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Exhibit 1.1(a)
3,400,000 Shares
INTERSTATE HOTELS COMPANY
(a Pennsylvania corporation)
Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
December [ ], 1996
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXX & CO., INCORPORATED
XXXXX XXXXXX INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
as Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Interstate Hotels Company, a Pennsylvania corporation (the "Company"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxxxxxxx Securities ("Xxxxxxxxxx"),
Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx"), Xxxxx Xxxxxx Inc. ("Xxxxx
Xxxxxx"), Credit Lyonnais Securities (USA) Inc. ("Credit Lyonnais"), and each
of the other underwriters named in Schedule A hereto (collectively, the "U.S.
Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Xxxxxxx Lynch, Montgomery,
Xxxxxx Xxxxxxx, Xxxxx Xxxxxx and Credit Lyonnais are acting as representatives
(in such capacity, Xxxxxxx Lynch, Montgomery, Xxxxxx Xxxxxxx,
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Xxxxx Xxxxxx and Credit Lyonnais shall hereinafter be referred to collectively
as the "Representatives"), with respect to the sale by the Company and the
purchase by the U.S. Underwriters, acting severally and not jointly, of the
respective number of shares of common stock, par value $.01 per share, of the
Company ("Common Stock") set forth in said Schedule A (except as otherwise
provided in the U.S. Pricing Agreement referred to below) and with respect to
the grant by the Company to the U.S. Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 510,000 additional shares of Common Stock to cover over-allotments, in
each case except as may otherwise be provided in the U.S. Pricing Agreement (as
hereinafter defined). The 3,400,000 shares of Common Stock (the "Initial U.S.
Securities") to be purchased by the U.S. Underwriters and all or any part of
the 510,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "Option U.S. Securities") are collectively hereinafter called
the "Securities."
Prior to the purchase and public offering of the Securities by the several
U.S. Underwriters, the Company and the Representatives, acting on behalf of the
several U.S. Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "U.S. Pricing Agreement"). The U.S. Pricing
Agreement may take the form of an exchange of any standard form of written
telecommunication between the Company and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering
of the Securities will be governed by this agreement (the "Agreement"), as
supplemented by the U.S. Pricing Agreement. From and after the date of the
execution and delivery of the U.S. Pricing Agreement, this Agreement shall be
deemed to incorporate the U.S. Pricing Agreement.
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of 600,000 shares of Common Stock
(the "Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada (the "International
Underwriters") for whom Xxxxxxx Xxxxx International, Credit Lyonnais
Securities, Xxxxxxxxxx Securities, Xxxxxx Xxxxxxx & Co. International Limited
and Xxxxx Xxxxxx Inc. are acting as the
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representatives (the "International Representatives") and the grant by the
Company to the International Underwriters, acting severally and not jointly, of
an option to purchase all or any part of the International Underwriters' pro
rata portion of up to 90,000 additional shares of Common Stock solely to cover
over-allotments, if any (the "Option International Securities", and
collectively with the Initial International Securities, the "International
Securities"). It is understood that the Company is not obligated to sell, and
the International Underwriters are not obligated to purchase, any Initial
International Securities unless all of the Initial U.S. Securities are
contemporaneous purchased by the U.S. Underwriters.
Prior to the purchase and public offering of the International Securities
by the several International Underwriters, the Company and the International
Representatives, acting on behalf of the several International Underwriters,
shall enter into an agreement substantially in the form of Exhibit A to the
International Purchase Agreement (the "International Pricing Agreement"). The
International Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication between the Company and the
International Representatives and shall specify such applicable information as
is indicated in Exhibit A to the International Purchase Agreement. The offering
of the International Securities will be governed by the International Purchase
Agreement, as supplemented by the International Pricing Agreement. From and
after the date of the execution and delivery of the International Pricing
Agreement, the International Purchase Agreement shall be deemed to incorporate
the International Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-15507) and a
related preliminary prospectus for the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), has filed such amendments
thereto, if any, and such amended preliminary prospectuses as may have been
required to the date hereof, and will file such additional amendments thereto
and such amended prospectuses as may hereafter be required. Such registration
statement (as amended, if applicable) and the prospectus constituting a part
thereof (including the information,
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if any, deemed to be part thereof pursuant to Rule 430A(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")),
as from time to time amended or supplemented pursuant to the 1933 Act, or
otherwise, are hereinafter referred to as the "Registration Statement," and the
"Prospectus," respectively, except that if any revised prospectus shall be
provided to the U.S. Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the U.S.
Underwriters for such use. Two forms of prospectuses are to be used in
connection with the offering and sale of the Securities to the Underwriters,
one relating to the International Securities and one relating to the U.S.
Securities. The form of prospectus relating to the International Securities is
identical to the form of prospectus relating to the U.S. Securities, except for
the front and back covers and the information under the caption "Underwriting."
Any registration statement (including any amendment or supplement thereto or
information which is deemed part thereof) filed by the Company to register
additional shares of Common Stock of the Company under Rule 462(b) of the 1933
Act Regulations (a "Rule 462(b) Registration Statement") shall be deemed to be
part of the Registration Statement. Any prospectus (including any amendment or
supplement thereto or information which is deemed part thereof) included in a
Rule 462(b) Registration Statement and any term sheet as contemplated by Rule
434 of the 1933 Act Regulations (a "Term Sheet") shall be deemed to be part of
the Prospectus. Capitalized terms used but not otherwise defined herein shall
have the meanings given to those terms in the Prospectus.
The Company understands that the U.S. Underwriters propose to make a
public offering of the Securities as soon as the U.S. Representatives deem
advisable after the Registration Statement becomes effective and the U.S.
Pricing Agreement has been executed and delivered.
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The Company has reserved up to 100,000 of the Securities (the "Reserved
Securities") for offering and sale to certain of its employees, customers,
vendors and business associates pursuant to a reserve share program as stated
in the "Underwriting" section of the Prospectus (the "Reserve Share Program").
The Securities under the Reserve Share Program will be sold to the employees,
customers, vendors and business associates by the U.S. Underwriters pursuant to
this Agreement and by the International Underwriters pursuant to the
International Purchase Agreement at the public offering price. Any such shares
not orally confirmed for purchase by such persons by the end of the first
business day following the date of this Agreement will be offered to the public
by the U.S. Underwriters and the International Underwriters as set forth in the
Prospectus.
SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to each U.S. Underwriter as of the
date hereof and as of the date of the U.S. Pricing Agreement (such later date
being hereinafter referred to as the "Representation Date") as follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a prospectus
which has been provided to the U.S. Underwriters by the Company for use in
connection with the offering of the Securities which differs from the
Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first
provided to the U.S. Underwriters for such use) and at the Closing.0 Time
referred to in Section 2 hereof, will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and will not
include an untrue statement of a material fact or
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omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
U.S. Underwriter through the Representatives expressly for use in the
Registration Statement or Prospectus.
(ii) Coopers & Xxxxxxx L.L.P., the accounting firm that audited the
financial statements included in the Registration Statement and
Prospectus, is an independent public accountant as required by the 1933
Act and the 1933 Act Regulations.
(iii) The financial statements (including the related notes thereto)
included in the Registration Statement and the Prospectus present fairly,
in all material respects, the financial position of the respective entity
or entities or group presented therein at the respective dates indicated
and the results of their operations for the respective periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis through the periods
specified. The other financial and statistical information and data
included in the Registration Statement and the Prospectus present fairly,
in all material respects, the information included therein and, to the
extent applicable, have been prepared on a basis consistent with such
financial statements and/or the books and records of the respective
entities or group presented therein. Pro forma financial information
included in the Prospectus has been prepared in accordance with the
applicable requirements of the 1933 Act and the 1933 Act Regulations with
respect to pro forma financial information and includes all adjustments
necessary to present fairly, in all material respects, the pro forma
financial position of the Company at the respective dates indicated and
the results of operations for the respective periods specified.
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(iv) 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 executive officers
of the Company, after due inquiry, threatened by the Commission or by the
state securities authority of any jurisdiction. No order preventing or
suspending the use of the Prospectus has been issued and no proceeding for
that purpose has been instituted or, to the knowledge of the executive
officers of the Company, after due inquiry, threatened by the Commission
or by the state securities authority of any jurisdiction.
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise described
therein, and giving pro forma effect to all acquisitions (as described in
the Prospectus), (A) there has been no change in the condition, financial
or otherwise, in the earnings, assets, business affairs or business
prospects of the Company or any of its Subsidiaries, whether or not
arising in the ordinary course of business, which would be materially
adverse to the Company and its Subsidiaries taken as a whole (any such
change being hereinafter referred to as a "Material Adverse Change"), (B)
there has been no casualty, loss or condemnation or other adverse event
with respect to any of the hotel properties in which the Company or any of
its Subsidiaries will own as of the Closing Date (the "Hotels") which
would have a material adverse effect on the earnings, assets, business
affairs or business prospects of the Company, its Subsidiaries or the
Hotels, which would be materially adverse to the Company and its
Subsidiaries taken as a whole (a "Material Adverse Effect"), (C) there
have been no transactions or acquisitions entered into by the Company or
any of its Subsidiaries, other than those in the ordinary course of
business, which would have a Material Adverse Effect, (D) there have been
no changes to any of the management agreements which the Company has
entered into with various hotel property owners, other than those in the
ordinary course of business, which would have a Material Adverse Effect,
(E) there has been no dividend or distribution of any kind declared, paid
or
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made by the Company on any class of its capital stock, and (F) there has
been no change in the capital shares of the Company, or any increase in
the indebtedness of the Company or any of its Subsidiaries or encumbering
of the Hotels which would have a Material Adverse Effect. For purposes of
this Agreement, "Subsidiary" means, with respect to any party, any
corporation or other entity, whether incorporated or unincorporated of
which more than 50% of either the equity interests is, or voting control
of such corporation or other entity is, directly or indirectly through
subsidiaries, beneficially owned by the Company.
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement and the
U.S. Pricing Agreement and the other Company Documents (as hereinafter
defined) to which it is a party; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership, leasing or management of property or the conduct of
business, except where the failure to so qualify would not have a Material
Adverse Effect.
(vii) Each of the Company's Subsidiaries that is a limited partnership
(collectively, the "Partnership Subsidiaries") and would constitute a
"significant subsidiary" under Rule 1-02 of Regulation S-X under the
Securities Act has been duly formed and is validly existing as a limited
partnership in good standing under and by virtue of the laws of the state
of its formation, with the requisite partnership power and authority to
own, lease and manage its properties, to conduct the business in which it
is engaged or proposes to engage as described in the Prospectus and to
enter into and perform its obligations under the Company Documents (as
defined herein) to which it is a party. Each of the Partnership
Subsidiaries is duly qualified or
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registered as a foreign entity to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership, leasing or management of property or
the conduct of business, except where the failure to so qualify would not
have a Material Adverse Effect.
(viii) Each of the Company's Subsidiaries that is a corporation (the
"Corporate Subsidiaries," and collectively with the Partnership
Subsidiaries, the "Subsidiaries") and would at the Closing Time constitute
a "significant subsidiary" under Rule 102 of Regulation S-X under the
Securities Act ("Significant Subsidiary") is a corporation duly
incorporated and validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation with the requisite corporate
power and authority to own, lease and manage its properties, to conduct
the business in which it is engaged or proposes to engage and to enter
into and perform its obligations under the Company Documents to which it
is a party. Each of the Corporate Subsidiaries is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership, leasing or management of property or the conduct of
business, except where the failure to so qualify would not have a Material
Adverse Effect. As of the Closing Time, all of the issued and outstanding
capital stock of each of the Corporate Subsidiaries will be duly
authorized, validly issued, fully paid and non-assessable, and except as
described, or in respect of indebtedness which is described, in the
Prospectus, all of such capital stock will be owned by the Company,
directly or through the Company's Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
restriction other than any lien or encumbrance imposed by any such
Subsidiaries' organizational documents or by shareholder agreements. No
shares of capital stock of the Company's Subsidiaries are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock of the Company's Subsidiaries and no
outstanding options, rights (preemptive or otherwise) or
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warrants to purchase or to subscribe for shares of such capital stock or
any other securities of Company's Subsidiaries other than pursuant to such
Subsidiaries' respective organizational documents.
(ix) At the Closing Time, the capital shares of the Company will be as
set forth in the Prospectus under "Capitalization" and "Description of
Capital Stock." All the issued and outstanding shares of Common Stock of
the Company have been duly authorized and are validly issued, fully paid
and non-assessable and have been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state
securities laws). No shares of the capital stock of the Company are
reserved for any purpose except as described in the Prospectus. Except as
described in the Prospectus and except as granted under this Agreement,
there are no outstanding securities convertible into or exchangeable for
any capital stock of the Company and there are no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to subscribe
for such Common Stock or any other securities of the Company.
(x) The Securities have been duly authorized for issuance and sale to
the U.S. Underwriters pursuant to this Agreement, and, when issued and
delivered by the Company pursuant to this Agreement against payment of the
consideration set forth in the U.S. Pricing Agreement, will be validly
issued, fully paid and non-assessable. The terms of the Common Stock
conform in all material respects to all statements and descriptions
related thereto contained in the Prospectus. The issuance of the
Securities is not subject to any preemptive or other similar rights, other
than pursuant to the Registration Rights Agreement (referred to in the
Prospectus under "The Organization, Acquisition and Financing Plan") and
the Stockholders' Agreements (as hereinafter defined).
(xi) All shares of Common Stock (other than the Securities) issued or
to be issued, at or prior to the Closing Time, in connection with the
Transactions (as hereinafter defined) have been duly authorized for
issuance by the Company, and as of
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the Closing Time upon payment therefor as provided herein will be validly
issued, fully paid and nonassessable.
(xii) None of the Company or any of its Subsidiaries (the "Transaction
Entities") is in violation of its certificate or articles of
incorporation, by-laws, certificate of partnership, partnership agreement,
certificate of formation, limited liability company agreement or other
similar governing document, as the case may be, and none of the
Transaction Entities is in default in the performance or observance of any
obligation, agreement covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument or of
any applicable law, rule, order, administrative regulation or
administrative or court decree, to which such entity is a party or by
which such entity may be bound, or to which any of its property or assets
or any Hotel may be bound or subject, except for such violations and
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect.
(xiii) (A) This Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Representatives, is a valid and binding
agreement of the Company; (B) at the Representation Date, the Pricing
Agreement will have been duly and validly authorized, executed and
delivered by the Company, and assuming due authorization, execution and
delivery by the Representatives, will be a valid and binding agreement of
the Company; (C) at the Closing Time, the Credit Agreement, dated June 25,
1996, as amended October [ ], 1996 among the Company, Interstate Hotels
Corporation ("IHC"), Credit Lyonnais New York Branch, and the other banks
signatory thereto (the "Credit Agreement") will be duly and validly
authorized, executed and delivered by the parties thereto, will be a valid
and binding agreement of the parties thereto, and will be enforceable
against the parties thereto in accordance with its terms; and (D) at the
Closing Time, the Master Agreement, dated as of November 4, 1996, among
Equity Inns Partnership, IHC, Equity Inns, Inc., Crossroads/Memphis
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Partnership, L.P. and Crossroads Furniture Company, L.L.C. (the "Master
Agreement") has been duly and validly authorized, executed and delivered
by IHC, is a valid and binding agreement of IHC, and is enforceable
against IHC in accordance with its terms. This Agreement, the U.S. Pricing
Agreement, the Credit Agreement, the Master Agreement and the Transaction
Agreements (defined below) are sometimes hereinafter collectively called
the "Company Documents."
(xiv) The performance of the obligations set forth herein or in the
other Company Documents and the consummation of the Transactions or the
other transactions contemplated hereby and thereby or in the Prospectus by
the Transaction Entities will not conflict with or constitute a breach or
violation by such parties of, or default under or result in the creation
or imposition of any lien, charge or encumbrance upon any Hotel or any
other property or asset of a Transaction Entity under, (A) any of the
other Company Documents; (B) any material contract, indenture, mortgage,
loan agreement, note, lease, joint venture or partnership agreement or
other instrument or agreement to which any Transaction Entity is a party
or by which they, any of them, any of their respective properties or other
assets or any Hotel may be bound or subject; (C) the certificate or
articles of incorporation, by-laws, certificate of limited partnership,
partnership agreement or other governing documents, as the case may be, of
any Transaction Entity, or (D) any applicable law, rule, order,
administrative regulation or administrative or court decree, in each case
except for conflicts, breaches, violations or defaults that would not have
a Material Adverse Effect.
(xv) The execution and delivery of all material agreements and
documents executed in connection with or in contemplation of the
transactions (collectively, the "Transactions") described in the
Prospectus as "The Organization," "Acquisition of Owned Hotels,"
"Acquisition of Additional Hotels," and "The Financing Plan" under the
heading "THE ORGANIZATION, ACQUISITION AND FINANCING PLAN" (the
"Transaction Agreements"), and the performance of the obligations set
forth therein and the consumma-
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tion of the Transactions or the transactions contemplated thereby by the
Transaction Entities have been duly and validly authorized by all
necessary corporate or partnership action, as the case may be, by or on
behalf of the Transaction Entities. Except as described in the Prospectus
(including, without limitation, the transactions described in the
Prospectus under the heading "The Organization, Acquisition and Financing
Plan -- Acquisition of Additional Hotels"), each of the Transactions will
have been completed on or before the Closing Time.
(xvi) None of the Company's commitments to a partnership formed
between or among one or more affiliates of the Company and one or more
affiliates of Blackstone Real Estate Advisors, L.P. (the "Interstone III
Partnership"), including, but not limited to the capital commitments
described under "The Organization and Financing Plan -- Acquisition of
Owned Hotels" in the Prospectus is expected to result in any Material
Adverse Effect.
(xvii)(a) No labor dispute with the employees of any Transaction
Entity exists or is imminent, and (b) none of the executive officers of
the Company is aware of any existing or imminent labor disturbance by the
employees of any of the Transaction Entities' principal suppliers,
manufacturers or contractors, which, in the case of either (a) or (b),
could reasonably be expected to result in any Material Adverse Effect.
(xviii) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the executive officers of the Company, after due inquiry,
threatened against or affecting any Transaction Entity, Hotel or officer
or director of the Company that is required to be disclosed in the
Registration Statement or the Prospectus or that, if determined adversely
to any Transaction Entity, Hotel, or such officer or director, considered
in the aggregate will or could reasonably be expected to (A) have a
Material Adverse Effect, or (B) materially and adversely affect the
consummation of the Transactions.
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(xix) Except as described in the Prospectus, there are no pending
legal or governmental proceedings to which any Transaction Entity is a
party or of which they or any of their respective properties or assets or
any Hotel is the subject, including ordinary routine litigation incidental
to the business, that, considered in the aggregate, could reasonably be
expected to have a Material Adverse Effect. There are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
which are required to be described or referred to in the Registration
Statement or to be filed as exhibits to the Registration Statement by the
1933 Act or by the 1933 Act Regulations which have not been so described,
referred to or filed, and the descriptions thereof or references thereto
in the Registration Statement are accurate in all material respects.
(xx) Except as described in the Prospectus, each of the Transaction
Entities has filed all federal, state, local and foreign income tax
returns which have been required to be filed (except in any case in which
the failure to so file would not have a Material Adverse Effect), and has
paid all taxes required to be paid and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except, in all cases, for any such tax, assessment, fine or
penalty that is being contested in good faith (except in any case in which
the failure to so pay would not have a Material Adverse Effect).
(xxi) None of the Transaction Entities is, and at Closing Time none of
the Transaction Entities will be, required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Except as described in the Prospectus, the Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively,
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"proprietary rights") material to the conduct of the business now operated
by them, and none of the Company or any of its Subsidiaries has received
any notice nor is any executive officer of the Company otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any proprietary rights, or of any facts which would render any
proprietary rights invalid or inadequate to protect the interest of such
Transaction Entity therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling, or finding) or invalidity or
inadequacy, singly or in the aggregate, would have a Material Adverse
Effect.
(xxiii) No authorization, approval, consent or order of any court or
governmental authority or agency or other entity or person is required to
be obtained by any Transaction Entity in connection with the offering,
issuance or sale of the Securities hereunder, except such as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities or real estate syndication laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") or such as
have been received prior to the date of this Agreement. No consent is
required to be obtained by any Transaction Entity in connection with the
consummation of any part of the Transactions, for which the failure to
obtain such consent would have a Material Adverse Effect, except such as
may have been received prior to the date of this Agreement.
(xxiv) Each of the Transaction Entities possesses, or has made
application for, such certificates, authorizations or permits issued by
the appropriate local, state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by it, or proposed
to be conducted by it, except for such certificates, authorizations and
permits, the failure to obtain, maintain or possess of which by any of the
Transaction Entities would not have a Material Adverse Effect, and none of
the Transaction Entities have received any notice of proceedings relating
to the revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
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(xxv) Except as described in the Prospectus or pursuant to the
Registration Rights Agreement or Stockholders' Agreements, there are no
persons with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered
by the Company under the 0000 Xxx.
[(XXVI) THE SECURITIES HAVE BEEN APPROVED FOR LISTING ON THE NEW YORK
STOCK EXCHANGE UPON NOTICE OF ISSUANCE.]
(xxvii) At the Closing Time, (A) the Transaction Entities will have
good indefeasible title or a valid leasehold estate, as the case may be,
to each of the Hotels and other real property interests indicated in the
Prospectus to be owned or leased by the Company (or its Subsidiaries), in
each case free and clear of all liens, encumbrances, claims, security
interests and defects, other than (i) those referred to in the Prospectus,
(ii) mortgages and security agreements relating to the Hotels, (iii) those
referred to in the existing title insurance policies pertaining to the
Hotels, and (iv) those which would not have a Material Adverse Effect; (B)
there will be no options or rights of first refusal to purchase any Hotel,
any interest therein or any part thereof, other than those referred to in
the Prospectus; (C) each of the Hotels will comply with all applicable
codes, laws and regulations (including, without limitation, building and
zoning codes, laws and regulations and laws relating to access to the
Hotels), except for such failures to comply that would not have Material
Adverse Effect, and (D) the executive officers of the Company shall have
no knowledge of, after due inquiry, any pending or threatened condemnation
proceeding, zoning change or other proceeding or action that would have a
Material Adverse Effect.
(xxviii) The Transaction Entities have obtained title insurance on the
fee and ground lease interests in each of the Hotels in which the Company
has an ownership interest, in an amount at least
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equal to the purchase price of each such owned Hotel.
(xxix) Except as disclosed in the Prospectus, and, except for
activities, conditions, circumstances or matters that would not have a
Material Adverse Effect, (A) to the knowledge of the executive officers of
the Company, after due inquiry, the operations of the Transaction Entities
are in compliance with all Environmental Laws (as defined below) and all
requirements of applicable permits, licenses, approvals and other
authorizations issued pursuant to Environmental Laws; (B) to the knowledge
of the executive officers of the Company, after due inquiry, none of the
Transaction Entities has caused or suffered to occur any Release (as
defined below) of any Hazardous Substance (as defined below) into the
Environment (as defined below) on, in or under or from any Hotel or any
developed or undeveloped land held (at any time) by any of the Transaction
Entities, and no condition exists on, in or under to any Hotel that could
reasonably be expected to result in the Company violating, or incurring
liability under, any Environmental Law or give rise to the imposition of
any Lien (as defined below) under any Environmental Law; (C) none of the
Transaction Entities has received any written notice of a claim under or
pursuant to any Environmental Law or under common law pertaining to
Hazardous Substances on, in, under or originating from any Hotel; (D) none
of the executive officers of the Company has knowledge of, after due
inquiry, nor has any Transaction Entity received any written notice from
any Governmental Authority (as defined below) or other person claiming any
violation of any Environmental Law or a determination to undertake and/or
request the investigation, remediation, clean-up or removal of any
Hazardous Substance released into the Environment on, in, under or from
any Hotel; and (E) no Hotel is included or, to the knowledge of the
executive officers of the Company, after due inquiry, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
defined below) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response, Compensation, and
Liability Information System database maintained
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by the EPA, and the executive officers of the Company have no knowledge,
after due inquiry, that any Hotel has otherwise been identified in a
published writing by the EPA as a potential CERCLA removal, remedial or
response site or, to the knowledge of the executive officers of the
Company, after due inquiry, proposed for inclusion on any similar list of
potentially contaminated sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant, hazardous material, or
similarly designated materials including, without limitation, oil, petroleum or
any petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCB's, pesticides, explosives, radioactive materials, dioxins, urea
formaldehyde insulation or any constituent of any such substance, pollutant or
waste which is identified, regulated, prohibited or limited under any
Environmental Law (including, without limitation, materials listed in the
United States Department of Transportation Optional Hazardous Material Table,
49 C.F.R. Section 172.101, or in the EPA's List of Hazardous Substances and
Reportable Quantities, 40 C.F.R. Part 302 as the same may now or hereafter be
amended; "Environment" shall mean any surface water, drinking water, ground
water, land surface, subsurface strata, river sediment, buildings, structures,
workplace and indoor and outdoor air; "Environmental Law" shall mean the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.) ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901, et
seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.), the
Clean Water Act, as amended (33 U.S.C. Section 1251, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), the
Occupational Safety and Health Act of 1970, as amended (29 U.S.C. Section 651,
et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Section 1801, et seq.), and all other federal, state and local laws,
ordinances, regulations, rules and orders relating to the protection of the
environment or of human health from environmental effects; "Governmental
Authority" shall mean any federal, state or local governmental office, agency
or authority having the duty or authority to promulgate, implement or enforce
any Environmental Law; "Lien" shall mean, with
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respect to any Hotel, any mortgage, deed of trust, pledge, security
interest, lien, encumbrance, penalty, fine, charge, assessment, judgment or
other liability in, on or affecting such Hotel; and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, emanating or disposing of any Hazardous
Substance into the Environment, including, without limitation, the abandonment
or discard of barrels, containers, tanks (including, without limitation,
underground storage tanks) or other receptacles containing or previously
containing any Hazardous Substance or any release, emission, discharge or
similar term, as those terms are defined or used in any Environmental Law.
(xxx) To the actual knowledge of the executive officers of the
Company, none of the environmental consultants retained by the Company or
any Subsidiary which prepared environmental and asbestos inspection
reports with respect to any of the Hotels was employed for such purpose on
a contingent basis or has any substantial interest in any Transaction
Entity, and none of them nor any of their directors, officers or employees
is connected with any Transaction Entity as a promoter, selling agent,
voting trustee, director, officer or employee.
(b) Any certificate signed by any executive officer or authorized
representative of the Company and delivered to the Representatives or to
counsel for the U.S. Underwriters shall be deemed a representation and warranty
by such entity or person, as the case may be, to each U.S. Underwriter as to
the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each U.S. Underwriter, severally and not jointly, and each U.S.
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in the U.S. Pricing Agreement, the number of
Initial U.S. Securities set forth in Schedule A hereto opposite the name of
such U.S. Underwriter (except as otherwise provided in the U.S. Pricing
Agreement), plus any
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additional number of Initial U.S. Securities which such U.S. Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(i) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the public offering price and the purchase price per
share to be paid by the several U.S. Underwriters for the Securities each
have been determined and set forth in the U.S. Pricing Agreement and an
amendment to the Registration Statement and the Prospectus will be filed
before the Registration Statement becomes effective.
(ii) If the Company has elected to rely upon Rule 430A under the 1933
Act Regulations, the purchase price per share to be paid by the several
U.S. Underwriters for the Securities shall be an amount equal to the
public offering price, less an amount per share to be determined by
agreement between the Representatives and the Company. The public offering
price per share of the Securities shall be a fixed price to be determined
by agreement among the Representatives and the Company. The public
offering price and the purchase price, when so determined, shall be set
forth in the U.S. Pricing Agreement. In the event that such prices have
not been agreed upon and the U.S. Pricing Agreement has not been executed
and delivered by all parties thereto by the close of business on the
fourteenth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any party to any
other party other than pursuant to Sections 6 and 7 hereof, unless
otherwise agreed to by the Company and the Representatives.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the U.S. Underwriters, severally and not jointly, to
purchase up to an additional 510,000 shares of Common Stock at the price per
share set forth in the U.S. Pricing Agreement solely to cover over-allotments.
The option hereby granted will expire 30 days after the date hereof (or, if the
Company has elected to rely on Rule 430A under the 1933 Act Regulations,
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30 days after the execution of the U.S. Pricing Agreement), provided that if
such thirtieth day is not a New York Stock Exchange trading day, the thirtieth
day will be the next succeeding New York Stock Exchange trading day and may be
exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial U.S. Securities upon notice by the Representatives
to the Company setting forth the number of Option U.S. Securities as to which
the several U.S. Underwriters are then exercising the option and the time and
date of payment and delivery for such Option U.S. Securities. Any such time
and date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days nor
earlier than two full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined, unless otherwise
agreed upon by the Representatives and the Company. If the option is exercised
as to all or any portion of the Option U.S. Securities, the Option U.S.
Securities shall be purchased by the U.S. Underwriters, severally and not
jointly, in proportion to their respective Initial U.S. Securities underwriting
obligations as set forth in Schedule A.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial U.S. Securities shall be made at the office of Xxxxx, Day, Xxxxxx &
Xxxxx ("Xxxxx Day"), 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Representatives and the Company, at
10:00 A.M. on the fourth business day (or the third business day if required
under Rule 15c6-1 of the rules and regulations (the "1934 Act Regulations") of
the Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act"), or unless postponed in accordance with the provisions of Section 10)
following the date the Registration Statement becomes effective (or, if the
Company has elected to rely upon Rule 430A of the 1993 Act Regulations, the
fourth business day (or the third business day if required under Rule 15c6-1 of
the 0000 Xxx) after execution of the U.S. Pricing Agreement), or such other
time not later than ten business days after such date as shall be agreed upon
by the Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event
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that any or all of the Option U.S. Securities are purchased by the U.S.
Underwriters, payment of the purchase price for, and delivery of certificates
for, such Option U.S. Securities shall be made at the above-mentioned offices
of Xxxxx Day, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company. Payment for the Initial U.S.
Securities shall be made to the Company by wire transfer in immediately
available funds, provided that it is understood and agreed that interest on the
aggregate purchase price for the Initial U.S. Securities in federal funds for
one day at Xxxxxxx Xxxxx'x overnight borrowing rate shall be deducted from such
payment and shall reduce the purchase price payable for the Initial U.S.
Securities by such amount. Payment for the Option U.S. Securities shall be
made to the Company by certified or official bank check or checks drawn in New
York Clearing House funds or similar next day funds payable to the order of the
Company, against delivery to the Representatives for the respective accounts of
the U.S. Underwriters of certificates for the Securities to be purchased by
them. Certificates for the Initial U.S. Securities and the Option U.S.
Securities, if any, shall be in such denominations and registered in such names
as the Representatives may request in writing at least two business days before
the Closing Time or the relevant Date of Delivery, as the case may be. It is
understood that each U.S. Underwriter has authorized the Representatives, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial U.S. Securities and the Option U.S. Securities,
if any, which it has agreed to purchase. Xxxxxxx Lynch, Montgomery, Xxxxxx
Xxxxxxx, Xxxxx Xxxxxx and Credit Lyonnais, individually and not as
representatives of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the
Option U.S. Securities, if any, to be purchased by any U.S. Underwriter whose
payment has not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but any such payment shall not relieve such U.S.
Underwriter from its obligations hereunder. The certificates for the Initial
U.S. Securities and the Option U.S. Securities, if any, will be made available
for examination and packaging by the Representatives not later than 10:00 A.M.
on the last business
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day prior to Closing Time or the relevant Date of Delivery, as the case may be,
in New York, New York.
SECTION 3. Covenants of the Company.
The Company covenants with each U.S. Underwriter as follows:
(a) As soon as the Company is advised or otherwise obtains knowledge of
any of the following, the Company will promptly notify the Representatives of
(i) the effectiveness of the Registration Statement and any amendment thereto
(including any post-effective amendments), (ii) the receipt of any comments
from the Commission relating to the Registration Statement and the Prospectus,
(iii) any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (iv) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
suspension of qualification of the Securities for offering or sale in any
jurisdiction or the initiation or threat of any proceedings for these purposes.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will give the Representatives notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment), any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus)
which the Company proposes for use by the U.S. Underwriters in connection with
the offering of the Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective, whether or
not such revised prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations or any Term
Sheet. The Company will furnish the Representatives with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any
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such prospectus to which the Representatives or counsel for the U.S.
Underwriters reasonably shall object.
(c) The Company will deliver to the Representatives, as soon as possible,
as many signed and conformed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated by reference
therein) as the Representatives reasonably may request.
(d) The Company will furnish to each U.S. Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended
or supplemented) as such U.S. Underwriter reasonably may request for the
purposes contemplated by the 1933 Act or the applicable rules and regulations
of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters, to amend or supplement the
Prospectus in order to comply with the 1933 Act or the 1934 Act or to make the
Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, the Company forthwith will amend or
supplement the Prospectus (in form and substance reasonably satisfactory to
counsel for the U.S. Underwriters) so that, as so amended or supplemented, the
Prospectus will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a purchaser,
not misleading; and the Company will furnish to the U.S. Underwriters a
reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the U.S. Underwriters,
to qualify the Securities for offering and sale under the applicable securities
laws of such states and other United States or foreign jurisdictions as the
Representatives may reasonably designate; provided, however, the Company will
not be required to qualify as a foreign corporation, file a general consent to
service of process in any such jurisdiction, subject itself to taxation in
respect of doing business in any
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jurisdiction in which it is not otherwise so subject, or provide any
undertaking or make any change in its charter, certificate of incorporation,
by-laws or other governing document that the Board of Directors of the Company
reasonably determines to be contrary to the best interests of the Company and
its shareholders. In each jurisdiction in which the Securities have been so
qualified, the Company will use all reasonable efforts to file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for so long a period as the Representatives
reasonably may request for the distribution of the Securities.
(g) The Company will make generally available to its security holders as
soon as practicable, but not later than 90 days after the close of the
Company's fiscal year, an earnings statement (in form and in a manner complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in said Rule
158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under "Use of Pro-
ceeds."
(i) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A and/or
Rule 434 of the 1933 Act Regulations, then immediately following the execution
of the U.S. Pricing Agreement, the Company will prepare and file with the
Commission in accordance with such Rule 430A and/or Rule 434 and Rule 424(b) of
the 1933 Act Regulations copies of an amended Prospectus, or, if required by
such Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file or transmit for filing
a Rule 462(b) Registration Statement not later than the date of execution of
the U.S. Pricing Agreement. If a Rule 462(b) Registration Statement is filed by
the Company, the Company shall make payment of, or arrange for payment
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of, the additional registration fee owing to the Commission as required by Rule
111 of the 1933 Act Regulations.
(j) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to Sections 13, 14 or 15 of the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(k) The Company will use its reasonable efforts to maintain the listing of
the Securities on the New York Stock Exchange.
(l) During a period 180 days from the Closing Time, the Company will not,
without the prior written consent of Xxxxxxx Xxxxx, directly or indirectly,
sell, offer to sell, transfer, pledge, hypothecate, grant any option for the
sale of or otherwise dispose of, any shares of Common Stock or any security
convertible into or exchangeable or exercisable for shares of the Common Stock,
except for (i) Securities to be sold to the U.S. Underwriters, (ii) the award
of options or other rights or the issuance of Common Stock pursuant to employee
and director stock purchase, equity incentive and option plans as described in
the Prospectus, (iii) the issuance of Common Stock (whether upon conversion,
exchange or otherwise) in connection with an acquisition, whether by purchase
of assets, merger or other form of business acquisition or combination
transaction, provided that the foregoing restrictions apply to the issued
Common Stock, or (iv) the adoption of a shareholder rights plan.
(m) During a period of [THREE] years from the Closing Time, the Company or
any partnership affiliated with the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, waive or assign any options or rights granted to the
Company in relation to the Company's acquisition of Equity Inns, including, but
not limited to, any right of first offer to purchase or manage any property.
(n) During a period of three years from the Closing Time, the Company will
deliver to Xxxxxxx Xxxxx, on behalf of the Representatives promptly upon their
being mailed or filed, copies of all current, regular and periodic reports of
the Company mailed to its sharehold-
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ers or filed with the New York Stock Exchange or with the Commission or any
governmental authority succeeding to any of the Commission's functions other
than reports on Form 3 or Form 4 or registration statements on Form S-8.
(o) The Company hereby agrees that it will ensure that the Reserved
Securities will be restricted as required by the National Association of
Securities Dealers, Inc. (the "NASD") or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months following the
date of this Agreement. The U.S. Underwriters will notify the Company as to
which persons will need to be so restricted. At the request of the U.S.
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the U.S. Underwriters for any
reasonable expenses (including, without limitation, legal expenses) they incur
in connection with such release.
SECTION 4. Payment of Expenses; Financial Advisory Fees.
(a) The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus, and of the Prospectus and any amendments or
supplements thereto, (ii) the cost of printing, or reproducing, and
distributing to the U.S. Underwriters copies of this Agreement and the U.S.
Pricing Agreement, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the U.S. Underwriters, (iv) the fees and
disbursements of the Company's counsel and accountants, (v) the qualification
of the Securities under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(f) hereof, including filing fees
and the fees of counsel at their normal hourly rate, in an aggregate amount not
to exceed $20,000 and [REASONABLE CHARGES AND DISBURSEMENTS FOR THE U.S.
UNDERWRITERS IN CONNECTION THEREWITH AND IN CONNECTION WITH THE PREPARATION OF
THE "BLUE SKY" SURVEY], [(VI) THE COST OF PRINTING, OR REPRODUCING AND
DELIVERING TO THE U.S. UNDERWRITERS COPIES OF THE "BLUE SKY" SURVEY,] (vii)
the fee of the National
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Association of Securities Dealers, Inc., [(VIII) THE FEES AND EXPENSES INCURRED
IN CONNECTION WITH THE LISTING OF THE SECURITIES ON THE NEW YORK STOCK
EXCHANGE, INC.,] (ix) the costs and charges of any transfer agent or registrar,
and the cost of preparing share certificates, and (x) any transfer taxes
imposed on the sale of the Securities to the several U.S. Underwriters and (xi)
all costs and expenses of the U.S. Underwriters, including the fees and
disbursements of counsel for the U.S. Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale
to employees and others having a business relationship with the Company. It is
understood, however, that except as provided in this Section 4, the U.S.
Underwriters will pay all of their costs and expenses, including the fees and
disbursements of their counsel, and any expenses in connection with a
"tombstone" advertisement in connection with the offering of the Securities.
(b) If this Agreement is cancelled or terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the U.S. Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations
of the U.S. Underwriters hereunder are subject to the accuracy in all material
respects, as of the date hereof and at Closing Time, of the representations and
warranties of the Company herein contained, to the performance by the Company
of its obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 P.M., New York City time, on the date hereof, or with the consent of the
Representatives, at a later time and date, not later, however, than 5:30 P.M.,
New York City time, on the first business day following the date hereof, or at
such later time and date as may be approved by a majority in interest of the
U.S. Underwriters; and at the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the
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Commission or any state securities regulatory authority. If the Company has
elected to rely upon Rule 430A and/or Rule 434 of the 1933 Act Regulations, (A)
the price of the Securities and any price-related information previously
omitted from the effective Registration Statement pursuant to such Rule 430A
and/or Rule 434 shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations within the prescribed time
period and (B) prior to the Closing Time, the Company shall have provided
evidence satisfactory to the Representatives of such timely filing, or a
post-effective amendment providing such information shall have been promptly
filed and declared effective in accordance with the requirements of Rule 430A
and/or Rule 434 of the 1933 Act Regulations and shall have become effective not
later than 5:30 p.m., New York City time, on the Representation Date or, with
the consent of the Representatives, at a later time and date, not later,
however, than 5:30 p.m., New York City time, on the first business day
following the Representation Date, or of such later date and time as shall have
been approved by a majority in interest of the Representatives. If a Rule
462(b) Registration Statement is required, such Rule 462(b) Registration
Statement shall have been transmitted to the Commission for filing and have
become effective within the prescribed time period, and, prior to the Closing
Time, the Company shall have provided to the U.S. Underwriters evidence of such
filing and effectiveness in accordance with Rule 462(b) of the 1933 Act
Regulations.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion of Xxxxx Day, in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters, dated as of
the Closing Time, with respect to the matters set forth below:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth
of Pennsylvania with the requisite power and authority to own or lease
its properties and conduct its business as described in the
Prospectus, and the Company has the requisite power and authority to
enter into and
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perform its obligations under the other Company Documents to which it
is a party.
(ii) The Company has the authorized and outstanding capital as set
forth under the caption "Capitalization" in the Prospectus, and the
authorized capital of the Company, including the Securities, conforms
in all material respects to the description thereof set forth under
the caption "Description of Capital Stock" in the Prospectus. All the
issued and outstanding shares of Common Stock of the Company has been
duly authorized and are validly issued, fully paid and non-assessable.
To the knowledge of such counsel, no shares of the capital stock of
the Company are reserved for any purpose except as described in the
Prospectus. To the knowledge of such counsel, except as described in
the Prospectus and other than as provided in this Agreement, there are
no outstanding securities convertible into or exchangeable for any
capital shares of the Company and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such stock or any other securities of the Company.
(iii) The Securities have been duly authorized for issuance and
sale to the U.S. Underwriters and, when issued and paid for in
accordance with this Agreement and the U.S. Pricing Agreement, will be
validly issued, fully paid and non-assessable. The issuance of the
Securities is not subject to any preemptive or other similar rights
(other than pursuant to the Registration Rights Agreement and the
Stockholders' Agreements) arising under the Pennsylvania Business
Corporation Law, the Articles of Incorporation or the by-laws of the
Company, or any agreement to which the Company is a party of which
such counsel is aware.
(iv) Each of this Agreement and the U.S. Pricing Agreement has been
duly and validly authorized, executed and delivered by the Company.
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(v) The execution and delivery of each of this Agreement and the
U.S. Pricing Agreement, and the performance by the Company of its
obligations set forth herein or therein do not and will not conflict
with or constitute a breach or violation of, or default under: (1) any
other Company Document; (2) any other contract or agreement filed as
an exhibit to the Registration Statement; (3) its articles of
incorporation or by-laws of the Company or (4) any law, rule or
administrative regulation applicable to the Company of any
governmental authority or agency of the United States or the
Commonwealth of Pennsylvania (except no opinion need be expressed as
to the by-laws or rules of the NASD or any state securities or real
estate syndication laws); or (5) any order or decree of any court or
governmental authority of which such counsel is aware, except in each
case for conflicts, breaches, violations or defaults that,
individually or in the aggregate, would not have a Material Adverse
Effect.
(vi) The Company is not an "investment company" or a person
"controlled by" an "investment company" within the meaning of the 1940
Act.
(vii) No authorization, approval, consent or order of any federal
or state court or governmental authority or agency is required in
connection with the offering, issuance or sale of the Securities
hereunder, in each case, except such as may be required in connection
with the sale of the Securities under the 1933 Act or the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations, the by-laws and
rules of the NASD, or state securities laws, real estate syndication
laws or such as have been received prior to the date of such opinion.
(viii) At the time the Registration Statement became effective, the
Registration Statement (other than the operating statistics, financial
statements and other financial data included therein or omitted
therefrom, as to
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which no opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(ix) To such counsel's knowledge, there is no litigation or
governmental proceeding pending or threatened against the Company, any
of its Subsidiaries or any Hotel which would affect the subject matter
of this Agreement or is required to be described in the Prospectus
which is not so described.
(x) The statements in the Prospectus under "Business and Properties-
-Operations," "Management" and "Certain Relationships and Related
Transactions," insofar as they purport to summarize the provisions of
documents referred to therein, and the statements in the Prospectus
under "Description of Capital Stock," "Shares Eligible for Future
Sale" and "Taxation," insofar as they purport to summarize the
provisions of documents or matters of law referred to therein or
constitute legal conclusions are accurate in all material respects.
(xi) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described in the Registration Statement, or
to be filed as exhibits thereto by the 1933 Act Regulations, other
than those described or referred to therein or filed as exhibits
thereto, and the descriptions thereof or references thereto are
accurate in all material respects.
(xii) To such counsel's knowledge, except as disclosed in the
Prospectus, there are no persons with registration or other similar
rights to have any securities of the Company registered pursuant to
the Registration Statement or otherwise registered by the Company
under the 1933 Act.
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[(XIII) THE SECURITIES ARE APPROVED FOR LISTING ON THE NEW YORK
STOCK EXCHANGE UPON OFFICIAL NOTICE OF ISSUANCE.]
(xiv) The Registration Statement has become effective under the
1933 Act, and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
In addition, Xxxxx Day shall state that representatives of such firm have
participated in conferences with officers, directors and employees of the
Company, representatives of the independent public accountants who examined the
financial statements contained in the Registration Statement and Prospectus and
representatives of the U.S. Underwriters concerning the information contained
in the Registration Statement and Prospectus and the proposed responses to
various items in Form S-1. On the basis thereof (relying as to materiality and
matters of fact upon the opinions or certificates of officers and other
representatives of the Company), but without independent verification by such
counsel of, and without passing upon or assuming any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus or any amendments or supplements
thereto, no facts have come to the attention of such counsel that cause them to
believe that (i) the Registration Statement (other than the operating
statistics, financial statements (including the notes thereto) and other
financial data included therein or omitted therefrom as to which such counsel
expresses no views), at the time such Registration Statement became effective,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading or (ii) the Prospectus (other than the
operating statistics, financial statements and other financial and statistical
data included therein or omitted therefrom as to which such counsel expresses
no views), as of its date or at the Closing Time, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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In giving its opinion, such counsel may rely, as to all matters of fact,
upon certificates and written statements of officers, directors and employees
of and accountants for the Company. Counsel may state that their opinion is
limited to matters governed by the federal laws of the United States, the laws
of the State of New York and the Business Corporation Law of the Commonwealth
of Pennsylvania.
(2) The favorable opinion in form and substance reasonably
satisfactory to counsel for the Underwriters, dated as of the Closing
Time, of Xxxxxx X. Xxxx, Esq., Senior Vice President and General Counsel
of the Company, with respect to the matters set forth below:
(i) The Company's Significant Subsidiaries (the "Subsidiaries") have
been duly incorporated or formed and are validly existing as corporations
or entities in good standing under the laws of the Commonwealth of
Pennsylvania with the full requisite power and authority to own or lease
their properties and conduct their business as described in the
Prospectus, and the Subsidiaries have the requisite power and authority to
enter into and perform their obligations under this Agreement and the
other Company Documents to which they are a party. The Subsidiaries are
duly qualified or registered as foreign corporations or entities to
transact business and are in good standing in each jurisdiction in which
such qualifications are required, whether by reason of the ownership,
leasing or management of property or the conduct of business, except where
the failure to so qualify would not have a Material Adverse Effect.
(ii) To such counsel's knowledge, the Subsidiaries are not in breach
or violation of or default under (1) any of the Company Documents; (2) any
other contract, indenture, mortgage, loan agreement, note, lease, joint
venture or partnership agreement or other in-
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strument or agreement to which they are a party or by which they are or
any Hotel may be bound or subject to and of which such counsel is aware;
(3) their articles of incorporation, by-laws or other applicable governing
document; (4) any applicable law, rule or administrative regulation of the
United States or the jurisdiction of its incorporation; or (5) any order
or administrative or court decree of which such counsel is aware, except
for conflicts, breaches, violations or defaults that, individually or in
the aggregate, would not have a Material Adverse Effect.
(iii) The execution and delivery of the Company Documents other than
this Agreement and the U.S. Pricing Agreement and the performance by the
Subsidiaries of their obligations set forth therein, do not and will not
conflict with or constitute a breach or violation of, or default under:
(1) any of the Company Documents; (2) any other contract, indenture,
mortgage, loan agreement, note, lease joint venture or partnership
agreement or other instrument or agreement to which the Subsidiaries are a
party or by which they are or any Hotel may be bound or subject to and of
which such counsel is aware; (3) the articles of incorporation, by-laws or
other governing documents of the Subsidiaries; (4) any law, rule or
administrative regulation applicable to the Subsidiaries of any
governmental authority or agency of the United States or the Commonwealth
of Pennsylvania; or (5) any order or administrative or court decree of
which such counsel is aware, except for conflicts, breaches, violations or
defaults, that, individually or in the aggregate, would not have a
Material Adverse Effect.
(iv) To such counsel's knowledge, there is no litigation or any legal
or governmental proceeding pending or threatened against the Subsidiaries
or any Hotel which would affect the subject matter of this Agreement.
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In giving its opinion, such counsel may (i) rely, as to all matters of
fact, upon certificates and written statements of officers, directors, partners
and employees of and accountants for the Company and the Subsidiaries and (ii)
state that his opinion is limited to matters governed by the federal laws of
the United States and the Business Corporation Law of the Commonwealth of
Pennsylvania. In addition, as to the knowledge of such counsel, such opinion
may recite that such knowledge is limited to matters in which counsel has had
direct involvement or about which such counsel has received notification from
senior management of the Company or otherwise and that, since such counsel has
no direct management responsibilities for the Company, there may be matters
concerning the Company of which such counsel is not aware.
(3) The favorable opinion, dated as of the Closing Time, of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, New York, New York ("Xxxxxxx Xxxx"),
counsel for the Representatives, (A) with respect to the matters set forth
in (viii) (with respect to the Company only and with respect to this
Agreement and the U.S. Pricing Agreement only) and [(XIII)] of subsection
(b)(1) of this Section and (B) containing a statement similar to the
statement referred to in the first sentence of the next to last paragraph
of Section 5(b)(1).
In giving its opinion, Xxxxxxx Xxxx may rely, (A) as to all matters of
fact, upon certificates and written statements of officers and employees of and
accountants for the Company, (B) as to the good standing and qualification of
the Company to do business in any state or jurisdiction, upon certificates of
appropriate government officials or opinions of counsel in such jurisdictions,
which opinions shall be in form and substance satisfactory to counsel for the
U.S. Underwriters, and (C) as to certain matters of law, upon the opinions
given pursuant to Sections 5(b)(1) and 5(b)(2) above.
(c) At Closing Time, (i) there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any Material Adverse Change, and
(ii) the Representatives shall have received a certificate of the President or
a Vice President and the chief financial or chief accounting officer (or such
officer acting in a similar capacity) of the Company,
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dated as of the Closing Time, evidencing compliance with the provisions of this
subsection (c) and stating that the representations and warranties in Section 1
hereof are true and correct, in all material respects, with the same force and
effect as though expressly made at and as of Closing Time.
(d) At the time of the execution of this Agreement, the Representatives
shall have received from Coopers & Xxxxxxx L.L.P. a letter, dated the date of
delivery thereof, in form and substance customary for transactions such as the
offering of the Securities, to the effect that (i) they are independent public
accountants with respect to the Company as required by the 1933 Act and the
1933 Act Regulations; (ii) it is its opinion that the financial statements
included in the Registration Statement prepared by such firm and covered by
their opinions therein comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations; (iii) based upon limited procedures set forth in its letter,
including a reading of the latest available interim financial statements of the
Company, a reading of the minute books of the Company, inquiries of officials
of the Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing has come
to its attention which causes Coopers & Xxxxxxx L.L.P. to believe that (A) the
unaudited financial statements of the Company included in the Registration
Statement do not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations or are not
in conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, (B) the operating data and balance sheet data
set forth in the Prospectus under the captions "Pro Forma Financial Data" were
not determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included in the Registration Statement, (C) the pro forma financial information
included in the Registration Statement was not prepared in accordance with the
applicable requirements of the 1933 Act or the 1933 Act Regulations with
respect to pro forma financial information or was not determined on a basis
substantially consistent with that of the audited xxxxx-
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cial statements included in the Registration Statement, or (D) at a specified
date not more than five days prior to the date of this Agreement, there has
been any change in the capital shares of the Company or any increase in the
debt of the Company or any decrease in the net assets of the Company as
compared with the amounts shown in September 30, 1996 historical financial
information of the Company included in the Registration Statement or, during
the period from September 30, 1996 to a specified date not more than five days
prior to the date of this Agreement, there were any decreases, as compared with
the corresponding period in the preceding year, in total revenues, net income
or funds from operations of the Company, except in all instances for changes,
increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur, and (iv) in addition to the examination
referred to in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Representatives, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company identified in
such letter.
(e) At the Closing Time, the Representatives shall have received from
Coopers & Xxxxxxx L.L.P. a letter, dated the Closing Time, to the effect that
it reaffirms that statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the "specified date" referred to
shall be a date not more than five days prior to the Closing Time and, if the
Company has elected to rely on Rule 430A of the 1933 Act Regulations, to the
further effect that they have carried out procedures as specified in clause
(iv) of subsection (d) of this Section with respect to certain amounts,
percentages and financial information specified by the Representatives and
deemed to be a part of the Registration Statement pursuant to Rule 430A(b) and
have found such amounts, percentages and financial information to be in
agreement with the records specified in such clause (iv).
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[(F) AT THE CLOSING TIME, THE SECURITIES SHALL BE APPROVED FOR LISTING ON
THE NEW YORK STOCK EXCHANGE UPON OFFICIAL NOTICE OF ISSUANCE.]
(g) At the Closing Time and at each Date of Delivery, if any, counsel for
the U.S. Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives and
counsel for the U.S. Underwriters.
(h) At or prior to the Closing Time, the Representatives shall have
received a letter agreement from each director and executive officer of the
Company who is also a holder of Common Stock (the "Restricted Shares") and
Blackstone in form customary for transactions such as the offering of the
Securities to the effect that such holder shall agree that during the period of
180 days from the date hereof, such holder will not, without the prior written
consent of Xxxxxxx Xxxxx, sell, offer to sell, transfer, grant any option for
the sale of, pledge, enter into any agreement to sell, or otherwise dispose of
any Restricted Shares, except (i) transfers to any family member or affiliate
of such holder, including any trust established by such holder, provided that
the foregoing restrictions apply thereto, (ii) transfers to the estate or legal
guardian of any other holder of shares of Common Stock, and (iii) pledges to
secure bona fide indebtedness or any foreclosure of such pledges.
(i) In the event that the U.S. Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option U.S.
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Transaction Entities
hereunder shall be true and correct in all material respects as of the Date of
Delivery and, at the Date of Delivery, the Representatives shall have received:
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(1) A certificate, dated such Date of Delivery, of the President or a
Vice President and the chief financial or chief accounting officer of the
Company confirming that the certificates delivered at Closing Time
pursuant to Section 5(c) hereof remain true and correct in all material
respects as of such Date of Delivery.
(2) The favorable opinion of Xxxxx Day, in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters, dated such
Date of Delivery, relating to the Option U.S. Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b)(1) hereof.
(3) The favorable opinion of Xxxxxx X. Xxxx, Esq., Senior Vice
President and General Counsel of the Company, in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters, dated such
Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(b)(2) hereof.
(4) The favorable opinion of Xxxxxxx Xxxx, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the Option U.S.
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b)(3) hereof.
(5) A letter from Coopers & Xxxxxxx L.L.P. in form and substance
reasonably satisfactory to the Representatives and dated such Date of
Delivery, substantially the same in form and substance as the letter
furnished to the Representatives pursuant to Section 5(d) hereof, except
that the "specified date" in the letter furnished pursuant to this Section
5(i)(5) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing
Time, and such termination shall be
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without liability of any party to any other party except as provided in Section
4 hereof.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter within
the meaning of Section 15 of 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement, or alleged
untrue statement, of a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to
be part of the Registration Statement pursuant to Rule 430A(b) of the 1933
Act Regulations, if applicable, any information contained in any Rule
462(b) Registration Statement, if applicable, any information contained in
any Term Sheet, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any U.S. Underwriter through the Representatives expressly
for use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided, further, that this indemnity agreement with
respect to any preliminary prospectus
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shall not inure to the benefit of any U.S. Underwriter from whom the
person asserting any such losses, liabilities, claims, damages or expenses
purchased Securities, or any person controlling such U.S. Underwriter, if
a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any such amendments or supplements thereto) was not
sent or given by or on behalf of such U.S. Underwriter to such person, if
such is required by law, at or prior to the written confirmation of the
sale of such Securities to such person and if the Prospectus (as so
amended or supplemented) would have corrected the defect giving rise to
such loss, liability, claim, damage or expense;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever for which indemnification is provided under subsection (i)
above if such settlement is effected with the written consent of the
indemnifying party; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the reasonable fees and disbursements of
one law firm chosen by Xxxxxxx Xxxxx to act as counsel for all
underwriters and their controlling persons), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever for which indemnification is
provided under subsection (i) or (ii) above, to the extent that any such
expense is not paid under (i) or (ii) above.
(b) Each U.S. Underwriter severally agrees to indemnify and hold harmless
the Company, each of the Company's directors and each of the Company's officers
who signs the Registration Statement or any amendment
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thereto and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a)(i), (ii) and
(iii) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such U.S.
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any claims asserted against or any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement except to the extent the indemnifying party
has been prejudiced in any material respect by such failure. An indemnifying
party may participate at its own expense in the defense of any such action. If
it so elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties receiving such
notice, may assume the defense of such action with counsel chosen by it and
reasonably approved by the indemnified parties defendant in such action, unless
such indemnified parties reasonably object to such assumption on the ground
that there may be legal defenses available to them which are different from or
in addition to those available to such indemnifying party. If an indemnifying
party assumes the defense of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations
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or circumstances. Anything in this Section 6 to the contrary notwithstanding,
an indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent provided that such consent was not
unreasonably withheld.
(d) In connection with the offer and sale of the Reserved Securities, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless the U.S. Underwriters from and against any and all losses,
liabilities, claims, damages and expenses incurred by them as a result of the
failure of eligible employees of the Company and other persons to pay for and
accept delivery of Reserved Securities which, by the end of the first business
day following the date of this Agreement, were subject to a properly confirmed
agreement to purchase.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 6 is for any reasons
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company, on the one hand, and the U.S.
Underwriters, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, on the one hand, and one or more
of the U.S. Underwriters, on the other hand, as incurred, in such proportions
that the U.S. Underwriters are responsible for that portion represented by the
percentage that the sum of the fees payable pursuant to Sections 4(c) and (d)
hereof and the underwriting discount appearing on the cover page of the
Prospectus bears to the public offering price appearing thereon and the
Company, responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls a U.S. Underwriter within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration State-
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ment, and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to contributions as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
and the U.S. Pricing Agreement, or contained in certificates of officers or
authorized representatives of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any U.S. Underwriter or controlling person, or by or on
behalf of the Company, and shall survive delivery of the Securities to the U.S.
Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by written notice to
the Company, at any time at or prior to Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any Material Adverse
Change, (ii) if there has occurred any material adverse change in the financial
markets in the United States or any outbreak of hostilities or escalation of
existing hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment
of the Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in the Common
Stock has been suspended by the Commission or if trading generally on either
the New York Stock Exchange, Inc. or the American Stock Exchange, Inc. has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said
Exchanges or by order of the Commission or any other governmental authority, or
if a banking moratorium has been declared by any of Federal, New York or
Pennsylvania authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
as provided in Sections 4 and 10 hereof. Notwithstanding any such
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termination, the provisions of Section 4, 6, and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the U.S. Underwriters shall fail at the Closing Time to
purchase the Initial U.S. Securities or on the Date of Delivery to purchase the
Option U.S. Securities which it or they are obligated to purchase under this
Agreement and the U.S. Pricing Agreement (the "Defaulted Securities"), the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting U.S. Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) If the number of Defaulted Securities does not exceed 10% of the
Securities, each of the non-defaulting U.S. Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that its respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting U.S. Underwriters, or
(b) If the number of Defaulted Securities exceeds 10% of the Securities,
this Agreement shall terminate without liability on the part of any non-de-
faulting U.S. Underwriter; provided that if such default occurs with respect to
the Option U.S. Securities after the Closing Time, this Agreement will not
terminate as to the Initial U.S. Securities.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, any of the Representatives or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the
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Registration Statement or Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the U.S. Underwriters shall be
directed to the Representatives at Xxxxxxx Xxxxx World Headquarters, North
Tower, World Financial Center, New York, New York 10281-1326, attention of
Xxxxxxx X. Xxxxxxxxx, Managing Director, with a copy to Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of
Xxxxxxx X. Xxxx, Esq.; notices to the Company shall be directed to it at
Xxxxxx Plaza 10, 000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, attention
of Xxxxxx X. Xxxx, Senior Vice President and General Counsel, with a copy to
Xxxxx, Day, Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
attention of Xxxxxx X. Xxxxxxxx, Esq.
SECTION 12. Parties.
This Agreement and the U.S. Pricing Agreement shall each inure to the
benefit of and be binding upon the parties hereto and their respective
successors. Nothing expressed or mentioned in this Agreement or the U.S.
Pricing Agreement is intended or shall be construed to give any person, firm or
corporation, other than those referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or the U.S. Pricing Agreement or any provision
herein or therein contained. This Agreement and the U.S. Pricing Agreement and
all conditions and provisions hereof and thereof are intended to be for the
sole and exclusive benefit of the parties hereto and thereto and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such
practice.
47
48
13. Governing Laws and Time.
This Agreement and the Pricing U.S. Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time. If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the U.S. Underwriters and the Company in
accordance with its terms.
48
49
Very truly yours,
INTERSTATE HOTELS COMPANY
By:
-----------------------------
Name: W. Xxxxxx Xxxxxxxxxx, Xx.
Title: President and Chief
Executive Officer
Confirmed and Accepted,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXX INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
-------------------------------
Name:
Title: Authorized Signatory
For themselves and as Representatives of the other U.S. Underwriters named in
Schedule A hereto.
49
50
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..........................................................
Xxxxxxxxxx Securities.............................................................
Xxxxxx Xxxxxxx & Co. Incorporated.................................................
Xxxxx Xxxxxx Inc..................................................................
Credit Lyonnais Securities (USA) Inc..............................................
[ALEX. XXXXX & SONS INCORPORATED..................................................
BT SECURITIES CORPORATION.........................................................
XXXX XXXXXX XXXXXXXX INC..........................................................
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION.....................................................................
XXXXXXXXXXX & CO., INC............................................................
PAINEWEBBER INCORPORATED..........................................................
PRUDENTIAL SECURITIES INCORPORATED................................................
SALOMON BROTHERS INC..............................................................
XXXXXXXX XXXXXXXX & CO. INCORPORATED..............................................
CIBC WOOD GUNDY SECURITIES CORP...................................................
ADVEST, INC.......................................................................
X.X. XXXXXXXX & CO................................................................
XX XXXXXXX SECURITIES, INC........................................................
XXXXXXX, XXXXXX & CO..............................................................
XXXXXXXXX & CO. OF VIRGINIA, INC..................................................
XXXXXXXX & XXXXXXXX, INCORPORATED.................................................
FIRST ALBANY CORPORATION..........................................................
XXXXXX XXXX LLC...................................................................
GENESIS MERCHANT GROUP SECURITIES.................................................
INTERSTATE/XXXXXXX XXXX CORPORATION...............................................
XXXXXX XXXXXXXXXX XXXXX INC.......................................................
XXXX XXXXX XXXX XXXXXX, INCORPORATED..............................................
XXXXXX XXXXXX & COMPANY, INC......................................................
XXXXXX/XXXXXX INCORPORATED........................................................
PENNSYLVANIA MERCHANT GROUP LTD...................................................
XXXXX XXXXXXXXX INCORPORATED......................................................
XXXXXXX XXXXX & ASSOCIATES, INC...................................................
THE XXXXXXXX-XXXXXXXX COMPANY, INC................................................
THE XXXXXXX COMPANIES INCORPORATED................................................
SUTRO & CO. INCORPORATED..........................................................
XXXXXX XXXXXXX INCORPORATED.......................................................
XXXXXXXX CAPITAL PARTNERS, L.P....................................................
XXX XXXXXX & COMPANY..............................................................
WHEAT, FIRST SECURITIES, INC.]....................................................
---------
TOTAL SHARES: 3,400,000
51
EXHIBIT A
3,400,000 Shares
INTERSTATE HOTELS COMPANY
(a Pennsylvania corporation)
Common Stock
(Par Value $.01 Per Share)
U.S. PRICING AGREEMENT
December [ ], 1996
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXX INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
as Representative of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the U.S. Purchase Agreement dated December [ ], 1996,
(the "U.S. Purchase Agreement") relating to the purchase by the several U.S.
Underwriters named in Schedule A thereto (the "U.S. Underwriters"), for whom
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Ex. A-1
52
Incorporated, Xxxxxxxxxx Securities, Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxx
Xxxxxx Inc. and Credit Lyonnais Securities (USA) Inc. are acting as
representatives (the "Representatives"), of the above shares of common stock
(the "Securities") of Interstate Hotels Company (the "Company").
Pursuant to Section 2 of the U.S. Purchase Agreement, the Company agrees
with each U.S. Underwriter as follows:
1. The public offering price per share for the Securities, determined as
provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the U.S.
Underwriters shall be $[ ], being an amount equal to the public offering price
set forth above less $[ ] per share.
Ex. A-2
53
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the U.S. Underwriters and the Company in accordance with its
terms.
Very truly yours,
INTERSTATE HOTELS COMPANY
By:
-----------------------------
Name: W. Xxxxxx Xxxxxxxxxx, Xx.
Title: President and Chief
Executive Officer
Confirmed and Accepted,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXX INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
-----------------------------
Name:
Title: Authorized Signatory
For themselves and as Representatives of the other
U.S. Underwriters named in the U.S. Purchase Agreement.
Ex. A-3
