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L&W DRAFT OF 12/18/95
$120,000,000
PRIME HOSPITALITY CORP.
___% First Mortgage Notes due 2006
UNDERWRITING AGREEMENT
January , 1996
XXXXX XXXXXX INC.
BT SECURITIES CORPORATION
XXXXXXXXXX SECURITIES
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentleman:
Prime Hospitality Corp., a Delaware corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell
$120,000,000 aggregate principal amount of its ___% First Mortgage Notes due
2006 (the "Notes") to Xxxxx Xxxxxx Inc., BT Securities Corporation and
Xxxxxxxxxx Securities (the "Underwriters"). The Notes will be issued pursuant
to the provisions of an Indenture to be dated as of January ___, 1996 (the
"Indenture") between the Company and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"). The payment of principal and interest
on the Notes and the performance of the obligations of the Company under the
Indenture will be secured by first priority security interests in the
Collateral pursuant to the Collateral Documents listed on Schedule I hereto
(the "Collateral Documents"). Capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Indenture.
The Company wishes to confirm as follows its agreement with the
Underwriters, in connection with the purchase of the Notes by the Underwriters.
1. Registration Statement and Prospectus. A registration
statement on Form S-3 (Registration No. 33-64685) with respect to the Notes,
including a preliminary form of prospectus, has been carefully prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission; one or more amendments to such registration
statement may have been so prepared and may have been, or may be, so filed,
including either (i) prior to effectiveness of such registration statement, a
further amendment to such registration statement (including the form of final
prospectus) or (ii) after effectiveness of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b)(1) or (4) under the Act.
Copies of such registration statement and amendments, each related preliminary
prospectus (the "Preliminary Prospectus") (including four fully executed copies
of the registration statement and each amendment thereto) and the pre-effective
prospectus or final form of prospectus have been delivered to the Underwriters.
Such registration statement as amended at the time it becomes effective or, if
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a post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in each
case information incorporated by reference therein and financial statements and
exhibits, and the information (if any) contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Act and deemed to
be a part of the registration at the time of its effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "Registration Statement;"
and such prospectus as then amended including such information incorporated by
reference therein, or first used to confirm sales, whether or not filed with
the Commission pursuant to Rule 424(b) under the Act, is herein after referred
to as the "Prospectus."
2. Agreements to Sell and Purchase. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of % of the
principal amount thereof, the principal amount of Notes set forth opposite the
name of such Underwriter in Schedule I hereto.
3. Terms of Public Offering. The Company has been advised by the
Underwriters that the Underwriters propose to make a public offering of their
respective portions of the Notes as soon after the Registration Statement and
this Agreement have become effective as in the Underwriters' judgment is
advisable and initially to offer the Notes upon the terms set forth in the
Prospectus.
4. Delivery of the Notes and Payment Therefor. Delivery to the
Underwriters of and payment for the Notes shall be made at the office of Xxxxxx
& Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New York City
time, on January ___, 1996 (the "Closing Date"). The place of closing for the
Notes and the Closing Date may be varied by agreement between the Underwriters
and the Company.
The Notes will be delivered to the Underwriters against payment of the
purchase price therefor by certified or official bank check or checks payable
in New York Clearing House (next day) funds to the order of the Company and
registered in such names and in such denominations as the Underwriters shall
request prior to 9:30 A.M., New York City time, on the second business day
preceding the Closing Date. The Notes to be delivered to the Underwriters
shall be made available to the Underwriters in New York City for inspection and
packaging not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date. Time shall be of the essence, and delivery at
the time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
5. Agreements of the Company. The Company covenants and agrees
with the several Underwriters as follows:
(a) The Company will cause the Prospectus to be filed with
the Commission as required by Section 1 hereof (but only if the
Underwriters have not reasonably objected thereto by notice to the
Company after having been furnished a copy a reasonable time prior to
filing) and will notify the Underwriters promptly of such filing; the
Company will notify the Underwriters promptly of the time when any
subsequent amendment to the Registration Statement has become effective
or any supplement to the Prospectus has been filed and of any request
by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information; the Company will
prepare and file with the Commission, promptly upon the Underwriters'
request, any amendments or supplements to the Registration Statement or
Prospectus that, in the Underwriters' opinion, may be necessary or
advisable in connection with the distribution of the Notes by the
Underwriters; and the Company will file no amendment or supplement to
the Registration Statement or Prospectus to which the Underwriters
shall reasonably object by notice to the Company after
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having been furnished a copy a reasonable time prior to the filing. In
the event that the Company and the Underwriters agree that the
Prospectus should be amended or supplemented, the Company, if requested
by the Underwriters, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(b) The Company will advise the Underwriters, promptly
after it shall have received notice or obtained knowledge thereof, of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such
purpose; and the Company will promptly use its best efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(c) Within the time during which a prospectus relating to
the Notes is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by
the Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Notes as
contemplated by the provisions hereof and the Prospectus. If during
such period any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing,
not misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify the Underwriters and will amend
the Registration Statement or supplement the Prospectus (at the expense
of the Company) so as to correct such statement or omission or effect
such compliance.
(d) The Company will make generally available to its
security holders as soon as practicable, but in any event not later
than 15 months after the end of the Company's current fiscal quarter,
an earnings statement (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration Statement
that shall satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Underwriters copies of
the Registration Statement (four of which will be signed and will
include all exhibits), each Preliminary Prospectus, the Prospectus, and
all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Underwriters may from time
to time reasonably request. The Company consents to the use, in
accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Notes are offered by
the several Underwriters and by dealers of each Preliminary Prospectus
and each Prospectus furnished by the Company.
(f) The Company will use its best efforts to qualify the
Notes for sale under the securities laws of such jurisdictions as the
Underwriters reasonably designate and to continue such qualifications
in effect so long as required for the distribution of the Notes but in
no event for more than 180 days, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction
or to subject itself to general taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. The
Company will also arrange for the determination of the eligibility for
investment of the Notes under the laws of such jurisdictions as the
Underwriters reasonably request.
(g) During the period of five years hereafter, the Company
will furnish to the Underwriters: (i) as soon as practicable after the
end of each fiscal year, copies of the Annual Report
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of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity
and cash flows for the year then ended and the opinion thereon of the
Company's independent public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement Annual Report
on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission the National Association
of Securities Dealers, Inc. ("NASD") or any securities exchange; and
(iii) as soon as available, copies of any report or communication of the
Company mailed generally to holders of its Common Stock or other
securities.
(h) The Company will apply the net proceeds from the sale
of the Notes to be sold by it hereunder for the purposes set forth in
the Prospectus.
(i) The Company will use its best efforts to have the
Notes listed, subject to notice of issuance, on the New York Stock
Exchange on or before the Closing Date.
(j) Notwithstanding any other provisions hereof, if this
Agreement shall be terminated by the Underwriters pursuant to any
provisions hereof (otherwise than pursuant to the second paragraph of
Section 10 hereof or by notice given to you terminating this Agreement
pursuant to Section 10 or Section 11 hereof), or if the sale to the
Underwriters of the Notes is not consummated because of any refusal,
inability or failure on the part of the Company, at or prior to the
Closing Date, to perform any agreement herein or to comply with any
provision hereof (unless such failure to perform or comply be due to
any default or omission by any Underwriter), the Company agrees to
reimburse the Underwriters upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Underwriters in
connection with the Underwriters' investigation, preparing to market
and marketing the Notes or in contemplation of performing the
Underwriters' obligations hereunder, including but not limited to
reasonable fees and disbursements of counsel, printing expenses, travel
expenses, postage, telegraph charges and telephone charges relating
directly to the offering contemplated by the Prospectus. Any such
termination shall be without liability of any party to any other party
except as set forth in this Section 5(j). This Section 5(j), Section 7
and Section 9 shall at all times be effective and shall apply.
The Underwriters, may, in their sole discretion waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, or to the
knowledge of the Company, has been threatened to be issued.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. Each
part of the Registration Statement, when such part became or becomes
effective, each Preliminary Prospectus, on the date of filing thereof
with the Commission, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission, or as first
used to confirm sales, and at the Closing Date, conformed or will
conform in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did
not or 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; each Preliminary
Prospectus, on the date of filing thereof with the Commission, and the
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Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission, or when first used to confirm sales,
and at the Closing Date, did not or will not include an untrue statement
of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were or will be made, not misleading; except that the foregoing
shall not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information relating to
the Underwriters furnished to the Company by or on behalf of the
Underwriters, specifically for use in the preparation thereof. The
documents incorporated by reference in the Prospectus, when they were
filed with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(b) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Company's Annual Report on
Form 10-K/A for the year ended December 31, 1994. The Company and each
of the Company's subsidiaries has been duly incorporated and is an
existing corporation in good standing under the laws of its respective
jurisdiction of incorporation, has full power and authority (corporate
and other) to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, would not have a material adverse effect on the condition
(financial or other), business, property or results of operations of
the Company and its subsidiaries taken as a whole (a "Material Adverse
Effect").
(c) The Company has an authorized and outstanding capital
stock as set forth under the heading "Capitalization" in the
Prospectus. All issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued
and are fully paid and nonassessable and (except as otherwise stated in
the Registration Statement) are owned beneficially by the Company
subject to no security interest, other encumbrance or adverse claim.
Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company, and the related notes thereto,
included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible
securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the
options or other rights granted and exercised thereunder, set forth in
the Registration Statement, accurately and fairly presents the
information required to be shown with respect to such plans,
arrangements, options and rights.
(d) Each of the Indenture and the Notes have been duly
authorized by the Company, the Indenture has been duly qualified under
the Trust Indenture Act and when duly executed and delivered will
constitute, and the Notes, when duly executed, authenticated, issued
and delivered as contemplated hereby and by the Indenture, will
constitute, valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(e) This Agreement has been duly authorized, executed and
delivered by the Company. The execution, delivery and performance of
this Agreement, the Indenture, the Collateral Documents,
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the pledge of the Collateral pursuant to the Collateral Documents, the
issuance, sale and delivery of the Notes and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it is bound or to which
any of the property of the Company or any of its subsidiaries is
subject, the charter or by-laws of the Company or any of its
subsidiaries, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties; no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
issuance or sale of the Notes and the pledge of the Collateral under the
Collateral Documents by the Company, except such as may be required
under the Act, the Trust Indenture Act or state securities laws; and the
Company has full power and authority to authorize, issue and sell the
Notes and to pledge the Collateral under the Collateral Documents as
contemplated by this Agreement.
(f) Xxxxxx Xxxxxxxx LLP and X.X. Xxxx & Company are
independent public accountants with respect to the Company as required
by the Act.
(g) The financial statements and schedules of the Company
and its predecessor and the related notes thereto, included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its predecessor, as the case may be, as of
the respective dates of such financial statements and schedules, and
the results of operations and changes in financial position of the
Company and its predecessor, as the case may be, for the respective
periods covered thereby. Such statements, schedules and related notes
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis as certified by Xxxxxx
Xxxxxxxx LLP and X.X. Xxxx & Company, as the case may be. No other
financial statements or schedules are required to be included in the
Registration Statement. The selected financial data set forth in the
Prospectus under the captions "Capitalization," "Summary Recent
Consolidated Financial and Other Data," "Recent Consolidated Financial
and Other Data," and "Selected Consolidated Financial Data of the
Company and its Predecessor," fairly present the information set forth
therein on the basis stated in the Registration Statement.
(h) The Company is not in violation of its charter or
by-laws or in default in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any other agreement, indenture,
mortgage, deed of trust or other contract, lease or other instrument to
which the Company is a party or by which it or its property is bound,
or to which any of the property or assets of the Company is subject
except for any such violation or default that could not have a Material
Adverse Effect.
(i) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown. There are no contracts or documents
of the Company or any of its subsidiaries that are required to be filed
as exhibits to the Registration Statement by the Act, the Trust
Indenture Act or by the Rules and Regulations that have not been so
filed.
(j) The Notes, the Indenture, the Collateral Documents and
the Collateral conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus.
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(k) Except as contemplated in the Prospectus, subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Company or any
of its subsidiaries has incurred any liabilities or obligations, direct
or contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its
subsidiaries, and there has not been any material adverse change, on a
consolidated basis, in the capital stock, short-term debt or long-term
debt of the Company and its subsidiaries, or any material adverse
change, or any development involving a prospective material adverse
change, in the condition (financial or other), business, net worth or
results of operations of the Company and its subsidiaries, taken as a
whole.
(l) There is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official, domestic
or foreign, now pending, or to the knowledge of the Company, threatened
or contemplated to which the Company or any of its subsidiaries is or
may be a party or to which the business or property of the Company or
any of its subsidiaries is or may be subject, (ii) to the knowledge of
the Company, no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been
proposed by any governmental body (other than Blue Sky laws, regulations
or orders), or (iii) no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction to which
the Company or any of its subsidiaries is or may be subject is issued
and outstanding that, in the case of clauses (i), (ii) and (iii) above,
(1) is required to be disclosed in the Registration Statement or the
Prospectus and that is not so disclosed, (2) might suspend the
effectiveness of the Registration Statement, (3) might prevent or
suspend the use of any Preliminary Prospectus in any jurisdiction, (4)
except as disclosed in the Registration Statement or the Prospectus,
might have a Material Adverse Effect, (5) would interfere with or
adversely affect the transactions contemplated by this Agreement in any
material respect, or (6) might in any manner invalidate any provisions
of this Agreement, the Indenture or the Notes.
(m) Except as otherwise disclosed in the Prospectus, the
Company and each of its subsidiaries has good and marketable title,
free and clear of all liens, claims, encumbrances and restrictions, to
all property and assets described in the Prospectus as being owned by
it, except for (i) liens for taxes not yet due and payable and (ii)
such liens, claims, encumbrances and restrictions as are not material
to the condition (financial or other), business, net worth or results
of operations of the Company and its subsidiaries, taken as a whole.
(n) Each of the Collateral Documents has been duly
authorized by all necessary corporate action and, when duly executed
and delivered by the Company, will constitute legal, valid and binding
obligations of the Company, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(o) The pledge, assignment and encumbrance of the
Collateral by the Company pursuant to the terms of the Collateral
Documents on the Closing Date will create a valid and perfected
security interest in the Collateral securing payment of the Notes and
payment and performance of all of the Company's other obligations under
the Indenture and the Collateral Documents. On the Closing Date, (i)
except as permitted by the Indenture and the Collateral Documents, such
security interest will constitute a first, prior and exclusive lien
with respect to the Collateral and (ii) no filings, registrations,
recordings, deliveries or other actions will be required in order to
perfect the security interest in such Collateral created under the
Collateral Documents, other than (A) filings, recordings, deliveries or
other actions which, on or before the Closing Date, will have been made
by or on behalf
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of the Company and (B) recordation of the Collateral Documents in the
jurisdictions in which the Collateral subject thereto is located.
(p) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
described in or specifically contemplated by the Prospectus: (i) the
Company and its subsidiaries have not incurred any material liabilities
or obligations, direct, indirect or contingent, or entered into any
material verbal or written agreement or other transaction which is not
in the ordinary course of business or which could result in a material
reduction in the future earnings of the Company and its subsidiaries;
(ii) the Company and its subsidiaries have not sustained any material
loss or interference with their respective businesses or properties from
fire, flood, windstorm, accident or other calamity, whether or not
covered by insurance; (iii) the Company has not paid or declared any
dividends or other distributions with respect to its capital stock and
the Company and its subsidiaries are not in default in the payment of
principal or interest on any outstanding debt obligations; (iv) there
has not been any change in the capital stock or indebtedness (other than
the Notes) material to the Company and its subsidiaries (other than in
the ordinary course of business); and (v) there has not been any
material adverse change in the condition (financial or otherwise),
business, properties or results of operations of the Company and its
subsidiaries, taken as a whole.
(q) Except as disclosed in or specifically contemplated by
the Prospectus, the Company and its subsidiaries have sufficient
trademarks, trade names, patent rights, mask works, copyrights,
licenses, approvals and governmental authorizations to conduct their
businesses as now conducted; and the Company has no knowledge of any
material infringement by it or its subsidiaries of trademark, trade
name, patent, mask works, copyrights, licenses, trade secret or other
similar rights of others, and there is no claim being made against the
Company or its subsidiaries regarding trademark, trade name, patent,
mask work, copyright, license, trade secret or other infringement which
could have a Material Adverse Effect.
(r) The Company has not been advised, and has no reason to
believe, that either it or any of its subsidiaries is not conducting
business in compliance with all applicable laws, rules and regulations
of the jurisdictions in which it is conducting business, the failure to
comply with which could have a Material Adverse Effect. None of the
Company or any of its subsidiaries is in violation of any safety or
similar law applicable to its business, nor any federal, state or
foreign law relating to discrimination in the hiring, promotion or pay
of employees, nor any applicable federal, state or foreign wages and
hours laws, nor any provisions of the Employee Retirement Income
Security Act, as amended, or the rules and regulations promulgated
thereunder ("ERISA"), which in each case could have a Material Adverse
Effect.
(s) Neither the Company nor any of its subsidiaries is
involved in any material labor dispute nor, to the best of the
knowledge of the Company and its subsidiaries, is any material labor
dispute threatened which, if such dispute were to occur, could have a
Material Adverse Effect.
(t) Except as disclosed in the Registration Statement, the
Company and its subsidiaries are in compliance with all applicable
existing federal, state, local and foreign laws and regulations
relating to the protection of human health or the environment or
imposing liability or requiring standards of conduct concerning any
Hazardous Materials ("Environmental Laws"), except for such instances
of noncompliance which, either singly or in the aggregate, would not
have a Material Adverse Effect. The term "Hazardous Material" means
(a) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (b) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended,
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(c) any petroleum or petroleum product, (d) any polychlorinated biphenyl
and (e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the
meaning of any other Environmental Law. There is no alleged liability,
or to the best knowledge and information of the Company potential
liability (including, without limitation, alleged or potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries,
or penalties) of the Company or any of its subsidiaries arising out of,
based on or resulting from (i) the presence or release into the
environment of any Hazardous Material at any location at which the
Company or any of its subsidiaries has previously conducted or is
currently conducting any business (whether or not owned by the Company
or any of its subsidiaries) or has previously owned or currently owns
any property or (ii) any violation or alleged violation of any
Environmental Law, in either case (x) which alleged or potential
liability is required to be disclosed in the Registration Statement,
other than as disclosed therein, or (y) which alleged or potential
liability, singly or in the aggregate, would have a Material Adverse
Effect.
(u) All tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, except to
the extent such failure to file would not, individually or in the
aggregate, have a Material Adverse Effect, and all material taxes
(including, but not limited to, withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due
from any taxing authority) have been paid other than those (i) being
contested in good faith and for which adequate reserves have been
provided or (ii) currently payable without penalty or interest.
(v) The Company is not an "investment company" under the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(w) The Company has not distributed and will not
distribute any offering material in connection with the offering and
sale of the Notes other than the Prospectus, the Registration Statement
and the other materials permitted by the Act.
(x) The Company and each of its subsidiaries maintain
insurance insuring against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and
each of its subsidiaries and their respective businesses, except where
the failure to maintain such insurance could not have a Material
Adverse Effect.
(y) Neither the Company nor any of its subsidiaries has at
any time (i) made any unlawful contribution to any candidate for
foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(z) The Company has not taken and will not take, directly
or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the
price of the Notes or to facilitate the sale or resale of the Notes.
(aa) Neither the issuance, sale and delivery of the Notes,
nor the application of the proceeds thereof by the Company and its
subsidiaries as set forth in the Prospectus, will violate Regulations
G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System.
(bb) Any material real property leases to which the Company
or any of its subsidiaries is a party are valid and binding and no
default has occurred and is continuing thereunder which would result in
any Material Adverse Effect, and the Company and its subsidiaries enjoy
peaceful and
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undisturbed possession under all such material real property leases to
which any of them is party as lessee with such exceptions as do not
materially interfere with the use made of such property by the Company
or such subsidiary.
(cc) Other than as contemplated by this Agreement, there is
no broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(dd) No consent, approval, authorization or order of, or
filing or qualification with, any governmental agency or body or any
court is required to be obtained or made by the Company for the
consummation of the transactions contemplated by this Agreement or in
connection with the sale of the Notes by the Company pursuant to this
Agreement, except such as have been obtained and made under the Act and
such as may be required under state securities law.
(ee) The Company has complied with all provisions of Section
517.075 Florida Statutes, relating to doing business with the Government
of Cuba or with any person or any affiliate located in Cuba.
(ff) The Company maintains a system of internal accounting
controls sufficient to provide assurance that: (1) transactions are
executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (3) access to assets is permitted
only in accordance with management's general or specific authorization;
and (4) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(gg) There have been no material changes in the
improvements located at or on the properties to be encumbered by the
Collateral Documents since the date of the surveys of such properties
conducted by registered surveyors as of the dates specified on Schedule
II.
(hh) Prior to and immediately after the issuance of the
Notes, (1) the present fair salable value of the assets of the Company
exceeded and will exceed the amount that will be required to be paid
on, or in respect of, the Company's debts and other liabilities
(including contingent liabilities) as they become absolute and matured,
(2) the Company does not have and will not have unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted and (3) the Company does not intend to, and does not believe
that it will, incur debts or other liabilities beyond its ability to
pay such debts and liabilities as they mature. The Company does not
intend to permit any of its subsidiaries to incur debts or other
liabilities beyond their respective ability to pay such debts and
liabilities as they mature.
(ii) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement, or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act.
(jj) The order confirming the Company's (or its
predecessor's) plan of reorganization (the "Plan") under Chapter 11 of
the Bankruptcy Code (the "Code") is a valid and binding order (i) as to
which a notice of appeal or petition for certiorari can no longer be
timely filed and as to which no
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timely-filed appeal or certiorari proceeding is pending and (ii) which
has not been overturned by a court of competent jurisdiction. There has
been "substantial consummation" (as defined in Section 1101(2) of the
Code) of the Plan.
(kk) The Notes have been approved for listing on the New
York Stock Exchange.
(ll) Each certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any Underwriter expressly for use in connection therewith; provided, however,
that the indemnification contained in this paragraph (a) with respect to any
Preliminary shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Notes by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus, provided that the Company has
delivered the Prospectus to the several Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
Company and such Underwriter or such controlling person shall have been advised
by its counsel that representation of such indemnified party and the Company by
the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in
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addition to any local counsel) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests among
themselves, which firm shall be designated in writing by Xxxxx Xxxxxx Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
Company shall not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Company agrees to indemnify and hold harmless
any Underwriter, to the extent provided in the preceding paragraph, and any
such controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with respect to information relating to such Underwriter furnished in writing by
or on behalf of such Underwriter expressly for use in the Registration
Statement, the Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, or any such controlling
person, based on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, and any such controlling person, shall
have the rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other hand from the
offering of the Notes, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified
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party as a result of the losses, claims, damages, liabilities and expenses
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating any claim or defending
any such action, suit or proceeding. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price of the Notes underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective principal
amounts of Notes set forth opposite their names in Schedule I hereto (or such
principal amounts of Notes increased as set forth in Section 10 hereof) and not
joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Notes and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Notes hereunder are subject to the following
conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 p.m., Washington, D.C. time, on the date of this
Agreement or at such later time as shall have been consented to by the
Underwriters; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) of the Rules and
Regulations, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company or the Underwriters,
shall be contemplated by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or otherwise, shall have been complied with to the
Underwriters' satisfaction.
(b) The Underwriters shall be reasonably satisfied that
since the respective dates as of which information is given in the
Registration Statement and Prospectus, (i) there shall not have been
any change in the capital stock of the Company or any of its
subsidiaries or any material change in the indebtedness (other than as
a result of the sale of the Notes or in the ordinary course of
business) of the Company or any of its subsidiaries, (ii) except as set
forth or contemplated by the Registration
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Statement or the Prospectus, no material verbal or written agreement or
other transaction shall have been entered into by the Company or any of
its subsidiaries, which is not in the ordinary course of business or
which could result in a material reduction in the future earnings of the
Company and its subsidiaries, (iii) no loss or damage (whether or not
insured) to the property of the Company or any of its subsidiaries shall
have been sustained which could have a Material Adverse Effect, (iv) no
legal or governmental action, suit or proceeding affecting the Company
or any of its subsidiaries which is material to the Company and its
subsidiaries or which affects or may affect the transactions
contemplated by this Agreement shall have been instituted or threatened,
and (v) there shall not have been any material change in the condition
(financial or otherwise), business, management results of operations or
prospects of the Company and its subsidiaries which makes it impractical
or inadvisable in the judgment of the Underwriters to proceed with the
public offering or purchase of the Notes as contemplated hereby.
(c) There shall have been furnished to the Underwriters,
in form and substance satisfactory to the Underwriters, except as
otherwise expressly provided below:
(i) An opinion of Xxxxxxx Xxxx & Xxxxxxxxx,
counsel for the Company, addressed to the Underwriters and
dated the Closing Date to the effect that:
(a) The Company and each of the Company's
Significant Subsidiaries (as defined under Rule 1-02 of
Regulation S-X under the Exchange Act) has been duly
incorporated and is an existing corporation in good standing
under the laws of its respective jurisdiction of incorporation,
has full power and authority (corporate; to own, lease and
operate hotels constituting collateral; and other) to conduct
its business as described in the Registration Statement and
Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification
except where the failure to be so qualified, considering all
such cases in the aggregate, would not have a Material Adverse
Effect.
(b) The Indenture and the Notes have been
duly authorized by the Company, the Indenture has been duly
qualified under the Trust Indenture Act and when duly executed
and delivered will constitute, and the Notes, when duly
executed, authenticated, issued and delivered as contemplated
hereby and by the Indenture, will constitute, valid and
legally binding obligations of the Company, enforceable in
accordance with their terms and, in the case of the Notes,
entitled to the benefits of the Indenture, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(c) The Collateral Documents have been duly
authorized by the Company, and when duly executed and delivered
will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms and, in the
case of the Notes, entitled to the benefits of the Indenture,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(d) The Company has authorized and
outstanding capital stock as set forth under "Capitalization"
in the Prospectus.
(e) The Registration Statement has become
effective under the Act; the Prospectus has been filed with
the Commission as required by Section 2(a) hereof and to the
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best knowledge of such counsel no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or, to the
knowledge of such counsel, threatened by the Commission.
(f) Each part of the Registration Statement,
when such part became effective, and the Prospectus, and any
amendment or supplement thereto, as of the respective date
thereof, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the Rules
and Regulations (other than the financial statements and
related schedules and financial and statistical data therein,
as to which such counsel need express no opinion).
(g) The descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate in all
material respects and fairly present the information required
to be shown; and such counsel does not know of any statutes or
legal or governmental proceedings required to be described in
the Prospectus that are not described as required, or of any
contracts or documents of a character required to be described
in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described
and filed as required.
(h) The Company is not an "investment
company" under the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(i) To such counsel's knowledge, there is (i)
no action, suit or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic
or foreign, now pending or threatened, to which the Company or
any of its Significant Subsidiaries is or may be a party or to
which the business or property of the Company or any of its
Significant Subsidiaries is or may be subject, and (ii) no
injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction to which the
Company or any of its Significant Subsidiaries is or may be
subject issued that, in the case of clauses (i) and (ii) above,
(a) is required to be disclosed in the Registration Statement
or the Prospectus and that is not so disclosed, (b) might
suspend the effectiveness of the Registration Statement, (c) to
such counsel's knowledge, might prevent or suspend the use of
any preliminary prospectus in any jurisdiction, (d) except as
disclosed in the Registration Statement or the Prospectus,
would have a Material Adverse Effect or (e) would in any manner
invalidate any provisions of this Agreement, the Indenture or
the Notes.
(j) The statements contained in the
Prospectus under the caption "Description of Notes" insofar as
they purport to describe the terms of the Notes, constitute
accurate summaries thereof in all material respects.
(k) Neither the issuance, sale and delivery
of the Notes, nor the application of the proceeds thereof by
the Company and its subsidiaries as set forth in the
Prospectus, will violate Regulations G, T, U or X promulgated
by the Board of Governors of the Federal Reserve System.
(l) No consent, approval, authorization or
order of, or filing or qualification with, any governmental
agency or body or any court is required to be obtained or made
by the Company for the consummation of the transactions
contemplated by this Agreement or in connection with the sale
of the Notes by the Company pursuant to this Agreement, except
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such as have been obtained and made under the Act, the Trust
Indenture Act and such as may be required under state
securities law or by the NASD.
(m) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and legally binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles. The performance of
this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
any statute or any agreement or instrument filed as an exhibit
to the Registration Statement, the charter or by-laws of the
Company, or, to such counsel's knowledge, any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and
the Company has full power and authority to authorize, issue
and sell the Notes as contemplated by this Agreement.
In addition, such counsel shall state that they have
participated in conferences with officers and other
representatives of the Company, representatives of the
independent certified public accountants of the Company and the
Underwriters at which the contents of the Registration
Statement, the Prospectus and any amendment thereof or
supplement thereto and related matters were discussed and,
although such counsel has not undertaken to investigate or
verify independently, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or
any amendment thereof or supplement thereto on the basis of the
foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives) no facts have
come to the attention of such counsel that would lead them to
believe that either the Registration Statement at the time it
became effective (or any amendment thereof made prior to the
Closing Date, as the case may be, as of the date of such
amendment) contained an untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date thereof (of
any amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement)
contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it
being understood that in each such case such counsel expresses
no belief or opinion with respect to the financial statements
and schedules and other financial or statistical data included
therein).
(ii) An opinion of Xxxxxx Xxxxxxxxx, Esq., Senior
Vice President, Secretary and General Counsel of the Company,
addressed to the Underwriters and dated the Closing Date to
the effect that:
(a) To the best knowledge of such counsel,
none of the Company or any of its subsidiaries is in violation
of any safety or similar law applicable to its business, nor
any federal, state or foreign law relating to discrimination
in the hiring, promotion or pay of employees, nor any
applicable federal, state or foreign wages and hours laws, nor
any provisions of ERISA, which in each case would have a
Material Adverse Effect.
(b) To the best knowledge of such counsel,
except as set forth in the Registration Statement, the Company
and its subsidiaries are in compliance with all applicable
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existing federal, state, local and foreign laws and regulations
relating to Environmental Laws, except for such instances of
noncompliance which, either singly or in the aggregate, would
not have a Material Adverse Effect. There is no alleged
liability, or, to the best of such counsel's knowledge,
potential liability (including, without limitation, alleged or
potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) of the
Company or any of its subsidiaries arising out of, based on or
resulting from (i) the presence or release into the environment
of any Hazardous Material at any location at which the Company
or any of its subsidiaries has previously conducted or is
currently conducting any business (whether or not owned by the
Company or any of its subsidiaries) or has previously owned or
currently owns any property or (ii) any violation or alleged
violation of any Environmental Law, in either case (x) which
alleged or potential liability is required to be disclosed in
the Registration Statement, other than as disclosed therein, or
(y) which alleged or potential liability, singly or in the
aggregate, would have a Material Adverse Effect.
(c) Neither the Company nor any of its
subsidiaries is involved in any material labor dispute nor, to
the best of such counsel's knowledge, is any material labor
dispute threatened which, if such dispute were to occur, would
have a Material Adverse Effect.
(d) Except as would not have a Material
Adverse Effect, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws and, to
the best of such counsel's knowledge, neither the Company nor
any of its subsidiaries is in default in the performance of
any obligation, agreement or condition contained in any of the
agreements filed as an exhibit to the Registration Statement.
(e) All of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable
and, except as otherwise stated in the Registration Statement,
to the best of such counsel's knowledge, are owned beneficially
by the Company subject to no security interest, other
encumbrance or adverse claim.
In addition, such counsel shall state that they have
participated in conferences with officers and other
representatives of the Company, representatives of the
independent certified public accountants of the Company and
the Underwriters at which the contents of the Registration
Statement, the Prospectus and any amendment thereof or
supplement thereto and related matters were discussed and,
although such counsel has not undertaken to investigate or
verify independently, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or
any amendment thereof or supplement thereto on the basis of
the foregoing (relying as to materiality to a large extent
upon the opinions of officers and other representatives) no
facts have come to the attention of such counsel that would
lead them to believe that either the Registration Statement at
the time it became effective (or any amendment thereof made
prior to the Closing Date, as the case may be, as of the date
of such amendment) contained an untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date thereof (of
any amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement)
contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
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circumstances under which they were made, not misleading (it
being understood that in each such case such counsel expresses
no belief or opinion with respect to the financial statements
and schedules and other financial or statistical data included
therein).
(iii) The opinion of local counsel to the Company
in each of Arizona, Arkansas, Connecticut, Florida, Georgia,
Kansas, Nevada, Ohio, Tennessee and Virginia, which local
counsel shall in each case be reasonably satisfactory to the
Underwriters, dated the Closing Date, substantially in the
form of Exhibit A hereto.
(iv) Such opinion of Xxxxxx & Xxxxxxx, counsel for
the Underwriters, dated the Closing Date, with respect to the
validity of the Notes, the Registration Statement, the
Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and
information as they reasonably request to enable them to pass
upon such matters.
(v) A certificate of the Company executed by the
Chairman of the Board or President and the chief financial or
accounting officer of the Company, dated the Closing Date, to
the effect that:
(a) The representations and warranties of
the Company set forth in Section 1 and Section 6 of
this Agreement are true and correct as of the date of
this Agreement and as of the Closing Date and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied under this Agreement on or
prior to the Closing Date;
(b) The Commission has not issued any
order preventing or suspending the use of the
Prospectus or any Preliminary Prospectus filed as a
part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the
best of the knowledge of the respective signers, no
proceedings for that purpose have been instituted or
are pending or contemplated under the Act;
(c) Each of the respective signers of the
certificate has carefully examined the Registration
Statement and the Prospectus; in his opinion and to
the best of his knowledge, the Registration Statement
and the Prospectus and any amendments or supplements
thereto contain all statements required to be stated
therein regarding the Company and its subsidiaries;
and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or
omits to state any material fact required to be stated
therein or necessary to make the statements therein
not misleading; and
(d) Since the respective dates as of
which information is given in the Registration
Statement and the Prospectus, and except as disclosed
in or contemplated by the Prospectus, (a) there has
not been any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), business, properties,
results of operations or management of the Company and
its subsidiaries; (b) no legal or governmental action,
suit or proceeding is pending or, to the best of their
knowledge, threatened against the Company or any of
its subsidiaries which is material to the Company and
its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business,
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or which may adversely affect the transactions
contemplated by this Agreement; (c) since such dates
and except as so disclosed, neither the Company nor any
of its subsidiaries has (i) entered into any verbal or
written agreement or other transaction which is not in
the ordinary course of business, which could result in
a material reduction in the future earnings of the
Company or which should have been set forth in an
amendment to the Registration Statement or in a
supplement to or amendment of any prospectus which has
not been disclosed in such supplement or prospectus,
(ii) incurred, other than in the ordinary course of
business, any material liability or obligation, direct,
indirect or contingent, (iii) made any change in its
capital stock, (iv) made any material change in its
short-term debt or funded debt or (v) repurchased or
otherwise acquired any of the Company's capital stock;
and (d) the Company has not declared or paid any
dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders of
record on a date prior to the Closing Date.
(vi) On the date this Agreement is executed and
also on the Closing Date, a letter addressed to the
Underwriters, from Xxxxxx Xxxxxxxx LLP, independent
accountants, the first one to be dated the date of this
Agreement and the second one to be dated the Closing Date, in
form and substance satisfactory to the Underwriters.
(vii) The Underwriters shall have received payoff
and release letters and/or instruments, dated the Closing
Date, from any secured lenders with mortgage indebtedness on
such hotels constituting Collateral, outlining the steps to be
taken for the repayment of indebtedness as set forth therein,
and undertaking to take all steps necessary to release all
liens thereunder upon the payment in full of all amounts due
in respect of such indebtedness.
(viii) If unavailable as of the Closing Date, the
Underwriters shall have received reasonable assurance that the
Company will pursue, obtain and record UCC-3 Termination
Statements, mortgage releases and all other documents and
other releases, in proper form for filing, necessary to
release all liens under the loans referred to in paragraph
(vii) above.
(ix) The Company shall have caused a valid,
perfected security interest in all of the right, title and
interest of the Company in and to the Collateral pursuant to
the Collateral Documents to be granted to the Collateral Agent
for the equal and ratable benefit of the holders of the Notes,
and the Underwriters shall have received executed Financing
Statements and Fixture Financing Statements with respect to the
Collateral under the Collateral Documents such that upon the
filing of such Financing Statements and Fixture Financing
Statements in the offices identified therein, such security
interest will become perfected with the priority required by
the Collateral Documents.
(x) The Underwriters shall have received executed
counterparts, in recordable form, of each Collateral Document,
together with all fees required in connection with recordation
of each such Collateral Document. The Company shall have duly
executed and delivered to the Collateral Agent, for the equal
and ratable benefit of the holders of the Notes, each
Collateral Document for the purpose of securing the payment
and performance of the obligations under the Indenture, with
the priority and otherwise as and to the extent required by
each such Collateral Document. The Company shall have
received the commitment of a title insurance company
reasonably satisfactory to the Underwriters agreeing to issue
to the Trustee, for the benefit of the Holders, Lenders
Policies of title insurance (the
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20
"Title Commitment"). The costs of the Title Commitment and
the policy to be issued pursuant to the Title Commitment shall
have been paid in full by the Company.
(xi) The Underwriters shall have received evidence
reasonably satisfactory to the Underwriters of the taking of
all actions with respect to the Collateral Documents as may be
necessary or, in the opinion of the Underwriters, desirable to
permit the perfection of the liens created, or purported to be
created, by the Collateral Documents.
(xii) The Company shall have delivered to the
Collateral Agent evidence satisfactory to the Underwriters
that (i) all insurance policies of the Company covering the
Collateral provide that the insurance company issuing such
policies will give the Collateral Agent at least 15 days prior
written notice of the cancellation, non-renewal or other
material change in coverage thereunder and (ii) the Collateral
Agent, for the benefit of the holders of the Notes, has been
named loss payee and additional insured with respect to
insurance policies covering the Collateral to the extent
required by the Collateral Documents.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Underwriters and to Xxxxxx & Xxxxxxx, counsel for the Underwriters. The
Company shall furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you request. Any certificate
signed by any officer of the Company and delivered to the Underwriters or to
counsel for the Underwriters shall be deemed to be a representation and
warranty by the Company to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, this Agreement
at the Underwriters' election will terminate upon notification by the
Underwriters to the Company without liability on the part of any Underwriter or
the Company except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 5 and 9 hereof and except to the extent provided in
Section 7 hereof.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing (or reproduction), and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, the Prospectus,
each amendment or supplement to any of them, this Agreement, the Indenture and
the Statement of Eligibility and Qualification of the Trustee; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each Preliminary Prospectus, the Prospectus, the Registration
Statement, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Notes; (iii) the preparation, printing (or reproduction), execution and delivery
of the Indenture and the preparation, printing, authentication, issuance and
delivery of the Notes, including any stamp taxes in connection with the original
issuance of the Notes; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection with
the offering of the Notes; (v) the registration of the Notes under the Exchange
Act and the listing of the Notes on the New York Stock Exchange; (vi) the
registration or qualification of the Notes for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(f)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing (or reproduction), and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees and the fees and expenses
of counsel for the Underwriters in connection with any filings required to be
made with the NASD; (viii) the fees and expenses of the Trustee, the Collateral
Agent and any paying agent (including related fees and expenses of their
respective counsel); (ix) the fees and expenses
20
21
associated with obtaining ratings for the Notes from nationally recognized
statistical rating organizations; (x) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Notes; and (xi) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Notes may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying the Underwriters, or by the Underwriters, by notifying
the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Notes which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate principal amount of Notes which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate principal amount of Notes which the
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the principal
amount of Notes set forth opposite its name in Schedule I hereto bears to the
aggregate principal amount of Notes set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as the Underwriters may
specify in accordance with Section 20 of the Master Agreement Among Underwriters
of Xxxxx Xxxxxx Inc., to purchase the Notes which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the Underwriters shall fail or refuse to purchase Notes which it or they are
obligated to purchase on the Closing Date and the aggregate principal amount of
Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Notes which the Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to the Underwriters
and the Company for the purchase of such Notes by one or more non-defaulting
Underwriters or other party or parties approved by the Underwriters and the
Company are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case which does not result in termination of this
Agreement, either the Underwriters or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Company, purchases Notes which a
defaulting Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be made by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by
notice to the Underwriters or by the Underwriters by notice to the
Company at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be
without liability on the part of the Company to any Underwriter (except
for the expenses to be paid or reimbursed by the Company pursuant to
Sections 5 and 9 hereof and except to the extent provided in Section 7
hereof) or of any Underwriter to the Company (except to the extent
provided in Section 7 hereof).
21
22
(b) This Agreement may also be terminated by the
Underwriters prior to the Closing Date by notice to the Company (i) if
additional material governmental restrictions, not in force and effect
on the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock
Exchange or in the over the counter market by the NASD, or trading in
securities generally shall have been suspended on either such Exchange
or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal or New York
authorities, (ii) if an outbreak of major hostilities or other national
or international calamity or any substantial material adverse change in
political, financial or economic conditions shall have occurred or shall
have accelerated or escalated to such an extent, as, in the judgment of
the Underwriters, to affect adversely the marketability of the Notes,
(iii) if any adverse event shall have occurred or shall exist which
makes untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or Prospectus or
which is not reflected in the Registration Statement or Prospectus but
should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or
(iv) if there shall be any action suit or proceeding pending or
threatened, or there shall have been any development or prospective
development involving particularly the business or properties or
securities of the Company or any of its subsidiaries or the transactions
contemplated by this Agreement, which, in the reasonable judgment of the
Underwriters, may materially and adversely affect the Company's business
or earnings and makes it impracticable or inadvisable to offer or sell
the Notes. Any termination pursuant to this subsection (b) shall be
without liability on the part of any Underwriter to the Company or on
the part of the Company to any Underwriter (except for expenses to be
paid or reimbursed by the Company pursuant to Sections 5 and 9 hereof
and except to the extent provided in Section 7 hereof).
12. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first and third paragraphs under
the caption "Underwriting" in any Preliminary Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
as such information is referred to in Sections 6(b) and 7 hereof.
13. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Notes sold hereunder and any termination of this Agreement.
14. Miscellaneous. Except as otherwise provided herein, notice
given pursuant to any provision of this Agreement shall be in writing and shall
be delivered (i) if to the Company, at the office of the Company at 000 Xxxxx 00
Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxx Xxxxxxxxx, Esq. with a copy
to Xxxxxxx X. Xxx, Esq., Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or (ii) if to the Underwriters, care of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division with a copy to Xxxx X. Xxxxxx, Xx., Esq.,
Xxxxxx & Xxxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, X.X. 00000.
15. Successors. This Agreement has been and is made solely for
the benefit of the several Underwriters, the Company, its directors and
officers, and the other controlling persons referred to in Section 7 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term
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"successors and assigns" as used in this Agreement shall include a purchaser
from any Underwriter of any of the Notes in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
17. Partial Unenforceability. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made
such minor changes (and only such minor changes) as are necessary to make it
valid and enforceable.
18. General. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof. This Agreement may be signed in various
counterparts which together constitute one and the same instrument. If signed
in counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
In this Agreement the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Underwriters.
[signature page follows]
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
PRIME HOSPITALITY CORP.
By:
-------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted by us in
New York, New York as of the date first above written.
XXXXX XXXXXX INC.
BT SECURITIES CORPORATION
XXXXXXXXXX SECURITIES
BY: XXXXX XXXXXX INC.
By:
---------------------
Name:
Title:
25
SCHEDULE I
UNDERWRITER PRINCIPAL AMOUNT OF NOTES
----------- -------------------------
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . $
BT Securities Corporation . . . . . . . . . . . .
Xxxxxxxxxx Securities . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . $120,000,000
============
26
SCHEDULE II
27
EXHIBIT A
[LETTERHEAD OF LAW FIRM]
_____________________, 1996
Xxxxx Xxxxxx, Inc.
BT Securities Corporation
Xxxxxxxxxx Securities
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Norwest Bank Minnesota, National Association
____________________________________________
____________________________________________
Re: Loan (the "Loan") by Norwest Bank Minnesota,
National Association, as Trustee under the
Indenture, to Prime Hospitality Corp. in the
Aggregate Principal Amount of $120,000,000
Ladies and Gentlemen:
We have acted as counsel for Prime Hospitality Corp., a Delaware
corporation (the "Company"), in connection with the transactions contemplated
by the Indenture, dated as of the date hereof (the "Indenture"), between
Norwest Bank Minnesota, National Association (the "Trustee") and the Company.
Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture and the Underwriting Agreement, dated as of
January ___, 1996, by and among the Company, Xxxxx Xxxxxx Inc., BT Securities
Corporation and Xxxxxxxxxx Securities (the "Underwriting Agreement").
In such capacity, we have reviewed the following documents, dated
as indicated below, as executed in connection with the Loan (collectively
referred to herein as the "Collateral Documents"):
(a) The Underwriting Agreement;
(b) The Registration Statement and the Prospectus;
(c) The Indenture;
(d) The Notes;
28
(e) UCC-1 Financing Statements, dated as of the date hereof
(the "Financing Statements"), between the Company, as
debtor, and the Trustee, as secured party;
(f) [Mortgage/Deed of Trust], Assignment of Leases and Rents
and Security Agreement, dated as of the date hereof (the
"[Mortgage/Deed of Trust]"), given by the Company to the
Trustee as security for the Notes and covering the [Name
of Premises] located at [Address of Premises] (the
"Premises");
(g) Environmental and Hazardous Substance Indemnification
Agreement, dated as of the date hereof (the
"Environmental Agreement"), made by the Company for the
benefit of the Trustee;
(h) Assignment of Franchise Agreement, dated as of the date
hereof (the "Franchise Assignment"), made by the Company
in favor of the Trustee;
(i) Assignment of Contracts and Documents, dated as of the
date hereof ("Assignment of Contracts"), made by the
Company in favor of Trustee; and
(j) [List any other relevant documents]
As to various questions of fact material to our opinion, we have
relied, without independent investigation, upon the representations made in the
Underwriting Agreement, the Indenture and the Collateral Documents and upon
certificates of officers of the Company. We have also examined such
certificates of public officials, corporate documents and records and other
certificates, and have made such investigations of law, as we have deemed
necessary in order to give the opinions hereinafter set forth. We have
assumed, without independent investigation, the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies.
We understand that with respect to title matters, you will be
relying on the title insurance commitment issued to you by Chicago Title
Insurance Company bearing Title No. ____________________ dated as of
_______________ and re-dated as of today. We have not made any investigation
of, and do not express an opinion as to, any matters of title to any property,
whether real, personal or mixed.
We express no opinion with respect to the effect of any law other
than the law of the state of _____________ and the federal law of the United
States. Insofar as our opinion pertains to matters of Delaware law, we have
relied upon the opinion of Xxxxxxx, Xxxx & Xxxxxxxxx, dated as of the date
hereof, a copy of which is attached hereto as Exhibit A.
Based upon the foregoing, and subject to the qualifications and
exceptions heretofore and hereinafter set forth, we are of the opinion that:
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____________, 1995
Page 29
1. The Company is duly qualified to do business and is in
good standing as a foreign corporation under the laws of the state of [state of
Premises] (the "State").
2. The Company holds all State permits and licenses
necessary or required for the Company to conduct its business as presently
conducted in the State. The Company has all requisite corporate power and
authority to own, lease and operate the premises as a hotel.
3. When duly executed and delivered on behalf of the
Company, each Collateral Document will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The aforesaid opinion as
to enforceability is also subject to the qualification that certain provisions
contained in the Collateral Documents may not be enforceable, but such
unenforceability will not render the Collateral Documents invalid as a whole or
substantially interfere with realization of the principal benefits and/or
security provided thereby.
4. The execution and delivery of the Collateral Documents
by the Company, the borrowing thereunder and the granting of liens in
connection therewith by the Company, and the payment of the indebtedness of the
Company evidenced by the Notes do not: (a) violate any statute, rule or
regulation of the State applicable to the Company or, to our knowledge, any
judgment, decree, order, regulation or rule of any court or governmental
authority of the State to which the Company, or any of its properties
(including, without limitation, the Premises) may be subject or (b) require any
consents, approvals, authorizations, registrations, declarations or filings by
the Company under any statute, rule or regulation of the State applicable to
the Company (other than consents which have been obtained prior to the
Closing), or (c) result in the creation of any Lien (other than pursuant to the
Collateral Documents) upon any property or assets of the Company (including,
without limitation, the Premises) located in the State.
5. The provisions of each Collateral Document are effective
to create a valid lien on the portion of the Collateral which is real property
and a valid security interest in favor of the Trustee, as secured party, in
that portion of the collateral (the "Article 9 Collateral") described in such
Collateral Document which is subject to Uniform Commercial Code as enacted in
the State (the "State UCC"), as security for the payment, to the extent set
forth therein, of all obligations of the Company to the Trustee, as secured
party, under the Collateral Documents.
6. Each Collateral Document is in appropriate form for
filing in the State.
7. The execution of each of the (A) [Mortgage/Deed of
Trust], (B) the recording of the [Mortgage/Deed of Trust] in the office of
________________________, (C) the recording and filing of the Financing
Statements in the office of ________________ and (D) the payment of fees due in
respect thereof, shall cause the Trustee, for the benefit of the holders of the
Notes, to have, as security for the
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____________, 1995
Page 30
payment of the obligations under the Indenture and the Notes, a valid
[Mortgage/Deed of Trust] lien of record on the portions of the Collateral
described in such [Mortgage/Deed of Trust] consisting of real property located
in _________________, and a valid, duly perfected security interest in the
portions of the Collateral described in such [Mortgage/Deed of Trust] consisting
of fixtures located in ______________, and the actions, recordings or filings
described in clauses (A), (B), (C) and (D) are the only actions, recordings or
filings necessary in any filing office in the State to publish notice of, and
perfect, as the case may be, the validity of such liens and security interests
in the Collateral consisting of real property and fixtures located in
________________________. From and after the date hereof (assuming the due
recording of the [Mortgage/Deed of Trust], and the filing of the Financing
Statements), the liens or security interests created consisting of real property
and fixtures located in ________________, by the filing of such [mortgage/deeds
of trust] and financing statements will be duly perfected.
8. Upon the proper recording or filing of the Collateral
Documents in the office of _______________, the security interest in favor of
the Trustee in the Article 9 Collateral will be perfected to the extent a
security interest in such collateral can be perfected by filing a financing
statement under the provisions of the State UCC.
9. The Franchise Assignment is in appropriate form for
recordation in the office of ________________, and upon the recording or filing
of the same in the office of _______________, will effect a valid assignment of
the Franchise Agreement described in such document by the Company.
10. Except as described in this opinion, no recording,
filing, privilege, or other tax must be paid in connection with the execution,
delivery, recordation or enforcement of the Collateral Documents.
11. The Trustee is not required, solely by reason of the
transactions contemplated by the Indenture and the Collateral Documents, to
qualify to do business in the State or to obtain any other authorization,
approval or action by, give any notice to or make any filing with, any
governmental, administrative or judicial authority or regulatory body of the
State in order to carry out the transactions contemplated by the Indenture and
the Collateral Documents, or avail itself of the remedies provided thereby; the
Trustee will not become subject to taxation in the State solely as a result of
the performance of the transactions contemplated by the Indenture and the
Collateral Documents.
12. The provisions of the Indenture and of the Collateral
Documents stating that they shall be governed by, and construed in accordance
with the laws of the State of New York will be enforced, recognized and in all
respects deemed controlling under the law of the State, except as to validity,
creation and perfection of the Liens, perfection of security interests, and
matters of procedure and remedies as to which the Collateral Documents will be
governed by and construed in accordance with the laws of the State.
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____________, 1995
Page 31
13. The foreclosure of any Collateral Document will not in
any manner restrict, affect or impair the Company's liability with respect to
the indebtedness secured thereby, or the Trustee's rights or remedies with
respect to the foreclosure or enforcement of any other security interests or
liens securing such indebtedness, to the extent any deficiency remains unpaid
after application of the proceeds of the foreclosure of such Collateral
Document.
14. The law (statutory or otherwise) of the State does not
require a lienholder to make an election of remedies where such lienholder
holds security interests and liens on both the real and the personal property
of a debtor or to take recourse first or solely against its collateral.
15. A mortgagor does not have a right of redemption under
the laws of the State or the terms of the Collateral Documents are effective to
waive such rights.
16. To the best of our knowledge, the Premises complies with
all applicable zoning, use, setback, building code, occupancy, subdivision,
land use and development laws, rules and regulations and there is no legal
action pending or threatened, or proposed change in zoning, which would affect
the use and occupancy of the Premises as a hotel.
17. The Loan, as made will not violate any applicable usury
laws of the State or other applicable laws regulating the interest rate, fees
and other charges that may be collected with respect to the Loan.
In addition, we have participated in conferences with officers and other
representatives of the Company, Xxxxxxx Xxxx & Xxxxxxxxx, representatives of
the independent certified public accountants of the Company and the
Underwriters at which the contents of the Registration Statement, the
Prospectus and any amendment thereof or supplement thereto and related matters
were discussed and, although we have not undertaken to investigate or verify
independently, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto on
the basis of the foregoing (relying as to materiality to a large extent upon
the opinions of officers and other representatives) no facts have come to our
attention that would lead us to believe that either the Registration Statement
at the time it became effective (or any amendment thereof made prior to the
Closing Date, as the case may be, as of the date of such amendment) contained
an untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date thereof (of any amendment
thereof or supplement thereto made prior to the Closing Date as of the date of
such amendment or supplement) contained an untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that in each such
case we express no belief or opinion with respect to the financial statements
and schedules and other financial or statistical data included therein).
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____________, 1995
Page 32
The foregoing opinions shall not be relied upon by any party
other than the Underwriters, the Trustee, holders of the Notes, their
successors and/or assigns and their respective counsel.
Very truly yours,
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