Exhibit 10.17
DEPOSITARY SHARES
EACH REPRESENTING 1/10 OF A SHARE OF 101/2% CLASS A CUMULATIVE PREFERRED SHARES,
SERIES 2002-A (LIQUIDATION PREFERENCE $250, OR $25 PER DEPOSITARY SHARE
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
October 1, 2002
X.X. XXXXXXX & SONS, INC.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Xxxxxx Lodging Company, an Ohio corporation that has
elected to be taxed as a real estate investment trust (the "Company"), hereby
confirms the Company's agreement with you as follows:
From time to time the Company proposes to enter into one or more
Pricing Agreements (each a "Pricing Agreement") in the form of Annex A hereto,
with such additions and deletions as the parties thereto may determine, and,
subject to the terms and conditions stated herein and therein, to issue and sell
to you (the "Underwriters") and if applicable, to the firms named in the
applicable Pricing Agreement (in such case, such firms and you shall be referred
to as the "Underwriters" and you and any other Underwriters designated by you
shall be referred to as the "Representatives" of the several Underwriters and
shall act on behalf of the Underwriters) certain depositary shares each
representing 1/10 of a share in 10 1/2% Class A Cumulative Preferred Shares,
Series 2002-A, without par value, (the "Depositary Shares"), specified in such
Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Shares").
The Pricing Agreement, including the provisions incorporated therein by
reference, is herein referred to as the "Underwriting Agreement." Unless
otherwise defined herein, terms defined in the Pricing Agreement are used herein
as therein defined.
This Underwriting Agreement Standard Provisions shall not be construed
as an obligation of the Company to sell any Depositary Shares or as an
obligation of the Underwriters to purchase any Depositary Shares. The obligation
of the Company to issue and sell any Depositary Shares and the obligation of the
Underwriters to purchase any Depositary Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each Pricing
Agreement shall specify the aggregate number of such Designated Shares, the
initial public offering price of such Designated Shares, the purchase price to
the Underwriters of such Designated Shares, the other Underwriters, if any, and
any Representatives of the Underwriters, and the number of Option Shares (as
defined herein), and shall set forth the date of delivery of such Designated
Shares. The Pricing Agreement shall also specify any additional terms of the
offering to which it pertains. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of facsimile communications or other electronic communications
satisfactory to the parties which produce a record of communications
transmitted.
1. DESCRIPTION OF DESIGNATED SHARES. The Company proposes to issue and
sell to the Underwriters the number of Designated Shares designated as "Firm
Shares" in any applicable Pricing Agreement (the "Firm Shares"), as provided in
Section 2 of this Agreement. Solely for the purpose of covering over-allotments
in the sale of the Firm Shares, the Company further proposes to grant to the
Underwriters the right to purchase up to the additional number of Designated
Shares designated as "Option Shares" in the Pricing Agreement (the "Option
Shares"), as provided in Section 3 of this Agreement.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, pursuant to each Pricing Agreement the
Company will agree to sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, will agree (a) to purchase from the
Company at the purchase price per share set forth in the Pricing
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Agreement, the number of Firm Shares set forth opposite the name of the
Underwriter in a schedule to the applicable Pricing Agreement and (b) to
purchase from the Company any additional number of Option Shares which the
Underwriters may become obligated to purchase pursuant to Section 3 hereof.
The Company will deliver definitive certificates for the Firm Shares at
the office of X.X. Xxxxxxx & Sons, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
("Xxxxxxx' Office"), or such other place as you and the Company may mutually
agree upon, for the accounts of the Underwriters against payment to the Company
of the purchase price for the Firm Shares sold by it to the several Underwriters
by wire transfer of immediately available funds payable to the order of the
Company as specified in such Pricing Agreement, at 9:00 a.m. St. Louis time on
the date specified in such Pricing Agreement or at such other place and time and
date as the Underwriters and the Company may agree upon in writing, such date
being herein called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior to
the Closing Date and will be in such names and denominations as you may request
at least forty-eight hours prior to the Closing Date.
The Company shall deliver the items required to be delivered by it by
Section 6 of this Agreement at 9:00 a.m. St. Louis time on the Closing Date at
the offices of Xxxxx Xxxx LLP, 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx,
Xxxxxxxx 00000 or at such other place, time and date as the Underwriters and the
Company may agree upon in writing.
Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Underwriters of the release of such
Designated Shares it is understood that the Underwriters propose to offer the
Designated Shares to the public upon the terms and conditions set forth in the
Prospectus (hereinafter defined), as amended or supplemented.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. If set forth in
the applicable Pricing Agreement, the Company will grant options to the
Underwriters to purchase from it the Option Shares, respectively, on the same
terms and conditions as the Firm Shares; provided, however, that such options
may be exercised only for the purpose of covering any over-allotments that may
be made by them in the sale of the Firm Shares. No Option Shares shall be sold
or delivered unless the Firm Shares previously have been, or simultaneously are,
sold and delivered.
The options will be exercisable by the Underwriter, or in the case of
multiple Underwriters, by the several Underwriters by the Representatives, at
any time, and from time to time, before the expiration of 30 days from the date
of the applicable Pricing Agreement (or, if such day shall be a Saturday or
Sunday or a holiday, on the next day thereafter when the New York Stock Exchange
is open for trading), for the purchase of all or part of the Option Shares
covered thereby, by notice given by you to the Company in the manner provided in
Section 11 hereof, setting forth the number of Option Shares as to which you are
exercising the options. The date of delivery of said Option Shares shall be
three business days after such notice unless otherwise agreed to by the parties.
You may terminate the options at any time, as to any unexercised portion
thereof, by giving written notice to the Company to such effect.
In the case of multiple Underwriters, the Representatives shall make
such allocation of the Option Shares as required to eliminate fractional shares.
Delivery of the Option Shares with respect to which the options shall have been
exercised shall be made to or upon your order at Xxxxxxx' Office, or at such
other place as you and the Company may mutually agree upon, against payment by
you of the per share purchase price to the Company by wire transfer of
immediately available funds payable to the order of the Company as specified in
such Pricing Agreement, at 9:00 a.m. St. Louis time on the date of delivery of
the Option Shares or at such other place and time and date as the Underwriters
and the Company may agree upon in writing, such date being herein called the
"Option Closing Date."
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The certificates for the Option Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office at least one full business
day prior to the Option Closing Date and will be in such names and denominations
as you may request at least forty-eight hours prior to the Option Closing Date.
At 9:00 a.m. on the Option Closing Date, the Company shall provide the
Underwriters such representations, warranties, agreements, opinions, letters,
certificates and covenants required to be delivered with respect to the Option
Shares as are required to be delivered on the Closing Date with respect to the
Firm Shares or as otherwise required to be delivered by Section 6 of this
Agreement at the offices of Xxxxx Xxxx LLP, 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xx.
Xxxxx, Xxxxxxxx 00000 or at such other place, time and date as the Underwriters
and the Company may agree upon in writing.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. (a) The
Company represents and warrants to and agrees with each Underwriter that (it
being understood that such representations, warranties and agreements shall be
deemed to relate to the Registration Statement and the Prospectus, each as
amended or supplemented to each such date) as of each date of any Pricing
Agreement, as of each date the Company issues and delivers Designated Shares
(including Option Shares) and as of each date the Registration Statement or the
Prospectus is amended or supplemented with respect to offerings of securities
pursuant to this Agreement.
(i) The Company has prepared, pursuant to and in conformity in all
material respects with the requirements of the Securities Act 1933, as
amended (the "1933 Act"), and the rules and regulations thereunder (the
"1933 Act Rules and Regulations") of the Securities and Exchange
Commission (the "SEC"), and has filed with the SEC a registration
statement on Form S-3 (File No. 333-39369) which has been declared
effective, including a prospectus relating to common shares, warrants,
preferred shares and depositary shares of the Company, for registration
of the Depositary Shares under the 1933 Act and the offering thereof
from time to time in accordance with Rule 415 of the 1933 Act Rules and
Regulations. The Company and the offering of the Depositary Shares in
the registration statement meet the requirements for use of Form S-3
under the 1933 Act. Such registration statement (and any further
registration statements which may be filed by the Company for the
purpose of registering additional Depositary Shares and in connection
with which this Agreement is included or incorporated therein by
reference as an exhibit) including all documents incorporated therein
by reference, as from time to time amended or supplemented by the
filing of documents pursuant to the Securities Exchange Act of 1934, as
amended, the 1933 Act or otherwise, are referred to herein as the
"Registration Statement." The term "Registration Statement" also means
the registration statement as amended by a post-effective amendment and
includes any abbreviated registration statement prepared and filed with
the SEC in accordance with Rule 462(b) under the 1933 Act (an
"Abbreviated Registration Statement"). The time at which the
Registration Statement became effective is referred to herein as the
"Effective Date." The Company proposes to prepare and file with the SEC
from time to time, pursuant to Rule 424 under the 1933 Act, supplements
to the prospectus (each a "Prospectus Supplement") included in the
Registration Statement that will describe the issuances of Designated
Shares pursuant to Pricing Agreements, the sale and plan of
distribution of the Designated Shares and additional information
concerning the Company and its business. The Company may, from time to
time, prepare and file with the SEC, pursuant to Rule 430 or 430A under
the 1933 Act Rules and Regulations, a preliminary Prospectus Supplement
(each a "Preliminary Prospectus") containing the prospectus included as
part of the Registration Statement, as supplemented by a preliminary
Prospectus Supplement, and including the documents incorporated in such
prospectus by reference, relating to the Depositary Shares. The
prospectus, including all documents incorporated therein by reference,
included in the Registration Statement, as supplemented by any
Preliminary Prospectus or Prospectus Supplement, in the form filed by
the Company with the SEC is herein called the "Prospectus." For
purposes of this Agreement, the words "amend," "amendment," "amended,"
"supplement" or "supplemented" with respect to the Registration
Statement or the Prospectus shall mean amendments or supplements to the
Registration Statement or the Prospectus, as the case may be as well as
documents filed after the date of this Agreement and incorporated by
reference therein as described above.
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(ii) Neither the SEC nor any state or other jurisdiction or other
regulatory body has issued, and neither is, to the knowledge of the
Company, threatening to issue, any stop order under the 1933 Act or
other order suspending the effectiveness of the Registration Statement
(as amended or supplemented) or preventing or suspending the use of any
Prospectus Supplement, Preliminary Prospectus or the Prospectus or
suspending the qualification or registration of the Depositary Shares
for offering or sale in any jurisdiction nor, to the knowledge of the
Company, instituted or threatened to institute proceedings for any such
purpose. The Prospectus and each Prospectus Supplement or Preliminary
Prospectus, as of the applicable date of issue, and the Registration
Statement and any amendments thereto as of the applicable effective
date, contain or will contain, as the case may be, all statements which
are required to be stated therein by, and in all material respects
conform or will conform, as the case may be, to the requirements of,
the 1933 Act and the 1933 Act Rules and Regulations. Neither the
Registration Statement nor any amendment thereto, as of the applicable
effective date, contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, not misleading, and neither the Prospectus, any
Prospectus Supplement, nor Preliminary Prospectus, at the applicable
date of issue, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted
from the Registration Statement, any Preliminary Prospectus, any
Prospectus Supplement, or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written
information furnished to the Company relating to the Underwriters by or
on behalf of the Underwriters expressly for use in the preparation
thereof (as provided in the Pricing Agreement). There is no contract or
document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required. The documents incorporated
by reference in the Prospectus pursuant to Item 12 of Form S-3 under
the 1933 Act, at the time they were filed with the SEC, complied in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and the rules and regulations
adopted by the SEC thereunder (the "1934 Act Rules and Regulations"),
except for the untimely filing of two material contract exhibits (the
Second Amended and Restated Agreement of Limited Partnership of Xxxxxx
Hotel Properties, L.P. and the Amendment to Second Amended and Restated
Agreement of Limited Partnership of Xxxxxx Hotel Properties, L.P.)
which exhibits were filed with the SEC on From 8-K on August 29, 2002
and which do not adversely affect the Company's eligibility to use of
Form S-3 for the offering of the Designated Shares. Any future
documents incorporated by reference so filed, when they are filed, will
comply in all material respects with the requirements of the 1934 Act
and the 1934 Act Rules and Regulations; no such incorporated document
contained or will contain any 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; and, when read
together and with the other information in the Prospectus, at the time
the Registration Statement became effective and at the Closing Date,
each such incorporated document did not or will not, as the case may
be, 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.
(iii) This Agreement has been and any applicable Pricing Agreement
shall be duly authorized, executed and delivered by the Company and
this Agreement constitutes and any Pricing Agreement shall constitute a
valid and legally binding obligation of the Company enforceable against
the Company in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (the "Exceptions").
(iv) The Company and its "subsidiaries" (as defined in Section
4(a)(vii) hereof) have been duly incorporated or organized and are
validly existing as corporations or organizations in good standing
under the laws of the states or other jurisdictions in which they are
incorporated or organized, with full power and authority (corporate and
other) to own, lease and operate their properties and conduct their
businesses as described in the Prospectus and, with respect to the
Company, to execute and deliver, and
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perform the Company's obligations under, this Agreement and under any
applicable Pricing Agreement; the Company and its subsidiaries are duly
qualified to do business as foreign corporations or organizations in
good standing in each state or other jurisdiction in which their
ownership or leasing of property or conduct of business legally
requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, would not have a Material
Adverse Effect. The term "Material Adverse Effect" as used herein means
any material adverse effect on the financial condition, net worth,
business, affairs, management, results of operations or cash flow of
the Company and its subsidiaries, taken as a whole.
(v) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree otherwise than
as set forth in the Prospectus and, since the respective dates as of
which information is given in the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries which would give rise to a Material Adverse Effect, or
any development involving a prospective Material Adverse Effect,
otherwise than as set forth in the Prospectus.
(vi) The issuance and sale of the Depositary Shares pursuant to a
Pricing Agreement and the execution, delivery and performance by the
Company of this Agreement and the applicable Pricing Agreement, and the
consummation of the transactions herein or therein contemplated, will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any of its subsidiaries under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the properties or assets of the Company or any of
its subsidiaries is subject or violate any statute, rule, regulation or
other law, or any order or judgment, of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except to such extent as,
individually or in the aggregate, does not have a Material Adverse
Effect, nor will such action result in any violation of the provisions
of the Company's articles of incorporation or code of regulations; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement and the applicable Pricing Agreement, the issuance and sale
of the Depositary Shares pursuant to a Pricing Agreement or the
consummation of the transactions contemplated hereby or thereby, except
such as have been, or will be prior to an applicable Closing Date,
obtained under the 1933 Act or as may be required by the New York Stock
Exchange ("NYSE") and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters.
(vii) The Company has duly and validly authorized capital stock as
set forth in the Prospectus; the Designated Shares, when issued, will
conform, to the description thereof in the Prospectus and the Preferred
Shares underlying the Depositary Shares have been, or, when issued and
paid for in the manner described herein and in the applicable Pricing
Agreement will be, duly authorized, validly issued, fully paid and
non-assessable; and the issuance of the Depositary Shares to be
purchased from the Company hereunder is not subject to registration,
preemptive or other similar rights, or any restriction upon the voting
or transfer thereof (except for those rights and restrictions relating
primarily to the Company's status as a REIT as described in Section
4(a)(xxiii) hereof, as set forth in the Company's articles of
incorporation or in the Company's shareholder rights plan) pursuant to
applicable law or the Company's articles of incorporation, code of
regulations or other governing documents or any agreement to which the
Company or any of its subsidiaries is a party or by which any of them
may be bound. All corporate action required to be taken by the Company
for the authorization, issuance and sale of the Depositary Shares
pursuant to a Pricing Agreement will have been duly and validly taken
prior to the date of the applicable Pricing Agreement. Except as
disclosed in the Prospectus, there are no outstanding subscriptions,
rights, warrants,
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options, calls, convertible securities, commitments of sale or rights
related to or entitling any person to purchase or otherwise to acquire
any shares of, or any security convertible into or exchangeable or
exercisable for, the capital stock of, or other ownership interest in,
the Company. The Company has no subsidiaries (collectively,
"subsidiaries") other than Xxxx Valley Leasing, Inc. and those
identified in Exhibit 21 to the Company's last filed Annual Report on
Form 10-K ("Exhibit 21"). The Company owns all of the outstanding
capital stock of or other equity interests in each such subsidiary
except as set forth in Exhibit 21. Other than the subsidiaries referred
to above, the Company does not own, directly or indirectly, any
material shares of stock or any other material equity or long-term debt
of any other corporation or have any material direct or indirect equity
interest or ownership of long-term debt in any firm, partnership, joint
venture, limited liability company, association or other entity, except
as described in the Prospectus. The outstanding shares of capital stock
of or other equity interests in the Company's subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable
and, except as set forth in Schedule 4.7 hereto, are owned by the
Company free and clear of any mortgage, pledge, lien, encumbrance,
charge or adverse claim and are not the subject of any agreement or
understanding with any person and were not issued in violation of any
preemptive or similar rights; and there are no outstanding
subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or instruments related to or entitling
any person to purchase or otherwise acquire any shares of, or any
security convertible into or exchangeable or exercisable for, the
capital stock of, or other ownership interest in any of the
subsidiaries. As of June 30, 2002, other than as set forth on Annex D,
the Company did not have any subsidiaries that constitute "significant
subsidiaries" as defined in Section 1-02(w) of Regulation S-X.
(viii) The statements set forth in the Prospectus, as of its date of
issue, describing the capital stock and the Designated Shares and this
Agreement and any Pricing Agreement, insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate in all material respects, and fairly present the
information required to be presented.
(ix) Each of the Company and its subsidiaries is in possession of
and is operating in compliance with all franchises, grants,
authorizations, licenses, certificates, permits, easements, consents,
orders and approvals ("Permits") from all state, federal, foreign and
other regulatory authorities, and has satisfied the requirements
imposed by regulatory bodies, administrative agencies or other
governmental bodies, agencies or officials, that are required for the
Company and its subsidiaries lawfully to own, lease and operate their
properties and conduct their businesses as described in the Prospectus,
and, each of the Company and its subsidiaries is conducting its
business in compliance with all of the laws, rules and regulations of
each jurisdiction in which it conducts its business, in each case with
such exceptions, individually or in the aggregate, as would not have a
Material Adverse Effect; each of the Company and its subsidiaries has
filed all notices, reports, documents or other information ("Notices")
required to be filed under applicable laws, rules and regulations, in
each case, with such exceptions, individually or in the aggregate, as
would not have a Material Adverse Effect; and, except as otherwise
specifically described in the Prospectus, neither the Company nor any
of its subsidiaries has received any notification from any court or
governmental body, authority or agency, relating to the revocation or
modification of any such Permit or, to the effect that any additional
authorization, approval, order, consent, license, certificate, permit,
registration or qualification ("Approvals") from such regulatory
authority is needed to be obtained by any of them, in any case where it
could be reasonably expected that obtaining such Approvals or the
failure to obtain such Approvals, individually or in the aggregate,
would have a Material Adverse Effect.
(x) Except to such extent as would not have a Material Adverse
Effect, the Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and paid
all taxes shown as due thereon; all such tax returns are complete and
correct in all material respects; all tax liabilities are adequately
provided for on the books of the Company and its subsidiaries except to
such extent as would not have a Material Adverse Effect; the Company
and its subsidiaries have made all necessary payroll tax payments and
are current and up-to-date in all material respects; and the Company
and its subsidiaries have no knowledge of any tax proceeding or action
pending or threatened against the Company or its subsidiaries which,
individually or in the aggregate, would have a Material Adverse Effect.
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(xi) Except as described in the Prospectus, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent licenses, trademarks, service marks and trade
names necessary to conduct the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to any patents, patent licenses, trademarks, service marks or
trade names which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.
(xii) Except in each case such as would not have a Material Adverse
Effect, or except in each case where such real property is pledged or
mortgaged to secure borrowings described in the Prospectus, the Company
and its subsidiaries have good and marketable title in fee simple, or
have valid ground leases, to all items of real property and good and
marketable title to all personal property owned by them or disclosed to
be owned by them in the Prospectus, in each case free and clear of all
liens, encumbrances, restrictions and defects except such as do not
materially affect the value of such property or do not interfere with
the use made and proposed to be made of such property; and any property
held under lease or sublease by the Company or any of its subsidiaries
is held under valid, duly authorized, subsisting and enforceable leases
or subleases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries; the Company and its subsidiaries have
title insurance on all real properties described in the Prospectus as
having been financed by them pursuant to a mortgage loan in an amount
at least equal to the aggregate principal amount of each such mortgage
loan or in an amount at least equal to the aggregate acquisition price
paid by the Company or its subsidiaries for such properties and the
cost of construction of the improvements located on such properties;
and neither the Company nor any of its subsidiaries has any notice or
knowledge of any material claim of any sort which has been, or may be,
asserted by anyone adverse to the Company's or any of its subsidiaries
rights as lessee or sublessee under any lease or sublease described
above, or affecting or questioning the Company's or any of its
subsidiaries' rights to the continued possession of the leased or
subleased premises under any such lease or sublease in conflict with
the terms thereof. To the knowledge of the Company, no lessee of any
portion of any of the properties described in the Prospectus is in
default under its respective lease and there is no event which, but for
the passage of time or the giving of notice or both, would constitute a
default under any such lease, except such defaults that would,
individually or in the aggregate, not have a Material Adverse Effect.
(xiii) No labor disturbance exists with the employees of the Company
or any of its subsidiaries or, to the Company's knowledge, is imminent
which, individually or in the aggregate, would have a Material Adverse
Effect. None of the employees of the Company or any of its subsidiaries
is represented by a union and, to the knowledge of the Company and its
subsidiaries, no union organizing activities are taking place. Neither
the Company nor any of its subsidiaries has violated any federal, state
or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees, nor any applicable wage or hour laws, or
the rules and regulations thereunder, which might, individually or in
the aggregate, result in a Material Adverse Effect.
(xiv) The Company and its subsidiaries are in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations thereunder ("ERISA"); no "reportable event" (as defined
in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company and its subsidiaries would have any
liability; the Company and its subsidiaries have not incurred and do
not expect to incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations thereunder (the "Code") for failure to meet
minimum funding standards; and to the Company's knowledge, each
"pension plan" for which the Company or any of its subsidiaries would
have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects, and, to
the Company's knowledge, nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
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(xv) Except as set forth in the Prospectus, the Company and its
subsidiaries maintain insurance of the types and in the amounts
generally deemed adequate for its business, including, but not limited
to, directors' and officers' insurance, insurance covering real and
personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full
force and effect. Neither the Company nor any of its subsidiaries has
been refused any insurance coverage sought or applied for, and the
Company has no reason to believe that it and its subsidiaries will not
be able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have
a Material Adverse Effect.
(xvi) Neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in default or
violation with respect to its articles of incorporation or by-laws (or
code of regulations). Neither the Company nor any of its subsidiaries
is, or with the giving of notice or lapse of time or both would be, in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject, or in violation of any statutes, laws, ordinances or
governmental rules or regulations or any orders or decrees to which it
is subject, including, without limitation, Section 13 of the 1934 Act,
which default or violation, individually or in the aggregate, would
have a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has, at any time during the past five years, (A) made any
unlawful contributions to any candidate for any political office, or
failed fully to disclose any contribution in violation of law, or (B)
made any payment to any state, federal or foreign government official,
or other person charged with similar public or quasi-public duty (other
than payment required or permitted by applicable law).
(xvii) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject, or any lessee, sublessee or
operator of any such property or portion thereof is a party, that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect or
which would materially and adversely affect the consummation of the
transactions contemplated hereby or which is required to be disclosed
in the Prospectus; to the Company's knowledge, no such proceedings are
threatened or contemplated. Neither the Company nor any of its
subsidiaries has, nor, to the Company's knowledge, any seller, lessee,
sublessee or operator of any such properties, or portion thereof or any
previous owner thereof has, received from any governmental authority
notice of any material violation of any municipal, state or federal
law, rule or regulation (including without limitation any such law,
rule or regulation applicable to the hotel lodging industry) and
including federal, state or local law or regulation relating to human
health or safety or the environment or hazardous substances or
materials concerning such properties that has not been cured to the
complete satisfaction of applicable regulatory authorities, and neither
the Company nor any of its subsidiaries knows of any such violation, or
any factual basis, occurrence or circumstance that would give rise to a
valid claim under or pursuant to any such laws, rules or regulations
which would, individually or in the aggregate, have a Material Adverse
Effect. Except as described in the Prospectus, none of the property
owned or leased by the Company or any of its subsidiaries is
contaminated in any material respect with any waste or hazardous
substances, and neither the Company nor any of its subsidiaries may be
deemed an "owner or operator" of a "facility" or "vessel" which owns,
possesses, transports, generates or disposes of a "hazardous substance"
as those terms are defined in Section 9601 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 ET SEQ. Neither the Company nor any of its
subsidiaries, nor, to the Company's knowledge, any seller, lessee,
sublessee or operator of any such property, or portion thereof, has
received from any governmental authority any written notice of any
condemnation of or zoning change that remains outstanding or unresolved
to the complete satisfaction of any applicable regulatory authorities
affecting such properties, or any part thereof and the Company does not
know of any such condemnation or zoning change which is threatened and
which if consummated would have a Material Adverse Effect. No contract
or document of a character
8
required to be described in the Registration Statement, the Prospectus
or any document incorporated by reference therein or to be filed as an
exhibit to the Registration Statement or any document incorporated
therein is not so described, filed or incorporated by reference as
required.
(xviii) The Company is not and, after giving effect to the offering
and sale of the Depositary Shares, will not be an "investment company"
or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xix) The accounting firms which have certified the financial
statements filed with or incorporated by reference in and as a part of
the Registration Statement, are (or were at the time) independent
public accounting firms within the meaning of the 1933 Act and the 1933
Act Rules and Regulations. The consolidated financial statements and
schedules of the Company, including the notes thereto, filed with or
incorporated by reference and as a part of the Registration Statement
or Prospectus, present fairly in all material respects the financial
condition of the Company and its subsidiaries as of the respective
dates thereof and the consolidated results of operations and changes in
financial position and consolidated statements of cash flow for the
respective periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved except as otherwise disclosed therein. All
adjustments necessary for a fair presentation of results for such
periods have been made. The selected financial data included or
incorporated by reference in the Registration Statement and Prospectus
present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements. Any operating or other statistical data included
or incorporated by reference in the Registration Statement and
Prospectus comply in all material respects with the 1933 Act and the
1933 Act Rules and Regulations and present fairly in all material
respects the information shown therein.
(xx) No holder of any security of the Company has any right to
require registration of Depositary Shares or any other security of the
Company because of the filing of the Registration Statement, the
execution of a Pricing Agreement, or the consummation of the
transactions contemplated hereby. No person has the right, contractual
or otherwise, to cause the Company to permit such person to underwrite
the sale of any of the Depositary Shares. Except for this Agreement and
any applicable Pricing Agreement, there are no contracts, agreements or
understandings between the Company or any of its subsidiaries and any
person that would give rise to a valid claim against the Company, its
subsidiaries or any Underwriter for a brokerage commission, finder's
fee or like payment in connection with the issuance, purchase and sale
of the Depositary Shares pursuant to a Pricing Agreement.
(xxi) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date or the Option Closing Date, if any,
relating to a particular issuance of Designated Shares and (ii)
completion of the distribution of the Designated Shares, will not
distribute, any offering material in connection with the offering and
sale of the Designated Shares other than the Registration Statement,
the Prospectus Supplement, Preliminary Prospectus or the Prospectus
relating to such issuance.
(xxii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Company's Depositary Shares, and the Company is not aware
of any such action taken or to be taken by affiliates of the Company.
(xxiii) (i) The Company is organized and operates in conformity with
the requirements for qualification as a real estate investment trust
("REIT") under Sections 856 and 857 of the Code, (ii) the Company
qualified as a REIT for all taxable years prior to 2002, and (iii) the
Company's method of operation will enable it to meet the requirements
for taxation as a REIT under the Code for 2002 and all subsequent
taxable years, and the Company intends to qualify as a REIT for all
such years. With respect to the Company's qualification as a REIT for
its taxable years ended December 31, 2000 and December 31, 2001, the
Company did not meet the requirements of Section 856(c)(2) of the Code
for such taxable years. Pursuant to Section 856(c)(6) of the Code, the
Company shall be considered to have satisfied the
9
requirements of Sections 856(c)(2) for its taxable years 2000 and 2001
because (A) the nature and amount of each item of its gross income
described in such Section is set forth in a schedule attached to its
income tax return for such taxable years; (B) the inclusion of any
incorrect information in the schedule referred to in (A) was not due to
fraud with the intent to evade tax; and (C) the failure to meet the
requirements of Section 856(c)(2) was due to reasonable cause and not
due to willful neglect.
(xxiv) Except as described in the Prospectus, neither the Company
nor any of its subsidiaries has either given or received any
communication regarding the termination of, or intent not to renew, any
of the leasehold interests of lessees in the Company's and its
subsidiaries' properties held under lease, any property managing or
operating agreement or any other agreement between the Company or its
subsidiaries and the operators of its properties or facilities, and no
such termination or non-renewal has been threatened by the Company, any
of its subsidiaries or, to the Company's knowledge, any other party to
any such lease, other than as would not have, individually or in the
aggregate, a Material Adverse Effect.
(xxv) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers or
stockholders of the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(xxvi) All the securities of the Company issued since November 1,
1997 were issued and sold in compliance with all applicable federal and
state securities laws, other than as would not have, individually or in
the aggregate, a Material Adverse Effect.
(b) Any certificate signed by any officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each of the Underwriters as to the
matters covered thereby.
5. ADDITIONAL COVENANTS. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, or a term sheet or abbreviated term sheet, as
applicable, to the SEC for filing pursuant to Rule 424(b) of the 1933 Act Rules
and Regulations.
(b) The Company will deliver to the Underwriters, or in the case of
multiple Underwriters, the Representatives, as soon as practicable after the
date of this Agreement as many copies of the Prospectus (including all documents
incorporated by reference therein) as the Underwriters may reasonably request
for the purposes contemplated by the 1933 Act; the Company will promptly advise
the Underwriters of any request of the SEC for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional information,
and of the issuance by the SEC or any state or other jurisdiction or other
regulatory body of any stop order under the 1933 Act or other order suspending
the effectiveness of the Registration Statement (as amended or supplemented) or
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending the qualification or registration of the Depositary Shares for
offering or sale in any jurisdiction, and of the institution or threat of any
proceedings therefor, of which the Company shall have received notice or
otherwise have knowledge prior to the completion of a particular distribution of
Designated Shares; and the Company will use its reasonable best efforts to
prevent the issuance of any such stop order or other order and, if issued, to
secure the prompt removal thereof.
(c) After the date of the Pricing Agreement relating to an issuance of
Designated Shares and prior to the Closing Date relating to that particular
issuance of Designated Shares, the Company will not file any amendment or
supplement to the Registration Statement, the Prospectus (or any other
prospectus relating to the Depositary Shares filed pursuant to Rule 424(b) of
the 1933 Act Rules and Regulations that differs from the Prospectus as filed
pursuant to such Rule 424(b)) and will not file any document under the 1934 Act
before the termination of the offering of the Designated Shares by the
Underwriters if the document would be deemed to be incorporated by reference
into the Registration Statement or the Prospectus, of which the Underwriters
shall not previously have been advised and furnished with a copy or to which the
Underwriters shall have reasonably objected or which is not
10
in compliance with the 1933 Act Rules and Regulations; and the Company will
promptly notify you after it shall have received notice thereof of the time when
any amendment to the Registration Statement becomes effective or when any
supplement to the Prospectus has been filed.
(d) During the period when the Prospectus relating to any of the
Designated Shares is required to be delivered under the 1933 Act by any
Underwriter or dealer, the Company will comply, at its own expense, with all
requirements imposed by the 1933 Act and the 1933 Act Rules and Regulations, as
now and hereafter amended, and by the rules and regulations of the SEC
thereunder, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealing in the Designated Shares during such period
in accordance with the provisions hereof and as contemplated by the Prospectus.
(e) If, during the period when the Prospectus relating to any of the
Designated Shares is required to be delivered under the 1933 Act by any
Underwriter or dealer, (i) any event relating to or affecting the Company or of
which the Company shall be advised in writing by the Underwriters, or in the
case of multiple Underwriters, the Representatives, shall occur as a result of
which, in the opinion of the Company or the Underwriters, or in the case of
multiple Underwriters, the Representatives, the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (ii) it
shall be necessary to amend or supplement the Registration Statement or the
Prospectus to comply with the 1933 Act, the 1933 Act Rules and Regulations, the
1934 Act or the 1934 Act Rules and Regulations, the Company will forthwith at
its expense prepare and file with the SEC, and furnish to the Underwriters, or
in the case of multiple Underwriters, the Representatives, a reasonable number
of copies of, such amendment or supplement or other filing that will correct
such statement or omission or effect such compliance. Each time the Registration
Statement or the Prospectus is amended or supplemented in accordance with this
Section 5(e) and such amendment or supplement sets forth amended or supplemental
financial information or such amended or supplemental information is
incorporated by reference in the Prospectus (except with respect to offerings of
securities not pursuant to this Agreement), the Company shall cause its
independent public accountants forthwith to furnish you with a letter, dated the
date of such amendment or supplement, as the case may be, in form satisfactory
to you, of the same tenor as the letter referred to in Section 6(e), with regard
to the amended or supplemental financial information included or incorporated by
reference in the Registration Statement or Prospectus as amended or supplemented
to the date of such letter; provided, however, that each time amended or
supplemental financial information is incorporated by reference in the
Prospectus to the Company's Quarterly Report on Form 10-Q or a Current Report on
Form 8-K, the letter required to be delivered pursuant to this Section 5(e)
shall be delivered to you only upon reasonable request.
(f) From time to time as requested by the Underwriters, or in the case
of multiple Underwriters, the Representatives, and during the period when the
Prospectus relating to the Designated Shares is required to be delivered under
the 1933 Act by any Underwriter or dealer, the Company will furnish such proper
information as may be lawfully required and otherwise cooperate in qualifying
Designated Shares for offer and sale under the securities or blue sky laws of
such jurisdictions as the Underwriters may reasonably designate and will file
and make in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the Company
shall not be required to qualify as a foreign corporation or shall be required
to qualify as a dealer in securities or to file a general consent to service of
process under the laws of any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Company will make generally available to
the holders of Designated Shares, as soon as practicable, an earning statement
(which need not be audited) in reasonable detail covering the 12 months
beginning not later than the first day of the month next succeeding the month in
which occurred the effective date (within the meaning of Rule 158) of the
Pricing Agreement.
(h) The Company will file timely all documents required to be filed
with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. The
Company will furnish to its security holders annual reports containing financial
statements audited by independent public accountants.
11
(i) During the period beginning from the date of the Pricing Agreement
for such Designated Shares and continuing through 30 days after the Closing Date
(and, if applicable, the Option Closing Date) relating to such Designated
Shares, the Company will not, without the prior written consent of the
Underwriters, or in the case of multiple Underwriters, the Representatives,
offer for sale, sell or enter into any agreement to sell, grant any option for
the sale of, or otherwise dispose of, or publicly announce an intention to
effect any such transactions, in any of the depositary shares or any preferred
shares ranking on parity with or superior to the Depositary Shares or the
preferred shares underlying the Depositary Shares, except for the Designated
Shares.
(j) The Company will apply the proceeds from the sale of the Depositary
Shares as set forth in the description under "Use of Proceeds" in the
Prospectus, as amended or supplemented, which description complies and will
comply in all respects with the requirements of Item 504 of Regulation S-K.
(k) The Company will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Depositary Shares, or any other
securities registered by the Company in connection therewith under the 1933 Act.
(l) After the date of the Pricing Agreement and prior to the Closing
Date (and, if applicable, the Option Closing Date) relating to a particular
issuance of Designated Shares, the Company will furnish to you, as soon as they
have been prepared, and prior to any filing with the SEC or public disclosure,
copies of any unaudited interim consolidated financial statements of the Company
and its subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the Prospectus.
(m) After the date of the Pricing Agreement and prior to the Closing
Date (and, if applicable, the Option Closing Date) relating to any particular
issuance of Designated Shares, the Company will not issue any press releases or
other communications directly or indirectly and will hold no press conferences
with respect to the Company or any of its subsidiaries, the financial condition,
results of operations, business, properties, assets or liabilities of the
Company or any of its subsidiaries, or the offering of the Depositary Shares,
without your prior written consent.
(n) The Company will use its reasonable best efforts to obtain approval
for, and maintain the listing of the Designated Shares on, the NYSE and to file
with the NYSE all documents and notices required by the NYSE of companies that
have securities listed or included on the NYSE.
(o) The Company and its subsidiaries will maintain and keep accurate
books and records reflecting their assets and maintain internal accounting
controls which provide reasonable assurance that (1) transactions are executed
in accordance with management's authorization, (2) transactions are recorded as
necessary to permit the preparation of the Company's consolidated financial
statements and to maintain accountability for the assets of the Company and its
subsidiaries, (3) access to the assets of the Company and its subsidiaries is
permitted only in accordance with management's authorization, and (4) the
recorded accounts of the assets of the Company and its subsidiaries are compared
with existing assets at reasonable intervals.
(p) If the Company elects to rely on Rule 462(b) under the 1933 Act for
the sale of any Designated Shares pursuant to a Pricing Agreement, the Company
shall both file an Abbreviated Registration Statement with the SEC in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the
1933 Act by the earlier of (i) 9:00 p.m., St. Louis time, on the date of the
applicable Pricing Agreement, and (ii) the time that confirmations are given or
sent, as specified by Rule 462(b)(2).
(q) If at any time during the 90-day period after the date of the
Pricing Agreement of any particular issuance of Designated Shares, any rumor,
publication or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Depositary Shares has
been or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith consult with you concerning the
issuance of a press release or other public statement, responding to or
commenting on such rumor, publication or event, provided, that nothing herein
shall prevent the Company from
12
complying with the Company's disclosure or other obligations, in the Company's
sole judgment, under the federal securities laws or the NYSE listing rules.
(r) The Company will continue to qualify as a REIT under the Code for
the 2002 taxable year.
(s) During the period beginning from the date of the Pricing Agreement
for a particular issuance of Designated Shares and continuing through the
Closing Date (and, if applicable, the Option Closing Date) relating to such
Designated Shares, the Company agrees to not, and to use its reasonable best
efforts to cause its officers, directors and affiliates not to, (i) take,
directly or indirectly any action designed to stabilize or manipulate the price
of any security of the Company, or which may cause or result in, or which might
in the future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any security of the Company, (ii) sell, bid for, purchase or pay
anyone any compensation for soliciting purchases of Depositary Shares other than
pursuant to this Agreement or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Designated Shares under any Pricing
Agreement shall be subject to the accuracy, as of the date of the Pricing
Agreement and as of the Closing Date (and, if applicable, the Option Closing
Date) relating to that particular issuance of Designated Shares, of the
representations and warranties of the Company contained herein, to the
performance by the Company of its covenants and obligations hereunder, and to
the following additional conditions:
(a) If the Registration Statement has not previously become effective,
the Registration Statement and all post-effective amendments theretofore filed
shall have become effective not later than 1:00 p.m., St. Louis time, on the
date of the Pricing Agreement, or at such later date and time as may be approved
by the Underwriters, or in the case of multiple Underwriters, the
Representatives; if the Company has elected to rely on Rule 462(b) under the
1933 Act, the Abbreviated Registration Statement shall have become effective not
later than the earlier of (x) 9:00 p.m. St. Louis time, on the date of the
Pricing Agreement, or (y) at such later date and time as may be approved by the
Underwriters, or in the case of multiple Underwriters, the Representatives. All
filings required by Rule 424 and Rule 430A of the 1933 Act Rules and Regulations
shall have been made. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been issued and
no proceeding for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened or contemplated by the SEC, and any
request of the SEC for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the reasonable satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Company on or prior to the
Closing Date (and, if applicable, the Option Closing Date) relating to a
particular issuance of Designated Shares, that the Registration Statement or
Prospectus or any amendment or supplement thereto contains an untrue statement
of fact which, in the opinion of counsel to the Underwriters, is material, or
omits to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing Date)
relating to a particular issuance of Designated Shares, you shall have received
one or more opinions of counsel for the Company, addressed to you and dated the
Closing Date (and, if applicable, the Option Closing Date) for such Designated
Shares, in substantially the forms of Annex B and Annex C.
In rendering the opinion, such counsel may rely, (1) as to matters
involving the application of laws of any jurisdiction other than Ohio or the
United States, upon opinions addressed to the Underwriters of other counsel
satisfactory to it and Xxxxx Xxxx LLP, and (2) as to all matters of fact, upon
certificates and written statements of the executive officers of, and
accountants for, the Company, provided, in either case, that such counsel shall
state in their opinion that they believe that and the Underwriters are justified
in relying thereon, and (3) as to the date of
13
qualification of the Company and its subsidiaries to do business in any state or
jurisdiction, upon certificates of appropriate governmental officials,
telephonic confirmation by representatives of such states or confirmation from
information contained on websites of such states.
Such counsel shall also confirm that during the preparation of the
Registration Statement and Prospectus, such counsel participated in conferences
with officers and representatives of the Company and its independent
accountants, at which conferences the contents of the Registration Statement and
the Prospectus were discussed, reviewed and revised. Such counsel shall also
confirm that such counsel regularly reviews the Company's periodic and current
reports prior to filing with the SEC. On the basis of the information which was
developed in the course of the preparation of the Registration Statement and
Prospectus and review of the Company's periodic and current reports, considered
in light of such counsel's understanding of applicable law and the experience
gained by such counsel through their practice thereunder, without such counsel
assuming responsibility for the accuracy and completeness of such statements
except to the extent expressly provided above, such counsel shall confirm that
nothing came to their attention that would lead them to believe that either the
Registration Statement (including any document filed under the 1934 Act and
deemed incorporated by reference therein), as of the Effective Date, 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, in
the light of the circumstances under which they were made, not misleading, or
the Prospectus or any amendment or supplement thereto (including any document
filed under the 1934 Act and deemed incorporated by reference therein) as of its
respective issue date and as of the Closing Date (or, if applicable, the Option
Closing Date) relating to a particular issuance of Designated Shares, contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than the financial statements or other financial
data as to which such counsel need express no opinion).
(d) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date) relating to a particular issuance of Designated Shares,
from Xxxxx Xxxx LLP, counsel to the Underwriters, such opinion or opinions,
dated the Closing Date (and, if applicable, the Option Closing Date) relating to
a particular issuance of Designated Shares with respect to such matters as you
may reasonably require; and the Company shall have furnished to such counsel
such documents as they reasonably request for the purposes of enabling them to
review or pass on the matters referred to in this Section 6 and in order to
evidence the accuracy, completeness and satisfaction of the representations,
warranties and conditions herein contained.
(e) On the date of the applicable Pricing Agreement and on the Closing
Date (and, if applicable, the Option Closing Date) relating to a particular
issuance of Designated Shares, you shall have received from Deloitte & Touche
LLP, a letter or letters, dated the date of the applicable Pricing Agreement and
the Closing Date (and, if applicable, the Option Closing Date) relating to that
particular issuance of Designated Shares, respectively, in form and substance
satisfactory to you, confirming that they are independent public accountants
with respect to the Company within the meaning of the 1933 Act and the 1933 Act
Rules and Regulations, and containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information relating
to the Company contained in the Registration Statement and Prospectus.
(f) Except as contemplated in the Prospectus, (i) neither the Company
nor any of its subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and (ii)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, or entered into any transactions, and there shall not have been any
change in the capital stock or short-term or long-term debt of the Company and
its subsidiaries or any change, or any development involving or which might
reasonably be expected to involve a prospective change in the condition
(financial or other), net worth, business, affairs, management, results of
operations or cash flow of the Company or its subsidiaries, the effect of which,
in any such case described in clause (i) or (ii), is in your judgment so
material or adverse as to make it
14
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Shares being delivered on such Closing Date (and, if
applicable, the Option Closing Date) relating to that particular issuance of
Designated Shares on the terms and in the manner contemplated in the Prospectus.
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the NYSE
or the establishing on such exchange by the SEC or by such exchange, or market,
of minimum or maximum prices which are not in force and effect on the date
hereof; (ii) a suspension or material limitation in trading in the Company's
securities on the NYSE or the establishing on such exchange by the SEC or by
such exchange of minimum or maximum prices which are not in force and effect on
the date hereof; (iii) a general moratorium on commercial banking activities
declared by either federal or any State of New York authorities; (iv) the
outbreak or escalation of hostilities or terrorism involving or affecting the
United States or the declaration by the United States of a national emergency or
war, which in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated Shares in the manner
contemplated in the Prospectus; or (v) any calamity or crisis, change in
national, international or world affairs, act of God, change in the
international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, which in
your judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Shares in the manner contemplated in
the Prospectus.
(h) You shall have received certificates, dated the Closing Date (and,
if applicable, the Option Closing Date) relating to a particular issuance of
Designated Shares and signed by the President and the Chief Financial Officer of
the Company, in their capacities as such, stating that:
(i) the condition set forth in Section 6(a) has been fully
satisfied;
(ii) they have carefully examined the Registration Statement and
the Prospectus as amended or supplemented and all documents
incorporated by reference therein and nothing has come to their
attention that would lead them to believe that either the Registration
Statement or the Prospectus, or any amendment or supplement thereto or
any documents incorporated by reference therein as of their respective
effective, issue or filing dates, contained, or the Prospectus as
amended or supplemented and all documents incorporated by reference
therein and when read together with the documents incorporated by
reference therein, at such Closing Date, contains, any untrue statement
of a material fact, or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(iii) since the date of the applicable Pricing Agreement, there has
occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has
not been so set forth and there has been no document required to be
filed under the 1934 Act and the 1934 Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed;
(iv) all representations and warranties made herein by the Company
are true and correct at such Closing Date, with the same effect as if
made on and as of such Closing Date, and all agreements herein to be
performed or complied with by the Company on or prior to such Closing
Date have been duly performed and complied with by the Company;
(v) except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, other than in the ordinary course of business, or entered
into any transactions not in the ordinary course of business, which in
either case are material to the Company or such subsidiary; and there
has been no dividend or distribution of any kind, paid or made by the
Company on any class of its capital stock; and
(vi) covering such other matters as you may reasonably request.
15
(j) The Company shall have furnished to you at the Closing Date (and,
if applicable, the Option Closing Date) relating to a particular issuance of
Designated Shares such further information, opinions, certificates, letters and
documents as you may have reasonably requested.
(k) The Designated Shares shall have been approved for trading upon
official notice of issuance on the New York Stock Exchange.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to Xxxxx Xxxx LLP, counsel for the Underwriters, in the
exercise of reasonable judgment.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) relating to a particular issuance of Designated Shares or
waived by you in writing, the Pricing Agreement may be terminated by you on
notice to the Company.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless each Underwriter from and against any losses, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, damages or liabilities
(or actions or claims in respect thereof) arise out of or are based upon (i) an
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus Supplement, Preliminary Prospectus, the Registration Statement, the
Prospectus or any other prospectus relating to the Depositary Shares, or any
amendment or supplement thereto, or in any blue sky application or other
document executed by the Company or based on any information furnished in
writing by the Company, filed in any state or other jurisdiction in order to
qualify any or all of the Depositary Shares under the securities laws thereof
(the "Blue Sky Application"), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) any untrue statement or alleged untrue
statement made by the Company in Section 4 of this Agreement or in any
representation or warranty by the Company to the Underwriters of the failure by
the Company to perform when and as required by any agreement or covenant
contained herein and will reimburse each Underwriter for any legal or other
expenses incurred by such Underwriter in connection with investigating,
preparing, pursuing or defending against any such loss, damage, liability or
action or claim, including, without limitation, any investigation or proceeding
by any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to the indemnified party, as such
expenses are incurred (including such losses, damages, liabilities or expenses
to the extent of the aggregate amount paid in settlement of any such action or
claim, provided that (subject to Section 7(d) hereof) any such settlement is
effected with the written consent of the Company); provided, however, that the
Company shall not be liable in any such case to the extent, but only to the
extent, that any such loss, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Prospectus Supplement, Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Depositary
Shares, or any such amendment or supplement, in reliance upon and in conformity
with written information relating to the Underwriter furnished to the Company by
you, expressly for use in the preparation thereof (as provided in the Pricing
Agreement).
The foregoing indemnity agreement with respect to any Prospectus
Supplement, Preliminary Prospectus, Registration Statement, or Prospectus shall
not inure to the benefit of any Underwriter (or its officers and employees or
any person who controls such Underwriter within the meaning of the 1933 Act)
from whom the person asserting any such loss, claims, damages or liabilities
purchased Depositary Shares if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if such is required by law, at or prior to the written confirmation of
the sale of such Depositary Shares to such person and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability; provided, that the Company has complied with its
obligation under Section 5(b) of this Agreement to provide copies of the
Prospectus to such Underwriter and has so complied within a reasonable amount of
time prior to written confirmation.
16
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company from and against any losses, damages or liabilities to
which the Company may become subject, under the 1933 Act or otherwise, insofar
as such losses, damages or liabilities (or actions or claims in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus Supplement, Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Depositary Shares, or any amendment or supplement thereto, or in
any other document executed by the Company, or arise out of are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Prospectus Supplement, Preliminary Prospectus, the Registration Statement, the
Prospectus or any other prospectus relating to the Depositary Shares, or any
such amendment or supplement, or other document executed by the Company, in
reliance upon and in conformity with written information relating to the
Underwriter furnished to the Company by you, or by any Underwriter through you,
expressly for use in the preparation thereof (as provided in the Pricing
Agreement), and will reimburse the Company for any legal or other expenses
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred (including such losses, damages,
liabilities or expenses to the extent of the aggregate amount paid in settlement
of any such action or claim, provided that (subject to Section 7(d) hereof) any
such settlement is effected with the written consent of the Underwriters.
(c) Promptly after receipt by an indemnified party under Section 7(a)
or 7(b) hereof of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under Section 7(a) or 7(b) hereof, notify each such indemnifying party in
writing of the commencement thereof, but the failure so to notify such
indemnifying party shall not relieve such indemnifying party from any liability
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have to any such indemnified party
otherwise than under Section 7(a) or 7(b) hereof. In case any such action shall
be brought against any such indemnified party and it shall notify each
indemnifying party of the commencement thereof, each such indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party under Section 7(a) or 7(b) hereof
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and, after notice from such indemnifying
party to such indemnified party of its election so to assume the defense
thereof, such indemnifying party shall not be liable to such indemnified party
under Section 7(a) or 7(b) hereof for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. The indemnified party shall have the right to employ its own
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 at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have been
advised by such counsel that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense, or
certain aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with respect
to those matters or aspects of the defense on which a conflict exists or may
exist on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel reasonably satisfactory to such indemnified
party to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne, and shall be paid as incurred,
by the indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 7(a) or 7(b) hereof to reimburse
such indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a) or 7(b) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of such request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying party
shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party
17
from all liability arising out of such action or claim and (B) does not include
a statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any such indemnified party. In no event shall such indemnifying
parties be liable for the fees and expenses of more than one counsel, including
any local counsel, for all such indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 7(a) or 7(b) hereof in respect of any losses, damages or
liabilities (or actions or claims in respect thereof) referred to therein, then
each indemnifying party under Section 7(a) or 7(b) hereof shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
damages or liabilities (or actions or claims in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriter, on the other hand, from the
offering of the Designated Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 7(c) hereof
and such indemnifying party was prejudiced in a material respect by such
failure, then each such indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault, as
applicable, of the Company, on the one hand, and the Underwriter, on the other
hand, in connection with the statements or omissions that resulted in such
losses, damages or liabilities (or actions or claims in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by, as applicable, the Company, on the one hand, and the Underwriter,
on the other hand, shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriter. The relative fault, as applicable, 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 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.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 7(d). The amount
paid or payable by such an indemnified party as a result of the losses, damages
or liabilities (or actions or claims in respect thereof) referred to above in
this Section 7(d) shall be deemed to include any legal or other expenses
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 7(d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Designated Shares underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The obligation
of the Underwriters in this Section 7(d) to contribute are several in proportion
to their respective underwriting obligations with respect to the Designated
Shares and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director, employee, agent
or other representative and to each person, if any, who controls any
Underwriters within the meaning of the 1933 Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company who signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the 1933 Act.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The respective
representations, warranties, agreements and statements of the Company and the
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain operative and in full
force and effect
18
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, the Company or any of its officers, directors or any controlling
persons, and shall survive delivery of and payment for the Depositary Shares
hereunder.
9. TERMINATION. (a) A Pricing Agreement may be terminated by you at any
time at or prior to the Closing Date by notice to the Company if any condition
specified in Section 6 hereof shall not have been satisfied on or prior to the
Closing Date. Any such termination shall be without liability of any party to
any other party except as provided in Sections 7 and 10 hereof.
(b) A Pricing Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
if any condition specified in Section 6 hereof shall not have been satisfied at
or prior to the Option Closing Date.
(c) This Agreement may be terminated at any time by the Company or you
upon the giving of written notice of such termination, but without prejudice to
any rights, obligations or liabilities of any party hereto accrued or incurred
prior to such termination. The termination of this Agreement shall not require
termination of any Pricing Agreement, and the termination of any Pricing
Agreement shall not require termination of this Agreement.
If you terminate a Pricing Agreement as provided in Sections 9(a) or
9(b) or terminate this Agreement as provided in Section 9(c), you shall notify
the Company by telephone or telegram, confirmed in writing as provided in
Section 11.
10. COSTS AND EXPENSES. The Company, whether or not the transactions
contemplated hereby are consummated or this Agreement or any Pricing Agreement
is terminated, will bear and pay the costs and expenses incident to the
registration of the Depositary Shares and public offering thereof, including,
without limitation, (a) all expenses (including stock transfer taxes) incurred
in connection with the delivery to the several Underwriters of the Depositary
Shares, the filing fees of the SEC, and the fees and expenses of the Company's
counsel and accountants, (b) the preparation, printing, filing, delivery and
shipping of the Registration Statement, each Prospectus Supplement, Preliminary
Prospectus, the Prospectus and any amendments or supplements thereto, (c) the
furnishing of copies of such documents to the Underwriters, (d) the registration
or qualification of the Designated Shares for offering and sale under the
securities laws of the various states and other jurisdictions, including the
reasonable fees and disbursements of counsel to the Underwriters relating to
such registration or qualification and in connection with preparing any Blue Sky
Memoranda or related analysis, (e) all printing and engraving costs related to
preparation of the certificates for the Depositary Shares, including transfer
agent and registrar fees, (f) all fees and expenses relating to the
authorization of the Depositary Shares and the Designated Shares for trading on
the NYSE, (g) all travel expenses, including air fare and accommodation
expenses, of representatives of the Company in connection with the offering of
the Depositary Shares (except for ground transportation), and (h) all of the
other costs and expenses incident to the performance by the Company of the
registration and offering of the Depositary Shares; provided, that the
Underwriters will bear and pay the fees and expenses of the Underwriters'
counsel (except as specifically provided in this Section 10(d)), the
Underwriters' out-of-pocket expenses, and any advertising costs and expenses
incurred by the Underwriters incident to the public offering of the Depositary
Shares.
11. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Director, Corporate Finance,
facsimile number (000) 000-0000, with a copy to Xxxxx Xxxx LLP, attention: X.
Xxxx Xxxxxx, facsimile number (000) 000-0000, or if sent to the Company shall be
mailed, delivered, sent by facsimile transmission, or telegraphed and confirmed
to the Company at Guildhall Building, Suite 0000, 00 X. Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000, facsimile number 000-000-0000, attention: Xxxxxxx X.
Xxxxx, with a copy to Xxxxxx X. Xxxxxx, Xxxxx & Xxxxxxxxx LLP, 0000 Xxxxxxxx
Xxxx Center, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, facsimile number
000-000-0000.
12. PARTIES. This Agreement and each Pricing Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company and, to the
extent provided in Sections 7 and 8, the officers and directors of
19
the Company and each person who controls the Company or any Underwriter and
their respective heirs, executors, administrators, successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, corporation or other entity any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and said controlling persons
and said officers and directors, and for the benefit of no other person,
corporation or other entity. No purchaser of any of the Depositary Shares from
any Underwriter shall be construed a successor or assign by reason merely of
such purchase.
In the case of multiple Underwriters for a particular offering pursuant
to a Pricing Agreement, in all dealings hereunder, you, and any other
Underwriter so designated as a Representative in the Pricing Agreement, shall
act on behalf of each of the several Underwriters, and the parties to the
Pricing Agreement shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of the Underwriters, made or given by you jointly
or by X.X. Xxxxxxx & Sons, Inc. on behalf of you, and any other Representatives,
as the Representatives, as if the same shall have been made or given in writing
by the Underwriters.
13. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall default
in its obligation to purchase the Designated Shares which it has agreed to
purchase hereunder, you may in your discretion arrange for you or another party
or other parties to purchase such Designated Shares on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do
not arrange for the purchase of such Designated Shares, then the Company shall
be entitled to a further period of thirty-six hours within which to procure
another party or parties reasonably satisfactory to you to purchase such
Designated Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Designated Shares, or the Company notifies you that it has so
arranged for the purchase of such Designated Shares, you or the Company shall
have the right to postpone the Closing Date for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any persons substituted under this Section 9 with like effect as if such person
had originally been a party to the applicable Pricing Agreement with respect to
such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Shares of a defaulting Underwriter or Underwriters made by you and
the Company as provided in subsection (a) above, the aggregate number of
Designated Shares which remains unpurchased does not exceed one-eleventh of the
total Designated Shares to be sold on the Closing Date, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
Designated Shares which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Designated Shares which such Underwriter agreed to
purchase in the applicable Pricing Agreement) of the Designated Shares of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Shares of a defaulting Underwriter or Underwriters made by you and
the Company as provided in subsection (a) above, the number of Designated Shares
which remains unpurchased exceeds one-eleventh of the total Designated Shares to
be sold on the Closing Date, or if the Company shall not exercise the right
described in subsection (b) above to require the non-defaulting Underwriters to
purchase Designated Shares of the defaulting Underwriter or Underwriters, then
this Agreement (or, with respect to the Option Closing Date, the obligations of
the Underwriters to purchase and of the Company to sell the Option Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company except for the expenses to be borne by the Company
and the Underwriters as provided in Section 11 hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
20
14. MISCELLANEOUS. The Underwriters shall not advertise or publish any
document concerning the public offering of the Depositary Shares without the
prior written consent and approval of the Company, which consent and approval
shall not be unreasonably withheld.
15. COUNTERPARTS. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
16. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
17. TIME OF ESSENCE. Time shall be of the essence of the Pricing
Agreement.
18. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
the choice of law or conflict of laws principles thereof.
21
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company and the Underwriters.
XXXXXX LODGING COMPANY
By: /s/ XXXXXXX X. XXXXX
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President, Chief Financial and
Investment Officer
Accepted in St. Louis,
Missouri as of the date
first above written,
X.X. XXXXXXX & SONS, INC.
By /s/ XXXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
22
ANNEX A
PRICING AGREEMENT
October 1, 2002
X.X. XXXXXXX & SONS, INC.
as Representatives of the several Underwriters
named in Schedule I hereto
c/o X.X. XXXXXXX & SONS, INC.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxx Lodging Company, an Ohio corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement Standard Provisions, dated October 1, 2002 (the
"Underwriting Agreement"), a copy of which is attached hereto, to issue and sell
to X.X. Xxxxxxx & Sons, Inc. (the "Underwriters") and if applicable, to the
firms named in Schedule I hereto (in such case, such firms and you shall be
referred to as the "Underwriters"), the Depositary Shares of the Company set
forth in Schedule II hereto (the "Designated Shares"). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference in its entirety
and shall be deemed to be a part of this Pricing Agreement to the same extent as
if such provisions had been set forth in full herein.
Each reference to the "Registration Statement" in the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
the Company's Registration Statement on Form S-3, File No. 333-39369.
Each reference to the Underwriters herein and in the
provisions of the Underwriting Agreement Standard Provisions shall be deemed to
refer to the firms named in Schedule I hereto. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement
Standard Provisions shall be deemed to refer to X.X. Xxxxxxx & Sons, Inc.
Only the items, if any, expressly listed in Schedule II
hereto constitute the information furnished by or on behalf of the Underwriters
as such information is referred to in Section 4(a)(ii) and Section 7 of the
Underwriting Agreement.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and sell to the Underwriters, and the Underwriters agree to purchase
from the Company, at the time and place and at the purchase price set forth in
Schedule II hereto, the Designated Shares set forth in Schedule II hereto.
23
If the foregoing is in accordance with your understanding,
please sign and return to us a counterpart hereof, and upon acceptance hereof by
you, this letter and such acceptance hereof, including the provisions of the
Underwriting Agreement incorporated herein by reference, shall constitute a
binding agreement among the Underwriters and the Company.
Very truly yours,
XXXXXX LODGING COMPANY
By /s/ XXXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President, Chief Financial
and Investment Officer
Acceptance as of the date hereof:
X.X. XXXXXXX & SONS, INC.
as Representatives of the several Underwriters
named in Schedule I hereto
By /s/ XXXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
24
SCHEDULE I TO PRICING AGREEMENT
Underwriters
------------
Number of Firm Shares
X.X. Xxxxxxx & Sons, Inc. 1,096,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 470,000
Xxxxxxxx Xxxxxxxx Xxxxxx & Co., Inc. 180,000
Xxxxx Fargo Securities, LLC 54,000
Total 1,800,000
25
SCHEDULE II TO PRICING AGREEMENT
DESIGNATED SHARES: Depositary Shares each representing 1/10 of a share in 10 1/2
% Class A Cumulative Preferred Shares, Series 2002-A, without par value,
deposited with National City Bank, Cleveland, Ohio, as depositary, redeemable on
or after October 7, 2007 at the option of the Company, with the terms as set
forth in the Prospectus Supplement dated October 1, 2002.
NUMBER OF FIRM SHARES:
1,800,000 Depositary Shares each representing 1/10 of a share in 10 1/2 % Class
A Cumulative Preferred Shares, Series 2002-A, without par value, deposited with
National City Bank, Cleveland, Ohio, as depositary, redeemable on or after
October 7, 2007 at the option of the Company, with the terms as set forth in the
Prospectus Supplement dated October 1, 2002.
NUMBER OF OPTION SHARES:
270,000 Depositary Shares each representing 1/10 of a share in 10 1/2 % Class A
Cumulative Preferred Shares, Series 2002-A, without par value, deposited with
National City Bank, Cleveland, Ohio, as depositary, redeemable on or after
October 7, 2007 at the option of Company, with the terms as set forth in the
Prospectus Supplement dated October 1, 2002.
PRICE TO PUBLIC:
$25 per share, total price $45,000,000 (without Option Shares)
PURCHASE PRICE BY THE UNDERWRITERS:
$24.2125 per share; $0.7875 underwriting discount per share
Underwriting discount total: $1,417,500
Discount with overallotment: $1,630,125
CLOSING DATE:
October 7, 2002
DIVIDENDS:
Dividends will be cumulative from the date of issuance and are payable
quarterly, starting January 15, 2003 at the rate of 10 1/2% of the initial
liquidation preference per annum, or $26.25 per preferred share (or $2.625 per
Depositary Share).
LIQUIDATION PREFERENCE:
The liquidation preference is equivalent to $25 per Depositary Share, plus
accumulated and unpaid dividends.
OTHER TERMS:
Proceeds to the Company (without Option Shares): $24.2125 per share;
$43,582,500 total
Redeemable at the option of the Company on or after October 7, 2007
See Prospectus Supplement of Company dated October 1, 2002
26
INFORMATION PROVIDED BY UNDERWRITERS:
Certain paragraphs of the underwriting section of the prospectus supplement, as
follows:
1. The second paragraph under the first table on page S-43 that begins "The
underwriters initially propose to offer the depositary shares.."
2. The first, second, third and fourth full paragraphs on page S-44.
27
ANNEX B
(i) The Registration Statement and all post-effective amendments
thereto have become effective under the 1933 Act; any required filing of the
Prospectus or any supplement thereto pursuant to Rule 424(b) or otherwise has
been made in the manner and within the time period required thereby; and, to the
knowledge of such counsel, no stop or other order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened by the SEC.
(ii) The Registration Statement and the Prospectus, and each amendment
or supplement thereto (including any document incorporated by reference into the
Prospectus), as of their respective effective or issue date, comply as to form
in all material respects to the requirements for registration statements on Form
S-3 under the 1933 Act and the applicable 1933 Act Rules and Regulations (except
that such counsel expresses no opinion as to the financial statements, related
schedules and other financial data included in or incorporated by reference into
the Registration Statement or the Prospectus); the conditions for use of Form
S-3 have been satisfied; and, as of the date they were filed with the SEC, the
documents incorporated by reference in the Prospectus appear on their face to
comply as to form in all material respects with the requirements of the 1934 Act
and the applicable 1934 Act Rules and Regulations, except for the untimely
filing of two material contracts exhibits (the Second Amended and Restated
Agreement of Limited Partnership of Xxxxxx Hotel Properties, L.P. and the
Amendment of Second Amended and Restated Agreement of Limited Partnership of
Xxxxxx Hotel Properties, L.P.), which exhibits were filed with the SEC on Form
8-K on August 29, 2002 and which do not adversely affect the Company's
eligibility to use Form S-3 for the offering of the Designated Shares (except
that such counsel need express no opinion as to the financial statements,
related schedules or other financial data included therein).
(iii) Each of the Agreement and the Pricing Agreement have been duly
authorized, validly executed and delivered by the Company and each constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
the Exceptions and except to the extent the enforceability of the
indemnification and contribution provisions of Section 7 of the Agreement may be
limited by public policy considerations.
(iv) The Company and the Company's subsidiaries set forth on Annex D
hereto (each a "Significant Subsidiary" and collectively, "Significant
Subsidiaries") are validly existing as corporations or other organizations in
good standing under the laws of the states or other jurisdictions in which they
are incorporated or organized, with full power and authority (corporate or
similar power) to own, lease and operate their properties and to conduct their
businesses as described in the Prospectus and, with respect to the Company, to
execute and deliver, and perform the Company's obligations under, the Agreement.
The Company and its Significant Subsidiaries are duly registered or qualified to
transact business as foreign corporations or other organizations in good
standing in each state or other jurisdiction in which their ownership or leasing
of property or conduct of business legally requires such registration or
qualification, except where the failure to be so registered or qualified,
individually or in the aggregate, would not have a Material Adverse Effect. (Our
opinions herein with respect to the Company's or any Significant Subsidiary's
good standing and valid existence in any state or other jurisdiction and its
registration or qualification to do business in such state or other jurisdiction
is based solely on a certificate of good standing issued by such state or
jurisdiction, telephonic confirmation by a representative of such state or
jurisdiction or confirmation from information contained on the website of such
state or jurisdiction.) The Company and its subsidiaries have been duly
incorporated or organized as corporations or other entities in the states of
their incorporation or organization, except for Red Lion Inns Operating L.P. as
to which we express no opinion.
(v) All of the outstanding shares of capital stock or other securities
evidencing equity ownership of each of the Company's Significant Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable
and, to the knowledge of such counsel, except as set forth in the
28
Prospectus or on Exhibit 21 to the Company Annual Report on Form 10-K for the
year ended December 31, 2001, are owned by the Company free and clear of any
mortgage, pledge, lien, encumbrance, charge or adverse claim and, except as set
forth on SCHEDULE A and except as provided in the Third Amended and Restated
Agreement of Limited Partnership of Xxxxxx Hotel Properties, L.P., are not the
subject of any agreement or understanding with any person, and were not issued
in violation of any preemptive or other similar rights arising by operation of
law or under the Significant Subsidiary's articles of incorporation or other
similar organizational document or agreement; and, to the knowledge of such
counsel, except as disclosed in the Prospectus, or set forth on SCHEDULE A
attached hereto, there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale, or instruments
related to or entitling any person to purchase or otherwise acquire any shares
of, or any security convertible into or exercisable or exchangeable for, any
such shares of capital stock or other ownership interest of any of such
subsidiaries.
(vi) The issuance and sale of the Designated Shares including the
issuance and sale of the Preferred Shares underlying the Designated Shares and
the execution, delivery and performance by the Company of the Agreement,
including the Pricing Agreement with respect to the Designated Shares, and the
consummation of the transactions herein contemplated, will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or any of its
subsidiaries under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the properties or assets of the
Company or any of its subsidiaries is subject, except to such extent as,
individually or in the aggregate, does not have a Material Adverse Effect, nor
will such action result in any violation of the provisions of the Company's
articles of incorporation or code of regulations or any statute, rule,
regulation or other law, or any order or judgment known to such counsel, of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties.
(vii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required in
connection with the execution, delivery and performance of the Agreement, and
the issuance and sale of the Designated Shares, and the consummation of the
transactions contemplated hereby, except such as may be required under the 1933
Act or the 1933 Act Rules and Regulations and have been obtained, or as may be
required by the NYSE in connection with the purchase and distribution of the
Designated Shares by the Underwriters, except that counsel expresses no opinion
with regard to state securities or blue sky laws. Each of the Company and its
subsidiaries has filed all Notices pursuant to, and has obtained all Approvals
required to be obtained under, and has otherwise complied with all requirements
of, all applicable laws and regulations in connection with the issuance and sale
of the Designated Shares, in each case with such exceptions, individually or in
the aggregate, as would not affect the validity of the Designated Shares, their
issuance or the transactions contemplated hereby or have a Material Adverse
Effect.
(viii) The Company has duly and validly authorized capital stock as set
forth in the Prospectus; the Depositary Shares, when issued, will conform, as to
legal matters, in all material respects to the description thereof in the
Prospectus and the Preferred Shares underlying the Depositary Shares have been
duly authorized, and when issued and paid for, will be validly issued, fully
paid and non-assessable; and the Designated Shares to be sold by the Company
have been duly authorized and, when delivered and paid for in accordance with
the Agreement and any Pricing Agreement, will be validly issued, fully paid and
non-assessable. All corporate action required to be taken by the Company for the
authorization, issue and sale of the Designated Shares including the Preferred
Shares underlying the Designated Shares has been duly and validly taken. The
Designated Shares are duly authorized for trading, subject to official notice of
issuance and evidence of satisfactory distribution, on the NYSE. The form of
specimen certificate representing the Depositary Shares filed as an exhibit with
the SEC is in due and proper form. The issuance of the Depositary Shares to be
purchased from the Company under the Agreement is not subject to preemptive or
other similar rights arising by operation of law or under the Company's articles
of
29
incorporation or code of regulations or, to our knowledge, any agreement, or any
restriction upon the voting or transfer thereof (except as set forth in the
Company's articles of incorporation) pursuant to applicable law or the code of
regulations of the Company or any agreement, known to us, to which the Company
or any of its subsidiaries is a party or by which any of them may be bound; and,
to such counsel's knowledge, except as described in the Prospectus, or set forth
on Schedule B, there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or rights related to
or entitling any person to purchase or otherwise acquire any shares of, or any
security convertible into or exercisable or exchangeable for, the capital stock
of, or other ownership interest in, the Company.
(ix) To the knowledge of such counsel, the Company and each of its
Significant Subsidiaries hold all Permits from all state, federal and other
regulatory authorities, and have satisfied in all material respects the
requirements imposed by regulatory bodies, administrative agencies or other
governmental bodies, agencies or officials, that are required for the Company
and its Significant Subsidiaries lawfully to own, lease and operate its
properties and conduct its business as described in the Prospectus, and, to the
knowledge of such counsel, each of the Company and its Significant Subsidiaries
is conducting its business in compliance in all material respects with all of
the laws, rules and regulations of each jurisdiction in which it conducts its
business.
(x) The statements made in the Form 8-K dated December 30, 1997, the
Registration Statement and in the Prospectus under the captions "The Company,"
"Description of Preferred Shares," "Description of Depositary Shares," "Federal
Income Tax Consequences," "ERISA Considerations," and under Item 15 of Part II
of the Registration Statement, and in the Prospectus Supplement under the
captions "Prospectus Supplement Summary," "Risk Factors," "The Company,"
"Corporate Governance," "Description of Class A Cumulative Preferred Shares,
Series 2002-A and Depositary Shares," and "Federal Income Tax Considerations,"
and in the Company's Annual Report on Form 10-K for the year ended December 31,
2001 under Items 1, 3, 11 and 13, to the extent that they constitute summaries
of statutes, laws, ordinances, rules, regulations, legal or governmental
proceedings, contracts and other documents referred to therein, have been
reviewed by such counsel and fairly summarize and fairly present in all material
respects the information called for by the 1933 Act and the 1933 Act Rules and
Regulations.
(xi) Neither the Company nor any of its Significant Subsidiaries is, or
with the giving of notice or lapse of time or both would be, in default or
violation with respect to its articles of incorporation or by-laws (or code of
regulations). To the knowledge of such counsel, neither the Company nor any of
its subsidiaries is, or with the giving of notice or lapse of time or both would
be, in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the properties or assets of the
Company or any of its subsidiaries is subject, or in violation of any statutes,
laws, ordinances or governmental rules or regulations or any orders or decrees
to which it is subject, including, without limitation, Section 13 of the 1934
Act, which default or violation, individually or in the aggregate, would have a
Material Adverse Effect.
(xii) To the knowledge of such counsel, (A) there are no legal,
governmental or regulatory proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or of that the business or
properties of the Company or any of its subsidiaries is the subject that are
required to be disclosed which are not so disclosed in the Registration
Statement and Prospectus; (B) there are no contracts or documents 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 that are not described or
filed as required; and (C) there are no statutes, ordinances, laws, rules or
regulations required to be described in the Registration Statement or Prospectus
which are not described as required.
30
(xiii) The Company is not and, after giving effect to the offering and
sale of the Designated Shares, will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
(xiv) To the knowledge of such counsel, and except as disclosed in the
Prospectus, no holder of any security of the Company has any right to require
registration of the Depositary Shares or any other security of the Company
because of the filing of the Registration Statement or the consummation of the
transactions contemplated hereby and, except as disclosed in the Prospectus, no
person has the right to require registration under the 1933 Act of any shares of
the Depositary Shares or other securities of the Company, except as set forth on
SCHEDULE C.
31
SCHEDULE A
Second and Amended and Restated Limited Partnership Agreement of Shawan Road
Hotel Limited Partnership, dated July 24, 1997, between Xxxxxx Xxxx Valley,
L.L.C. and Xxxx Valley Associates, LLC.
32
SCHEDULE B
Stock Purchase Option Agreement, dated as of February 1, 1999, by and among the
Company, Xxxxxx Hotel Properties, L.P. and AEW Partners III, X.X.
Xxxxxx Lodging Company Long Term Incentive Plan
Dividend Reinvestment and Optional Share Purchase Plan
33
SCHEDULE C
Registration Rights Agreement, dated as of November 4, 1996, by and among Xxxxxx
Lodging Company and certain holders of securities of Xxxxxx Lodging Company
Registration Rights Agreement, dated as of February 1, 1999, by and between
Xxxxxx Lodging Company and AEW Partners III, L.P.
Registration Rights Agreement, dated as of January 1, 2002, between Xxxxxx
Lodging Company and JABO LLC
34
ANNEX C
Xxxxxx Lodging Company
Terminal Tower, Suite 0000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Re: Status as a REIT
Ladies and Gentlemen:
In connection with the prospectus supplement and prospectus
(the "Prospectus") being filed by you on the date hereof with the Securities and
Exchange Commission, you have requested our opinion regarding whether Xxxxxx
Lodging Company (the "Company") has qualified as a real estate investment trust
("REIT") for its taxable years ended December 31, 1996 through December 31,
2001, has been organized in conformity with the requirements for qualification
as a REIT, and whether its method of operation has enabled the Company to meet,
and will enable it to continue to meet, the requirements for qualification and
taxation as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"). This opinion is conditioned upon certain representations made by the
Company as to factual matters as set forth in the Prospectus and the
registration statements on Forms S-3 and S-11 previously filed with the
Securities and Exchange Commission (the "Registrations"). In addition, the
Company has provided a representation letter and certificate ("Representation
Letter") certifying, among other items, that it has made a timely election to be
taxed as a REIT under the Code commencing with its initial taxable year ended
December 31, 1996, and that commencing with the first taxable year that the
Company has elected to be taxed as a REIT, the Company has operated and will
continue to operate in accordance with the terms and provisions of its Articles
of Incorporation and in accordance with the method of operation described in the
Prospectus and the Registrations.
Based on such representations, it is our opinion that the
Company has qualified as a REIT for its taxable years ended December 31, 1996
through December 31, 2001, the Company is organized in conformity with the
requirements for qualification as a REIT, and the Company's current and proposed
method of operation will enable it to meet the requirements for qualification
and taxation as a REIT under the Code for its taxable year ended December 31,
2002 and for all future taxable years. With respect to our opinion that the
Company has qualified as a REIT for its taxable years ended December 31, 2000
and December 31, 2001, we note that the Company did not meet the requirements of
Section 856(c)(2) of the Code for such taxable years. Pursuant to Section
856(c)(6) of the Code, the Company nevertheless is considered to have satisfied
the requirements of Sections 856(c)(2) for its taxable years 2000 and 2001 if
(A) the nature and amount of each item of its gross income described in such
Section is set forth in a schedule attached to its income tax return for such
taxable years; (B) the inclusion of any incorrect information in the schedule
referred to in (A) is not due to fraud with intent to evade tax; and (C) the
failure to meet the requirements of Section 856(c)(2) is due to reasonable cause
and not due to willful neglect (collectively, the "Cure Provisions"). We are of
the opinion that for the taxable years ended December 31, 2000 and December 31,
2001, the Company satisfied the Cure Provisions, and accordingly, the Company
will be deemed to have satisfied the requirements of Section 856(c)(2) for such
taxable years.
This opinion is based on various statutory provisions and
regulations promulgated thereunder, in effect on the date hereof, and the
interpretations of such provisions and regulations by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Also, any variation
from the factual statements set forth in the Prospectus, the Registrations or
the Representation Letter may affect the conclusions stated herein. Moreover,
the Company's qualification and taxation as a REIT depends upon the Company's
ability to meet, through actual annual operating results, distribution levels
35
and diversity of stock ownership, the various qualification tests imposed under
the Code, the results of which will not be reviewed by Xxxxx & Xxxxxxxxx LLP.
Accordingly, no assurance can be given that the actual results of the Company's
operations for any one taxable year will satisfy such requirements. We wish to
point out that our opinion is not binding on the Internal Revenue Service and,
without limiting our opinion, we note that there can be no assurance that all of
the requirements for qualification as a REIT for any particular taxable year
have in fact been met until the return for such taxable year has been reviewed
by the Internal Revenue Service or the period for such review has expired.
This opinion is limited to the federal income tax matters
addressed herein, and no other opinions are rendered with respect to other
federal tax matters or to any issues arising under the tax laws of any state or
locality. We undertake no obligation to update the opinions expressed herein
after the date of this letter. This opinion is rendered to the addressee of this
letter solely for the purpose referred to in the first paragraph hereof, and may
not be relied on or referred to by any other person or entity or by any
addressee for any other purpose without the express written consent of this
Firm. We hereby consent to the filing of this opinion as an Exhibit to the
Prospectus.
Very truly yours,
Xxxxx & Xxxxxxxxx LLP
36
ANNEX X
Xxxxxx Hotel Properties LP
Red Lion Inns Operating XX
Xxxxxx Holding LLC
Xxxxxx Buffalo LLC
Xxxxxx Berkeley LLC
Bellboy, Inc.
French Lick Leasing LLC
Buffalo Leasing LLC
Westboy LLC
Shawan Road Hotel Limited Partnership
Xxxxxx Kansas City LLC
Beachboy LLC
37
SCHEDULE 4.7
PLEDGES OF INTERESTS IN SUBSIDIARIES:
1. Security Agreement - Pledge and Assignment of Membership Interests, dated
July 31, 2001, by and between Xxxxxx Hotel Properties, L.P. and Concord Lodging
Investment Partners (Lyndhurst) LLC and Nationwide Life Insurance.
JOINT VENTURES CONTAINING RESTRICTIONS ON TRANSFER OF INTERESTS IN SUBSIDIARIES:
1. Limited Partnership Agreement of Boystar Ventures, L.P., dated July 15, 1997,
between Xxxxxx Hotel Properties, L.P. and Capstar BK Company L.L.C.
2. Second Amended and Restated Limited Partnership Agreement of Shawan Road
Hotel Limited Partnership, dated July 24, 1997, between Xxxxxx Xxxx Valley,
L.L.C. and Xxxx Valley Associates, L.L.C.
3. Operating Agreement of Xxxxxx San Diego, L.L.C., dated November 7, 1997,
between Xxxxxx Hotel Properties, L.P. and OLS San Diego, LLC.
4. Limited Liability Company Agreement of Xxxxxx/AEW LLC, dated February 1,
1999, between AEW Partners III, L.P. and Xxxxxx Hotel Properties, L.P.
5. Operating Agreement of BoyCon L.L.C., dated May 1, 2001, between Xxxxxx Hotel
Properties, L.P. and Concord Lodging Investment Partners (Lyndhurst) LLC, as
amended.
38
