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EXHIBIT 1.1
2,000,000 Shares
XXXXXXX INNS, INC.
Common Stock
UNDERWRITING AGREEMENT
March 5, 1997
Xxxxxxxxxxx & Co., Inc.
The Xxxxxxxx-Xxxxxxxx Company, Inc.
c/o Oppenheimer & Co., Inc.
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxx Inns, Inc., a Georgia corporation (the "Company"),
proposes to sell to you (the "Underwriters") an aggregate of 2,000,000 shares
(the "Firm Shares") of the Company's common stock, $0.10 par value (the "Common
Stock"). In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 300,000 shares (the "Option Shares") of
Common Stock for the purpose of covering over-allotments in connection with the
sale of the Firm Shares. The Firm Shares and the Option Shares are together
called the "Shares."
1. Sale and Purchase of the Shares. On the basis of
the representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at $12.00 per share (the "Initial Price"),
the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule I to this Agreement.
(b) The Company grants to the Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted to
eliminate fractions) of the total number of Option Shares to be
purchased by the Underwriters as
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such Underwriter is purchasing of the Firm Shares. Such option may be
exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any
time on or before 12:00 noon, New York City time, on the business day
before the Firm Shares Closing Date (as defined below), and from time
to time thereafter within 30 days after the date of this Agreement, in
each case upon written notice (which may be facsimile), or verbal or
telephonic notice confirmed by written notice (which may be facsimile),
setting forth the number of Option Shares to be purchased and the time
and date (if other than the Firm Shares Closing Date) of such purchase
which shall be not more than three business days following the date of
exercise of the option.
2. Delivery and Payment. Delivery by the Company of the Firm
Shares to the Underwriters for their respective accounts, and payment of the
purchase price therefor by wire transfer of same day funds to the Company at the
bank account designated in writing by the Company at least one business day
prior to the Firm Shares Closing Date, shall take place at the offices of Xxxxxx
& Xxxxx at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York
City time, on the third business day following the date of this Agreement;
provided, however, that if the Firm Shares sold hereunder are priced after 4:30
p.m., New York City time, on any business day, payment and delivery in respect
of the Firm Shares shall take place on the fourth business day following the
date of this Agreement; and further, if it is determined that settlement within
the foregoing time frame is not feasible, then payment and delivery in respect
of the Firm Shares shall occur at such time on such other date, not later than
ten business days after the date of this Agreement, as shall be agreed upon by
the Company and the Underwriters (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In the event the option with respect to all or any part of the
Option Shares is exercised, delivery by the Company of the Option Shares to the
Underwriters for their respective accounts, and payment of the purchase price
therefor by wire transfer of same day funds to the Company at the bank account
designated in writing by the Company at least one business day prior to the
Option Shares Closing Date (as defined below), shall take place at the offices
of Xxxxxx & Xxxxx specified above at the time and on the date (which may be the
same date as, but in no event shall be earlier than, the Firm Shares Closing
Date) specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment with respect to each exercise of the option are called an
"Option Shares Closing Date"). The Firm Shares Closing Date and each Option
Shares Closing Date are called, individually, a "Closing Date" and,
collectively, the "Closing Dates."
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Unless otherwise indicated, certificates evidencing the Shares
shall be registered in such names and shall be in such denominations as the
Underwriters shall request at least two full business days before the Firm
Shares Closing Date or, in the case of Option Shares, on the day of notice of
exercise of the option as described in Section 1(b) and shall be made available
to the Underwriters for checking and packaging, at such place as is designated
by the Underwriters, at least one full business day before the Firm Shares
Closing Date (or the Option Shares Closing Date in the case of the Option
Shares).
3. Representations and Warranties of the Company. The
Company and, where applicable, Xxxxxxx Operating Company (the "Operator"),
hereby represent and warrant to each Underwriter as follows:
(a) A registration statement on Form S-3 (File No. 333-20143),
with respect to shares of the capital stock of the Company, including
the Shares, including a prospectus, have been carefully prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(the "Securities Rules") of the Securities and Exchange Commission (the
"Commission") thereunder, have been filed with the Commission and
declared effective. Such registration statement and prospectus may have
been amended or supplemented prior to the date of this Underwriting
Agreement; any such amendment of such registration statement or
supplement was so prepared and filed, and any such amendment filed
after the effective date of such registration statement (the "Effective
Date") has been declared effective. No stop order suspending the
effectiveness of the registration statement has been issued, and no
proceeding for that purpose has been instituted or threatened by the
Commission. A prospectus supplement (the "Prospectus Supplement")
setting forth the terms of the offering, sale and plan of distribution
of the Shares (the "Offering") and additional information concerning
the Company and its business has been or will be so prepared and will
be filed pursuant to Rule 424(b) of the Securities Rules on or before
the second business day after the date hereof (or such earlier time as
may be required by the Securities Rules). Copies of such registration
statement and prospectus, any such amendments or supplements and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Agreement (including one
fully executed copy of the registration statement and of each amendment
thereto for you and your counsel) have been delivered to you and your
counsel. The registration statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement," and the
final form of prospectus included in the Registration Statement, as
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supplemented by the Prospectus Supplement, is referred to herein as the
"Prospectus." Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated by
reference therein. For purposes of this Agreement, all references to
the Registration Statement and Prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the
Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval System (XXXXX), and such copy shall be identical in content
to any Prospectus delivered to you for use in connection with the
offering of the Securities.
(b) Each part of the Registration Statement, when such part
became or becomes effective and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Firm Shares Closing Date and, if later, at an Option Shares
Closing Date, conformed or will conform in all material respects with
the requirements of the Securities Act and the Securities Rules; each
part of the Registration Statement, when such part became or becomes
effective, or when such part was filed with the Commission, 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; the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Firm Shares Closing Date and, if later, at an
Option Shares 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 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 concerning
the Underwriters that was furnished to the Company by the Underwriters
specifically for use in the preparation thereof. Specifically, the
Company makes no representation or warranty as to the paragraphs with
respect to stabilization and passive market making on the inside front
cover page of the Prospectus and the statements contained under the
caption "Underwriting" in the Prospectus. The Company acknowledges
that, for the purposes of this Agreement, such statements constitute
the only information furnished in writing by the Underwriters on behalf
of the Underwriters specifically for inclusion in the Registration
Statement or the Prospectus.
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(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement
thereto, when they became or become effective under the Securities Act
or were or are filed with the Commission under the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as the case may be, conformed or will conform in all material respects
with the requirements of the Securities Act, the Securities Rules, the
Exchange Act and/or the rules and regulations of the Commission
thereunder (the "Exchange Rules"), as applicable.
(d) The financial statements of the Company and the Operator
together with the related schedules and notes thereto, set forth or
included or incorporated by reference in the Registration Statement and
Prospectus fairly present the financial condition of the Company and
the Operator as of the dates indicated and the results of operations,
changes in financial position, stockholders' equity and cash flows for
the periods therein specified, in conformity with generally accepted
accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein). The summary and selected
financial and statistical data included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the
information shown therein and, to the extent based upon or derived from
the financial statements, have been compiled on a basis consistent with
the financial statements presented therein. In addition, the pro forma
financial statements of the Company and the Operator, and the related
notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the basis described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
Furthermore, all financial statements required by Rule 3-14 of
Regulation S-X ("Rule 3-14"), if any, have been included or
incorporated by reference in the Registration Statement and the
Prospectus and any such financial statements are in conformity with the
requirements of Rule 3-14. No other financial statements are required
to be set forth or incorporated by reference in the Registration
Statement or the Prospectus under the Securities Act or the Securities
Rules.
(e) Ernst & Young LLP, whose reports are incorporated by
reference in the Registration Statement, are and, during the periods
covered by their reports, were independent public
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accountants as required by the Securities Act and the Securities Rules.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Georgia. Other than Xxxxxxx Alabama, Inc., an Alabama corporation,
the Company has no subsidiary or subsidiaries and does not control,
directly or indirectly, any corporation, partnership, joint venture,
association or other business organization. The Company is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its business
makes such qualification necessary (including every jurisdiction in
which it owns or leases property), except for such jurisdictions where
the failure to so qualify would not have a material adverse effect on
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company. Except as disclosed
or incorporated by references in the Registration Statement and the
Prospectus, the Company does not own, lease or license any asset or
property or conduct any business outside the United States of America.
The Operator, a Georgia corporation which is lessee of each hotel
property (the "Inns") owned by the Company, has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Georgia. The Operator is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which
the character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction in which it is acting as lessee
of an Inn), except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Operator or the Company. Each of the
Company and the Operator has all requisite corporate power and
authority, and all necessary authorizations, approvals, consents,
orders, licenses, certificates and permits of and from all governmental
or regulatory bodies or any other person or entity, to own, lease,
license and operate their respective assets and properties and conduct
their respective businesses as now being conducted and as described or
incorporated by reference in the Registration Statement and the
Prospectus; except for such authorizations, approvals, consents,
orders, licenses, certificates and permits the absence of which would
not have a material adverse effect upon the assets or properties,
business, results of operations, prospects or condition (financial or
otherwise) of the Company or the Operator; and no such authorization,
approval, consent, order, license,
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certificate or permit contains a materially burdensome restriction
other than as disclosed or incorporated by reference in the
Registration Statement and the Prospectus.
(g) The Company owns or possesses adequate and enforceable
rights to use all trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how
and other similar rights (collectively, the "Intangibles") necessary
for the conduct of its business as now being conducted and as described
or incorporated by reference in the Registration Statement and the
Prospectus. The Operator owns the trademark "The Xxxxxxx Inn," and the
Company has an enforceable option to purchase such trademark for
$25,000 subject to the terms and provisions of such option. Neither the
Company nor the Operator has infringed, is infringing, or has received
any notice on infringement of, any Intangible of any other person, that
will have a material adverse effect upon the assets or properties,
business, results of operations, prospects or condition (financial or
otherwise) of the Company and the Operator and the Company does not
know of any basis therefor.
(h) The Company has good title to each of the items of
personal property which are reflected in the financial statements
referred to in Section 4(d) or are referred to in the Registration
Statement and the Prospectus or any document incorporated by reference
therein as being owned by the Company and valid and enforceable
leasehold interests in each of the items of real and personal property
which are referred to in the Registration Statement and the Prospectus
or any document incorporated by reference therein as being leased by
the Company, in each case free and clear of all liens, encumbrances,
claims, security interests and defects, other than those described in
the Registration Statement and the Prospectus and those which do not
and will not have a material adverse effect upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(i) The Company has good and marketable title to, or leasehold
interests in, all properties and assets (including, without limitation,
mortgaged assets), as described in the Registration Statement and the
Prospectus or any document incorporated by reference therein, owned by
the Company, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration
Statement and the Prospectus or any document incorporated by reference
therein, or are not material in relation to the business of the
Company; no lessee under any of the leases pursuant to which the
Company leases its properties has an option or right of first refusal
to purchase the premises demised under such
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lease; the use and occupancy of each of the properties owned by the
Company complies in all material respects with all applicable codes and
zoning laws and regulations; neither the Company nor the Operator has
any knowledge of any pending or threatened condemnation or zoning
change that will in any material manner affect the size of, use of,
improvements on, construction on, or access to any of the properties
owned by the Company, which would have a material adverse effect upon
the proposed use of such property as a limited service inn; and neither
the Company nor the Operator has any knowledge of any pending or
threatened proceeding or action that will in any material respect
affect the size of, use of, improvement of, construction on, or access
to any of the properties owned by the Company.
(j) Title insurance in favor of the mortgagee and the Company
is maintained with respect to each of the properties owned by the
Company in an amount at least equal to the greater of (i) the cost of
acquisition of such property or (ii) the cost of construction of the
improvements located on such property (measured at the time of such
construction).
(k) The mortgages and deeds of trust encumbering the
properties and assets described or incorporated by reference in the
Registration Statement and the Prospectus are not convertible into
shares of Common Stock or other equity interest in the Company nor does
the Company hold a participating interest therein.
(l) In the event of the purchase by the Company of the parcels
of property to be purchased by it pursuant to any purchase agreements,
contracts and letters of intent referred to in the Registration
Statement and Prospectus relating to sites for additional inns (the
"Property Purchase Agreements"), the Company will receive good and
marketable title to all such parcels of property (the "Proposed
Acquisitions"), in each case free and clear of all liens, charges,
encumbrances, claims, security interests, restrictions and defects,
other than those that would not be material in relation to the business
of the Company. To the best knowledge of the Company: (i) the intended
use and occupancy of each of the Proposed Acquisitions complies with
all applicable codes and zoning laws and regulations, except for such
failures to comply which would not individually or in the aggregate
have a material adverse effect on the ability of the Company to
develop, construct and own an inn on such parcel of property and lease
it to the Operator; and (ii) there is no pending or threatened
condemnation, zoning change, environmental or other proceeding or
action that will in any material respect affect the size of, use of,
improvements on, construction on, or access to the Proposed
Acquisitions.
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(m) There is no litigation or governmental or other proceeding
or investigation before any court or before or by any public body or
board pending or, to the Company's or the Operator's best knowledge,
threatened (and neither the Company nor the Operator knows of any basis
therefor) against, or involving the assets, properties or businesses of
the Company or the Operator which would materially adversely affect the
value or the operation of any such assets or properties or the
business, results of operations, prospects or condition (financial or
otherwise) of the Company or the Operator.
(n) Except as disclosed in the Registration Statement or the
Prospectus or any document incorporated by reference therein, (i) there
is not present on any of the properties owned by the Company or the
Proposed Acquisitions any hazardous substances, hazardous materials,
toxic substances, asbestos or waste materials (collectively, "Hazardous
Materials"), (ii) there has not occurred or is not presently occurring
from any of such properties any unlawful spills, releases, discharges
or disposal of Hazardous Materials, and (iii) all such properties are
in compliance with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials,
which failure would have a material adverse effect on the earnings,
business, results of operations, prospects or condition (financial or
otherwise) of the Company. Except for those properties set forth on
Schedule II, the Company has caused Phase I Environmental Surveys to be
completed with respect to each of the properties owned by the Company
and the Proposed Acquisitions and has delivered copies of all such
Environmental Surveys to the Underwriters.
(o) The Company will obtain and maintain title insurance in
favor of the Company on each of the Proposed Acquisitions, when and if
consummated, not later than the time that financing for the
construction of an inn thereon is obtained, in an amount at least equal
to the cost of the acquisition of such property.
(p) Property and casualty insurance in favor of the Company is
maintained with respect to each of the properties owned by the Company,
and will be obtained and maintained with respect to each of the
Proposed Acquisitions, when and if consummated, in an amount and on
such terms as are reasonable and customary for businesses of this type.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (i) there has not
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been any material adverse change in the assets or properties, business,
results of operations, prospects or condition (financial or otherwise)
of the Company, whether or not arising from transactions in the
ordinary course of business; (ii) the Company has not sustained any
material loss or interference with its assets, businesses or properties
(whether owned or leased) from fire, explosion, earthquake, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order
or decree; and (iii) since the date of the latest balance sheet,
included or incorporated by reference in the Registration Statement and
the Prospectus, except as reflected therein, the Company has not
undertaken any liability or obligation, direct or contingent, except
such liabilities or obligations undertaken in the ordinary course of
business.
(r) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required. Each mortgage, line of credit
agreement, loan agreement, guarantee, employee leasing agreement,
property management agreement, franchise agreement, cost reimbursement
agreement, employment contract, stock option agreement, warrant
agreement, registration rights agreement, leasing agreement,
construction contract, purchase agreement and all other agreements of
the Company and the Operator described in the Registration Statement or
the Prospectus or incorporated by reference therein or listed as
exhibits to the Registration Statement are in full force and effect and
are valid and enforceable by and against the Company or the Operator,
as the case may be, in accordance with their terms, assuming the due
authorization, execution and delivery thereof by each of the other
parties thereto. Neither the Company or the Operator, nor to the best
of the Company's and the Operator's knowledge, any other party is in
default in the observance or performance of any term or obligation to
be performed by it under any such agreement, and no event has occurred
which with notice or lapse of time or both would constitute such a
default, which default or event would have a material adverse effect on
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company. No default exists,
and no event has occurred which with notice or lapse of time or both
would constitute a default, in the due performance and observance of
any term, covenant or condition, by the Company or the Operator, as the
case may be, of any other agreement or instrument to which the Company
or the Operator is a party or by which they or their properties or
businesses may be bound or affected, which default or event would have
a material adverse effect on the
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assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company or the Operator.
(s) Neither the Company nor the Operator is in violation of
any term or provision of their respective charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation would have a
material adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of the
Company or the Operator.
(t) Neither the execution, delivery and performance of this
Agreement by the Company or the Operator nor the consummation of any of
the transactions contemplated hereby (including, without limitation,
the issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company
pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or the Operator is a
party or by which either is bound, or any other respective properties
or businesses are bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or
the Operator or violate any provision of the charter or by-laws of the
Company or the Operator, as applicable, except for such consents or
waivers which have already been obtained and are in full force and
effect.
(u) The Company has authorized, issued and outstanding capital
stock as set forth under the caption "Capitalization" in the Prospectus
Supplement. All of the outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable
and none of them was issued in violation of any preemptive or other
similar right. The Shares, when issued and sold pursuant to this
Agreement, will be duly authorized and validly issued, fully paid and
nonassessable and none of them will be issued in violation of any
preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there
is no commitment, plan or arrangement to issue, any share of stock of
the Company or any security convertible into or exercisable or
exchangeable for, such
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capital stock. The Common Stock and the Shares conform in all material
respects to all statements relating thereto contained in the
Registration Statement and the Prospectus.
(v) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described or referred to therein, the Company has not (i) issued any
securities or incurred any liability or obligation, direct or
contingent, except such liabilities or obligations incurred in the
ordinary course of business including, without limitation, debt
financing to acquire properties and to construct inns thereon, (ii)
entered into any transaction not in the ordinary course of business or
(iii) declared or paid any dividend or made any distribution on any
shares of its capital stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any shares
of its capital stock.
(w) No holder of any security of the Company has the right
which has not been waived to have any security owned by such holder
included in the Registration Statement or any right to demand
registration of any security owned by such holder during the period
ending 45 days after the date of this Agreement. The Company and each
of its executive officers and directors have delivered to the
Underwriters their enforceable written agreement that for a period of
at least 45 days after the date of this Agreement, each such party will
not, except for sales by the Company of Common Stock pursuant to the
exercise of outstanding employee and director stock options and
pursuant to the Company's dividend reinvestment and stock purchase
plan, without the prior written consent of the Underwriters, offer for
sale, sell, distribute, pledge, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or encumber, or exercise
any registration rights with respect to, any shares of Common Stock (or
any securities convertible into, exercisable for or exchangeable for
any shares of Common Stock or any rights to purchase or acquire shares
of Common Stock) owned by them.
(x) All necessary corporate action has been duly and validly
taken by the Company and the Operator to authorize the execution,
delivery and performance of this Agreement and the issuance and sale of
the Shares by the Company. This Agreement has been duly and validly
authorized, executed and delivered by the Company and the Operator and
constitutes and will constitute the legal, valid and binding
obligations of the Company and the Operator enforceable against the
Company and the Operator in accordance with its terms. Each approval,
consent, order, authorization, designation, declaration or filing by or
with any regulatory, administrative or other governmental body
necessary in connection with the execution
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and delivery by the Company and the Operator of this Agreement and the
issuance and sale of the Shares by the Company (except such as may be
required under the Act or such additional steps as may be required by
the National Association of Securities Dealers, Inc. (the "NASD") or by
the Nasdaq National Market, if any) has been obtained or made and is in
full force and effect. The Shares are included for quotation on the
Nasdaq National Market.
(y) Neither the Company nor the Operator is involved in any
labor dispute nor, to the knowledge of the Company or the Operator, is
any such dispute threatened, which dispute would have a material
adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the
Company or the Operator.
(z) The Company and the Operator are conducting their
respective businesses in compliance with all applicable laws, rules and
regulations of the jurisdictions in which they are conducting business,
including, without limitation, the Americans with Disabilities Act of
1990 and all applicable local, state and federal employment,
truth-in-advertising, franchising and immigration laws and regulations,
except where the failure to be so in compliance would not have a
material adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of the
Company.
(aa) No transaction has occurred between or among the Company
and any of its officers or directors or any affiliate or affiliates of
any such officer or director that is required to be described in and is
not described in the Registration Statement and the Prospectus.
(bb) Other than the trust instrument under which the Trust (as
defined below) was created and currently exists, no agreement or
understanding, written or otherwise, exists between or among any person
or entity and any trustee or successor trustee (each, a "Trustee") of
the grantor trust owning 90.1% of the outstanding common stock of the
Operator (the "Trust") which in any way would limit or restrict any of
the rights of a Trustee in the Trust or any amendment thereto.
(cc) Neither the Company nor the Operator has taken, nor will
either take, directly or indirectly, any action designed to or which
might reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of any of the Shares.
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(dd) The Company and the Operator have filed all federal,
state, local and foreign tax returns which are required to be filed
through the date hereof (and will file all such tax returns when and as
required to be filed after the date hereof, or have received extensions
thereof, and have paid all taxes shown on such returns to be due on or
prior to the date hereof (and will pay all taxes shown on such returns
to be due after the date hereof) and all assessments received by it to
the extent that the same are material and have become due.
(ee) The execution, delivery and performance of each of the
Property Purchase Agreements (other than any letters of intent) and the
consummation of the transactions contemplated therein have been duly
authorized by all necessary action, and will not conflict with or
constitute a breach of, or a default under, or result in the creation
or imposition of any lien, charge or encumbrance under any property or
assets of the Company, nor will such action result in a violation of
the Company's charter, by-laws, or any applicable law, administrative
regulation or administrative or court decree.
(ff) The Company has met the qualification requirements for a
"real estate investment trust" during its taxable years ending on or
after December 31, 1994 and its proposed method of operations will
enable it to continue to meet the requirements for qualification and
taxation as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), assuming no change in the
applicable underlying law. The Company does not know of any event which
would cause or is likely to cause the Company to fail to qualify as a
"real estate investment trust" at any time.
(gg) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(hh) The Company has complied with all of the requirements
and filed the required forms as specified in Florida Statutes Section
517.075.
4. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares are
subject to each of the following terms and conditions:
(a) The Prospectus Supplement shall have been timely filed
with the Commission in accordance with Section 5(a) of this Agreement.
(b) No order preventing or suspending the use of the
Prospectus shall have been or shall be in effect and no order
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suspending the effectiveness of the Registration Statement shall be in
effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of you and your counsel.
(c) The representations and warranties of the Company and the
Operator contained in this Agreement shall be true and correct when
made and on and as of each Closing Date as if made on such date and the
Company shall have performed all covenants and agreements and satisfied
all the conditions contained in this Agreement required to be performed
or satisfied by it at or before such Closing Date.
(d) The Underwriters shall have received on each Closing Date
a certificate, addressed to the Underwriters and dated such Closing
Date, of the chief executive officer or the chief financial officer of
the Company, to the effect that such person has carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are
true and correct on and as of such Closing Date with the same effect as
if made on such Closing Date and the Company has performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to
such Closing Date.
(e) The Underwriters shall have received on each Closing Date
a certificate, addressed to the Underwriters and dated such Closing
Date, of the chief executive officer or the chief financial officer of
the Operator, to the effect that such person has carefully examined
this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such
Closing Date with the same effect as if made on such Closing Date.
(f) The Underwriters shall have received at the time this
Agreement is executed and on each Closing Date, a letter or letters
signed by Ernst & Young LLP, addressed to the Underwriters and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance satisfactory to the Underwriters, as to their status
as independent accountants within the meaning of the Securities Act and
the Securities Rules, the information in or incorporated by reference
in the Registration Statement in response to Item 10 of Form S-3 under
the Securities Act and matters relating to the financial statements and
other financial and statistical information included or incorporated by
reference in the Registration Statement and the Prospectus.
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(g) The Underwriters shall have received on each Closing Date
from Xxxxxx & Xxxxxxx, A Professional Corporation, counsel for the
Company, an opinion, addressed to the Underwriters and dated such
Closing Date, and stating in effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Georgia; the Company is duly qualified
and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets
or properties (owned, leased or licensed) or by the nature of
its business makes such qualification necessary (including
every jurisdiction in which it owns or leases property),
except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company; to the best
of such counsel's knowledge, the Company has no subsidiary or
subsidiaries (other than Xxxxxxx Alabama, Inc.) and does not
control, directly or indirectly, any corporation, partnership,
joint venture, association or other business organization; and
the Company has all requisite corporate power and authority to
own, lease, license and operate its assets and properties and
conduct its business as now being conducted and as described
in the Registration Statement and the Prospectus or any
document incorporated by reference therein.
(ii) The Operator has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Georgia; the Operator is duly qualified
and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets
or properties (owned, leased or licensed) or by the nature of
its businesses makes such qualification necessary (including
every jurisdiction in which it is acting as lessee of an Inn),
except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Operator; and the
Operator has all requisite corporate power and authority to
own, lease, license and operate its assets and properties and
conduct its business as now being conducted and as described
in the Registration *Statement and the Prospectus or any
document incorporated by reference therein.
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(iii) The Company has authorized, issued and
outstanding capital stock as set forth under the caption
"Capitalization" in the Prospectus Supplement; the
certificates evidencing the Shares are in due and proper legal
form and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock have
been duly authorized and validly issued; and all of the
outstanding shares of Common Stock are fully paid and
nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will
have been issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and, to
the knowledge of such counsel, there is no commitment, plan or
arrangement to issue, any share of capital stock, of the
Company or any security convertible into or exercisable or
exchangeable for, capital stock of the Company. The Common
Stock and the Shares conform in all material respects to all
statements relating thereto contained in the Registration
Statement and the Prospectus.
(iv) The information set forth under the captions
"Articles of Incorporation and Bylaw Provisions,"
"Restrictions on Transfer" and "Common Stock" in the
Prospectus to the extent that it constitutes matters of law,
summaries of legal matters, documents, or legal conclusions,
has been reviewed by such counsel and is correct in all
material respects.
(v) The descriptions contained or incorporated by
reference in the Registration Statement and the Prospectus of
statutes, legal and governmental proceedings, contracts and
other documents are accurate, and insofar as such statements
constitute a summary of documents referred to therein, matters
of law or legal conclusions, are fair summaries of the
material provisions thereof and accurately present the
information required with respect to such documents and
matters. All statutes, legal or governmental proceedings, and
all agreements and other documents required to be described in
the Registration Statement (or incorporated by reference
therein) have been so described. All agreements and other
documents known to such counsel to be required to be filed as
exhibits to the Registration Statement have been so filed or
incorporated by reference therein.
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(vi) The agreements of the Company, and its
executive officers and directors, that for a period of
45 days from the date of this Agreement each such party will
not, except for sales by the Company of Common Stock pursuant
to the exercise of outstanding employee and director stock
options and pursuant to the Company's dividend reinvestment
and stock purchase plan, without the Underwriters' prior
written consent, offer for sale, sell, distribute, pledge,
grant any option for the sale of, or otherwise dispose of,
directly or indirectly, or encumber, or exercise any
registration rights with respect to, any shares of Common
Stock (or any securities convertible into, exercisable for or
exchangeable for any shares of Common Stock or any rights to
purchase or acquire shares of Common Stock) owned by such
party, have been duly and validly executed and delivered by
such parties and constitute the legal, valid and binding
obligation of each such party enforceable against each such
party in accordance with its terms.
(vii) All necessary corporate action has been duly
and validly taken by the Company and the Operator to
authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the
Company. This Agreement has been duly and validly executed
and delivered by the Company and the Operator and constitutes
the legal, valid and binding obligation of the Company and
the Operator, enforceable against the Company and the
Operator in accordance with its terms.
(viii) Neither the execution, delivery and
performance of this Agreement by the Company and the
Operator nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give
rise to a right to terminate or accelerate the due date of
any payment due under, or conflict with or result in the
breach of any term or provision of, or constitute a default
(or any event which with notice or lapse of time, or both,
would constitute a default) under, or require consent or
waiver under, or result in the execution or imposition of any
lien, charge or encumbrance upon any properties or assets of
the Company or the Operator pursuant to the terms of, any
indenture, mortgage, deed of trust, note, franchise, license,
permit or other agreement or instrument known to such counsel
and to which the Company or the Operator is a party or by
which they or any of their respective properties or
businesses are bound, or any judgment, decree, order,
statute, rule or regulation or violate any provision of the
charter or by-laws of the Company or the Operator.
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(ix) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, in the due
performance and observance by the Company of any term,
covenant or condition of any agreement, instrument or other
document to which the Company is a party or by which its
assets or properties or businesses are bound or affected.
(x) To the best of such counsel's knowledge,
neither the Company nor the Operator is in violation of
any term or provision of its charter or by-laws, and neither
the Company nor the Operator is in violation of any term or
provision of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation.
(xi) To the best of such counsel's knowledge, other
than the trust instrument under which the Trust was created
and currently exists, no agreement or understanding, written
or otherwise, exists between any person or entity and a
Trustee of the Trust which in any way would limit or restrict
any of the rights of a Trustee in the Trust or any amendment
thereto.
(xii) No consent, approval, authorization or order
of any court or governmental agency or body is required
for the performance by the Company or the Operator of this
Agreement or the consummation of the transactions
contemplated hereby, except such as have been obtained under
the Securities Act.
(xiii) To the best of such counsel's knowledge, there
is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body
or board pending or threatened against, or involving the
assets, properties or businesses of, the Company which is
reasonably likely to have a material adverse effect upon the
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(xiv) The Registration Statement, the Prospectus,
the Prospectus Supplement, each of the documents
incorporated by reference in the Registration Statement and
the Prospectus and each amendment or supplement thereto
(except for the financial statements and notes and schedules
and other financial and statistical information included
therein, as to which such counsel expresses no opinion)
comply as to form in all material respects with the
requirements of the Securities Act and the Securities
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Rules and the Exchange Act and the Exchange Rules, as the case
may be.
(xv) The Registration Statement has become
effective under the Securities Act, and, to the best of
such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are threatened or pending. The Shares have been approved for
quotation on the Nasdaq National Market.
(xvi) The Company has met the qualification
requirements for a "real estate investment trust" during its
taxable years ending on or after December 31, 1994 and its
proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a
"real estate investment trust" under the Code, assuming no
change in the applicable underlying law. The discussion in the
Prospectus under the caption "Federal Income Tax
Considerations" is accurate and complete.
(xvii) The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
(xviii) The Proposed Acquisitions have been duly
authorized by the Company and to the knowledge of such
counsel, the Proposed Acquisitions will not violate, conflict
with or constitute a breach of, or result in a default under,
any provisions of the Company's charter, by-laws, or other
material contracts, leases or other instruments or any
applicable law, administrative regulation or administrative
for court order or decree.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the
Company and public officials, and with respect to matters of Georgia
Law, they may rely upon the opinion of Xxxxxx Xxxxxxx Xxxxx &
Scarborough L.L.P. With respect to the opinion in paragraph (vii) of
such opinion as to the enforceability of this Agreement against the
Company, such counsel may assume that the Laws of the State of Oklahoma
are identical to the Laws of the State of New York. Copies of such
certificates shall be furnished to you and your counsel.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Underwriters and representatives of
the independent certified
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public accountants of the Company, at which conferences the contents of
the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained or incorporated by reference in the
Registration Statement and the Prospectus (except as specified in the
foregoing opinion), on the basis of the foregoing no facts have come to
the attention of such counsel which have caused such counsel to believe
that the Registration Statement at the time it became effective and at
each Closing Date contained any 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, or that the
Prospectus as of its date and at each Closing Date contained any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need not express any belief with respect
to matters of title to properties owned by the Company or as to the
financial statements and schedules and other financial information
included or incorporated by reference in the Registration Statement or
the Prospectus).
(h) The Underwriters shall have received on each Closing Date
from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx L.L.P., Georgia counsel for the
Company, an opinion, addressed to the Underwriters and dated such
Closing Date, and stating in
effect that:
(i) The Company has authorized and issued capital
stock as set forth under the caption "Capitalization" in the
Prospectus Supplement; all of the outstanding shares of Common
Stock have been duly and validly authorized and have been duly
and validly issued; and all of the outstanding shares of
Common Stock are fully paid and nonassessable and none of them
was issued in violation of any preemptive or other similar
right. The Shares when issued and sold pursuant to this
Agreement will be duly and validly issued, fully paid and
nonassessable and none of them will have been issued in
violation of any preemptive or other similar right.
(ii) All necessary corporate action has been duly and
validly taken by the Company and the Operator to authorize the
execution, delivery and performance of this Agreement and the
issuance and sale of the Shares by the Company. This Agreement
has been duly and validly executed and delivered by the
Company and the Operator and constitutes the legal, valid and
binding obligation
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of the Company and the Operator, enforceable against the
Company and the Operator in accordance with its terms.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the
Company and public officials. Copies of such certificates shall be
furnished to you and your counsel.
(i) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Underwriters and
their counsel and the Underwriters shall have received from Xxxxxx &
Xxxxx a favorable opinion, addressed to the Underwriters and dated such
Closing Date, with respect to the Shares, the Registration Statement
and the Prospectus, and such other related matters, as the Underwriters
may reasonably request, and the Company shall have furnished to Xxxxxx
& Xxxxx such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(j) The Underwriters shall have received on each Closing Date
a certificate, including exhibits thereto, addressed to the
Underwriters and dated such Closing Date, of the Secretary or an
Assistant Secretary of the Company, signed in such officer's capacity
as such officer, as to the (i) certificate of incorporation and by-laws
of the Company; (ii) resolutions authorizing the execution and delivery
of the Registration Statement, this Agreement and the performance of
the transactions contemplated by this Agreement, the Registration
Statement, the Prospectus and the Offering and (iii) incumbency of the
person or persons authorized to execute and deliver the Registration
Statement, this Agreement and any other documents contemplated by the
offering of the Shares. In addition, such certificate shall state that:
(x) the representations and warranties of the Company in this Agreement
are true and correct, as if made at 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 at or prior to the
Closing Date; (y) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened by the Commission; (z)
since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or Prospectus that has not
been set forth, and there has been no document required to be filed
under the Exchange Act and the Exchange Rules that upon such filing
would be deemed to be incorporated by reference in the Prospectus, that
has not been so filed.
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(k) The Underwriters shall have received on each Closing Date
a certificate, including exhibits thereto, addressed to the
Underwriters and dated such Closing Date, of the Secretary or an
Assistant Secretary of the Operator, signed in such officer's capacity
as such officer, as to the (i) certificate of incorporation and by-laws
of the Company; (ii) resolutions authorizing the execution and delivery
of this Agreement and (iii) incumbency of the person or persons
authorized to execute and deliver this Agreement. In addition, such
certificate shall state that the representations and warranties of the
Operator in this Agreement are true and correct, as if made at and as
of the Closing Date.
(l) The Underwriters shall have received on each Closing Date
certificates of the Secretaries of State (or comparable officials)
where the Company and the Operator are incorporated and/or doing
business as to the good standing of the Company and the Operator,
listing all charter documents on file, qualification of the Company and
the Operator to do business as a foreign corporation, payment of taxes
and filing of annual reports. In addition, the Underwriters shall have
received copies of charter documents of the Company and the Operator
certified by the Secretary of State of the State of Georgia.
(m) The Company and the Operator shall have furnished to you
such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Underwriters. The Company will furnish the
Underwrites with such conformed copies of such opinions, certificates, letters
and other documents as the Underwriters shall reasonably request.
5. Covenants of the Company. The Company covenants and agrees
as follows:
(a) The Company will cause the Prospectus Supplement to be
filed as required by Section 3(a) hereof (but only if the Underwriters
or their counsel 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 you promptly of such filing. During the period
in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or such date which is 90 days after
the Closing Date, whichever is later, the Company will notify the
Underwriters promptly of the time when any subsequent amendment to the
Registration Statement has become effective or any subsequent
supplement to the Prospectus has been filed,
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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
request of the Underwriters, any amendments or supplements to the
Registration Statement or Prospectus that, in their or their counsel's
opinion, may be necessary or advisable in connection with your
distribution of the Shares; and the Company will file no amendment or
supplement to the Registration Statement or Prospectus (other than any
prospectus supplement relating to the offering of other securities
registered under the Registration Statement or any document required to
be filed under the Exchange Act that upon filing is deemed to be
incorporated by reference therein) to which the Underwriters or their
counsel shall reasonably object by notice to the Company after having
been furnished a copy a reasonable time prior to the filing.
(b) The Company will advise the Underwriters, promptly after
it shall receive notice or obtain 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 or
registration of the Shares for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such
purpose; and it 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) The Company will comply with all requirements imposed upon
it by the Securities Act, the Securities Rules, the Exchange Act and
the Exchange Rules as from time to time in force, so far as necessary
to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the provisions hereof and the Prospectus. If during
such period where a prospectus relating to the Shares is required to be
delivered under the Securities Act or such date which is 90 days after
the Firm Shares Closing Date, whichever is later, any event occurs as a
result of which, in the opinion of your counsel, the Registration
Statement contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omits 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 or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will promptly notify you and will amend or
supplement the Registration Statement or Prospectus (at the expense of
the
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Company) so as to correct such statement or omission or effect such
compliance.
(d) The Company shall make generally available to its security
holders and to the Underwriters as soon as practicable, but not later
than 45 days after the end of the 12-month period beginning at the end
of the fiscal quarter of the Company during which the Effective Date
occurs (or 90 days if such 12-month period coincides with the Company's
fiscal year), an earnings statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the
provisions of Section 11(a) of the Securities Act or Rule 158 of the
Securities Rules.
(e) The Company shall furnish to the Underwriters and their
counsel, without charge, signed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the
Securities Rules, as many copies of the Prospectus and any amendments
thereof and supplements thereto as the Underwriters may reasonably
request.
(f) For a period of five years after the date of this
Agreement, the Company shall supply to the Underwriters, copies of such
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its capital stock and furnish to the Underwriters a copy
of each annual or other report it shall be required to file with the
Commission.
(g) Without the prior written consent of the Underwriters for
a period of 45 days after the date of this Agreement, the Company shall
not, directly or indirectly, issue, offer, sell or register with the
Commission, or otherwise encumber or dispose of, directly or
indirectly, any equity securities of the Company (or any securities
convertible into or exercisable or exchangeable for equity securities
of the Company or any rights to purchase or acquire equity securities
of the Company), except for (i) the issuance of the Shares pursuant to
the Registration Statement and (ii) the issuance of shares of Common
Stock pursuant to (x) the exercise of outstanding employee and director
options or the grant or issuance of options under the Company's
existing stock option plans or (y) the Company's dividend reinvestment
and stock purchase plan.
(h) On or before completion of this Offering, the Company
shall make all filings required under applicable
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securities laws and by the Nasdaq National Market (including any
required registration under the Exchange Act). On or before the date of
this Agreement, the Shares shall be approved for quotation on the
Nasdaq National Market.
(i) The Company will continue to elect to qualify as a "real
estate investment trust" and will use its best efforts to continue to
meet the requirement to qualify as a "real estate investment trust."
(j) The Company agrees to pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the Offering and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the
preparation, printing, filing and distribution of the Registration
Statement including all exhibits thereto, the Prospectus, all
amendments and supplements to the Registration Statement and the
Prospectus, and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) if applicable, the registration or
qualification of the Shares for offer and sale under the securities
laws of the various jurisdictions, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with any
such registration and qualification; (iv) the furnishing (including
cost of shipping and mailing) to the Underwriters of copies of the
Prospectus and all amendments or supplements to the Prospectus, and of
the several documents required by this Section to be so furnished, as
may be reasonable requested for use in connection with the Offering and
the sale of the Shares by the Underwriters or by dealers to whom Shares
may be sold; (v) the filing fees of the NASD in connection with its
review of the terms of the Offering; (vi) the furnishing (including
costs of shipping and mailing) to the Underwriters of copies of all
reports and information required by 5(f); (vii) inclusion of the Shares
for quotation on the Nasdaq National Market; and (viii) all transfer
taxes, if any, with respect to the sale and delivery of the Shares by
the Company to the Underwriters. Subject to the provisions of Section
8, the Underwriters agree to pay, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated,
all costs and expenses incident to the performance of the obligations
of the Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation, the
fees and disbursements of counsel for the Underwriters.
6. Indemnification.
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(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 Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are 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; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such
Underwriter on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter
specifically for use therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, contained in the paragraphs relating to
stabilization and passive market making on the inside front cover page
of the Prospectus and the statements contained under the caption
"Underwriting" in the Prospectus; provided, however, that the
obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to
the underwriting discounts and commissions received by such
Underwriter.
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(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 6(a) or
6(b) shall be available to any party who shall fail to give notice as
provided in this Section 6(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded
that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such
action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without
its written consent.
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7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6 is due in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company who may also be liable for contribution) to which the Company and
one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the Offering or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 6 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (i) the total proceeds from the Offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(ii) the underwriting discounts and commissions received by the Underwriters, as
set forth in the table on the cover page of the Prospectus. The relative fault
of the Company or the Underwriter shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7, in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount and commission applicable to the Shares purchased by such
Underwriter hereunder; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any
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person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as such Underwriter, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to the immediately preceding sentence of this Section 7. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
Section, notify such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom contribution may be
sought shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its written consent. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to their respective underwriting commitments and not joint.
8. Termination. This Agreement may be terminated with respect
to the Shares to be purchased on a Closing Date by the Underwriters by
notifying the Company at any time:
(a) in the absolute discretion of the Underwriters at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Underwriters will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Underwriters,
inadvisable to proceed with the Offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Underwriters, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc. or on the
American Stock Exchange, Inc. has been suspended or limited, or minimum
or maximum ranges for prices for securities shall have been fixed, or
maximum ranges for prices for securities have been required, by said
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exchanges or by order of the Commission, the NASD, or any other
governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or federal authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 4 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (i) if
this Agreement is terminated by the Underwriters or the Underwriters because of
any failure, refusal or inability on the part of the Company or the Operator to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Underwriters for all out-of-pocket expenses
(including the fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (ii) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages occasioned by
its failure or refusal.
9. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 8) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Underwriters may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Underwriters may deem advisable or the remaining Underwriter may agree to
purchase all of the Shares, in each case upon this Agreement. If no such
arrangements have been made by the close of business on the business day
following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriter on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then the nondefaulting Underwriter shall be obligated to purchase
such Shares on the terms herein set forth in proportion to their
respective obligations hereunder; provided, however, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
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(b) if the number of Shares to be purchased by the defaulting
Underwriter on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to an additional business day within
which it may, but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Underwriters to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Underwriters or the Company shall
have the right to postpone the applicable Closing Date for a period of not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or the Prospectus) may be effected by the Underwriters and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and the nondefaulting Underwriter or
the Company shall make arrangements pursuant to this Section within the period
stated for the purchase of the Shares that the defaulting Underwriter agreed to
purchase, this Agreement shall terminate with respect to the Shares to be
purchased on such Closing Date without liability on the part of the
nondefaulting Underwriter to the Company and without liability on the part of
the Company, except in both cases as provided in Sections 5(j), 6, 7, 8 and 9.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriter arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
10. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 5(j), 6, 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term
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"successors and assigns" shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Underwriters, c/o Oppenheimer & Co., Inc., Xxxxxxxxxxx
Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxx, and (b) if to the Company, to its agent for service as such agent's
address appears on the cover page of the Registration Statement.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
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Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
XXXXXXX INC, INC.
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Title: President and Chief
Executive Officer
Xxxxxxx Operating Company is
signing this Agreement solely for
the purpose of making the
representations set forth in
Sections 3 and 4 hereof and is not
otherwise incurring any obligations
hereunder.
XXXXXXX OPERATING COMPANY
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Title: President
CONFIRMED
XXXXXXXXXXX & CO., INC.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
By Xxxxxxxxxxx & Co., Inc.
By/s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Managing Director
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SCHEDULE I
Number of Firm
Shares to
Name Be Purchased
---- ------------
1. Xxxxxxxxxxx & Co. Inc. 1,000,000
2. The Xxxxxxxx-Xxxxxxxx Company, Inc. 1,000,000
---------
TOTAL 2,000,000
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SCHEDULE II
Properties Missing Phase I Environmental Surveys
Name:
Bainbridge, Georgia
Conyers, Georgia
Milledgeville, Georgia
Oakwood, Georgia
Seneca, South Carolina
Florence, Alabama
Georgetown, South Carolina
Dublin, Georgia
Macon, Georgia
Boiling Springs, South Carolina
Duncan, South Carolina
Greeneville, Tennessee
Oxford, Alabama
Tuscaloosa, Alabama
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