
Statement, the General Disclosure Package (defined below), the Prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, as of each Effective Date or the
Execution Time (defined below) or the date of the Prospectus, as the case may be (it being
understood that the several specific references in this Agreement to documents incorporated by
reference in the Registration Statement, the General Disclosure Package or the Prospectus are for
clarifying purposes only and are not meant to limit the inclusiveness of any other definition
herein). For purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system (“XXXXX”).
All references in this Agreement to financial statements and schedules and other information
which is “contained,” “included,” “stated” or “described” in the Registration Statement, the
General Disclosure Package or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, the General Disclosure Package or the
Prospectus shall be deemed to include the filing of any document under the Securities Exchange Act
of 1934, as amended (the “1934 Act”), and the rules and regulations of the Commission
promulgated thereunder (the “1934 Act Regulations”), which is or is deemed to be
incorporated by reference in the Registration Statement, the General Disclosure Package or the
Prospectus, as the case may be.
The Company owns 100% of the partnership interests of the Partnership and is the sole general
partner of the Partnership. The Partnership directly or indirectly owns twenty (23) hotels as
described in the Prospectus (individually a “Hotel” and collectively, the
“Hotels”). The Partnership (or one of its subsidiaries) leases each of the Hotels to a
wholly-owned subsidiary (a “Lessee”), pursuant to a separate lease (collectively, the
“Leases”). All of the Hotels are operated and managed by a manager (the “Manager”)
pursuant to separate management agreements (collectively, the “Management Agreements”),
each between a Lessee and the
Manager. The Leases and the Management Agreements are referred to herein, collectively, as
the “Hotel Agreements.”
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1. Representations and Warranties.
(a) Representations and Warranties by the Company and the Partnership. The Company and the
Partnership, jointly and severally, represent and warrant to the Underwriter as of the date hereof,
the Applicable Time referred to in Section 1(a)(i) hereof, as of the Closing Time referred to in
Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in Section 2(b) hereof,
and agrees with the Underwriter, as follows:
(i) Status as a Well-Known Seasoned Issuer. (i) At the time of filing the
Registration Statement, (ii) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the
1934 Act or form of prospectus), (iii) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) of the Securities Act) made
any offer relating to the Securities in reliance on the exemption of Rule 163 of the 1933
Act, and (iv) at the Execution Time of this Agreement (with such date being used as the
determination date for purposes of this clause (iv)), the Company was and is a “well-known
seasoned issuer” as defined in Rule 405 of the 1933 Act. The Registration Statement is an
“automatic shelf registration statement,” as defined in Rule 405 of the 1933 Act. The
Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the
1933 Act objecting to use of the automatic shelf registration statement form, and the
Company has not otherwise ceased to be eligible to use the automatic shelf registration
statement form.
(ii) Compliance with Registration Requirements.
(A) Each of the Registration Statement and any post-effective amendment thereto
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment thereto
has been issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated by
the Commission, and any request on the part of the Commission for additional
information has been complied with.
(B) At the respective times the Registration Statement and any post-effective
amendments thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration Statement and
any amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and did
not 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.
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(C) Neither the Prospectus nor any amendments or supplements thereto, at the
time the Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or omitted or will
omit 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.
(D) Each document incorporated or deemed to be incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and will comply
when filed in all material respects with the requirements of the 1934 Act and, when
read together with the other information in the General Disclosure Package, as of
the Applicable Time, and in the Prospectus, at the date of the Prospectus, at the
First Closing Date or the Second Closing Date, did not and will not include an
untrue statement of a material fact or omit 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; and any further documents so filed and incorporated
by reference in the Registration Statement, the General Disclosure Package or the
Prospectus, when such documents become effective or are filed with the Commission,
as the case may be, will conform to the requirements of the 1934 Act, in all
material respects, 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.
(E) As of the Applicable Time (as defined below), neither (x) the Issuer
General Use Free Writing Prospectus(es) (as defined below) issued at or prior to the
Applicable Time, the information set forth on Schedule D hereto and the
Statutory Prospectus (as defined below) as of the Applicable Time, all considered
together (collectively, the “General Disclosure Package”), nor (y) any
individual Issuer Limited Use Free Writing Prospectus (as defined below), when
considered together with the General Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(F) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the issuer notified or notifies the
Underwriter as described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement or the Prospectus, and any
preliminary or other prospectus deemed to be a part thereof that has not been
superseded or modified.
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(G) The representations and warranties in subsections (B) through (E) above
shall not apply to statements in or omissions from the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use therein.
(H) Each preliminary prospectus (including the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto)
complied when so filed in all material respects with the 1933 Act Regulations and
each preliminary prospectus and the Prospectus delivered to the Underwriter for use
in connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(I) At the time of filing the Registration Statement and any post-effective
amendments thereto, at the earliest time thereafter that the Company or another
offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of
the 1933 Act Regulations) of the Securities and at the date hereof, the Company was
not and is not an “ineligible issuer,” as defined in Rule 405 of the 1933 Act
Regulations.
(J) As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 6:30 p.m. (Eastern time) on January 18, 2011 or such
other time as agreed by the Company and the Underwriter.
“Statutory Prospectus” as of any time means the prospectus relating to the
Securities that is included in the Registration Statement immediately prior to that time,
including any document incorporated by reference therein.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the
Securities that (i) is required to be filed with the Commission by the Company, (ii) is a
“road show that is a written communication” within the meaning of Rule 433(d)(8)(i) whether
or not required to be filed with the Commission or (iii) is exempt from filing pursuant to
Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering
that does not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors (other than a
Bona Fide Electronic Road Show (as defined below)), as evidenced by its being specified in
Schedule E hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus.
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(iii) Offering Materials. The Company has not distributed and will not
distribute, prior to the later of the last Date of Delivery or the completion of the
Underwriters’ distribution of the Securities, any offering material in connection with the
offering and sale of the Securities other than an Issuer General Use Free Writing
Prospectus, a preliminary prospectus and the Prospectus.
(iv) No Stop Order. No stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company, threatened or contemplated
by the Commission or by the state securities authority of any jurisdiction. No order
preventing or suspending the use of the Prospectus has been issued and no proceeding for
that purpose has been instituted or, to the knowledge of the Company, threatened or
contemplated by the Commission or by the state securities authority of any jurisdiction.
(v) Capitalization. The shares of Common Stock conform in all material
respects to the description thereof contained in the Registration Statement, the General
Disclosure Package and the Prospectus; immediately prior to the Closing Time, 154,570,543
shares of Common Stock will be issued and outstanding; all of the outstanding shares of
Common Stock of the Company and the outstanding shares of capital stock or equity interests
of each subsidiary of the Company, all of which are listed on Schedule F attached
hereto (each, including the Partnership, except where noted, a “Subsidiary”, and
collectively, the “Subsidiaries”) have been duly and validly authorized and issued
are fully paid and nonassessable, and except as disclosed in the General Disclosure Package
and Prospectus, all of the outstanding shares of capital stock, partnership interests and
limited liability company membership interests, as applicable, of the Subsidiaries,
including the Partnership, are directly or indirectly owned of record and beneficially by
the Company; except as disclosed in the General Disclosure Package and Prospectus, there are
no outstanding (i) securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any equity interests of the Company or any such
Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from the Company
or any such Subsidiary any such equity interests or any such convertible or exchangeable
securities or obligations or (iii) obligations of the Company or any such Subsidiary to
issue any equity interests, any such convertible or exchangeable securities or obligation,
or any such warrants, rights or options.
(vi) Good Standing of the Company. The Company has been duly incorporated and
is validly existing as a corporation under the laws of the State of Maryland and is in good
standing with the State Department of Assessments and Taxation of the State of Maryland,
with all requisite corporate power and authority to own, lease and operate its properties,
and conduct its business as described in the Registration Statement, the General Disclosure
Package and the Prospectus, and is duly qualified or licensed to transact business as a
foreign entity and is in good standing in each jurisdiction in which the nature or conduct
of its business requires such qualification or license and in which the failure to be so
qualified or licensed, individually or in the aggregate, (i) could reasonably be expected to
have a material adverse effect on the performance of this Agreement or the
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consummation of
any transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse effect on, or
result in a material adverse change in, the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and the Subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business, except as set
forth or contemplated in the General Disclosure Package and the Prospectus (exclusive of any
supplement thereto) (any such effect or change described in clause (ii) hereof is
hereinafter called a “Material Adverse Effect”); except for pledges of limited
liability company membership interests granted in connection with the incurrence of debt as
disclosed in the General Disclosure Package and the Prospectus, all of the issued and
outstanding shares of common stock, capital stock, limited liability company membership
interests or partnership interests, as applicable, of each Subsidiary are owned by the
Company directly or through its Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim; except for restrictions in loan documents
entered into in connection with indebtedness, which loan documents were provided to the
Underwriter (or its counsel) and are disclosed in the General Disclosure Package and the
Prospectus, no Subsidiary is prohibited or restricted, directly or indirectly, from (A)
paying dividends to the Company, (B) making any other distribution with respect to such
Subsidiary’s capital stock, (C) repaying to the Company or any other Subsidiary any amounts
which may from time to time become due under any loans or advances to such Subsidiary from
the Company or such other Subsidiary, or (D) transferring any such Subsidiary’s property or
assets to the Company or to any other Subsidiary; other than the Subsidiaries, the Company
does not, and upon completion of the offering of the Securities will not, own, directly or
indirectly, any capital stock or other equity securities of any corporation or any ownership
interest in any partnership, limited liability company, joint venture or other entity other
than the Subsidiaries.
(vii) Ownership of the Partnership; Good Standing of the Subsidiaries. The
Company is the sole general partner of the Partnership and owns, directly or indirectly,
100% of the partnership interests (“Units”) in the Partnership; the Subsidiaries
have been duly incorporated, formed or organized, as the case may be, and are validly
existing as a corporation, limited liability company, general partnership or limited
partnership, as the case may be, in good standing under the laws of their respective
jurisdictions of incorporation, formation or organization, as applicable, with all requisite
power and authority to own, lease and operate their respective properties and to conduct
their respective business as described in the Registration Statement, the General Disclosure
Package and the Prospectus; each Subsidiary is duly qualified or licensed to transact
business as a foreign entity and is in good standing in each jurisdiction in which the
nature or conduct of its business requires such qualification or license, and in which the
failure to be so qualified or licensed, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(viii) The Partnership Agreement. The Agreement of Limited Partnership of the
Partnership, as further amended and/or restated (the “Partnership Agreement”), has
been duly and validly authorized, executed and delivered by or on behalf of each of the
partners of the Partnership and constitutes a valid and binding agreement of the parties
thereto, enforceable in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by general principles of equity.
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(ix) Compliance with Laws. The Company, the Subsidiaries and the Hotels are in
compliance in all material respects with all applicable laws, rules, regulations, orders,
decrees and judgments, including those relating to transactions with affiliates, except
where the failure to be in compliance would not have a Material Adverse Effect.
(x) Absence of Breaches and Defaults. The Company is not in violation of its
Articles of Amendment and Restatement, as amended and/or restated (the “Articles”),
or its bylaws, as amended and/or restated (the “Bylaws”); the Partnership is not in
violation of its Certificate of Limited Partnership or the Partnership Agreement; no
Subsidiary is in violation of its organizational documents (including, without limitation,
partnership and limited liability company agreements), except for such violations that,
individually or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect; neither the Company nor any Subsidiary is in breach of or default in, nor to
the knowledge of the Company and the Partnership has any event occurred which with notice,
lapse of time, or both would constitute a breach of or default in, the performance or
observance by the Company or any Subsidiary, as the case may be, of any obligation,
agreement, contract, franchise, covenant or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or their respective
properties is bound, except for such breaches or defaults that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
(xi) Absence of Conflicts. The execution, delivery and performance of this
Agreement and the other agreements listed as exhibits to the Registration Statement by the
Company and the Partnership (to the extent a party thereto) and the issuance, sale and
delivery by the Company of the Securities and the consummation of the transactions
contemplated herein do not and will not (A) conflict with, or result in any breach or
constitute a default (nor constitute any event which with notice, lapse of time or both
would constitute a breach or default) (i) by the Company of any provisions of its Articles
or Bylaws, by the Partnership of any provisions of its Certificate of Limited Partnership or
Partnership Agreement, by any Subsidiary (excluding the Partnership) of any provision of its
organizational documents, or (ii) by the Company or any Subsidiary of any provision of any
obligation, agreement, contract, franchise, license, indenture, mortgage, deed of trust,
loan or credit agreement, lease or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective properties may be bound or
affected, or (iii) by the Company or any Subsidiary under any U.S. federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to the Company
or any Subsidiary, except in the use of clauses (A)(ii) and (A)(iii) above, for such
conflicts, breaches or defaults that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect, or (B) result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or asset of the Company or any
Subsidiary, except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus.
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(xii) Company Authorization of Agreement and Offering. The Company has the full
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated herein; the Company has the corporate power to issue, sell and
deliver the Securities as provided herein; this Agreement has been duly authorized, executed
and delivered by the Company and is a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles and except as rights to
indemnity and contribution thereunder may be limited by applicable law or policies
underlying such law.
(xiii) Partnership Authorization of Agreement and Offering. The Partnership
has the full partnership power and authority to enter into this Agreement and to consummate
the transactions contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Partnership and is a legal, valid and binding agreement of the Partnership
enforceable against the Partnership in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally, and by general equitable principles and except as
rights to indemnity and contribution thereunder may be limited by applicable law or policies
underlying such law.
(xiv) Authorization and Description of the Hotel Development Agreement. The
Purchase Agreement by and between 0000 Xxxxxxxx LP and DiamondRock Times Square Acquisition,
LLC, dated January 18, 2011, has been duly and validly authorized, executed and delivered by
or on behalf of the Partnership, and to the knowledge of the Company and the Partnership, by
each of the other parties thereto and constitutes a valid and binding agreement of the
parties thereto, enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by general principles of equity; the description of the
agreement set forth in the General Disclosure Package and the Prospectus under the heading
“Our Company—Recent Developments” constitutes an accurate summary of the material terms
thereof.
(xv) Absence of Further Requirements. No approval, authorization, consent or
order of, or registration or filing with, any U.S. federal, state or local governmental or
regulatory commission, board, body, authority or agency is required for the Company’s or the
Partnership’s or any Subsidiary’s execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated herein or therein, including the sale and
delivery of the Securities, other than (A) such approvals as have been obtained, or will
have been obtained before the Closing Time or each Date of Delivery, as the case may be,
under the 1933 Act and the 1934 Act, (B) such approvals as have been obtained in connection
with the approval of the listing of the Securities on the New York Stock Exchange and (C)
any necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Securities are being offered by the Underwriter.
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(xvi) Possession of Licenses and Permits. Each of the Company, the
Subsidiaries, and, to the knowledge of the Company, the Manager with respect to the Hotels,
has all necessary licenses, permits, authorizations, consents and approvals, possess valid
and current certificates, has made all necessary filings required under any 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 their respective businesses
as described in the General Disclosure Package and the Prospectus, except for such licenses,
permits, authorizations, consents and other approvals the absence of which, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse Effect;
neither the Company nor any of the Subsidiaries, nor any Hotel nor, to the knowledge of the
Company, the Manager with respect to the Hotels, is in violation of, in default under, or
has received any notice regarding a possible violation, default or revocation of any such
certificate, license, permit, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment applicable to the
Company, any Subsidiary or any Hotel the effect of which, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.
(xvii) Absence of Proceedings. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, there are no actions, suits,
proceedings, inquiries or investigations pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or any Hotel or, to
the knowledge of the Company, the Manager with respect to the Hotels, or which has as the
subject thereof any of the respective officers and directors of the Company or any officers,
directors, managers or partners of its Subsidiaries, or to which the properties, assets or
rights of any such entity are subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority, arbitral
panel or agency, that are not covered by insurance and (i) could reasonably be expected to
have a material adverse effect on the performance of this Agreement or the transactions
contemplated hereby or (ii) could reasonably be expected to have a Material Adverse Effect.
(xviii) Financial Statements. The consolidated financial statements of the
Company and the Subsidiaries, including the notes thereto, included or incorporated by
reference in the Registration Statement, the General Disclosure Package and the Prospectus
present fairly the consolidated financial position of the respective entities to which such
financial statements relate (the “Covered Entities”) as of the dates indicated and
the consolidated results of operations and changes in financial position and shareholders’
equity and cash flows of the Covered Entities for the periods specified; the supporting
schedules included or incorporated by reference in the Registration Statement, if any,
fairly present the information required to be stated therein; such financial statements and
supporting schedules have been prepared in conformity with generally accepted accounting
principles as applied in the United States (“GAAP”) and on a consistent basis during
the periods involved (except as may be expressly stated in the related notes thereto) and in
accordance with Regulation S-X promulgated by the Commission; the financial data set forth
or incorporated by reference in the Registration Statement, the General Disclosure Package,
the preliminary prospectus and the
Prospectus fairly present the information shown therein and has been compiled on a
basis consistent with the financial statements included in the Registration Statement, the
General Disclosure Package and the Prospectus; no other financial statements or supporting
schedules are required to be included in the Registration Statement; all disclosures
contained in the Registration Statement, the General Disclosure Package or the Prospectus,
regarding “non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the 1934 Act and Item 10 of
Regulation S-K of the 1933 Act, to the extent applicable.
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(xix) Independent Accountants. KPMG LLP, who has audited the financial
statements of the Covered Entities and has expressed their opinion in a report with respect
to the financial statements of the Covered Entities included or incorporated by reference in
the Registration Statement, the General Disclosure Package and the Prospectus, is, and was
during the periods covered by its report, an independent registered public accounting firm
with respect to the Covered Entities as required by the 1933 Act.
(xx) No Material Adverse Change in Business. Subsequent to the respective
dates as of which information is given in the Registration Statement, the General Disclosure
Package, the preliminary prospectus and the Prospectus, and except as may be otherwise
stated in the Registration Statement, the General Disclosure Package or the Prospectus, as
of the date hereof and the Closing Time and each Date of Delivery, as the case may be, there
has not been (A) any Material Adverse Effect, whether or not arising in the ordinary course
of business, (B) any probable transaction or binding agreement that is material to the
Company and the Subsidiaries taken as a whole, entered into by the Company or any of the
Subsidiaries, (C) any obligation, contingent or otherwise, directly or indirectly incurred
by the Company or any Subsidiary that could reasonably be expected to result in a Material
Adverse Effect or (D) any dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock or repurchase or redemption by the Company of any
class of capital stock.
(xxi) Registration Rights. Except as disclosed in the Registration Statement,
the General Disclosure Package, the preliminary prospectus and the Prospectus, there are no
persons with registration or other similar rights to have any equity or debt securities,
including securities which are convertible into or exchangeable for equity securities,
registered pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act; and no person has a right of participation or first refusal with respect
to the sale of the Securities by the Company.
(xxii) Authorization of the Securities. The issuance and sale of the
Securities to the Underwriter hereunder have been duly authorized by the Company, and when
issued and duly delivered against payment therefor as contemplated by this Agreement, the
Securities will be validly issued, fully paid and nonassessable, free and clear of any
pledge, lien, encumbrance, security interest or other claim created by or known to the
Company, and the issuance and sale of the Securities by the Company is not subject to
preemptive or other similar rights arising by operation of law, under the organizational
documents of the Company or under any agreement to which the Company or any Subsidiary
is a party.
11
(xxiii) Authorization of the Units. The issuance of the Units to the Company
in exchange for contribution of proceeds from the sale of the Securities described in the
General Disclosure Package and the Prospectus has been duly authorized by the Partnership,
and when issued and duly delivered against payment therefor, will be validly issued, fully
paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest
or other claim created by or known to the Company or the Partnership; and the issuance of
Units by the Partnership is not subject to preemptive or other similar rights arising by
operation of law under the organizational documents of the Partnership or under any
agreement to which the Partnership is a party.
(xxiv) Transfer Taxes. Except as disclosed in the Registration Statement, the
General Disclosure Package and in the Prospectus, there are no transfer taxes or other
similar fees or charges under Federal law or the laws of any state or any political
subdivision thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance or sale by the Company of the Securities.
(xxv) Listing on NYSE. The Securities have been registered pursuant to Section
12(b) of the 1934 Act and at the Closing Time, the Securities will be duly listed and
admitted and authorized for trading on the New York Stock Exchange, subject only to official
notice of issuance.
(xxvi) Absence of Manipulation. 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 Securities.
(xxvii) FINRA. Neither the Company nor any of its affiliates (i) is required
to register as a “broker” or “dealer” in accordance with the provisions of the 1934 Act, or
(ii) directly, or indirectly through one or more intermediaries, controls or has any other
association with (within the meaning of Article I of the By-laws of the Financial Industry
Regulatory Authority, Inc. (the “FINRA”)) any member firm of the FINRA.
(xxviii) Legal, Tax or Accounting Advice. Neither the Company nor the
Partnership has relied upon the Underwriter or legal counsel for the Underwriter for any
legal, tax or accounting advice in connection with the offering and sale of the Securities.
(xxix) Form of Stock Certificate. The form of certificate used to evidence the
Common Stock complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the Articles and Bylaws of the Company and the
requirements of the New York Stock Exchange.
12
(xxx) Title to Property. (A) The Company and the Subsidiaries have good and
marketable title in fee simple to, or a valid leasehold interest in, all real property owned
or leased by them that are material to the business as described in the General Disclosure
Package and the Prospectus, and good title to all personal property owned by them, in
each case free and clear of all liens, security interests, pledges, charges,
encumbrances, encroachments, restrictions, mortgages and other defects, except such as are
(i) disclosed in the General Disclosure Package and the Prospectus or (ii) listed as an
exception to the owner’s or leasehold title insurance policies furnished by the Company to
the Underwriter and its counsel or (iii) could not reasonably be expected to have a material
adverse effect on the Company’s interest in the related property, the value of such property
or the business conducted thereon; (B) any real property, improvements, equipment and
personal property held under lease by the Company or any Subsidiary are held under valid,
existing and enforceable leases, in each case, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property by the Company
or any Subsidiary; and (C) except with respect to the Company’s corporate headquarters at 0
Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, XX 00000 (the “Headquarters”), the Company or a
Subsidiary has an owner’s or leasehold title insurance policy, from a title insurance
company licensed to issue such policy, on each property described in the Registration
Statement, General Disclosure Package and Prospectus as being owned or leased, as the case
may be, by the Company or a Subsidiary, that insures the Company’s or the Subsidiary’s fee
simple or leasehold interest, as the case may be, in such real property, 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.
(xxxi) Condition of Property. To the knowledge of the Company, all real
property owned or leased by the Company or any Subsidiary (other than the Company’s
corporate headquarters office space), whether owned in fee simple or through a joint venture
or other partnership, including the Hotels (each, a “Property” and collectively, the
“Properties”), is free of any material structural defects and all building systems
contained therein are in reasonable working order in all material respects, subject to
ordinary wear and tear or, in each instance, the Company or any Subsidiary, as the case may
be, has created an adequate reserve or capital budget to effect reasonably required repairs,
maintenance and capital expenditures; to the knowledge of the Company, water, storm water,
sanitary sewer, electricity and telephone service are all available at the property lines of
such property over duly dedicated streets or perpetual easements of record benefiting such
property; except as described in the General Disclosure Package and the Prospectus, to the
knowledge of the Company, there is no pending or threatened special assessment, tax
reduction proceeding or other action that could have a Material Adverse Effect.
(xxxii) Property Leases. Except with respect to the Headquarters, each of the
properties listed in the General Disclosure Package and the Prospectus as a property with
respect to which the Company or one of its Subsidiaries has a leasehold interest is the
subject of a lease that (A) is in the name of the relevant Subsidiary and has been duly and
validly authorized, executed and delivered by or on behalf of the relevant Subsidiary or (B)
has been assigned to a Subsidiary pursuant to an assignment of lease which has been duly and
validly authorized, executed and delivered by or on behalf of the relevant Subsidiary and to
the knowledge of the Company, by each of the other parties thereto and each such lease
constitutes a valid and binding agreement of the parties thereto,
enforceable in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally or by general principles of equity.
13
(xxxiii) Disclosure of Legal Matters. The descriptions in the Registration
Statement, the General Disclosure Package and the Prospectus of the legal or governmental
proceedings, contracts, leases and other legal documents therein described present fairly in
all material respects the information required to be disclosed, and there are no legal or
governmental proceedings, contracts, leases, or other documents of a character required to
be described in the Registration Statement, the General Disclosure Package or the Prospectus
or to be filed as exhibits to the Registration Statement which are not described or filed as
required; all agreements between the Company or any of the Subsidiaries and third parties
expressly referenced in the Registration Statement, the General Disclosure Package and the
Prospectus are or will be legal, valid and binding obligations of the Company or one or more
of the Subsidiaries, enforceable in accordance with their respective terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally and by general equitable principles
and except with respect to this Agreement to the extent that the indemnification provisions
hereof may be limited by federal or state securities laws and public policy considerations
in respect thereof; and to the best of the Company’s knowledge, no party thereto is in, or
with the passage of time or the giving of notice or both will be in, breach or default under
any of such agreements that could have a Material Adverse Effect.
(xxxiv) Possession of Intellectual Property. The Company and each Subsidiary,
and, to the knowledge of the Company, the Manager with respect to the Hotels, owns or
possesses adequate and sufficient licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights, domain names, software and design licenses,
approvals, trade secrets, manufacturing processes, other intangible property rights and
know-how (collectively “Intellectual Property Rights”) necessary to entitle the
Company and each Subsidiary to conduct its business as described in the General Disclosure
Package and Prospectus; neither the Company nor any Subsidiary has received notice of
infringement of or conflict with (and the Company knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intellectual Property Rights
which could reasonably be expected to have a Material Adverse Effect; neither the Company
nor any Subsidiary is a party to or bound by any options, licenses or agreements with
respect to the Intellectual Property Rights of any other person or entity that are required
to be set forth in the General Disclosure Package and Prospectus and are not described as
required.
(xxxv) Accounting and Disclosure Controls. The Company, each of the
Subsidiaries and, to the knowledge of the Company, the Manager with respect to the Hotels,
maintain a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles as applied
in the United States and to maintain accountability for assets; (iii) access to assets is permitted
14
only in accordance with management’s general or specific authorization;
(iv) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences; (v)
management is made aware of all material transactions concerning the Company or its
properties; and (vi) the Company qualifies as a REIT under the requirements of the Code.
The Company, each of the Subsidiaries and, to the knowledge of the Company, the Manager with
respect to the Hotels employ disclosure controls and procedures that are designed to ensure
that information required to be disclosed by the Company in reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms, and is accumulated and communicated to the
Company’s management, including its principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding disclosure.
(xxxvi) Payment of Taxes. Each of the Company and the Subsidiaries has filed
on a timely basis (including in accordance with any applicable extensions) all necessary
U.S. federal, state, local and foreign income and franchise tax returns required to be filed
through the date hereof or have properly requested extensions thereof (except in any case in
which the failure so to file would not reasonably be expected to have a Material Adverse
Effect), and have paid all taxes shown as due thereon, and if due and payable, any related
or similar assessment, fine or penalty levied against the Company or any of the
Subsidiaries; no tax deficiency has been asserted against any such entity, nor does the
Company or any of the Subsidiaries know of any tax deficiency which is likely to be asserted
against any such entity which, if determined adversely to any such entity, could reasonably
be expected to have a Material Adverse Effect; all such tax liabilities are adequately
provided for on the respective books of such entities.
(xxxvii) Insurance. Each of the Company and the Subsidiaries maintains
insurance (issued by insurers of recognized financial responsibility) of the types and with
policies in such amounts and with such deductibles and covering such risks as are in the
reasonable opinion of management prudent for their respective businesses; all policies of
insurance and fidelity or surety bonds insuring the Company or any of its Subsidiaries or
their respective businesses, assets, employees, officers and directors are in full force and
effect; the Company and its Subsidiaries are in compliance with the terms of such policies
and instruments in all material respects; and there are no claims by the Company or any of
its Subsidiaries under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause; the Company has no
reason to believe that it or any Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that could not reasonably be expected to result in a Material
Adverse Effect; and except for insurance coverage for the Courtyard Manhattan/Midtown East
which was denied by one carrier prior to its conversion to a Marriott Courtyard, neither the
Company nor any Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
15
(xxxviii) Environmental Laws. The Company has obtained Phase I Environmental
Audits with respect to the Properties as described in the General Disclosure Package and the
Prospectus and except as otherwise disclosed in the General Disclosure Package and the
Prospectus, (i) none of the Company, the Partnership, any of the Subsidiaries nor, to the
knowledge of the Company, any other owners of the Properties, has used, handled, stored,
treated, transported, manufactured, spilled, leaked, released or discharged, dumped,
transferred or otherwise disposed of or dealt with, Hazardous Materials (as defined below)
on, in, under or affecting any Property, except for the use, handling, storage, and
transportation of Hazardous Materials (a) necessary for the operation of the Hotels and
consistent with (1) the practice of comparable hotels in the industry and (2) the intended
or recommended use, handling, storage and transportation of such Hazardous Materials, and
(b) in compliance with applicable Environmental Statutes (as defined below); (ii) the
Company, the Partnership and the other Subsidiaries do not intend to use any Property or any
subsequently acquired properties for the purpose of using, handling, storing, treating,
transporting, manufacturing, spilling, leaking, discharging, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials, except for the use, handling,
storage, and transportation of Hazardous Materials (a) necessary for the operation of the
Hotels and consistent with (1) the practice of comparable hotels in the industry and (2) the
intended or recommended use, handling, storage and transportation of such Hazardous
Materials, and (b) in compliance with applicable Environmental Statutes; (iii) none of the
Company, the Partnership, nor any of the other Subsidiaries has received any notice of, or
has any 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 federal, state or local
environmental statute or regulation or under common law, pertaining to Hazardous Materials
on or originating from any Property or any assets described in the General Disclosure
Package and the Prospectus or any other real property owned or occupied by any such party or
arising out of the conduct of any such party or of an agent of any such party, including
without limitation a claim under or pursuant to any Environmental Statute; and (iv) no
Property is included or proposed for inclusion on the National Priorities List issued
pursuant to CERCLA (as defined below) by the United States Environmental Protection Agency
(the “EPA”) or, to the knowledge of the Company, proposed for inclusion on any
similar list or inventory issued pursuant to any other Environmental Statute or issued by
any other Governmental Authority (as defined below).
As used herein, “Hazardous Material” shall include, without limitation, any (a)
petroleum or petroleum product (including, without limitation, waste or used oil, gasoline,
heating oil, kerosene and any other petroleum products or substances or materials derived
from or commingled with any petroleum products), infectious medical waste, lead based paint,
mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or
otherwise), asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, polychlorinated biphenyls (PCBs), radon gas, pollutant, or contaminant (b) waste
or substance that is listed, defined, designated, or classified as, or otherwise determined
or identified as ignitable, corrosive, dangerous, flammable, explosive, radioactive, toxic,
a hazardous substance, a hazardous material, or a hazardous waste by any federal, state or
local environmental law, ordinance, order, common law, rule or regulation including without limitation, the
16
Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Sections 9601 et seq. (“CERCLA”), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 5101 et seq., the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq., the
Toxic Substances Control Act, as amended, 15 U.S.C. Sections 2601 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C. Sections 136 et seq., the
Clean Air Act, as amended, 42 U.S.C. Sections 7401 et seq., the Clean Water Act (Federal
Water Pollution Control Act), as amended, 33 U.S.C. Sections 1251 et seq., the Safe Drinking
Water Act, as amended, 42 U.S.C. Sections 300f et seq., and the Occupational Safety and
Health Act, as amended, 29 U.S.C. Sections 651 et seq., 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 federal, state or
local governmental authority having or claiming jurisdiction over the properties and assets
described in the General Disclosure Package and the Prospectus (a “Governmental
Authority”).
(xxxix) Environmental Liabilities. To the knowledge of the Company, there are
no costs or liabilities associated with the Properties pursuant to any Environmental Statute
(including, without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with any Environmental Statute or any permit, license or
approval, any related constraints on operating activities and any potential liabilities to
third parties) which could reasonably be expected to have a Material Adverse Effect.
(xl) Independent Appraisals and Environmental Reports. To the knowledge of the
Company, none of the entities that prepared appraisals of the Properties, nor the entities
that prepared Phase I or other environmental assessments with respect to any Property, was
employed for such purpose on a contingent basis or has any substantial interest in the
Company or any of the Subsidiaries, and none of their directors, officers or employees is
connected with the Company or any of the Subsidiaries as a promoter, selling agent, officer,
director or employee.
(xli) Anti-Discrimination Laws. None of the Company, the Partnership or any
Subsidiary or, to the knowledge of the Company, the Manager, with respect to the Hotels, is
in violation of or has received notice of any violation with respect to any U.S. federal or
state law relating to discrimination in the hiring, termination, promotion, terms or
conditions of employment or pay of employees, nor any applicable U.S. federal or state wages
and hours law, the violation of any of which could reasonably be expected to have a Material
Adverse Effect.
17
(xlii) ERISA. Any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained by the
Company, the Subsidiaries or their “ERISA Affiliates” (as defined below) or to which the
Company, the Subsidiaries or their ERISA Affiliates contribute or are required to
contribute are in compliance in all material respects with ERISA; “ERISA
Affiliate” means any trade or business, whether or not incorporated, which with the
Company or a Subsidiary is treated as a single employer under Section 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the “Code”); no such employee benefit plan is subject to
Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA; all contributions
required to have been made under each such employee benefit plan have been made on a timely
basis; there has been no “prohibited transaction” (as defined in Section 4975 of the Code or
Section 406 or 407 of ERISA) for which the Company, the Subsidiaries or their ERISA
Affiliates have any material liability; and each such employee benefit plan that is intended
to be qualified under Section 401(a) of the Code is so qualified and to the knowledge of the
Company, nothing has occurred, whether by action or failure to act, which could reasonably
be expected to cause the loss of such qualification, in each case, except as disclosed in
the Registration Statement, the General Disclosure Package and the Prospectus.
(xliii) Anti-Bribery Laws. Neither the Company nor any of the Subsidiaries
nor, to the knowledge of the Company any officer, director, manager or director purporting
to act on behalf of the Company or any of the Subsidiaries has at any time (i) made any
contributions to any candidate for political office, or failed to disclose fully any such
contributions, in violation of law, (ii) made any payment to any U.S. federal, state, local
or foreign governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by applicable law and the
Company’s Code of Business Conduct provided to the Underwriter, or (iii) engaged in any
transactions, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the normally
maintained books and records of the Company and the Subsidiaries.
(xliv) Loans to Certain Related Parties. Except as otherwise disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus, there are no
outstanding loans or advances or material guarantees of indebtedness by the Company or any
of the Subsidiaries to or for the benefit of any of the officers, directors, managers or
trustees of the Company or any of the Subsidiaries or any of the members of the families of
any of them.
(xlv) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of the
Company or any of the Company’s directors or officers, in their capacities as such, to
comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the rules and
regulations promulgated by the Commission thereunder (the “Xxxxxxxx-Xxxxx Act”),
including Section 402 related to loans and Sections 302 and 906 related to certifications.
(xlvi) Foreign Corrupt Practices Act. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such Persons of the FCPA,
including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA and the
Company, its Subsidiaries, and to the knowledge of the Company, its affiliates have
conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith. “FCPA” means Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder.
18
(xlvii) Money Laundering Laws. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency (collectively, the
“Money Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company, threatened.
(xlviii) Office of Foreign Assets Control. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.
(xlix) Affiliations with Underwriter. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, the Company (i) does not have
any material lending or other relationship with any bank or lending affiliate of the
Underwriter and (ii) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any affiliate of the Underwriter.
(l) Compliance with Securities Laws. All securities issued by the Company, any
of the Subsidiaries or any entity established by the Company or any Subsidiary, have been
issued and sold in compliance with (i) all applicable federal and state securities laws,
(ii) the laws of the applicable jurisdiction of incorporation or formation of the issuing
entity, and (iii) to the extent applicable to the issuing entity, the requirements of the
New York Stock Exchange. The Company is in compliance in all material respects with the
current listing standards of the New York Stock Exchange.
19
(li) Rights and Actions Affecting Properties. To the knowledge of the Company,
each of the Properties complies with all applicable zoning laws, ordinances,
regulations and deed restrictions or other covenants in all material respects; if and
to the extent there is a failure to comply, such failure, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect and will not result in a
forfeiture or reversion of title; to the knowledge of the Company, there is no pending or
threatened condemnation, zoning change, or other similar proceeding or action that will in
any material respect affect the size of use of, improvements on, construction on or access
to any of the Properties, except such zoning changes, proceedings or actions that,
individually or in the aggregate, would not have a Material Adverse Effect; all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties and assets
(including the Properties) of the Partnership or any of the Subsidiaries that are required
to be described in the General Disclosure Package and the Prospectus (or the preliminary
prospectus) are disclosed therein; to the knowledge of the Company, no lessee, licensee,
concessionaire or vendor of any portion of any of the Properties is in default under any of
the leases or licenses governing such properties and there is no event which, but for the
passage of time or the giving of notice or both could constitute a default under any of such
leases or licenses, except such defaults that could not reasonably be expected to have a
Material Adverse Effect; no person has an option or right of first refusal to purchase all
or any part of any Hotel, or any interest therein, which option or right is required to be
described in the Registration Statement, the General Disclosure Package or the Prospectus
and which option or right is not so described.
(lii) Convertible Property Interests. The mortgages and deeds of trust
encumbering the Hotels are not convertible into equity interests in the property, nor will
the Company or the Partnership hold a participating interest therein and such mortgages and
deeds of trust are not cross-defaulted or cross-collateralized to any property not to be
owned directly or indirectly by the Company or the Partnership.
(liii) Finder’s Fees. The Company has not incurred any liability for any
finder’s fees or similar payments in connection with the transactions herein contemplated.
(liv) Related Party Transactions. No relationship, direct or indirect, exists
between or among the Company or any of the Subsidiaries on the one hand, and the directors,
officers, trustees, managers, shareholders, partners, customers or suppliers of the Company
or any of the Subsidiaries on the other hand, which is required to be described in the
Registration Statement, the General Disclosure Package and the Prospectus and which is not
so described.
(lv) Investment Company Act. Neither the Company nor any of the Subsidiaries
is, and after giving effect to the offering and sale of the Securities and the use of the
proceeds as described under the caption “Use of Proceeds” in the General Disclosure Package
and the Prospectus, will be an “investment company” or an entity “controlled” by an
“investment company”, as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”).
(lvi) Absence of Labor Disputes. There are no existing or, to the knowledge of
the Company, threatened labor disputes with the employees of the Company or any of the
Subsidiaries or, to the knowledge of the Company, the Manager with respect to the
Hotels which could reasonably be expected to have a Material Adverse Effect.
20
(lvii) Statistical and Market Related Data. The industry, statistical and
market related data included in the Registration Statement, the General Disclosure Package
and the Prospectus are based on or derived from sources available that the Company believes
are reliable and, to the knowledge of the Company, such data are accurate.
(lviii) Federal Tax Status. The Company elected to be taxed as a real estate
investment trust (a “REIT”) under the Code commencing with its taxable year ended December
31, 2005; commencing with the Company’s taxable year ended December 31, 2005, the Company
has been organized and operated in conformity with the requirements for qualification and
taxation as a REIT under the Code, and its current and proposed ownership and operations
will allow the Company to continue to satisfy the requirements for qualification and
taxation as a REIT under the Code for its taxable year ending December 31, 2011 and in the
future; as long as the Partnership has only one member for federal income tax purposes, it
will be disregarded as an entity separate from the Company and if and when the Partnership
has two or more members for federal income tax purposes, the Partnership will be treated as
a partnership within the meaning of Sections 7701(a)(2) and 761(a) of the Code and will not
be treated as a publicly traded partnership taxable as a corporation under Section 7704 of
the Code; 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 would reasonably be
expected to cause the Company to fail to qualify as a real estate investment trust under the
Code for the taxable year ending December 31, 2011 or at any time thereafter.
(lix) Tax Disclosures. The factual description of, and the assumptions and
representations regarding, the Company’s organization and current and proposed method of
operation set forth in the General Disclosure Package and the Prospectus under the headings
“Federal Income Tax Considerations Related to Our REIT Election” and “Supplement to Federal
Income Tax Considerations” accurately and completely summarize the matters referred to
therein in all material respects.
(lx) Absence of Business Interruption. Neither the Company, any of its
Subsidiaries, nor any Hotel, has sustained, since September 18, 2010, any loss or
interference with its business from fire, explosion, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or arbitrators’ or
court or governmental action, order or decree that could reasonably be expected to have a
Material Adverse Effect, otherwise than as set forth in the General Disclosure Package and
the Prospectus.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company, the
Partnership, or any Subsidiary delivered to the Underwriter or to counsel for the Underwriter
pursuant to or in connection with this Agreement shall be deemed a representation and warranty by
the Company and the Partnership to the Underwriter as to the matters covered thereby.
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2. Sale and Delivery to Underwriter; Closing.
(a) Initial Securities. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter and the Underwriter agrees to purchase from the Company, at the price per share set
forth in Schedule B, the number of Initial Securities set forth in Schedule A
opposite the name of the Underwriter.
(b) Option Securities. In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company hereby grants an
option to the Underwriter to purchase up to an additional 1,650,000 shares of Common Stock, at the
price per share set forth in Schedule B, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but not payable on the
Option Securities. The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time upon notice by the Underwriter to the Company
setting forth the number of Option Securities as to which the Underwriter is then exercising the
option and the time and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a “Date of Delivery”) shall be determined by the Underwriter, but shall
not be later than seven full business days after the exercise of said option, nor in any event
prior to the Closing Time, as hereinafter defined.
(c) Denominations; Registration; Payment. The Securities to be purchased by the Underwriter
hereunder shall be delivered by or on behalf of the Company to the Underwriter, in definitive form,
and in such authorized denominations and registered in such names as the Underwriter may request
upon at least forty-eight hours’ prior notice to the Company, including, at the option of the
Underwriter, through the facilities of The Depository Trust Company (“DTC”) for the account
of the Underwriter, against payment by or on behalf of the Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified to the Underwriter
by the Company upon at least forty-eight hours’ prior notice. The Company will cause the
certificates representing the Initial Securities to be made available for checking and packaging at
least twenty-four hours prior to the Closing Time (as defined below) with respect thereto at the
office of Hunton & Xxxxxxxx LLP, Riverfront Plaza, East Tower, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000, or at the office of DTC or its designated custodian, as the case may be. The time
and date of such delivery and payment shall be at 9:00 A.M. (Eastern time) on the third business
day after the date hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be agreed upon by the
Underwriter and the Company (such time and date of payment and delivery being herein called
“Closing Time”).
In addition, in the event that any or all of the Option Securities are purchased by the
Underwriter, payment of the purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Underwriter and the Company, on each Date of Delivery as specified in the notice from
the Underwriter to the Company.
22
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company against delivery to the Underwriter for the account of the
Underwriter of certificates for the Securities to be purchased by them.
3. Covenants of the Company and the Partnership. The Company and the Partnership,
jointly and severally, covenant with the Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to
Section 3(b), will comply with the requirements of Rule 430B, and will promptly notify the
Underwriter, and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or any document incorporated by reference therein or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of
any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and
(v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in
connection with the offering of the Securities. The Company will effect the filings required under
Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on
Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible moment. The Company will pay any
required registration fee for this offering pursuant to Rule 456(b)(1) under the 1933 Act within
the time period required by such rule (without regard to the proviso therein relating to the four
business days extension to the payment deadline) and in any event prior to the Closing Time.
(b) Filing of Amendments and 1934 Act Documents. The Company will give the Underwriter notice
of its intention to file or prepare any amendment to the Registration Statement or any amendment,
supplement or revision to either the prospectus included in the Registration Statement at the time
it became effective or to the Prospectus or any Incorporated Document, and will furnish the
Underwriter with copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to which the
Underwriter or counsel for the Underwriter shall reasonably object. The Company has given the
Underwriter notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations at least 24
hours prior to the Applicable Time; the Company will give the Underwriter notice of its intention
to make any such filing from the Applicable Time to the Closing Time and will furnish the
Underwriter with copies of any such documents at least 24 hours prior to such proposed filing, as
the case may be, and will not file or use any such document to which the Underwriter or counsel for
the Underwriter shall reasonably object unless the Company’s legal counsel has advised the Company
that filing such documents is required pursuant to the 1934 Act or 1934 Act Regulations.
23
(c) Delivery of Registration Statements. The Company has furnished or will deliver to the
Underwriter and counsel for the Underwriter, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of experts, and will also
deliver to the Underwriter, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for the Underwriter. The copies
of the Registration Statement and each amendment thereto furnished to the Underwriter will be
identical to the electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to the Underwriter, without charge,
as many copies of each preliminary prospectus (if any) as the Underwriter reasonably requested, and
the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to the Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the
Underwriter or for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriter such number of copies of such
amendment or supplement as the Underwriter may reasonably request. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a
result of which such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement relating to the Securities or included or would
include an untrue statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances, prevailing at
that subsequent time, not misleading, the Company will promptly notify the Underwriter and will
promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
24
(f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriter, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the Underwriter may designate;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriter the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(i) Listing. The Company will effect the listing of the Securities on the New York Stock
Exchange, subject to notice of issuance, and use commercially reasonable efforts to comply at all
times with the listing requirements of the New York Stock Exchange or another national securities
exchange, as amended from time to time, and use its commercially reasonable efforts to maintain
such listing on the New York Stock Exchange or another national securities exchange.
(j) Restriction on Sale of Securities. During a period of forty five (45) days from the date
of the Prospectus, the Company will not, without the prior written consent of the Underwriter, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other securities, in cash or
otherwise; provided, however, that (A) the Company may offer and issue its Common
Stock under the Company’s Amended and Restated 2004 Stock Option and Incentive Plan (as amended),
and (B) the Company may offer and issue Common Stock or Units in the Partnership as consideration
for the Company’s or the Partnership’s acquisition of real property but only if, in the case of (B)
above, the holders of such shares or Units agree in writing not to sell, offer, dispose of or
otherwise transfer any such shares or Units during such 45-day period without the prior written
consent of the Underwriter (which consent may be withheld at the sole discretion of the
Underwriter). Notwithstanding the foregoing, if (1) during the last 17 days of the 45-day
restricted period the Company issues an earnings release or material news or a material event
relating to the Company occurs or (2) prior to the expiration of the 45-day restricted period, the
Company announces that it will release earnings results or becomes aware that material news or a
material event will occur during the 16-day period beginning on the last day of the 45-day
restricted period, the restrictions imposed in this clause
(j) shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event.
25
(k) Reporting Requirements. The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Price Manipulation. The Company will not, and will use its best efforts to cause its
officers, directors, partners and affiliates, as applicable, not to, (i) take, directly or
indirectly prior to termination of the underwriting syndicate contemplated by this Agreement, any
action designed to stabilize or manipulate the price of any security of the Company, or which may
cause or result in, or which might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Securities, (ii) sell, bid for, purchase or pay anyone any compensation for
soliciting purchases of the Securities or (iii) pay or agree to pay to any person any compensation
for soliciting any order to purchase any other securities of the Company.
(m) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it
obtains the prior consent of the Underwriter, and the Underwriter represents and agrees that,
unless it obtains the prior consent of the Company, it has not made and will not make any offer
relating to the Securities that would constitute an “issuer free writing prospectus,” as defined in
Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. Any such free writing prospectus consented to by the
Company and the Underwriter is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents that it has treated or agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433,
and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely filing with the Commission where required, legending and
record keeping.
(n) Compliance with Laws. The Company will comply in all material respects with all
applicable securities and other applicable laws, rules and regulations, including, without
limitation, the Xxxxxxxx-Xxxxx Act, and use its commercially reasonable efforts to cause the
Company’s directors and officers, in their capacities as such, to comply in all material respects
with such laws, rules and regulations, including, without limitation, the provisions of the
Xxxxxxxx-Xxxxx Act in each case, upon and at all times after the applicable compliance date (if
any).
(o) Undertakings. The Company will comply with all of the provisions of any undertakings in
the Registration Statement.
(p) REIT Qualification. The Company shall not take any action to revoke or otherwise
terminate the Company’s REIT election pursuant to Section 856(g) of the Code, except as otherwise
determined by the Board of Directors of the Company to be in the best interests of stockholders.
26
(q) Payment of Commission Filing Fees. The Company will pay any required registration fee for
the offering of the Securities pursuant to Rule 456 under the 1933 Act within the time period
required by such rule.
(r) Investment Company. The Company shall not invest, or otherwise use the proceeds received
by the Company from its sale of the Shares in such a manner as would require the Company or any of
its Subsidiaries to register as an investment company under the Investment Company Act.
4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses incident to the
performance of their obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and exhibits) as originally
filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriter
of this Agreement and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriter, including any stock or other
transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriter, (iv) the fees and disbursements of the Company’s counsel,
accountants and other advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriter in connection therewith and in connection
with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriter of copies of each preliminary prospectus, any Permitted Free Writing
Prospectus and of the Prospectus and any amendments or supplements thereto and any costs associated
with electronic delivery of any of the foregoing by the Underwriter to investors, (vii) the
preparation, printing and delivery to the Underwriter of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the costs and expenses of the Company relating to investor presentations on any
“road show” (if any) undertaken in connection with the marketing of the Securities, including
without limitation, expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show presentations, travel and
lodging expenses of the officers of the Company, and 50% of the cost of aircraft and other
transportation chartered in connection with the road show; provided, however, that (A) the
Underwriter shall pay its direct costs and expenses associated with the road show and (B) the
Underwriter shall pay 50% of the costs of chartered aircraft and other transportation chartered in
connection with the road show, and (x) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriter in connection with, the review by FINRA of the terms of
the sale of the Securities and (xi) the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the Underwriter in
accordance with the provisions of Sections 9(a)(i), 9(a)(ii) or 11 hereof, the Company shall
reimburse the Underwriter for all of its out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriter.
27
5. Conditions of Underwriters’ Obligations. The obligations of the Underwriter
hereunder are subject to the accuracy of the representations and warranties of the Company and the
Partnership contained in Section 1 hereof or in certificates of any officer of the Company or any
Subsidiary delivered pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement has become effective
and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall
have been issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the Underwriter. A prospectus
containing the Rule 430B Information shall have been filed with the Commission in the manner and
within the time frame required by Rule 424(b) without reliance on Rule 424(b)(8) or a
post-effective amendment providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430B. No amendment or supplement to the Registration
Statement or Prospectus shall have been filed to which the Underwriter shall have reasonably
objected.
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter shall have received the
favorable opinion, dated as of Closing Time, from each of:
(i) Xxxxxxx Procter LLP, counsel for the Company and the Subsidiaries, in form and
substance satisfactory to counsel for the Underwriter, to the effect set forth in
Exhibit A-1 hereto and to such further effect as counsel to the Underwriter may
reasonably request;
(ii) Xxxxxxx X. Tennis, Esq., counsel for the Company and the Subsidiaries, in form and
substance satisfactory to counsel for the Underwriter, to the effect set forth in
Exhibit A-2 hereto and to such further effect as counsel to the Underwriter may
reasonably request; and
(iii) Xxxxxxx Procter LLP, counsel for the Company and the Subsidiaries, as to tax
matters, in form and substance satisfactory to counsel for the Underwriter, to the effect
set forth in Exhibit A-3 hereto and to such further effect as counsel to the
Underwriter may reasonably request
(c) Opinion of Counsel for Underwriter. At Closing Time, the Underwriter shall have received
the favorable opinion, dated as of Closing Time, of Hunton & Xxxxxxxx LLP, counsel for the
Underwriter, in form and substance satisfactory to the Underwriter. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the Underwriter. Such counsel may
also state that, insofar as such opinion involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
28
(d) Officers’ Certificate. At Closing Time, the Underwriter shall have received a certificate
of the Chief Executive Officer or President and Chief Operating Officer and the Executive Vice
President, Chief Financial Officer and Treasurer of the Company and the Partnership, dated as of
Closing Time, to the effect that the signers of such certificates have carefully examined the
Prospectus and General Disclosure Package and (i) there has been no (A) Material Adverse Effect,
(B) transaction that is material to the Company and the Subsidiaries considered as one enterprise,
(C) any obligation, direct or contingent, that is material to the Company and the Subsidiaries
considered as one enterprise, incurred by the Company or the Subsidiaries, (D) any change in the
capitalization of the Company or any Subsidiary that is material to the Company and the
Subsidiaries considered as one enterprise, or (E) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or the capital stock, limited liability
company membership interests or partnership interest of any Subsidiary, except in case of each of
clauses (A) through (E) above, as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto), (ii) the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or, to their knowledge, contemplated by the Commission.
(e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Underwriter shall have received from KPMG LLP a letter dated such date, in form and substance
satisfactory to the Underwriter, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement and the Prospectus. Such
letters shall address the audited financial statements, unaudited interim financial statements
(including a statement that such unaudited financial statements have been reviewed in accordance
with the standards established under Statement on Auditing Standards No. 100) and shall provide
customary negative assurances.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriter shall have received from KPMG
LLP a letter, dated as of Closing Time, to the effect that it reaffirms the statements made in the
letter furnished pursuant to subsection (e) of this Section. The affirmation of statements made in
such letter shall be as of a date not more than two (2) Business Days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have been approved for listing
on the New York Stock Exchange, subject only to official notice of issuance.
(h) Lock-up Agreements. On or prior to the date of this Agreement, the Underwriter shall have
received an agreement substantially in the form of Exhibit B hereto signed by the persons
listed on Schedule C hereto.
(i) No Material Adverse Effects. At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the Prospectus or the
General Disclosure Package, any Material Adverse Effect.
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(j) Conditions to Purchase of Option Securities. In the event that the Underwriter exercises
its option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company and Partnership contained herein and the
statements in any certificates furnished by the Company, the Partnership and any Subsidiary
hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Underwriter shall have received:
(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
Chief Executive Officer or President and Chief Operating Officer and the Executive Vice
President, Chief Financial Officer and Treasurer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.
(ii) Opinions of Counsels for Company. The favorable opinion of Xxxxxxx
Procter LLP, counsel for the Company and the Subsidiaries, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b)(i) hereof. The favorable opinion of Xxxxxxxx J.
Tennis, Esq., counsel for the Company and the Subsidiaries, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b)(ii) hereof. The favorable opinion of Xxxxxxx
Procter LLP, counsel for the Company and the Subsidiaries, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b)(iii) hereof.
(iii) Opinion of Counsel for Underwriter. The favorable opinion of Hunton &
Xxxxxxxx LLP, counsel for the Underwriter, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from KPMG LLP in form and substance
satisfactory to the Underwriter and dated such Date of Delivery, substantially in the same
form and substance as the letter furnished to the Underwriter pursuant to Section 5(f)
hereof. The affirmation of statements made in such letter shall be as of a date not more
than two (2) Business Days prior to the date thereof.
(k) Additional Documents. At Closing Time and at each Date of Delivery counsel for the
Underwriter shall have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for the Underwriter.
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6. Indemnification.
(a) Indemnification of Underwriter. (1) The Company and the Partnership, jointly and
severally, agree to indemnify and hold harmless the Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”), its selling agents and
each person, if any, who controls the Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including the Rule 430B
Information or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Underwriter), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430B Information, or any preliminary
prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of Company and its Directors and Officers. The Underwriter agrees to
indemnify and hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the Underwriter expressly for use
therein as such appears in the Prospectus in the fifth paragraph under the heading “Underwriting.”
31
(c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by
the Underwriter and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party; provided, further, that if the defendants in any
such action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party under this Section 6
for any legal or other expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the second proviso to the preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one separate counsel
(other than local counsel), reasonably approved by the indemnifying party (or by the Underwriter in
the case of Section 6(b)), representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party. No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a failure to act
by or on behalf of any indemnified party.
32
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel (accompanied by documentation or detailed description of such fees and expenses), such
indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more
than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at least 45 days
prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.
7. Contribution. If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Partnership on the one hand and the
Underwriter on the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Partnership on the one hand and of the
Underwriter on the other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company and the Partnership on the one hand and the
Underwriter on the other hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriter, in each case as set
forth on the cover of the Prospectus bear to the aggregate public offering price of the Securities
as set forth on the cover of the Prospectus.
The relative fault of the Company and the Partnership on the one hand and the Underwriter on
the other hand shall be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the Underwriter and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Partnership and the Underwriter agrees that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section 7 shall be
deemed to include any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
33
Notwithstanding the provisions of this Section 7, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and the Underwriter’s
Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the Company.
The provisions of this Section shall not affect any agreement among the Company with respect
to contribution.
8. Representations, Warranties and Agreements to Survive. All representations,
warranties and agreements contained in this Agreement or in certificates of officers of the Company
or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of the Underwriter or its
Affiliates or selling agents, any person controlling the Underwriter, its officers or directors or
any person controlling the Company and (ii) delivery of and payment for the Securities.
9. Termination of Agreement.
(a) Termination; General. The obligations of the Underwriter hereunder shall be subject to
termination in the absolute discretion of the Underwriter, at any time prior to the Closing Time or
any Delivery Date, (i) if any of the conditions specified in Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, or (ii) if there has been, in the
judgment of the Underwriter, since the respective dates as of which information is given in the
Registration Statement, any Material Adverse Effect, or material change in management of the
Company or any Subsidiary, whether or not arising in the ordinary course of business, or (iii) if
there has occurred any outbreak or escalation of national or international hostilities, other
national or international calamity or crisis (including without limitation any terrorist or similar
attack), any change in the United States or international financial markets, or any substantial
change in United States’ or international economic, political, financial or other conditions, the
effect of which on the
34
financial markets of the United States is such as to make it, in the sole judgment of the Underwriter, impracticable to market the Shares in the manner and
on the terms described in the Prospectus (exclusive of any supplement thereto) or enforce contracts
for the sale of the Securities, or (iv) if trading in any securities of the Company has been
suspended by the Commission or by the New York Stock Exchange, or if trading generally on the New
York Stock Exchange or in the Nasdaq Stock Market has been suspended (including an automatic halt
in trading pursuant to market-decline triggers, other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than limitations on hours or
numbers of days of trading) have been fixed, or maximum ranges for prices for securities have been
required, by such exchange or the FINRA or by order of the Commission or any other governmental
authority, or (v) a general banking moratorium shall have been declared by any federal, New York or
Maryland authorities or (vi) any federal or state statute, regulation, rule or order of any court
or other governmental authority has been enacted, published, decreed or otherwise promulgated
which, in the reasonable opinion of the Underwriter, materially adversely affects or will
materially adversely affect the business or operations of the Company, or (vii) any action has been
taken by any federal, state or local government or agency in respect of its monetary or fiscal
affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the
securities markets in the United States, or (viii) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as in the reasonable
judgment of the Underwriter may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been insured.
(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
(c) Notice of Termination. If the Underwriter elects to terminate this Agreement as provided
in this Article 9, the Company shall be notified promptly by electronic communication to the
Company’s Chief Executive Officer or by facsimile.
10. [Intentionally deleted].
11. Postponement. In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the Underwriter to purchase and
the Company to sell the relevant Option Securities, as the case may be, either the (i) Underwriter
or (ii) the Company shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectus or in any other documents or arrangements.
12. Default by the Company. (a) If the Company shall fail at Closing Time or at the
Date of Delivery to sell the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in
full force and effect. No
action taken pursuant to this Section shall relieve the Company from liability, if any, in
respect of such default.
35
13. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company (and each employee, representative or other agent of the Company) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to the Company relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed
federal income tax treatment of the transactions contemplated hereby, and the term “tax structure”
includes any fact that may be relevant to understanding the purported or claimed federal income tax
treatment of the transactions contemplated hereby.
14. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriter shall be directed to the Underwriter at Xxxxxxx,
Sachs & Co., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department
(telephone no. 000-000-0000); notices to the Company and the Partnership shall be directed to the
offices of the Company at 0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, Attention:
General Counsel (facsimile no. 301-380-6727), with a copy to Xxxxxxx Procter LLP, Exchange Place,
Boston, Massachusetts, 02109, Attention: Xxxxxxx X. Xxxxxxx, (facsimile no. 617-523-1231).
15. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that
(a) the purchase and sale of the Securities pursuant to this Agreement, including the determination
of the public offering price of the Securities and any related discounts and commissions, is an
arm’s-length commercial transaction between the Company, on the one hand, and the Underwriter, on
the other hand, (b) in connection with the offering contemplated hereby and the process leading to
such transaction the Underwriter is and has been acting solely as a principal and is not the agent
or fiduciary of the Company, or its respective stockholders, creditors, employees or any other
party, (c) the Underwriter has not assumed nor will it assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether the Underwriter has advised or is currently
advising the Company on other matters) and the Underwriter has no obligation to the Company with
respect to the offering contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Underwriter and its respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company, and (e) the Underwriter
has not provided any legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company has consulted its own respective legal, accounting, regulatory
and tax advisors to the extent it deemed appropriate.
16. Parties. This Agreement shall each inure to the benefit of and be binding upon
the Underwriter and the Company and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or corporation, other
than the Underwriter and the Company and their respective successors and the controlling persons
and officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriter and the Company and
their respective successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from the Underwriter shall be deemed to be a successor by reason merely of
such purchase.
36
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
19. Counterparts. This Agreement may be executed 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 Agreement.
20. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.
21. USA Patriot Act. In accordance with the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the underwriter is required to
obtain, verify and record information that identifies its clients, including the Company, which
information may include the name and address of its clients, as well as other information that will
allow the underwriter to properly identify its clients.
22. Definitions.
The terms which follow, when used in this Agreement, shall have the meanings indicated.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New
York City.
“Execution Time” shall mean the date and time that this Agreement is executed and delivered by
the parties hereto.
For purposes of Section 1(a) and for the avoidance of doubt, the phrase “to the Knowledge of
the Company”, to the extent such phrase is used to qualify the representations and warranties of
the Company that relate to the Manager, refers to the knowledge of the Company or its employees or
agents (not including the Manager) gained in the ordinary course of the Company’s business and
through the Company’s correspondence and communications made in the ordinary course of business.
“U.S.” or “United States” shall mean the United States of America (including the states
thereof and the District of Columbia), its territories, its possessions and other areas subject to
its jurisdiction.
37
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriter, the Company and the Partnership in
accordance with its terms.
Very truly yours, | ||||||||||
DIAMONDROCK HOSPITALITY COMPANY | ||||||||||
By: | /s/ Xxxxxxx X. Tennis | |||||||||
Name: Xxxxxxx X. Tennis | ||||||||||
Title: Executive Vice President | ||||||||||
DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP | ||||||||||
By: | DIAMONDROCK HOSPITALITY COMPANY, | |||||||||
its general partner | ||||||||||
By: | /s/ Xxxxxxx X. Tennis
|
|||||||||
Title: Executive Vice President |
38
Accepted and agreed to as of
the date first above written:
the date first above written:
XXXXXXX, XXXXX & CO.
By:
|
/s/ Xxxxxxx, Sachs & Co.
|
39
SCHEDULE A
Number of | ||||
Name of Underwriter | Initial Securities | |||
Xxxxxxx, Xxxxx & Co. |
11,000,000 | |||
Total |
11,000,000 | |||
Sch A-1
SCHEDULE B
1. The price per share for the Securities paid by the Underwriter, determined as provided in said
Section 2, shall be $12.07.
Sch B - 1
SCHEDULE C
List of persons and entities subject to lock-up
Xxxxxxx X. XxXxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxx
W. Xxxxxx Xxxxxxx
Xxxxxxx X. Xxx
Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Tennis
Xxxx X. Xxxxxxx
Sch C - 1
SCHEDULE D
Information Conveyed at the Applicable Time
Information Conveyed at the Applicable Time
Price to the Public:
|
$12.15 per share | |
Offering Size:
|
11,000,000 or 12,650,000 shares if the Underwriter exercises its option to purchase 1,650,000 additional shares | |
Closing Date:
|
January 21, 2011 |
Sch D - 1
SCHEDULE E
Issuer General Use Free Writing Prospectuses
None.
Sch E - 1
SCHEDULE F
Subsidiaries of the Company
Jurisdictions in which the Company is Qualified as a Foreign Corporation: Massachusetts, Minnesota
and South Carolina
Jurisdiction of | Jurisdiction in which Qualified to do | |||
Subsidiary | Organization | Business as a Foreign Corporation | ||
Bloodstone TRS, Inc.
|
Delaware | Massachusetts and South Carolina | ||
DiamondRock Acquisition, LLC
|
Delaware | N/A | ||
DiamondRock Allerton Owner, LLC
|
Delaware | N/A | ||
DiamondRock Alpharetta Owner, LLC
|
Delaware | Georgia | ||
DiamondRock Alpharetta Tenant, LLC
|
Delaware | Georgia | ||
DiamondRock Atlanta Perimeter Owner, LLC
|
Delaware | Georgia | ||
DiamondRock Atlanta Perimeter Tenant, LLC
|
Delaware | Georgia | ||
DiamondRock Bethesda General, LLC
|
Delaware | Maryland | ||
DiamondRock Bethesda Limited, LLC
|
Delaware | Maryland | ||
DiamondRock Bethesda Owner Limited Partnership
|
Maryland | N/A | ||
DiamondRock Bethesda Tenant, LLC
|
Delaware | Maryland | ||
DiamondRock Boston Expansion Owner, LLC
|
Delaware | Massachusetts | ||
DiamondRock Boston Owner, LLC
|
Delaware | Massachusetts | ||
DiamondRock Boston Retail Owner, LLC
|
Delaware | Massachusetts | ||
DiamondRock Boston Tenant, LLC
|
Delaware | Massachusetts | ||
DiamondRock Cayman Islands, Inc.
|
Cayman Islands | N/A | ||
DiamondRock Charleston Owner, LLC
|
Delaware | South Carolina | ||
DiamondRock Charleston Tenant, LLC
|
Delaware | South Carolina | ||
DiamondRock Chelsea Owner, LLC
|
Delaware | New York | ||
DiamondRock Chelsea Tenant, LLC |
Delaware | |||
DiamondRock Chelsea Tenant, LLC d/b/a Xxxxxxx Xxxxxx Garden Inn |
New York (d/b/a New York only) |
Sch F - 1
Jurisdiction of | Jurisdiction in which Qualified to do | |||
Subsidiary | Organization | Business as a Foreign Corporation | ||
DiamondRock Chicago Xxxxxx Owner, LLC
|
Delaware | Illinois | ||
DiamondRock Chicago Xxxxxx Tenant, LLC
|
Delaware | Illinois | ||
DiamondRock Chicago Owner, LLC
|
Delaware | Illinois | ||
DiamondRock Chicago Tenant, LLC
|
Xxxxxxxx | Xxxxxxxx | ||
XxxxxxxXxxx Xxxx 00xx Xxxxxx NYC Owner
Holdings, LLC
|
Delaware | New York | ||
DiamondRock East 40th Street NYC Owner, LLC
|
Delaware | New York | ||
DiamondRock East 40th Street NYC Tenant, LLC
|
Delaware | New York | ||
DiamondRock Frenchman’s Holdings, LLC
|
Delaware | N/A | ||
DiamondRock Frenchman’s Owner, Inc.
|
U.S. Virgin Islands | N/A | ||
DiamondRock Xxxxxxx Gate Owner, LLC
|
Delaware | Kentucky | ||
DiamondRock Xxxxxxx Gate Tenant, LLC
|
Delaware | Kentucky | ||
DiamondRock Hospitality Limited Partnership
|
Delaware | Massachusetts | ||
DiamondRock Hospitality, LLC
|
Delaware | N/A | ||
DiamondRock LAX Owner, LLC
|
Delaware | California | ||
DiamondRock LAX Tenant, LLC
|
Delaware | California | ||
DiamondRock Manhattan/Midtown East Owner, LLC
|
Delaware | New York | ||
DiamondRock Manhattan/Midtown East Tenant, LLC
|
Delaware | New York | ||
DiamondRock Minneapolis Owner, LLC
|
Delaware | Minnesota | ||
DiamondRock Minneapolis Tenant, LLC
|
Delaware | Minnesota | ||
DiamondRock Oak Brook Owner, LLC
|
Delaware | Illinois | ||
DiamondRock Oak Brook Tenant, LLC
|
Delaware | Illinois | ||
DiamondRock Orlando Airport Owner, LLC
|
Delaware | Florida | ||
DiamondRock Orlando Airport Tenant, LLC
|
Delaware | Florida | ||
DiamondRock Salt Lake City Fee Owner, LLC
|
Delaware | Utah | ||
DiamondRock Salt Lake Owner, LLC
|
Delaware | Utah |
Sch F - 2
Jurisdiction of | Jurisdiction in which Qualified to do | |||
Subsidiary | Organization | Business as a Foreign Corporation | ||
DiamondRock Salt Lake Tenant, LLC
|
Delaware | Utah | ||
DiamondRock Sonoma Owner, LLC
|
Delaware | California | ||
DiamondRock Sonoma Tenant, LLC
|
Delaware | California | ||
DiamondRock Times Square Acquisition, LLC
|
Delaware | New York | ||
DiamondRock Time Square Tenant, LLC
|
Delaware | New York | ||
DiamondRock Torrance Owner, LLC
|
Delaware | California | ||
DiamondRock Torrance Tenant, LLC
|
Delaware | California | ||
DiamondRock Vail Owner, LLC
|
Delaware | Colorado | ||
DiamondRock Vail Tenant, LLC
|
Delaware | Colorado | ||
DiamondRock Waverly Owner, LLC
|
Delaware | Georgia | ||
DiamondRock Waverly Tenant, LLC
|
Delaware | Georgia | ||
DRH Austin Owner General, LLC
|
Delaware | Texas | ||
DRH Austin Owner Limited, LLC
|
Delaware | N/A | ||
DRH Austin Owner Limited Partnership
|
Delaware | Texas | ||
DRH Austin Tenant General, LLC
|
Delaware | Texas | ||
DRH Austin Tenant Limited, LLC
|
Delaware | N/A | ||
DRH Austin Tenant Limited Partnership
|
Delaware | Texas | ||
DRH Worthington Owner General, LLC
|
Delaware | Texas | ||
DRH Worthington Owner Limited, LLC
|
Delaware | N/A | ||
DRH Worthington Owner Limited Partnership
|
Delaware | Texas | ||
DRH Worthington Tenant General, LLC
|
Delaware | Texas |
Sch F - 3
EXHIBIT A-1
FORM OF OPINION OF COMPANY’S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)(i)
TO BE DELIVERED PURSUANT TO SECTION 5(b)(i)
XXXXXXX, XXXXX & CO.
Xxxxxxx, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: DiamondRock Hospitality Company
Ladies and Gentlemen:
We are furnishing this opinion letter to you pursuant to Section 5(b)(i) of the Purchase Agreement,
dated as of January 18, 2011 (the “Purchase Agreement”), among DiamondRock Hospitality Company, a
Maryland corporation (the “Company”) DiamondRock Hospitality Limited Partnership, a Delaware
limited partnership (the “Partnership”), and you (the “Underwriter”).
We have acted as counsel for the Company in connection with the sale to the Underwriters by the
Company of 11,000,000 shares (the “Shares”) of common stock, $0.01 par value per share (the “Common
Stock”), of the Company (excluding 1,650,000 shares of Common Stock that may be sold in the event
the Underwriter exercises its option to purchase additional shares) pursuant to the Purchase
Agreement. As such counsel, we have assisted in the preparation and filing with the Securities and
Exchange Commission (the “Commission”) of (i) the Company’s Registration Statement on Form S-3ASR
(File No. 333-161298) filed by the Company on August 12, 2009 (the “Registration Statement”), which
Registration Statement became effective upon filing with the Commission, (ii) the preliminary
prospectus supplement, dated January 18, 2011, as filed with the Commission pursuant to Rule 424(b)
under the Securities Act of 1933, as amended (the “Securities Act”) and (iii) the prospectus
supplement, dated January 18, 2011. The prospectus, dated August 12, 2009, included in the
Registration Statement is herein referred to as the “Base Prospectus” and together with the
preliminary prospectus supplement, dated January 18, 2011, is referred to herein as the
“Preliminary Prospectus.” The prospectus supplement dated January 18, 2011, together with the Base
Prospectus is referred to herein as the “Prospectus.” Capitalized terms that are not defined
herein but are defined in the Purchase Agreement shall be defined as they are defined in the
Purchase Agreement.
We have reviewed the Registration Statement, the General Disclosure Package and the Prospectus and
have made such investigation of law and reviewed such corporate records, certificates and other
documents, including certificates of representatives of the Company, the Partnership and the
Subsidiaries and certificates of public officials, as we have deemed appropriate to render the
opinions set forth below. We have not undertaken any obligation to verify independently any of the
factual matters relating to the transactions contemplated by the Purchase Agreement. We have
relied, without independent verification, on certificates of public
officials and, as to matters of fact material to the opinions set forth below, on representations
made in the Purchase Agreement and certificates and other inquiries of officers of the Company.
A-1-1
Any reference to “our knowledge” or to any matters “known to us,” “of which we are aware” or
“coming to our attention,” or any variation of any of the foregoing, shall mean the actual
knowledge of the lawyers in the firm who actively participated in the preparation of the
Registration Statement, the General Disclosure Package and the Prospectus, after such inquiries as
they deemed appropriate with other lawyers in our firm who have rendered substantive legal advice
to the Company, without any independent investigation.
Our opinions expressed in numbered paragraphs 1 and 2 below as to the valid existence and good
standing of the Company and the Partnership are based solely on certificates of legal existence
and/or good standing issued by the Department of Assessment and Taxation of the State of Maryland
or Secretary of State of the State of Delaware, as applicable, copies of which have been made
available to your counsel, and our opinions with respect to such matters are rendered as of the
respective dates of such certificates and limited accordingly.
In connection with our opinion expressed in numbered paragraph 6 below, we have relied exclusively
upon oral telephonic advice from one or more members of the Commission’s staff.
In connection with our opinion expressed in numbered paragraph 10 below, we have relied exclusively
on the letter, dated January [_____], 2011, from [Xxxxxx X’Xxxxx] of the New York Stock Exchange, a
copy of which has been delivered to your counsel.
We express no opinion as to the law of any jurisdiction other than the law of the Commonwealth of
Massachusetts, the Maryland General Corporation Law (the “MGCL”), the Delaware Revised Uniform
Limited Partnership Act and the federal laws of the United States of America. To the extent that
any other laws govern any of the matters as to which we express an opinion herein, we have assumed,
without independent investigation, that the laws of such jurisdiction are identical to the internal
laws of the Commonwealth of Massachusetts, and we express no opinion as to whether such assumption
is reasonable or correct. Without limiting the generality of the foregoing, we express no opinion
with respect to (i) the securities or “Blue Sky” laws of any foreign jurisdiction or of any state
or other jurisdiction of the United States, or (ii) state or federal antifraud laws.
Based upon the foregoing, and subject to the additional qualifications set forth below, we are of
the opinion that:
1. | The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Maryland. |
2. | The Partnership has been duly formed and is validly existing as a partnership in good
standing under the laws of the State of Delaware. |
3. | Each of the Company and the Partnership has the corporate power or limited partnership
power to conduct its business and to own, lease and operate its respective properties as
such business and properties are described in the Registration Statement, the General
Disclosure Package and the Prospectus and to execute and to perform its obligations under
the Purchase Agreement.
|
A-1-2
4. | The Common Stock Certificate complies in all material respects with the applicable
requirements of the MGCL, the Articles of Amendment and Restatement of the Company (the
“Articles”) and the Third Amended and Restated Bylaws of the Company (the “Bylaws”). |
5. | The capital stock of the Company conforms in all material respects to the description
thereof contained in the General Disclosure Package and the Prospectus under the captions
“Description of Capital Stock,” “Description of Common Stock,” Description of Preferred
Stock,” and “Description of Certain Material Provisions of Maryland Law, Our Charter and
Our Bylaws.” |
6. | The Registration Statement has become effective under the Securities Act. Any required
filing of each of the Preliminary Prospectus or the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b). To our
knowledge, (i) no stop order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act and (ii) no proceedings for that purpose have been
instituted or are pending or threatened by the Commission. |
7. | The Purchase Agreement has been duly authorized, executed and delivered by the Company
and the Partnership. |
8. | The Shares have been duly authorized and, when issued in accordance with the Purchase
Agreement against payment of the consideration set forth therein, will be validly issued,
fully paid and non-assessable, and will not be subject to any preemptive right in the
Articles or the Bylaws of the Company or arising under the MGCL. |
9. | The execution, delivery and performance of the Purchase Agreement by the Company and
the Partnership and the issuance by the Company of the Shares in accordance therewith: (a)
do not require any consent, approval, license or exemption by, order or authorization of,
or filing, recording or registration by the Company with any Delaware governmental
authority pursuant to the Delaware General Corporation Law, any Maryland governmental
authority pursuant to MGCL or any Massachusetts or federal governmental authority, except
such as have been made or obtained under the Securities Act, and except as may be required
under the securities or Blue Sky laws of any foreign jurisdiction or of any state or other
jurisdiction of the United States, as to which we express no opinion, (b) will not violate
(i) the provisions of the Articles or Bylaws of the Company, (ii) the provisions of the
certificate of limited partnership or the Partnership Agreement of the Partnership or (iii)
the provisions of the organizational documents of the Subsidiaries, (c) will not violate
any law or regulation of the United States, the MGCL, the Revised Uniform Limited
Partnership Act of the State of Delaware or the Limited Liability Company Act of the State
of Delaware applicable to the Company or the Partnership, or any order, judgment or decree
of any Maryland, Delaware, Massachusetts instrumentality or court, specifically naming the
Company or the Partnership of which we are aware and (d) will not result in a breach of, or constitute a
default under, any of the agreements set forth on Exhibit A attached hereto. |
A-1-3
10. | The Shares have been approved for listing, subject to notice of issuance, on the New
York Stock Exchange. |
11. | The statements in the Preliminary Prospectus and the Prospectus set forth under the
headings captioned “Description of Capital Stock,” “Description of Certain Material
Provisions of Maryland Law, Our Charter and Our Bylaws” and “Description of The Partnership
Agreement of Diamond Rock Hospitality Limited Partnership,” insofar as such statements
contain description of laws, rules or regulations, and insofar as they describe the terms
of agreements or the Company’s Articles or Bylaws are correct in all material respects. |
12. | The Company is not, and after giving effect to the issuance of the Shares and the
application of the proceeds as described in the Prospectus, will not be, an “investment
company,” as that term is defined in the Investment Company Act of 1940, as amended. |
We understand that Hunton & Xxxxxxxx LLP will rely upon paragraphs 1, 3, 4, 5, 8 and 9 of this
opinion only to the extent that such paragraphs relate to the MGCL in connection with the rendering
of its opinions of even date herewith to the addressees hereof.
This opinion letter is furnished by us as counsel for the Company to you and is solely for the
benefit of the Underwriter in connection with the issuance to the Underwriter of the Shares, and,
except as set forth in the paragraph above, may not be relied on by the Underwriter for any other
purpose, or furnished to, quoted or otherwise referred to, or relied on by, in whole or in part,
any other person, firm or corporation for any purpose, without our prior written consent.
* * * * *
Reference is made to the registration under the Securities Act of 1933, as amended (the “Securities
Act”) of 11,000,000 shares of common stock, $0.01 par value per share (the “Shares”), of
DiamondRock Hospitality Company, a Maryland corporation (the “Company”), pursuant to a Registration
Statement on Form S-3ASR (No. 333-161298) (the “Registration Statement), as filed prior to the date
hereof with the Securities and Exchange Commission (the “Commission”) under the Securities Act, and
the prospectus supplement dated January 18, 2011, relating to the Shares (the “Prospectus
Supplement”). The Registration Statement automatically became effective upon filing with the
Commission on August 12, 2009. The form of prospectus included in the Registration Statement when
the Registration Statement became effective, as supplemented by the Prospectus Supplement and filed
with the Commission on January 18, 2011 pursuant to Rule 424(b)(5) under the Securities Act, is
herein referred to as the “Prospectus.” When the Registration Statement became effective, the form
of prospectus included in it omitted certain information in reliance upon Rule 430B under the
Securities Act. That information is contained in the Prospectus, which is deemed to be a part of
the Registration Statement as of the time specified in Rule 430B(f)(1). The Prospectus also
updates or supplements certain information contained in the Registration Statement. Reference is
also made to the form of prospectus as supplemented by the preliminary prospectus supplement dated
January 18, 2011
and included in the Registration Statement immediately prior to
_____
p.m. (Eastern time) on January
18, 2011, (the “Applicable Time”), as supplemented by the documents (if any) listed on Appendix A
hereto and the information contained in Appendix B hereto (collectively, the “Pricing Disclosure
Package”).
A-1-4
This letter is being furnished to you at the request of the Company and pursuant to Section 5(b)(i)
of the Purchase Agreement (the “Purchase Agreement”), dated as of January 18, 2011, among the
Company, DiamondRock Hospitality Limited Partnership, a Delaware limited partnership (the
“Partnership”), and you (the “Underwriter”).
As counsel to the Company, we reviewed the Registration Statement, the Prospectus and the Pricing
Disclosure Package, and participated in discussions with your representatives, those of your
counsel and those of the Company and its independent registered public accounting firm, at which
the contents of the Registration Statement, the Prospectus and the Pricing Disclosure Package were
discussed. Between the Applicable Time and the time of the delivery of this letter, we
participated in further discussions with you, your representatives, those of counsel for the
Underwriters, and those of the Company and its accountants, and we reviewed certain certificates of
officers of the Company and public officials and letters from the Company’s independent public
accountants delivered to you today.
The purpose of our engagement was not to establish or to confirm factual matters set forth in the
Registration Statement, the Prospectus and the Pricing Disclosure Package, and we have not
undertaken any obligation to verify independently any of the factual matters set forth in the
Registration Statement, the Prospectus and the Pricing Disclosure Package. Moreover, many of the
determinations required to be made in the preparation of the Registration Statement, the Prospectus
and the Pricing Disclosure Package involve matters of a non-legal nature.
Subject to the foregoing, we confirm to you that: (i) on the basis of the information that we
gained in the course of performing the services referred to above, nothing came to our attention
that caused us to believe that (a) the Registration Statement, at the date and time it became
effective, contained an untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not misleading, (b) the
Prospectus, as of its date, contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (c) the Pricing Disclosure Package, at
the Applicable Time, contained an untrue statement of a material fact or omitted to state any
material fact necessary to make statements therein, in the light of the circumstances under which
they were made, not misleading, and (ii) nothing further came to our attention in the course of the
procedures described in the second sentence of the third paragraph of this letter that caused us to
believe that the Prospectus, as of the date and time of delivery of this letter, contains an untrue
statement of a material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made, not misleading;
provided, however, except as set forth in paragraph 11 of our letter to you as of even date
herewith, we do not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Prospectus and the Pricing Disclosure
Package, and we do not express any belief as to the financial statements and related notes,
financial statement schedules or financial or accounting data
A-1-5
contained in the Registration Statement, the Prospectus and the Pricing Disclosure Package. In the first sentence of this
paragraph, “attention” refers to the actual knowledge of each of the lawyers of our firm who
actively participated in the preparation of the Registration Statement, the Prospectus and the
Pricing Disclosure Package, after such inquiries as they deemed appropriate with other lawyers in
our firm providing substantive attention to other legal matters on behalf of the Company and the
Partnership; and “believe” refers to the good faith belief of each of those lawyers. In addition,
we express no opinion or belief as to the conveyance of the Pricing Disclosure Package or the
information contained therein to investors.
We are not representing the Company, the Partnership or any Subsidiary in any pending litigation in
which it is a named defendant that challenges the validity or enforceability of, or seeks to enjoin
the performance of, the Purchase Agreement.
Further, we confirm to you that the Registration Statement, as of its effective time and date, the
Pricing Disclosure Package, as of the Applicable Time, and the Prospectus, as of the date of the
Prospectus, appeared to us on their face to be responsive in all material respects to the
requirements of the form on which the Registration Statement was filed, as well as the applicable
requirements of Regulation C under the Securities Act, except that the foregoing statement does not
address any requirement relating to financial statements and related notes, financial statement
schedules or financial or accounting data contained in the Registration Statement or the
Prospectus.
This letter is furnished by us as counsel for the Company to you and is solely for your benefit as
underwriters in connection with the issuance of the Shares, and, except as set forth in the
paragraphs above, may not be relied on by the Underwriter for any other purpose, or furnished to,
quoted or otherwise referred to, or relied on by, in whole or in part, any other person, firm or
corporation for any purpose, without our prior written consent.
Very truly yours,
X-0-0
XXXXXXX X-0
FORM OF OPINION OF XXXXXXX X. TENNIS, ESQ.,
TO BE DELIVERED PURSUANT TO SECTION 5(b)(ii)
TO BE DELIVERED PURSUANT TO SECTION 5(b)(ii)
XXXXXXX, XXXXX & CO.
Xxxxxxx, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
I am the general counsel of DiamondRock Hospitality Company, a Maryland corporation (the
“Company”). I have represented the Company and DiamondRock Hospitality Limited Partnership, a
Delaware limited partnership (the “Partnership”), in connection with, among other things, the
execution and delivery of the Purchase Agreement, dated as of January 18, 2011 (the “Purchase
Agreement”), among the Company, the Partnership and you (the “Underwriter”).
I am furnishing this opinion letter pursuant to Sections 5(b)(ii) and 5(j)(ii) of the Purchase
Agreement. Capitalized terms that are not defined herein but are defined in the Purchase Agreement
shall have the meaning ascribed to them in the Purchase Agreement.
In connection with the delivery of this opinion, I have examined such corporate or partnership
records, certificates and other documents or other agreements and such questions of law that I have
considered necessary or appropriate for the purposes of this opinion. Upon the basis of such
examination, I advise you that, in my opinion:
1. | Except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, there are no outstanding (i) securities or obligations of
the Company, the Partnership or any Subsidiary convertible into or exchangeable for any
capital stock of the Company, (ii) warrants, rights or options to subscribe for or
purchase from the Company, the Partnership or any Subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations or (iii) obligations of
the Company, the Partnership or any Subsidiary to issue or sell any shares of capital
stock, partnership interests or membership interests, as applicable, any such
convertible or exchangeable securities or obligation, or any such warrants, rights or
options. |
2. | To my knowledge, no actions, suits, proceedings, investigations, legal or
governmental proceedings are pending or overtly threatened to which the Company or the
Partnership or any Subsidiary or any of their directors, officers or employees is a
party or to which the properties, assets or rights of the Company or the Partnership or
any Subsidiary is subject, at law or in equity, before any federal, state, local or
foreign governmental or regulatory commission, board, body, authority, arbitral panel
or agency that are required pursuant to Item 103 of Regulation S-K under the Securities
Exchange Act of 1934, as amended, to be described in the Registration Statement, the
General Disclosure Package or the Prospectus. |
A-2-1
3. | Neither the Company nor the Partnership, nor, to my knowledge, any Subsidiary
is (i) in breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its charter,
bylaws, certificate of limited partnership, partnership agreement or other
organizational documents or (ii) in breach or default (nor has any event occurred which
with notice, lapse of time or both would constitute a breach or default) in the
performance or observance of any of its obligations, agreements, covenants or
conditions contained in any license, indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument known to me which the Company, the
Partnership or any Subsidiary is a party or by which it or its properties are bound or
affected, except for such breaches or defaults which would not individually or in the
aggregate, have a Material Adverse Effect. |
4. | Each Subsidiary listed on Exhibit A (the “Designated Subsidiaries”) is
validly existing as a corporation, limited liability company, or limited partnership.
Each Subsidiary listed on Exhibit B (the “Identified Subsidiaries”) is in good
standing under the law of its jurisdiction of organization, and is duly qualified to do
business and is in good standing as a foreign corporation in the jurisdictions set
forth opposite its name on Exhibit B hereto. |
5. | Each of the Designated Subsidiaries has the corporate power, limited liability
company power or limited partnership power, as the case may be, to conduct its
respective business and to own, lease and operate its respective properties as such
business and properties are described in the Registration Statement and the Prospectus. |
6. | With the exception of its interests in the Designated Subsidiaries, the Company
does not own, directly or indirectly, capital stock or other equity interests in any
other corporation, limited liability company, partnership, joint venture, trust or
other entity. |
7. | The Securities, when issued in accordance with the Purchase Agreement against
payment of the consideration set forth therein, will be free and clear of any pledge,
lien, encumbrance, security interest or claim created by the Company. |
8. | The issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued, and are fully paid and non-assessable. |
9. | The issued and outstanding shares of capital stock, units of partnership
interests or membership interests of the Partnership and each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable, and are owned of
record directly or indirectly by the Company. |
10. | To my knowledge, there are no contracts or documents of a character required to
be filed as exhibits to the Registration Statement or summarized in the Registration
Statement, the General Disclosure Package and the Prospectus that have not been so
filed, summarized or described. |
A-2-2
11. | The execution, delivery and performance of the Purchase Agreement by the
Company and the Partnership and the issuance by the Company of the Securities in
accordance therewith will not, to my knowledge, result in a breach of, or default that
would reasonably be expected to have a Material Adverse Effect under any agreement,
license, instrument, indenture, mortgage or deed of trust known to me to which the
Company, the Partnership or any Subsidiary is a party or by which any of them or their
respective properties may be bound. |
12. | Except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, to my knowledge, no agreement grants to any person the
right to require the Company to file a registration statement under the 1933 Act with
respect to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered pursuant to
the Registration Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the 1933 Act, except for any such
rights that have been waived. |
The foregoing opinions are limited to the Federal laws of the United States and the laws of the
States of New York, Delaware (but only insofar as set forth in the Revised Uniform Limited
Partnership Act of the State of Delaware) and Maryland (but only insofar as set forth in the
Maryland General Corporation Law).
I have relied as to certain matters on information obtained from public officials and other sources
believed by me to be responsible, and I have assumed that the original documents conformed to the
specimens examined by me and that the signatures on all documents examined by me are genuine,
assumptions which I have not independently verified but have no information to the contrary.
This opinion letter is furnished by me as counsel for the Company and the Partnership and may be
relied upon by you and your successors and assigns. I also consent to reliance on this opinion by
Xxxxxxx Procter LLP (“Xxxxxxx Procter”) and Hunton & Xxxxxxxx LLP (“Hunton & Xxxxxxxx”) in
connection with the rendering of their opinions of even date herewith to the addressees hereof.
Except as set forth above, this opinion letter may not be used or relied upon by you, Xxxxxxx
Procter or Hunton & Xxxxxxxx, or quoted by you, Xxxxxxx Procter or Hunton & Xxxxxxxx, for any other
purpose or by any other person, nor may this opinion letter be furnished to any other person,
without in each instance, my prior written consent.
This opinion letter is given as of the date hereof. I assume no obligation to update or supplement
this opinion letter to reflect any facts or circumstances which may hereafter come to my attention,
including any subsequent changes in law or regulation, or the interpretation thereof.
Very truly yours,
X-0-0
XXXXXXX X-0
FORM OF TAX OPINION OF XXXXXXX PROCTER LLP
TO BE DELIVERED PURSUANT TO SECTION 5(b)(iii)
TO BE DELIVERED PURSUANT TO SECTION 5(b)(iii)
XXXXXXX, XXXXX & CO.
Xxxxxxx, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel for DiamondRock Hospitality Company, a Maryland corporation (the
“Company”), in connection with the preparation of the Company’s registration statement on Form S-3
(File No. 333-161298), dated August 12, 2009, as amended and supplemented by the preliminary
prospectus supplement, dated January 18, 2011, and the final prospectus supplement, dated January
18, 2011 (together, the “Prospectus Supplement”), filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the “Registration Statement”), and sale by the
Company of up to 12,650,000 shares (the “Shares”) of common stock, $0.01 par value per share, of
the Company (including 1,650,000 Shares to be sold in connection with the exercise of the
Underwriter’s (as defined below) option to purchase additional shares) to you pursuant to the
purchase agreement dated January 18, 2011 (the “Purchase Agreement”) among the Company, DiamondRock
Hospitality Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), and
you (the “Underwriter”). This opinion letter addresses the Company’s qualification as a real
estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the
“Code”), the classification of the Operating Partnership for federal income tax purposes, and the
accuracy of certain matters discussed in the Registration Statement under the heading “Federal
Income Tax Considerations Related to our REIT Election” and in the Prospectus Supplement under the
heading “Supplement to Federal Income Tax Considerations.”
The advice set forth herein is not intended for or written to be used, nor can it be used, by
any taxpayer for the purpose of avoiding United States tax penalties that may be imposed on the
taxpayer. The advice contained herein was written to support the issuance and sale of the Shares.
You should seek advice based on your particular circumstances from an independent tax advisor. The
foregoing language is intended to satisfy the requirements under the regulations in Section 10.35
of Treasury Department Circular 230.
In rendering the following opinions, we have reviewed and relied upon the Articles of
Amendment and Restatement of Articles of Incorporation dated as of June 25, 2004 and the Third
Amended and Restated Bylaws of the Company dated as of December 15, 2009, each as amended from time
to time and as in effect as of the date of this opinion letter, the Limited Partnership Agreement
of the Operating Partnership dated as of June 4, 2004 and as in effect as of the date hereof, and
such other records, certificates, and documents as we have deemed necessary or appropriate for
purposes of rendering the opinions set forth herein. For purposes of
this opinion letter, we have assumed (i) the genuineness of all signatures on documents we
have examined, (ii) the authenticity of all documents submitted to us as originals, (iii) the
conformity to the original documents of all documents submitted to us as copies, (iv) the
conformity, to the extent relevant to our opinions, of final documents to all documents submitted
to us as drafts, (v) the authority and capacity of the individual or individuals who executed any
such documents on behalf of any person, (vi) due execution and delivery of all such documents by
all the parties thereto, (vii) the compliance of each party with all material provisions of such
documents, and (viii) the accuracy and completeness of all records made available to us.
A-3-1
We also have reviewed and relied upon the representations, as to factual matters, and
covenants of the Company and the Operating Partnership contained in a letter that they provided to
us in connection with the preparation of this opinion letter (the “REIT Certificate”), and that we
have discussed with the Company’s representative, regarding the ownership, organization and
operations of the Company and the Operating Partnership and other matters affecting the Company’s
ability to qualify as a REIT. For purposes of this opinion letter, we assume that each such
representation and covenant has been, is and will be true, correct and complete, that the Company,
the Operating Partnership and their subsidiaries, as well as the managers of their hotels, have
been, are and will be owned and operated in accordance with the REIT Certificate and that all
representations and covenants that speak to the best of the belief and/or knowledge of any
person(s) or party(ies), or are subject to similar qualification, have been, are and will continue
to be true, correct and complete as if made without such qualification. To the extent such
representations and covenants speak to the intended ownership or operations of any person, we
assume that such person will in fact be owned and operated in accordance with such stated intent.
Based upon the foregoing and subject to the limitations set forth herein, we are of the
opinion that:
(i) commencing with the Company’s taxable year ended December 31, 2005, the Company has been
organized and operated in conformity with the requirements for qualification and taxation as a REIT
under the Code and its current and proposed ownership and operations will allow the Company to
continue to satisfy the requirements for qualification and taxation as a REIT under the Code for
subsequent taxable years;
(ii) as long as the Operating Partnership has only one partner for federal income tax
purposes, it will be disregarded as an entity separate from the Company and if and when the
Operating Partnership has two or more partners for federal income tax purposes, the Operating
Partnership will be treated as a partnership within the meaning of Code Sections 7701(a)(2) and
761(a) and will not be treated as a publicly traded partnership taxable as a corporation under the
rules of Code Section 7704; and
(iii) the statements set forth under the heading “Federal Income Tax Considerations Related to
our REIT Election” in the Registration Statement and under the heading “Supplement to Federal
Income Tax Considerations” in the Prospectus Supplement, insofar as such statements constitute
matters of law, summaries of legal matters, legal documents, contracts or legal proceedings, or
legal conclusions, are correct in all material respects and do not omit to state a
matter of law necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
* * * * *
A-3-2
We express no opinion other than the opinions expressly set forth herein. Our opinions are
not binding on the Internal Revenue Service or a court. The Internal Revenue Service may disagree
with and challenge our conclusions, and a court could sustain such a challenge. Our opinions are
based upon the Code, the Income Tax Regulations and Procedure and Administration Regulations
promulgated thereunder and existing administrative and judicial interpretations thereof, all as in
effect as of the date of this opinion letter. Changes in applicable law could cause the federal
income tax treatment of the Company or the Operating Partnership to differ materially and adversely
from the treatment described above and render the tax discussion in the Registration Statement
incorrect or incomplete.
We are rendering this opinion letter to you pursuant to Section 5(b) of the Purchase Agreement
in connection with the sale of Shares and this opinion letter may not be relied upon by any other
person or for any other purpose without our prior written consent. This opinion letter speaks only
as of the date hereof, and we undertake no obligation to update this opinion letter or to notify
any person of any changes in facts, circumstances or applicable law (including without limitation
any discovery of any facts that are inconsistent with the REIT Certificate).
Very truly yours, |
A-3-3
EXHIBIT B
[Form of lock-up from directors, officers or other stockholders pursuant to Section 5(i)]
January 18, 2011
XXXXXXX, XXXXX & CO.
Xxxxxxx, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by DiamondRock Hospitality Company
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of DiamondRock Hospitality Company,
a Maryland corporation (the “Company”), understands that Xxxxxxx, Xxxxx & Co. (the “Underwriter”)
proposes to enter into a Purchase Agreement (the “Purchase Agreement”) with the Company and
DiamondRock Hospitality Limited Partnership, a Delaware limited partnership, providing for the
public offering of shares (the “Securities”) of the Company’s common stock, par value $0.01 per
share (the “Common Stock”). In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder and an officer and/or director of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with the Underwriter that, during a period of forty-five (45) days from the date
of the Purchase Agreement, the undersigned will not, without the prior written consent of the
Underwriter, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
for the sale of, or otherwise dispose of or transfer any shares of the Company’s Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned
or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file, or cause to be filed, any registration statement under
the Securities Act of 1933, as amended, with respect to any of the foregoing (collectively, the
“Lock-Up Securities”) or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of
the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned may sell shares of the Company’s Common Stock to the
Company for the purpose of paying any taxes payable by such director and/or officer upon the
vesting of shares of restricted stock of the Company owned directly by such director and/or officer
during the 45-day period, provided that, when combined with all other sales of any shares of the
Company’s Common Stock by its directors and/or officers, such sales will not exceed an aggregate of
300,000 shares of the Company’s Common Stock. Moreover, if:
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(1) during the last 17 days of the 45-day lock-up period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the 45-day lock-up period, the Company announces that it will
release earnings results or becomes aware that material news or a material event will occur during
the 16-day period beginning on the last day of the 45-day lock-up period,
the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the
material news or material event, as applicable, unless the Underwriter waives, in writing, such
extension.
The undersigned hereby acknowledges and agrees that written notice of any extension of the 45-day
lock-up period pursuant to the previous paragraph will be delivered by the Underwriter to the
Company (in accordance with Section 14 of the Purchase Agreement) and that any such notice properly
delivered will be deemed to have been given to, and received by, the undersigned.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in
compliance with the foregoing restrictions.
Very truly yours, | ||||||
Signature: | ||||||
Print Name: | ||||||
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