Exhibit 1.1
1,052,650 Shares
AMERICAN GENERAL HOSPITALITY CORPORATION
Common Stock
UNDERWRITING AGREEMENT
----------------------
February 12, 1998
XXXXXXX XXXXX XXXXXX
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
American General Hospitality Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell an aggregate of 1,052,650 shares (the
"Shares") of its common stock, $0.01 par value per share (the "Common Stock"),
to Xxxxx Xxxxxx Inc. (the "Underwriter"). The offering of the Shares pursuant to
this Agreement is referred to herein as the "Offering."
Upon consummation of the transactions contemplated hereby and application
of the net proceeds from the sale of the Shares, the Company, through its
wholly-owned subsidiaries, AGH GP, Inc. ("AGH GP") and AGH LP, Inc. ("AGH LP")
will own an approximately 1.0% general partnership interest and an approximately
84.4% limited partnership interest in American General Hospitality Operating
Partnership, L.P., a Delaware limited partnership (together with its subsidiary
partnerships and limited liability companies, the "Operating Partnership"). The
Operating Partnership currently owns 40 hotels listed on Schedule I hereto which
represent, as of the date hereof, all of the hotel real property in which the
Company, either through the Operating Partnership or the Subsidiaries (as
defined herein), owns an interest (the "Current Hotels"). Thirteen of the
Current Hotels (the "Initial Hotels") were acquired in connection with the
Company's initial public offering of Common Stock in July 1996 (the "IPO"), and
the remaining 27 Current Hotels (the "Acquired Hotels") were acquired subsequent
to, and not in connection with, the IPO. The Operating Partnership leases 31 of
the Current Hotels to AGH Leasing, L.P., one Subsidiary leases the Radisson Twin
Towers Orlando hotel to Twin Towers Leasing, L.P. (AGH Leasing, L.P. and Twin
Towers Leasing, L.P., being referred to herein collectively as the "Lessee"),
and the remaining Current Hotels are leased to affiliates of Prime Hospitality
Corp.,
(the "Prime Lessee"), pursuant to separate participating leases (the "Leases").
The Lessee and the Prime Lessee are collectively referred to herein as the
"Lessees." Thirty-one of the Current Hotels are operated by American General
Hospitality, Inc. ("XXXX"), pursuant to separate management agreements between
XXXX and the Lessee (the "Management Agreements"). The Wyndham Garden-Marietta
hotel is operated by Wyndham Hotel Corporation ("Wyndham") pursuant to a
management agreement (the "Wyndham Management Agreement") between the Lessee and
Wyndham. The eight Current Hotels leased to the Prime Lessee are leased and
operated by the Prime Lessee pursuant to separate participating lease agreements
(the "Prime Lease Agreements") between the Operating Partnership, Mt. Arlington
New Jersey, LLC or Portland/Xxxxxxx LLC (as applicable) and the Prime Lessee.
The Operating Partnership and/or the Subsidiaries (as defined herein) has
entered into agreements (the "Acquisition Agreements") as described in the
Company's Current Report on Form 8-K dated January 8, 1998, to acquire 14
additional hotels (such additional hotels being hereinafter referred to as the
"Acquisition Hotels" and, together with the Current Hotels, the "Hotels").
The Company and the Operating Partnership wish to confirm as follows their
agreements with the Underwriter in connection with the purchase of the Shares by
the Underwriter.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act, Commission No.
333-33007 (the "Initial Registration Statement"), including a prospectus
relating to the Shares, and such amendments to the Initial Registration
Statement as may have been required prior to the date hereof have been filed
with the Commission, and such amendments have been similarly prepared. The
Initial Registration Statement and any post-effective amendments thereto have
become effective under the Act. The Company also has filed, or proposes to file,
with the Commission pursuant to Rule 424(b) under the Act, a prospectus
supplement relating to the offering of the Shares pursuant to Rule 415 of the
Act.
The term "Registration Statement" as used in this Agreement means the
Initial Registration Statement (including all financial schedules and exhibits),
as amended at the time it became effective and as may be supplemented or amended
prior to the execution of this Agreement together with any Incorporated Document
(as defined below). If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the Initial Registration Statement
will be filed and must be declared effective before the offering of the Shares
may commence, the term "Registration Statement" as used in this Agreement means
the Initial Registration Statement as amended by said post-effective amendment.
The term "Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement at the time it was declared effective
(the "Base Prospectus") together with the prospectus supplement relating to the
offering of the Shares under Rule 415 of the Act dated the date hereof in the
form first filed with the Commission on or after the date hereof (the
"Prospectus Supplement"). The term "Prepricing Prospectus Supplement" as used in
this Agreement means the Base Prospectus together with any
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prospectus supplement subject to completion included in the Initial Registration
Statement as filed with the Commission pursuant to Rule 424(b) under the Act;
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. Any reference in this Agreement to the Initial
Registration Statement, the Registration Statement, the Base Prospectus, any
Prepricing Prospectus Supplement or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of the Initial Registration Statement,
the Registration Statement, such Prepricing Prospectus Supplement or the
Prospectus, as the case may be, and any reference to any amendment or supplement
to the Initial Registration Statement, the Registration Statement, any
Prepricing Prospectus Supplement or the Prospectus shall be deemed to refer to
and include any documents filed after such date under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the Initial Registration
Statement, the Registration Statement, any Prepricing Prospectus Supplement, the
Prospectus, or any amendment or supplement thereto. Capitalized terms used but
not otherwise defined herein have the meanings given to them in the Prospectus.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject to
all the terms and conditions set forth herein, to issue and sell to the
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company, AGH GP, AGH LP and the Operating Partnership herein
contained and subject to all the terms and conditions set forth herein, the
Underwriter agrees to purchase from the Company, at a purchase price of $26.8375
per Share (the "purchase price per share"), the Shares.
3. Terms of Public Offering. The Company has been advised by you that you
propose to make a public offering of the Shares as soon after this Agreement has
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
The Company understands that the Underwriter intends to deposit the Shares
with the trustee of The Equity Focus Trusts REIT Portfolio Series 1998-A (the
"Trust"), a registered unit investment trust under the Investment Company Act of
1940, as amended, in exchange for units in the Trust. The Underwriter is acting
as sponsor and depositor of the Trust and is therefore considered an affiliate
of the Trust.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriter of and payment for the Shares shall be made at the office of Xxxxx
Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New
York City time, on February 18, 1998 (the "Closing Date"). The place of closing
for the Shares and the Closing Date may be varied by agreement between you and
the Company.
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Certificates for the Shares to be purchased hereunder shall be
registered in such names and in such denominations as you shall request prior to
1:00 p.m., New York City time, on the second business day preceding the Closing
Date. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 a.m., New York City time, on the
business day next preceding the Closing Date. The certificates evidencing the
Shares to be purchased hereunder shall be delivered to you on the Closing Date
against payment of the purchase price therefor by wire transfer of immediately
available funds to the Company.
5. Agreements of the Company and the Operating Partnership. The Company
and the Operating Partnership jointly and severally agree with the Underwriter
as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Initial Registration Statement, any
Prepricing Prospectus Supplement or the Prospectus or for additional
information; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Initial Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) within the period of
time referred to in paragraph (e) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Act or any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Company will furnish to you, without charge, (i) as many
copies of the Initial Registration Statement and of each amendment thereto,
including financial statements and all exhibits thereto, as may be reasonably
requested by the Underwriter, (ii) such number of conformed copies of the
Initial Registration Statement and of each amendment thereto, but without
exhibits, as you may reasonably request, (iii) such number of copies of the
Incorporated
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Documents, without exhibits, as you may reasonably request, and (iv) two copies
of the exhibits to the Incorporated Documents.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus or, prior to the
end of the period of time referred to in the first sentence in paragraph (e)
below, file any document which, upon filing becomes an Incorporated Document, of
which you shall not previously have been advised or to which, within one
business day following your receipt of a copy of the document proposed to be
filed, you shall reasonably object after being so advised or (ii) so long as, in
the opinion of counsel for the Underwriter, a prospectus is required to be
delivered in connection with sales by the Underwriter or any dealer, file any
information, documents or reports pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without delivering a copy of such
information, documents or reports to you prior to or concurrently with such
filing.
(e) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriter a prospectus is required by the Act to be delivered
in connection with sales by the Underwriter or dealer, the Company will
expeditiously deliver to the Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky or real estate syndication laws of the
jurisdictions in the United States in which the Shares are offered by the
Underwriter and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection with
sales by the Underwriter or dealer. If during such period of time any event
shall occur that in the judgment of the Company or in the opinion of counsel for
the Underwriter is required to be set forth in the Prospectus (as then amended
or supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus (or to
file under the Exchange Act any document which, upon filing, becomes an
Incorporated Document) in order to comply with the Act or any other law, the
Company will forthwith prepare and, subject to the provisions of paragraph (d)
above, file with the Commission an appropriate supplement or amendment thereto
(or to such document), and will expeditiously furnish to the Underwriter and any
dealers a reasonable number of copies thereof. In the event that the Company and
you agree that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(f) The Company will cooperate with you and with counsel for the
Underwriter in connection with the registration or qualification of the Shares
for offering and sale by the Underwriter and by dealers under the securities or
Blue Sky or real estate syndication laws of such jurisdictions as you may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided
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that in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(g) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(h) During the period of five years hereafter, the Company will
furnish to you (i) concurrently with mailing or filing, a copy of each report of
the Company mailed to stockholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may reasonably
request, which information you will treat confidentially unless the Company has
publicly disclosed such information.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Sections 10 or 11 hereof) or if this Agreement shall be
terminated by the Underwriter because of any failure or refusal on the part of
the Company to comply with the terms or fulfill any of the conditions of this
Agreement, the Company agrees to reimburse you for all out-of-pocket expenses
(including reasonable fees and expenses of your counsel) incurred by you in
connection herewith.
(j) The Company will apply the net proceeds from the sale of the
Shares in accordance with the description set forth under the caption "Use of
Proceeds" in the Prospectus.
(k) The Company will (i) prepare and timely file with the Commission
a Prospectus Supplement pursuant to Rule 424(b) under the Act containing
information previously omitted at the time of effectiveness of the Registration
Statement and will advise you of the time and manner of such filing, and (ii)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus Supplement and prior to the termination of the
offering of the Shares by the Underwriter.
(l) Except as stated in this Agreement and in the Prospectus, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(m) The Company will cause the Shares to be listed, subject to notice
of issuance, on the New York Stock Exchange (the "NYSE") on or before the
Closing Date.
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(n) The Company qualifies, and will use its best efforts to meet the
requirements to qualify, as a "real estate investment trust" under the Internal
Revenue Code of 1986, as amended (the "Code").
(o) The Company and the Operating Partnership in good faith will
enforce the terms of any agreements with the Lessees or any parties affiliated
with the Lessees relating to such agreements.
6. Representations and Warranties of the Company, AGH GP, AGH LP and the
Operating Partnership. The Company, AGH GP, AGH LP and the Operating
Partnership, jointly and severally, represent and warrant to the Underwriter
that (with such representations and warranties regarding XXXX herein being
expressly made subject to the knowledge of the Company and the Operating
Partnership):
(a) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Act. No stop order suspending
the effectiveness of the Registration Statement or any part thereof has been
issued and no proceeding for that purpose has been instituted or, to the
knowledge of the Company, threatened by the Commission or the securities
authority of any state or other jurisdiction. The Registration Statement in the
form in which it became effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the Prospectus and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, complied or will comply in all material respects with the
provisions of the Act and did not or will not at any such times 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,
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information relating to the Underwriter furnished to
the Company in writing by or on behalf of the Underwriter through you expressly
for use therein.
(b) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and no such further document, when it is filed, will contain an
untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Underwriter against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectus. Except as disclosed in the Prospectus, and in a
separate writing delivered by the Company, there are no outstanding options,
warrants or other rights calling for the issuance of, or any commitment, plan or
arrangement to issue, any capital stock of the Company or any security
convertible into or exchangeable for capital stock of the Company, other than
the issuance of OP Units in connection with the acquisition of properties in the
usual course of business. As of the Closing Date, the Company will have reserved
a sufficient number of shares of Common Stock for issuance upon (i) the exchange
of OP Units held by certain continuing investors that acquired OP Units in
connection with the acquisition of real property by the Company, and (ii) the
exercise of options for shares of Common Stock to be issued under the Company's
stock option plans.
(d) Each of the Company, the Operating Partnership, the Subsidiaries
(as defined herein), the Lessee, and XXXX (each such entity, a "Relevant Party")
is a corporation, limited partnership, general partnership or limited liability
company duly organized or formed, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation.
Each such entity has or will have full corporate, partnership or limited
liability company power and authority to own, lease and operate its properties,
to conduct its business and to enter into this Agreement and each Operative
Document (as defined herein) to which it is a party. Each such entity is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification.
(e) (i) All of the outstanding OP Units of the Operating Partnership,
and shares of capital stock, partnership interests or membership interests in
each of the other Relevant Parties have been validly issued or created under the
agreements forming the Relevant Parties and are owned or held by the persons in
the percentage amounts set forth and in the manner described in the Prospectus
to the extent described therein, and (ii) the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, and the organizational or
formation documents of the other Relevant Parties are in full force and effect.
None of the Subsidiaries (other than the Operating Partnership) has issued any
ownership interests to any party other than a Relevant Party. AGH GP is the sole
general partner of the Operating Partnership and owns a 1% general partnership
interest in the Operating Partnership. Upon completion of the Offering, AGH LP
will own an approximate 84.4% limited partnership interest in the Operating
Partnership. AGHL GP, Inc. is the sole general partner of AGH Leasing, L.P.
Except as described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), there are no outstanding options, warrants or
other rights calling for the issuance of, or any commitment, plan or arrangement
to issue, any equity interests in the Operating Partnership, or any membership
or
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equity interests in any other Relevant Party or any security convertible into,
or exchangeable or exercisable for, any such interests in the Operating
Partnership or any other Relevant Party.
(f) The Company has no subsidiaries other than the entities listed on
Schedule 6(f) hereto (collectively, the "Subsidiaries" and individually, a
"Subsidiary"). Other than its interests in the Subsidiaries, the Company does
not own, directly or indirectly, securities of any corporation, partnership,
joint venture, limited liability company, association or other business
association.
(g) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Relevant Parties
or any of their respective partners, directors or officers in their capacity as
such, or to which any of the Current Hotels is subject, that are required to be
described in the Registration Statement or the Prospectus but are not described
as required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required by the Act.
(h) No Relevant Party is in violation of its certificate or articles
of incorporation or by-laws, partnership agreement, or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to such entities or of any decree of any court or
governmental agency or body having jurisdiction over such entities, or in
default in any material respect in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which any such entity is a party or by which any of them or any of their
respective properties may be bound.
(i) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement and the Operative Documents, nor the
consummation of the transactions contemplated hereby or thereby by the Company,
the Subsidiaries, the Lessee or XXXX, as applicable, (i) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required for the registration of the Shares
under the Act and the Exchange Act and compliance with the securities or Blue
Sky laws of various jurisdictions, all of which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws, partnership agreement or other
organizational documents, of any of such entities or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
any material agreement, indenture, lease or other instrument to which any of
such entities is a party or by which any of them or any of their respective
properties may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to any
of such entities or any of their respective properties, or will result in the
creation or imposition of any lien, charge or
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encumbrance upon any property or assets of any of such entities pursuant to the
terms of any agreement or instrument to which any of them is a party or by which
any of them may be bound or to which any of the property or assets of any of
them is subject.
(j) The offers and sales of OP Units prior to the date hereof were
exempt from the registration requirements of the Act and applicable state
securities and Blue Sky laws. All offers and sales by the Company of Common
Stock prior to the date hereof were either duly registered or exempt from the
registration requirements of the Act and applicable state securities and Blue
Sky laws.
(k) The accountants, Coopers & Xxxxxxx L.L.P., who have audited the
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), are
independent public accountants as required by the Act.
(l) The financial statements, together with related schedules and
notes included or incorporated by reference in the Registration Statement or the
Prospectus (and any amendment or supplement thereto), present fairly, in all
material respects, the financial position, results of operations and changes in
financial position of the entities to which they relate at the respective dates
or for the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the other financial and statistical information and
data included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are accurately presented
and prepared on a basis consistent with such financial statements and the books
and records of the relevant entities; the pro forma financial statements of the
Company and the Lessee included or incorporated by reference in the Registration
Statement and the Prospectus comply in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X of the Commission, and the pro
forma adjustments have been made based upon management's reasonable good faith
estimates of the pro forma adjustments and have been properly applied to the
audited historical amounts in the compilation of such statements; no other
financial statements, data or schedules are required by Form S-3, Regulation S-
K, Regulation S-X or otherwise to be included or incorporated by reference in
the Registration Statement.
(m) The execution and delivery of, and the performance by the
Company, AGH GP, AGH LP and the Operating Partnership of their respective
obligations under, this Agreement have been duly and validly authorized by each
of the Company, AGH GP, AGH LP and the Operating Partnership, and this Agreement
has been duly executed and delivered by the Company, AGH GP, AGH LP and the
Operating Partnership, and, assuming due authorization, execution and delivery
by or on behalf of the Underwriter, constitutes the valid and legally binding
agreement of each of the Company, AGH GP, AGH LP and the Operating Partnership,
enforceable against the Company, AGH GP, AGH LP and the Operating Partnership in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy,
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insolvency, moratorium and other laws affecting the enforceability of creditors'
rights and general principles of equity.
(n) Each of the documents listed on Schedule 6(n) hereto
(collectively, the "Operative Documents") has been duly authorized and executed
by the Company, the Operating Partnership or any Subsidiary, as the case may be,
and each Operative Document, assuming the due authorization, execution and
delivery by the other party or parties thereto, constitutes a valid and binding
agreement of each such party thereto enforceable in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, moratorium and other laws affecting the enforceability of creditors'
rights and general principles of equity.
(o) Except as disclosed in the Prospectus, subsequent to the
respective dates as of which such information is given or incorporated by
reference in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of the Subsidiaries, nor to the
Company's knowledge, the Lessee or XXXX, has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and the Subsidiaries
taken as a whole.
(p) The Company or the Operating Partnership (either directly or
through a Subsidiary) has good and marketable title in fee simple to each of the
items of real property and good and marketable title to each of the items of
personal property which are included in the Current Hotels, and valid and
enforceable leasehold interests in each of the items of real and personal
property which are included in the Current Hotels, in each case free and clear
of all liens, charges, encumbrances, claims, security interests, defects and
restrictions, other than those described or incorporated by reference in the
Registration Statement and the Prospectus and those which do not and will not
have a material adverse effect on the properties, business, financial condition
or results of operations of the Company and the Subsidiaries. All leases
pursuant to which the Operating Partnership leases any items of real or personal
property included in the Current Hotels are valid, binding and enforceable
leases. To the extent described or incorporated by reference in the Registration
Statement, such leases conform in all material respects to the description
thereof set forth or incorporated by reference in the Registration Statement and
no notice has been given or material claim asserted by anyone adverse to the
rights of Company under any of such leases or affecting the Operating
Partnership's or the present owner's rights to continued possession of any
leased property.
(q) The Operating Partnership has title policies in effect naming the
Operating Partnership as named party with respect to each of the Current Hotels.
11
(r) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, any Prepricing
Prospectus Supplement, the Prospectus or other materials, if any, permitted by
the Act.
(s) (i) Each of the Company, the Operating Partnership, the other
Subsidiaries, the Lessee and XXXX have all permits, licenses, franchises and
authorizations of governmental and regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus, (ii) each of the Company, the Operating
Partnership, the other Subsidiaries, the Lessee and XXXX has fulfilled and
performed all its material obligations with respect to such permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus, and (iii) except as
described in the Prospectus, none of such permits contains any restriction that
is materially burdensome to the Company, the Operating Partnership, any of the
other Subsidiaries, the Lessee or XXXX.
(t) The Company, together with its Subsidiaries, maintains a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) None of the Company, any of its Subsidiaries or any employee or
agent of any of them, has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus.
(v) The Company, each of the Subsidiaries, the Lessee and XXXX have
filed all tax returns required to be filed, which returns are complete and
correct in all material respects, and neither the Company, any Subsidiary, the
Lessee or XXXX is in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto, other than any
taxes being contested in good faith by the applicable entity.
(w) Except as described in the Prospectus, no person or entity has
any right to require the registration of any shares of Common Stock or any other
securities of the Company because of the filing of the registration statement or
sale of the Shares contemplated by this Agreement.
12
(x) The Company and its Subsidiaries are organized and intend to
operate in the manner described in the Registration Statement so that the
Company will meet the requirements for qualification as a real estate investment
trust under Sections 856 through 860 of the Code and the rules and regulations
thereunder as currently in effect, commencing with the year ended December 31,
1996. The Operating Partnership and each Subsidiary that is a partnership or a
limited liability company will be treated as a partnership, and not as an
association taxable as a corporation or a publicly traded partnership, for
federal income tax purposes.
(y) The Company, the Subsidiaries and the Lessee are not now and
after the sale of the Shares to be sold hereunder and application of the net
proceeds from such sale as described in the Prospectus Supplement under the
caption "Use of Proceeds," none of them 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.
(z) The Company, the Subsidiaries, the Lessee and XXXX are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they are
engaged; and neither the Company, nor any Subsidiary has any reason to believe
that it will not be able to renew that coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially and adversely
affect the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries taken as a whole, the Lessee or
XXXX except as described in or contemplated by the Prospectus.
(aa) Except with respect to economic terms, the Leases entered into
with the Lessee are all substantially similar to each other and the Leases
entered into with the Prime Lessee are substantially similar to each other.
Other than the Wyndham Management Agreement, the Management Agreements are all
substantially similar to each other.
(bb) To the knowledge of the Company, no lessee, licensee or
concessionaire of any portion of any of the Current Hotels 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, would
constitute a default under any of such leases or license, except such defaults
that would not singly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), business, properties, net worth, results of
operations or prospects of the Company or its Subsidiaries taken as a whole.
(cc) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
13
(dd) The Shares are duly authorized for listing, subject to official
notice of issuance, on the NYSE.
(ee) Neither the Company, any of its Subsidiaries, nor the Lessee
nor, to the knowledge of the Company, XXXX is involved in any material labor
dispute nor, to the knowledge of the Company, is any such dispute threatened. No
general labor problem exists or, to the knowledge of the Company, is imminent
with the employees of any of the Current Hotels, the Company, any of the
Subsidiaries, or the Lessee or, to the knowledge of the Company, XXXX.
(ff) The Company, the Subsidiaries and the Lessee and, to the
knowledge of the Company, XXXX have sufficient trademarks, trade names, patent
rights, copyrights, licenses, trade secrets, approvals and governmental
authorizations (the "Intangible Rights") necessary to conduct the business of
the Current Hotels as now conducted; the expiration of any Intangible Rights,
other than the use of the franchise names pursuant to the franchise agreements
and licenses to which the Current Hotels are subject, would not, singly or in
the aggregate, have a material adverse effect on the condition (financial or
otherwise), business, properties, net worth, results of operations or prospects
of such entity; and the Company does not have any knowledge of any material
infringement of any Intangible Right and there is no claim being made against
the Company, any of the Subsidiaries, the Lessee or XXXX regarding any
Intangible Right which could have a material adverse effect on the condition
(financial or otherwise), business, prospects, properties, net worth, results of
operations or prospects of any of the Company, any of the Subsidiaries, the
Lessee or any Current Hotel or, to the knowledge of the Company, XXXX.
(gg) Except as described in the Prospectus, the mortgages and deeds
of trust encumbering the Current Hotels will not be cross-defaulted or
cross-collateralized with any other property not owned directly or indirectly by
the Company or the Subsidiaries.
(hh) Each of the Current Hotels, the Company, the Subsidiaries and
the Lessee and, to the knowledge of the Company, XXXX, (i) is in compliance in
all material respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), (ii) has received all permits, licenses
or other approvals required of them under applicable Environmental Laws to
conduct their respective business and (iii) is in material compliance with all
terms and conditions of any such permit, license or approval.
(ii) (i) Except as may be specifically disclosed in the "Phase I"
environmental assessment reports referred to in the Prospectus (the
"Environmental Reports"), the Company, the Subsidiaries and the Lessee and, to
the knowledge of the Company, XXXX and the entities from which the Operating
Partnership acquired the Current Hotels (the "Selling Entities"), have not at
any time, and, to the knowledge of the Company, no other party has at any time,
handled, buried, stored, retained, refined, transported, processed,
manufactured, generated, produced, spilled, allowed to seep, leak, escape or
xxxxx, or be pumped, poured, emitted, emptied,
14
discharged, injected, dumped, transferred or otherwise disposed of or dealt
with, Hazardous Materials (as hereinafter defined) on, to or from the Current
Hotels. The Company, the Subsidiaries, the Lessee and XXXX do not intend to use
the Current Hotels or any subsequently acquired properties for the purpose of
handling, burying, storing, retaining, refining, transporting, processing,
manufacturing, generating, producing, spilling, seeping, leaking, escaping,
leaching, pumping, pouring, emitting, emptying, discharging, injecting, dumping,
transferring or otherwise disposing of or dealing with Hazardous Materials,
except for such Hazardous Materials as may be customarily required in hotel
operations, stored and used in the quantities customary for such uses and in
compliance with applicable Environmental Laws.
(ii) Except as disclosed in the Environmental Reports, to the
knowledge of the Company, there has been no seepage, leak, escape, xxxxx,
discharge, injection, release, emission, spill, pumping, pouring, emptying
or dumping of Hazardous Materials into waters on or adjacent to the
Current Hotels or onto lands from which such hazardous or toxic waste of
substances might seep, flow or drain into such waters.
(iii) Except as disclosed in the Environmental Reports,
neither the Company, any Subsidiary or the Lessee or, to the knowledge of
the Company, XXXX has received notice of any occurrence or circumstance
which, with notice or passage of time or both, would give rise to, any
claim under or pursuant to any Environmental Law pertaining to hazardous
or toxic waste or substances on or originating from the Current Hotels or
arising out of the conduct of any such party, including, without
limitation, pursuant to any Environmental Law.
(iv) No environmental engineering firm which prepared the
Environmental Reports (or amendments thereto) or physical condition
(engineering) reports with respect to the Acquired Hotels was employed for
such purpose on a contingent basis or has any substantial interest in the
Company, the Subsidiaries, any of the Selling Entities, XXXX or the
Lessee.
As used herein, "Hazardous Materials" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material as defined by any Federal, state or
local environmental law, ordinance, rule, or regulation including, without
limitation, Environmental Laws, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.) ("CERCLA"), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Section 1801, et seq.), the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 9601, et seq.) and in the
regulations adopted and publications promulgated pursuant to each of the
foregoing or by any Federal, state or local governmental authority having
or claiming jurisdiction over the Current Hotels as described in the
Prospectus.
15
(jj) To the knowledge of the Company, all physical condition
(engineering) reports obtained for the Acquired Hotels are materially true and
correct. The Operating Partnership will set aside annually, as a cash reserve
account for capital expenditures and replacement and refurbishment of furniture,
fixtures and equipment, an amount equal to 4.0% of total hotel revenues for each
of the Current Hotels. Other than as described in the Prospectus, neither the
Company, any of the Subsidiaries, the Lessee nor XXXX is aware of any material
capital expenditures (other than expenditures for maintenance in the ordinary
course of business) which will be required in connection with any of the Current
Hotels prior to the fifth anniversary of this Agreement.
(kk) The assets of the Company and the Subsidiaries do not
constitute "plan assets" as defined in Department of Labor Regulations Section
0000-0-000 promulgated under the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
(ll) The statements set forth in the Prospectus under the caption
"Federal Income Tax Considerations," insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate and
complete in all material respects.
Any certificate signed by any officer of the Company, AGH GP, AGH
LP, the Operating Partnership, any Subsidiary, the Lessee or XXXX on behalf of
any of such entities and delivered to you or to counsel for the Underwriter
shall be deemed a representation and warranty by such entity to the Underwriter
as to the matters covered thereby.
7. Indemnification and Contribution. (a) The Company, AGH GP, AGH LP and
the Operating Partnership, jointly and severally, agree to indemnify and hold
harmless each of you and the directors, officers, employees and agents of the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Prepricing Prospectus Supplement or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to the Underwriter
furnished in writing to the Company by or on behalf of the Underwriter through
you expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any Prepricing
Prospectus Supplement shall not inure to the benefit of the Underwriter (or to
the benefit of any person controlling the Underwriter) on account of any such
loss, claim, damage, liability or expense arising from the sale of the Shares by
the Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue
16
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus Supplement was corrected
in the Prospectus, provided that the Company has delivered the Prospectus to the
Underwriter in requisite quantity on a timely basis to permit such delivery or
sending within the time required by the Act. The foregoing indemnity agreement
shall be in addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Underwriter or any person controlling the Underwriter in respect of which
indemnity may be sought against the Company, AGH GP, AGH LP or the Operating
Partnership, the Underwriter or such controlling person shall promptly notify in
writing the Company, AGH GP, AGH LP or the Operating Partnership, and the
Company, AGH GP, AGH LP or the Operating Partnership shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. The Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Underwriter or such controlling person unless (i)
the Company, AGH GP, AGH LP and the Operating Partnership have agreed in writing
to pay such fees and expenses, (ii) the Company, AGH GP, AGH LP and the
Operating Partnership have failed to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both the Underwriter or such controlling person and
the Company, AGH GP, AGH LP or the Operating Partnership and the Underwriter or
such controlling person shall have been advised in writing by its counsel that
representation of such indemnified party and the Company, AGH GP, AGH LP or the
Operating Partnership by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the Company, AGH GP, AGH LP and the
Operating Partnership shall not have the right to assume the defense of such
action, suit or proceeding on behalf of the Underwriter or such controlling
person). In any event, it is understood, however, that the Company, AGH GP, AGH
LP and the Operating Partnership shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for the Underwriter and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Company, AGH GP, AGH LP or the Operating
Partnership shall not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Company, AGH GP, AGH LP and the Operating
Partnership agrees to indemnify and hold harmless the Underwriter, to the extent
provided in the preceding paragraph, and any such controlling person from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
17
(c) The Underwriter agrees to indemnify and hold harmless the
Company, the Operating Partnership, AGH GP and AGH LP and their respective
directors and officers who sign the Registration Statement, and any person who
controls the Company, the Operating Partnership, AGH GP or AGH LP within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company, AGH GP, AGH LP and the
Operating Partnership to the Underwriter, but only with respect to losses,
claims, damages, liabilities and expenses arising out of or based upon any
untrue statement or alleged untrue statement of a material fact set forth in the
information relating to the Underwriter furnished in writing by or on behalf of
the Underwriter through you expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus Supplement, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, AGH GP, AGH LP or the Operating Partnership, or any of their
respective directors, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any Prepricing Prospectus
Supplement, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against the Underwriter pursuant to this paragraph (c),
the Underwriter shall have the rights and duties given to the Company, AGH GP,
AGH LP and the Operating Partnership by paragraph (b) above (except that if the
Company, AGH GP, AGH LP or the Operating Partnership shall have assumed the
defense thereof the Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the Underwriter's expense), and the
Company, AGH GP, AGH LP and the Operating Partnership, their respective
directors, any such officer, and any such controlling person shall have the
rights and duties given to the Underwriter by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which the Underwriter
may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, AGH GP, AGH LP and the Operating Partnership on the one hand and the
Underwriter on the other hand from the offering of the Shares, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, AGH
GP, AGH LP and the Operating Partnership on the one hand and the Underwriter on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, AGH GP,
AGH LP and the Operating Partnership on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares (before deducting expenses) received by the
Company, AGH GP, AGH LP and the Operating Partnership bear to the total
underwriting discounts and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the
18
Company, AGH GP, AGH LP and the Operating Partnership on the one hand and the
Underwriter on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, AGH GP, AGH LP and the Operating Partnership on the one
hand or by the Underwriter on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, AGH GP, AGH LP, the Operating Partnership and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by a pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. 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 of the Shares underwritten by
it and distributed to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7(e), each person, if
any, who controls a party to this Agreement within the meaning of the Act, shall
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement shall have the same rights to
contributions as the Company.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company, AGH GP, AGH LP and the Operating
Partnership set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter or the Company, AGH GP,
AGH LP and the Operating Partnership, their respective directors or officers, or
any person controlling the Company, AGH GP, AGH LP
19
or the Operating Partnership , (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
the Underwriter or any person controlling the Underwriter, or to the Company,
AGH GP, AGH LP and the Operating Partnership, their respective directors or
officers, or any person controlling the Company, AGH GP, AGH LP and the
Operating Partnership, shall be entitled to the benefits of the indemnity,
contribution, and reimbursement agreements contained in this Section 7.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase the Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Initial
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 p.m., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or the Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effectiveness of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company and the
Subsidiaries taken as a whole not contemplated by the Prospectus, which in your
reasonable opinion would materially, adversely affect the market for the Shares,
or (ii) any event or development relating to or involving the Company or any
officer or director of the Company, which makes any statement made in the
Prospectus untrue or which, in the reasonable opinion of the Company and its
counsel or the Underwriter and its counsel, requires the making of any addition
to or change in the Prospectus in order to state a material fact required by the
Act or any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Prospectus
to reflect such event or development would, in your reasonable opinion,
materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, opinions of Battle
Xxxxxx, LLP and Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, counsel for the Company,
the Subsidiaries and the Lessee, dated the Closing Date and addressed to you, in
substantially the form set forth on Exhibit 8(c) attached hereto.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the State of New York or the State of
20
Maryland and such opinion may be subject to the limitations and assumptions with
respect to matters concerning the laws of such jurisdiction contained in such
other counsel's opinion, provided that (1) each such local counsel is acceptable
to the Underwriter, (2) such reliance is expressly authorized by each opinion so
relied upon, and a copy of each such opinion is delivered to the Underwriter and
is, in form and substance, reasonably satisfactory to you and your counsel, and
(3) counsel shall state in their opinion that they believe that they and the
Underwriter are justified in relying thereon. In addition, in rendering the
foregoing opinion, such counsel may rely, as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company, the
Operating Partnership, the Lessee, AGH GP and AGH LP and certificates or other
written statements of officers or departments of various jurisdictions having
custody of documents respecting the existence or good standing of the Company,
the Operating Partnership, the Lessee, AGH GP and AGH LP, provided that copies
of all such opinions, statements or certificates shall be delivered to counsel
for the Underwriter.
(d) You shall have received on the Closing Date an opinion of
Coopers & Xxxxxxx L.L.P., special tax advisor to the Company, dated the Closing
Date and addressed to you, satisfactory in form and substance to counsel for the
Underwriter, to the effect that the discussion contained in the Prospectus under
the caption "Federal Income Tax Considerations Other Tax Considerations" fairly
summarizes the Texas state tax considerations that are material to a holder of
Shares.
(e) You shall have received on the Closing Date an opinion of Hunton
& Xxxxxxxx, counsel for the Underwriter, dated the Closing Date and addressed to
you, with respect to the Registration Statement, the Prospectus and this
Agreement and such other related matters as you may request.
(f) You shall have received letters addressed to you, and dated the
date hereof and the Closing Date, from Coopers & Xxxxxxx L.L.P., independent
certified public accountants, substantially in the forms heretofore approved by
you.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company or the
Underwriter, shall be contemplated by the Commission at or prior to the Closing
Date; (ii) there shall not have been any change in the capital stock of the
Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business and the proposed new
credit facility being entered into by the Company and the Operating Partnership)
from that set forth or contemplated in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); (iii) there shall not have
been since the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries taken as a
whole; (iv) the Company and
21
the Subsidiaries shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company and the Subsidiaries, taken as a whole, other than those
reflected or contemplated in the Registration Statement or the Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the Company, the Operating Partnership, AGH LP and AGH GP
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company, AGH GP and AGH LP (or such other officers as are acceptable to you), to
the effect set forth in this Section 8(g) and in Section 8(h).
(h) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(i) The Shares shall have been listed or approved for listing,
subject to notice of issuance, on the NYSE.
(j) The Company, AGH GP, AGH LP, the Operating Partnership and the
Lessee shall have furnished to the Underwriter such certificates, in addition to
those specifically mentioned herein, as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel in your reasonable discretion.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them as may be reasonably
requested for use in connection with the offering and sale of the Shares; (iii)
the preparation, printing, authentication, issuance and delivery of certificates
for the Shares, including any stamp taxes in connection with the original
issuance and sale of the Shares; (iv) the printing (or reproduction) and
delivery of this Agreement, the Blue Sky Memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the NYSE; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriter
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such
22
registration and qualification); (vii) the filing fees and the fees and expenses
of counsel for the Underwriter in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.; (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Shares; (ix) the fees and expenses of the Company's accountants and the fees
and expenses of counsel (including local and special counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Initial Registration Statement to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of such post-effective amendment has been released by the
Commission. Until such time as this Agreement shall have become effective, it
may be terminated by the Company, by notifying you, or by you, by notifying the
Company.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed within 24 hours by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date, (i) trading in the Common Stock shall have been suspended by the
Commission or the NYSE, (ii) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market shall
have been suspended or materially limited, (iii) a general moratorium on
commercial banking activities in New York or Texas shall have been declared by
either federal or state authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to make
it, in your reasonable judgment, impracticable or inadvisable to commence or
continue the offering of the units of the Trust to the public or (y) to enforce
contracts for the sale of Units in the Trust. Notice of such termination may be
given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
12. Information Furnished by the Underwriter. The Company and the
Operating Partnership acknowledge that the statements set forth in the second
and third sentences of the penultimate paragraph on the cover page, the last
paragraph on the cover page, the name of the Underwriter appearing on the cover
page and the back cover page of the Prospectus, and the statements in the first,
third and sixth paragraphs under the caption "Underwriting" in the Prepricing
Prospectus Supplement, constitute the only information furnished by or on behalf
of the Underwriter through you as such information is referred to in Sections
6(a) or 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered
23
(i) if to the Company, AGH GP, AGH LP or the Operating Partnership, at the
office of the Company at 0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, Attention: Xxxxxx X. Xxxxx, Chairman, Chief Executive Officer and
President; or (ii) if to you, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriter, the Company, the Operating Partnership, AGH GP and AGH LP and their
respective directors and officers, and the other controlling persons referred to
in Section 7 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or by
virtue of this Agreement. Neither the term "successor" nor the term "successors
and assigns" as used in this Agreement shall include a purchaser from the
Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
24
Please confirm that the foregoing correctly sets forth the agreement
between the Company, AGH GP, AGH LP and the Operating Partnership and the
Underwriter.
Very truly yours,
AMERICAN GENERAL HOSPITALITY
CORPORATION
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Printed Name: Xxxxxxx X. Xxxx
-----------------------
Title: Executive Vice President
------------------------------
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By AGH GP, INC.,
as general partner
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Printed Name: Xxxxxxx X. Xxxx
-----------------------
Title: Executive Vice President
-----------------------------
AGH GP, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Printed Name: Xxxxxxx X. Xxxx
-----------------------
Title: Executive Vice President
------------------------------
AGH LP, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Printed Name: Xxxxxxx X. Xxxx
-----------------------
Title: Executive Vice President
------------------------------
25
Confirmed as of the date first
above mentioned on behalf of
themselves.
XXXXX XXXXXX INC.
By /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Printed Name: Xxxxxxx Xxxxxxxx
---------------------
Title: Director
---------------------------
26
SCHEDULE I
CURRENT HOTELS
Holiday Inn Dallas DFW Airport West
Courtyard by Marriott Meadowlands
Hampton
Inn Richmond Airport
Hotel Maison de Ville
Hilton Hotel-Toledo Holiday Inn
Select Dallas DFW Airport South
Holiday Inn Select New Orleans Hampton
Inn Ocean
City International Airport
Crowne Plaza Madison
Holiday Inn Park Center Plaza
Wyndham Albuquerque Airport Hotel
Wyndham Airport Hotel San Xxxx
Holiday Inn Select Mission Valley
Wyndham Hotel Lake Buena Vista
Holiday Inn Resort Monterey
Hilton Hotel Durham
Radisson Hotel Arlington Heights
Wyndham Garden Hotel-Marietta
Doubletree Guest Suites Hotel
Westin Resorts Key Largo
Holiday Inn Corporate Center Phoenix
Hilton Airport Hotel Grand Rapids
Holiday Inn Select Bucks County
Marriott Houston West Loop
Radisson Twin Towers Xxxxxxx
Xxxxxx Hotel Cocoa Beach
Courtyard by Marriott Durham
Crowne Plaza Suites Las Vegas
St. Tropez Suites Las Vegas
Ramada Inn Mahwah
Sheraton Crossroads Hotel Mahwah
Ramada Plaza Meriden
Sheraton Four Points Hotel Mt. Arlington
Crowne Plaza Portland
Ramada Plaza Xxxxxxx
Ramada Plaza Hotel Alexandria
Holiday Inn and Suites Alexandria
Holiday Inn Annapolis
Holiday Inn Express BWI
Holiday Inn X'Xxxx International Hotel
28
SCHEDULE 6(f)
SUBSIDIARIES
State or Other Jurisdiction
of Incorporation or
Subsidiary Organization/Type of Entity
---------- ---------------------------
AGH GP, Inc. Nevada/Corporation
AGH LP, Inc. Nevada/Corporation
American General Hospitality Operating Delaware/Limited Partnership
Partnership, L.P.
AGH UPREIT LLC Delaware/Limited Liability Company
AGH SECAUCUS LLC Delaware/Limited Liability Company
AGH DFW South LLC Delaware/Limited Liability Company
AGH 75 Arlington Heights LLC Delaware/Limited Liability Company
AGH 2780 Atlanta LLC Delaware/Limited Liability Company
2929 Xxxxxxxx Limited Liability Company Delaware/Limited Liability Company
BCHI Acquisition, LLC Delaware/Limited Liability Company
3100 Glendale Joint Venture Ohio/General Partnership
MDV Limited Partnership Texas/Limited Partnership
Madison Motel Associates Wisconsin/General Partnership
183 Hotel Associates, Ltd. Texas/Limited Partnership
Richmond Williamsburg Associates, Ltd. Texas/Limited Partnership
455 Meadowlands Associates, Ltd. Texas/Limited Partnership
DFW South I Limited Partnership Texas/Limited Partnership
Lake Buena Vista Partners, Ltd. Florida/Limited Partnership
Cocoa Beach Hilton, Ltd. Florida/Limited Partnership
75 Arlington Heights Limited Partnership, Delaware/Limited Partnership
L.P.
2780 Atlanta Limited Partnership, L.P. Delaware/Limited Partnership
Portland/Xxxxxxx Corp. Delaware/Corporation
AGH Portland/Xxxxxxx LLC Delaware/Limited Liability Company
29
Portland/Xxxxxxx LLC Delaware/Limited Liability Company
Mt. Arlington New Jersey, LLC Delaware/Limited Liability Company
AGH X'Xxxx International LLC Delaware/Limited Liability Company
Durham I-85 Limited Partnership Delaware/Limited Partnership
AGH PSS I, Inc. Delaware/Corporation
SIGNIFICANT SUBSIDIARIES
------------------------
American General Hospitality Operating Partnership, L.P.
AGH GP, Inc.
AGH LP, Inc.
AGH UPREIT LLC
AGH SECAUCUS LLC
AGH DFW South LLC
AGH 75 Arlington Heights LLC AGH 2780 Atlanta LLC
Portland/Xxxxxxx Corp.
SCHEDULE 6(n)
OPERATIVE DOCUMENTS
(1) The Participating Leases between the Operating Partnership and AGH Leasing,
L.P. with respect to the Courtyard by Marriott Durham, Ramada Plaza Hotel
Alexandria, Holiday Inn and Suites Alexandria, Holiday Inn Annapolis,
Holiday Inn Express BWI and Holiday Inn X'Xxxx International Hotels
(2) The Participating Leases between the Operating Partnership and Xxxxxxx
Holding Corp. with respect to the Crowne Plaza Suites Las Vegas, St. Tropez
Suites Las Vegas, Ramada Inn Mahwah and Ramada Plaza Meriden Hotels
(3) The Participating Lease between Mt. Arlington New Jersey, LLC and Xxxxxxx
Holding Corp. (Sheraton Four Points Hotel Mount Arlington)
(4) The Participating Lease between Portland/Xxxxxxx LLC and Fairfield Holding
Corp. (Crowne Plaza Portland)
(5) The Participating Lease between Portland/Xxxxxxx LLC and Fairfield Holding
Corp. (Ramada Plaza Xxxxxxx)
(6) The Participating Lease between the Operating Partnership and Mahwah
Holding Corp. (Sheraton Crossroads Hotel Mahwah)
(7) The Management Agreements between AGH Leasing, L.P. and American General
Hospitality, Inc. with respect to the Courtyard by Marriott Durham, Ramada
Plaza Hotel Alexandria, Holiday Inn and Suites Alexandria, Holiday Inn
Annapolis, Holiday Inn Express BWI and Holiday Inn X'Xxxx International
Hotels
(8) Purchase and Sale Agreement, dated November 20, 1997, between Prime
Hospitality Corp. and American General Hospitality Operating Partnership,
L.P.
(9) Contract for Purchase and Sale of Hotels, dated November 26, 1997, by and
among Various Entities Identified on Schedule A as Sellers and American
General Hospitality Operating Partnership, L.P.
(10) Amendment No. 1 to Contract for Purchase and Sale of Hotels, dated November
26, 1997, by and among Various Entities Identified on Schedule A as Sellers
and American General Hospitality Operating Partnership, L.P.
(11) Contract for Purchase and Sale of Hotel, dated November 26, 1997, between
Zeta Mystic Hotel, Inc. and American General Hospitality Operating
Partnership, L.P.
(12) Amendment No. 1 to Contract for Purchase and Sale of Hotel, dated November
26, 1997, between Zeta Mystic Hotel, Inc. and American General Hospitality
Operating Partnership, L.P.
EXHIBIT 8(c)
Form of Opinion of Counsel
1. The Company is a corporation duly incorporated and validly
existing 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
full corporate power to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business as described in the
Registration Statement and the Prospectus requires such registration or
qualification, except where the failure to so register or qualify would not have
any material adverse effect on the condition, financial or otherwise, business,
properties or results of operation of the Company.
2. There are [_________] shares of Common Stock issued and
outstanding on the date hereof (immediately prior to the issuance of the Shares)
(the "Outstanding Shares") and the Company does not have the authority, pursuant
to the Charter, to issue shares of any other class of stock. The Outstanding
Shares have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights under the
Maryland General Corporation Law ("MGCL"). The Shares have been duly authorized
and, when issued and delivered to the Underwriter against payment therefor in
accordance with the terms of the Underwriting Agreement and the Resolutions (as
defined in the opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP), will be
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights under the MGCL. The terms of the stock of the Company conform in
all material respects to the description thereof in the Registration Statement
and the Prospectus. The form of certificate representing the Shares conforms to
the requirements of the MGCL.
3. To the best knowledge of such counsel, except as described in the
Prospectus or the Registration Statement (or any amendment or supplement
thereto) or any Incorporated Document, there are no outstanding options,
warrants or other written rights calling for the issuance of, or any written
commitment, plan or arrangement to issue, any capital stock of the Company or
any security convertible into, or exchangeable for, the capital stock of the
Company.
4. Each of the Operating Partnership, the Significant Subsidiaries
and the Lessee is a corporation, limited partnership or limited liability
company duly incorporated or formed, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation,
with full corporate, partnership or limited liability company power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus (and any amendment
or supplement thereto), and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business as described in the
Registration Statement and
the Prospectus requires such registration or qualification, except where the
failure to so qualify would not have a material adverse effect on the condition,
financial or otherwise, business, properties or results of operations of the
Company, the Operating Partnership, the Lessee or any Significant Subsidiary,
respectively.
5. All of the outstanding limited partnership interests of the
Operating Partnership and the Lessee were created under the agreements forming
the Operating Partnership and the Lessee, as the case may be, and have been duly
authorized and validly issued. All of the outstanding shares of capital stock of
the Significant Subsidiaries which are corporations and XXXX have been duly
authorized and validly issued. To the best knowledge of such counsel, based
solely on a review of the documents referred to in clauses (f) and (g) above,
after giving effect to the sale of the Shares, AGH GP will be the record owner
of a 1% interest, as sole general partner in the Operating Partnership, and AGH
LP will be the record owner of an approximate [ ]% interest, as a limited
partner in the Operating Partnership. To the best knowledge of such counsel,
except as described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), or any Incorporated Document, there are no
outstanding options, warrants or other written rights calling for the issuance
of, or any written commitment, plan or arrangement to issue, any equity interest
or any membership interest in the Operating Partnership, the Significant
Subsidiaries or the Lessee or any security convertible into, or exchangeable or
exercisable for, any such interests in the Operating Partnership, the
Significant Subsidiaries or the Lessee.
6. With respect to the Company, the Operating Partnership, the
Significant Subsidiaries, and the Lessee, neither the issuance and sale of the
Shares, the execution, delivery or performance of the Underwriting Agreement nor
the consummation of the transactions contemplated thereby by the Company, the
Operating Partnership, AGH GP or AGH LP, as applicable, (i) requires any
consent, approval, authorization or other order of, or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as has been obtained for the registration
of the Shares under the Act and the Exchange Act, and state securities or Blue
Sky laws of various jurisdictions and clearance by the NASD in connection with
the purchase and sale of the Shares by the Underwriter as contemplated by the
Underwriting Agreement (as to which such counsel need express no opinion, and
except that no opinion need be given with respect to liquor laws, statutes,
rules or regulations), (ii) conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the Charter or the certificate
or articles of incorporation, or bylaws, partnership agreement or other
organizational documents, of any of such entities or (iii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
any agreement, indenture, lease or other instrument known to such counsel to
which any of such entities is a party or by which any of them or any of their
respective properties may be bound, which in each case has been filed or
incorporated by reference as an exhibit to the Registration Statement or any
Incorporated Document, or violates or will violate any statute, law, regulation,
ruling or filing or judgment, injunction, order or decree applicable to any of
such entities, any of their respective properties, or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of any of such entities encumbrance upon any property or assets of any of
such entities pursuant to the terms of any agreement or instrument
known to such counsel, which in each case has been filed as an exhibit to the
Registration Statement or any Incorporated Document, to which any of them is a
party or by which any of them may be bound or to which any of the property or
assets of any of them is subject (except that no opinion need be given with
respect to the indemnification and contribution provisions of the Underwriting
Agreement or the requirements of state securities or Blue Sky laws).
7. The execution and delivery of, and the performance by the
Company, the Operating Partnership, AGH GP and AGH LP of their respective
obligations under the Underwriting Agreement are within the corporate or
partnership power and authority of each of such entities and have been duly and
validly authorized by the Company, the Operating Partnership, AGH GP and AGH LP
and the Underwriting Agreement has been duly authorized, executed and delivered
by the Company, the Operating Partnership, AGH GP and AGH LP.
8. To the best knowledge of such counsel, there are no legal or
governmental actions, suits or court proceedings pending or threatened against
the Company, or any of the Significant Subsidiaries, XXXX or the Lessee, or any
of their respective partners, directors or officers in their capacity as such,
or to which any of the Current Hotels (as defined in the Underwriting Agreement)
is subject, that are of a character which are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or in any Incorporated Document but are not described as required. To
the best knowledge of such counsel, there are no agreements, contracts,
indentures, leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or in any Incorporated Document or to be filed as an exhibit to the
Registration Statement or to any Incorporated Document that are not described or
filed as required by the Act, as the case may be.
9. At the Closing Date, the Registration Statement and the
Prospectus and any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other financial,
accounting and statistical data included therein or excluded therefrom or the
exhibits to the Registration Statement, as to which such counsel need not
express an opinion) comply as to form in all material respects with the
requirements of the Act, except that such counsel need express no opinion as to
the form of exhibits to the Registration Statement, or to the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, except to the extent set forth in this paragraph, paragraph 10 hereof
and the penultimate paragraph of this opinion; and each of the Incorporated
Document (except for the financial statements and the notes thereto and the
schedules and other financial and statistical data included therein, as to which
such counsel need not express an opinion) complies as to form in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder.
10. The statements under the captions "Description of Common Stock,"
"Risk Factors -- Tax Risks," "Risk Factors -- Potential Anti-Takeover Effect of
Certain Provisions of Maryland Law and the Company's Charter and Bylaws,"
"Operating Partnership Agreement" and "Federal Income Tax Consideration" (other
than statements regarding Texas tax considerations under the subcaption "--
Other Tax Considerations") contained in the Prospectus, to the extent they
constitute matters of law, descriptions of statutes, rules or regulations, or
legal conclusions, each, respectively, fairly presents in all material respects
the information disclosed therein.
11. The offers and sales of units of limited partnership interests
by the Operating Partnership, and the offers and sales by the Company of shares
of Common Stock subsequent to November 13, 1997 and prior to the Closing Date as
described in the Registration Statement and the Prospectus or any Incorporated
Document were either duly registered or exempt from the registration
requirements of the Act and, to the extent applicable, New York Blue Sky laws.
12. Except as described in the Registration Statement and the
Prospectus or any Incorporated Document and to the best knowledge of such
counsel, there are no contracts, agreements or understanding between the Company
and any person granting such person or entity the right to require the
registration of any shares of Common Stock or any other securities of the
Company because of the filing of the Registration Statement or sale of the
Shares as contemplated by the Underwriting Agreement.
13. After giving effect to the Offering and the use of proceeds from
sale of the Shares as described in the Prospectus Supplement, neither the
Company, the Operating Partnership nor any of the Significant Subsidiaries is
required to be registered under the Investment Company Act of 1940, as amended.
14. Each Operative Document to which the Company, the Operating
Partnership, the Significant Subsidiaries and the Lessee is a party has been
duly authorized and executed by such entity. Assuming due execution and
authorization by the parties thereto and assuming the applicability of New York
law, the form of the Prime Lease Agreements will constitute a valid and binding
obligation of the parties thereto, enforceable against each in accordance with
the terms thereof.
15. Based on certain customary assumptions and representations
(acceptable to such counsel and to counsel for the Underwriter in its reasonable
discretion) relating to applicable asset composition, source of income,
stockholder diversification distribution, record keeping tests and other
requirements of the Code necessary for the Company to qualify as a REIT, the
Company was organized and has operated in conformity with the requirements for
qualification and taxation as a REIT under Sections 856 through 860 of the Code
for the each of the taxable years ended December 31, 1996 and December 31, 1997;
the Company's current organization and method of operations will enable the
Company to continue to qualify as a REIT under the Code.
16. Such counsel has been advised by the NYSE that the Shares are
duly authorized for listing, subject to official notice of issuance.
17. Such counsel has been advised by the staff of the Commission
that the Registration Statement and all post-effective amendments, if any, have
become effective under the Act as of August 28, 1997 and, to the best knowledge
of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose are pending before or contemplated by the Commission, and any
required filing of the Prospectus pursuant to Rule 424(b) under the Act has been
made in accordance with Rule 424(b) under the Act.
18. In addition, such counsel has participated in certain
conferences with officers and other representatives of the Company, the
Operating Partnership, the Significant Subsidiaries, the Lessee, representatives
of the Company's independent accountants and with you and your representatives
and counsel in connection with the preparation of the Registration Statement at
which the contents of the Registration Statement, and the Prospectus therein and
related matters were discussed and, although such counsel has not verified
independently and, therefore, does not assume any responsibility, explicitly or
implicitly, for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, on the basis of the
foregoing, nothing has come to the attention of such counsel during the course
of the above-described process that has caused such counsel to believe that the
Registration Statement, at the time the Registration Statement became effective,
or the Final Prospectus, as of its date and the Prospectus Supplement as of its
date and the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no opinion, view or belief with respect to the financial
statements and the notes thereto and the schedules and the other financial,
accounting or statistical data included in or excluded from the Registration
Statement or the Prospectus).
