EXHIBIT 1.1
LASALLE HOTEL PROPERTIES
14,200,000 COMMON SHARES/1/
OF BENEFICIAL INTEREST
UNDERWRITING AGREEMENT
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April __, 1998
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXX XXXXX XXXX XXXXXX INCORPORATED
XXXXXX XXXXXXX XXXX XXXXXX
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
LaSalle Hotel Properties, a Maryland real estate investment trust (the
"Company"), and LaSalle Hotel Operating Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership"), each hereby confirms its agreement
with the several underwriters named in Schedule 1 hereto (the "Underwriters"),
for whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein
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contained, the Company proposes to issue and sell to the several Underwriters an
aggregate of 14,200,000 common shares (the "Firm Securities"), of the Company's
common shares of beneficial interest, par value $0.01 per share (the "Common
Shares"). The Company also proposes to issue and sell to the several
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/1/ PLUS AN OPTION TO PURCHASE FROM LASALLE HOTEL PROPERTIES UP TO 2,130,000
ADDITIONAL SHARES TO COVER OVER-ALLOTMENTS.
Underwriters not more than 2,130,000 additional Common Shares if requested by
the Representatives as provided in Section 3 of this Agreement. Any and all
Common Shares to be purchased by the Underwriters pursuant to such option are
referred to herein as the "Option Securities," and the Firm Securities and any
Option Securities are collectively referred to herein as the "Securities."
2. Representations and Warranties of the Company and the Operating
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Partnership. The Company and the Operating Partnership, jointly and severally,
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represent and warrant to, and agree with, each of the several Underwriters that:
(a) A registration statement on Form S-11 (File No. 333-45647) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by the Representatives prior
to the execution of this Agreement, or (ii) if such registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement, including
a form of prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this Agreement. The
Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Securities, which registration shall be effective upon filing with
the Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Registration Statement (as
hereinafter defined) and any Preliminary Prospectus or Prospectus incorporated
therein at the time such Registration Statement becomes effective); the term
"Registration Statement" includes both the Original Registration Statement and
any Rule 462(b) Registration Statement; the term "Preliminary Prospectus" means
each prospectus subject to completion filed with such Registration Statement or
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any amendment or supplement thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any amendment
thereto at the time it was or is declared effective); the term "Prospectus"
means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet relating
to the Securities that is first filed pursuant to Rule 424(b)(7) under the
Act, together with the Preliminary Prospectus identified therein that such
Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the Act, the
prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending
use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or part thereof or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared effective) and
on the Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary
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in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing provisions of this paragraph
(b) do not apply to statements or omissions made in any Preliminary Prospectus,
the Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with, and that is
effective upon filing with the Commission pursuant to, Rule 462(b) and has
received confirmation of the Commission's receipt and (ii) the Company has given
irrevocable instructions for transmission of the applicable filing fee in
connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Act or the Commission has
received payment of such filing fee.
(d) The Company has been duly organized and is validly existing as a
real estate investment trust in good standing under the laws of Maryland and is
duly qualified to transact business as a foreign trust and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the condition (financial or otherwise), business prospects, net worth or results
of operations of the Company and the Operating Partnership, taken as a whole (a
"Material Adverse Effect"). The Advisor (as defined in the Prospectus or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) has
been duly organized and is validly existing as a corporation in good standing
under the laws of Maryland and is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect. The Affiliated Lessee (as
each of the foregoing terms are defined in the Prospectus or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), which is a
corporation, has been duly organized and is validly existing as a corporation in
good standing under the laws of Illinois and is duly qualified to transact
business as a foreign corporation and is in good standing under the laws of all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business, except where the failure to be so qualified would not
have a Material Adverse Effect. The partnerships owning the Initial Hotels
prior to the Firm Closing Date (the "Hotel Partnerships") have been duly
organized and are validly existing as partnerships in good standing under the
laws of their respective jurisdictions of organization and are duly qualified to
transact business as foreign partnerships and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
properties or the conduct of their business require such qualification, except
where the failure to be respective so qualified would not have a Material
Adverse Effect.
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(e) The Company and the Operating Partnership, the Advisor, the
Affiliated Lessee and the Hotel Partnerships have full power (corporate or
other) to own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus; and
each of the Company and the Operating Partnership has full power (corporate or
other) to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it.
(f) The Company's only subsidiary is the Operating Partnership, except
for the Affiliated Lessee, which is not a consolidated subsidiary. The Operating
Partnership has been duly organized and is validly existing as a limited
partnership in good standing under the laws of Delaware and is duly qualified to
transact business as a foreign limited partnership and is in good standing under
the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect.
As of the Firm Closing Date, the Company and the limited partners of the
Operating Partnership will enter into an Agreement of Limited Partnership of the
Operating Partnership, substantially in the form of Exhibit 10.1 to the
Registration Statement, with such other nonmaterial changes and revisions as are
acceptable to the Representatives (the "Operating Partnership Agreement"), which
agreement will be in full force and effect as of the Firm Closing Date. The
Operating Partnership Agreement has been duly authorized, executed and delivered
by the Company as the general partner thereof and constitutes the valid and
binding obligation of such general partner. All of the limited and general
partnership interests in the Operating Partnership (the "OP Units") to be issued
in connection with the Formation Transactions (as defined in the Prospectus, or
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
have been duly authorized for issuance by the Operating Partnership to the
holders or prospective holders thereof, and, at the Firm Closing Date, against
the payment of consideration therefor in accordance with the Operating
Partnership Agreement, will be validly issued, fully paid and owned in the
amounts set forth on Schedule 2 hereto, and, in the case of the OP Units to be
issued to the Company, free and clear of any security interests, liens,
encumbrances, equities or claims. Immediately after the Firm Closing Date,
3,316,310 OP Units of limited partner interest and 15,419,905 OP Units of
general partner interest of the Operating Partnership will be issued and
outstanding. The OP Units conform in all material respects to the description
thereof contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus. The Company is, and immediately after
the Firm Closing Date will be, the sole general partner of the Operating
Partnership.
(g) The authorized capital stock of the Company is as set forth in
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus under the caption "Shares of Beneficial Interest" and the
issued and outstanding shares of beneficial interest of the Company, as of the
Firm Closing Date, will be as set forth in the Prospectus or, if the
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Prospectus is not in existence, the most recent Preliminary Prospectus, under
the caption "Capitalization." All of the issued shares of beneficial interest of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable. The 969,500 Common Shares (the "Formation Shares") to be issued
to the Contributors in connection with the Formation Transactions have been duly
authorized for issuance by the Company to the holders or prospective holders
thereof, and, at the Firm Closing Date, against the payment of consideration
therefor in accordance with the Transaction Document (as defined herein), will
be validly issued, fully paid and nonassessable and owned in the amounts set
forth on Schedule 3 hereto. The Firm Securities and the Option Securities have
been duly authorized and at the Firm Closing Date or the related Option Closing
Date (as the case may be), after payment therefor in accordance herewith, will
be validly issued, fully paid and nonassessable. No holders of outstanding
shares of beneficial interest of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no holder
of securities of the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of any securities
owned by such holder under the Act in the public offering contemplated by this
Agreement.
(h) The capitalization of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.
(i) All of the issued and outstanding Common Shares of the Company
have been offered and sold in compliance with all applicable laws (including,
without limitation, federal and state securities laws).
(j) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities, equity interests or obligations of the Company or
the Operating Partnership convertible into or exchangeable for any beneficial
interests, capital stock or other equity interests (as the case may be) of the
Company or the Operating Partnership, (B) warrants, rights or options to
subscribe for or purchase from the Company or the Operating Partnership any such
beneficial interests, capital stock or other equity interests or any such
convertible or exchangeable securities, equity interests or obligations, or (C)
obligations of the Company or the Operating Partnership to issue any shares of
beneficial interests, capital stock, other equity interests, any such
convertible or exchangeable securities, equity interests or obligations, or any
such warrants, rights or options.
(k) The offer and issuance of the Formation Shares and the offer,
issuance and exchange of the OP Units in connection with the Formation
Transactions were or will be exempt from the registration requirements of the
Act and applicable state securities and blue sky laws.
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(l) The balance sheet and the pro forma condensed consolidated
balance sheet and the pro forma condensed consolidated statements of income of
the Company (including the notes thereto) included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company at
the dates therein specified. The pro forma condensed balance sheet and the pro
forma condensed consolidated statements of operations (including the notes
thereto) of the Affiliated Lessee (as defined in the notes thereto) included in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the financial
position of the Affiliated Lessee at the dates therein specified. The separate
financial statements (including the notes thereto) for certain of the Initial
Hotels included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) fairly
present, respectively, the financial data included therein at the dates and for
the periods therein specified. The combined financial statements (including the
notes thereto) of the Initial Hotels (excluding Marriott's Seaview Resort and
the LaGuardia Airport Marriott) (as defined in the notes thereto) included in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the financial
position, the results of operations and cash flows and changes in partners'
capital of such Initial Hotels for the periods therein specified. All of the
foregoing financial statements (including the notes thereto) and schedules have
been prepared in accordance with generally accepted accounting principles
consistently applied for each of the periods presented. The selected financial
data set forth under the caption "Selected Financial Data" in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present, on the basis stated in the Prospectus (or such
Preliminary Prospectus), the information included therein.
(m) The pro forma condensed consolidated balance sheet and the pro
forma condensed consolidated statements of income of the Company included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) comply in all material
respects with the applicable requirements of Rule 11-02 of Regulation S-X of the
Commission and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of such information and the assumptions
used in the preparation thereof are, in the opinion of the Company, reasonable.
Other than the historical and pro forma financial statements (and schedules)
included therein, no other historical or pro forma financial statements (or
schedules) are required to be included in the Registration Statement or
Prospectus.
(n) KPMG Peat Marwick LLP, Xxxxxx Xxxxxxxx LLP, Coopers & Xxxxxxx LLP
and Deloitte & Touche LLP, who have certified certain financial statements and
schedules, and delivered their reports with respect to the audited financial
statements and schedules, included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), are independent public accountants as required by the
Act and the applicable rules and regulations thereunder.
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(o) The assumptions made by the Company disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), under the caption "Distributions" are reasonable in light of the
expected and intended method of operation of the Company and the Operating
Partnership.
(p) The execution and delivery of this Agreement have been duly
authorized by the Company and the Operating Partnership and this Agreement has
been duly executed and delivered by the Company and the Operating Partnership,
and is the valid and binding agreement of each of the Company and the Operating
Partnership, enforceable against the Company and the Operating Partnership in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws relating to
creditors' rights generally and to the application of equitable principles in
any proceeding, whether at law or in equity.
(q) No legal or governmental proceedings are pending to which the
Company or the Operating Partnership, the Advisor or, with respect to any
Initial Hotel, the Hotel Partnerships, is a party or to which any of their
properties is subject that are required to be described in the Registration
Statement or the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and are not described therein, and to the best
knowledge of the Company, no such proceedings have been threatened against the
Company or the Operating Partnership, the Advisor, or such Hotel Partnerships or
with respect to any of their respective properties; and no contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that is
not described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or filed as required.
(r) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company and the Operating Partnership with the other provisions of this
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws and,
if the registration statement filed with respect to the Securities (as amended)
is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act,
or (ii) conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, material lease or other material agreement or material instrument to
which the Company or the Operating Partnership or the Advisor is a party or by
which any of them or any of their respective properties are bound, or the
charter documents or by-laws or certificate of limited partnership or
partnership agreement or other organizational documents (as the case may be) of
the Company or the Operating Partnership or the Advisor or any statute or any
judgment, decree, order, rule or regulation of any court or other
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governmental authority or any arbitrator applicable to the Company or the
Operating Partnership, or the Advisor.
(s) Each of the Company, the Operating Partnership, the Advisor, the
LaSalle Contributors and the Hotel Partnerships has full power (corporate or
other) to enter into and deliver (as applicable) the agreements set forth on
Schedule 5 hereto and all other agreements and other documents related to the
Formation Transactions (collectively, the "Transaction Documents") to which each
is party and to carry out all the terms and provisions thereof to be carried out
by each, respectively. The execution and delivery of each of the Transaction
Documents have been duly authorized by the Company and the Operating
Partnership, the Advisor, the LaSalle Contributors and the Hotel Partnerships
(as applicable) and the Transaction Documents have been or will be on the Firm
Closing Date duly executed and delivered by the Company and the Operating
Partnership, the Advisor, the LaSalle Contributors and the Hotel Partnerships
(as applicable), and each is the valid and binding agreement of the Company and
the Operating Partnership, the Advisor, the LaSalle Contributors and the Hotel
Partnerships (as applicable), enforceable against the Company and the Operating
Partnership, the Advisor, the LaSalle Contributors and the Hotel Partnerships
(as applicable) in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity. The
Transaction Documents are sufficient to effect the transfer to the Company and
the Operating Partnership of all direct or indirect interests in the Initial
Hotels and other assets specified therein upon payment of the specified
consideration therefor. Pursuant to the Transaction Documents, the Initial
Hotels and other assets specified therein will be transferred to the Company or
the Operating Partnership by way of a transfer of interests in partnerships
(other than with respect to the acquisition of the LaGuardia Airport Marriott,
which will be a direct transfer) which, immediately prior to the transfer, own
the Initial Hotels and such other assets.
(t) The execution and delivery of the Transaction Documents, the
compliance by the Company and the Operating Partnership, the Advisor, the
LaSalle Contributors and the Hotel Partnerships (as applicable) with their
respective obligations under the Transaction Documents and the consummation of
the Formation Transactions do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the Registration Statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other agreement
or instrument to which the Company or the Operating Partnership, the Advisor,
the LaSalle Contributors or the Hotel Partnerships is a party or by which any of
them or any of their
9
respective properties are bound, or the charter documents or by-laws or
certificate of limited partnership or partnership agreement or other
organizational documents (as the case may be) of the Company or the Operating
Partnership, the Advisor, the LaSalle Contributors or the Hotel Partnerships, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Company or the
Operating Partnership, the Advisor, the LaSalle Contributors or the Hotel
Partnerships.
(u) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), none of the Company
or the Operating Partnership, the Advisor or, any Initial Hotel, has sustained
any material loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental proceeding
and there has not been any change, or any development involving a prospective
change, which would have a Material Adverse Effect, except in each case as
described in or contemplated by the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(v) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(w) The Company has not distributed and, prior to the later of (i)
the Closing Date and (ii) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or other materials, if any, permitted by the Act.
(x) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), (1) the Company and
the Operating Partnership have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction not
in the ordinary course of business; (2) the Company has not purchased any shares
of its outstanding beneficial interests, nor declared, paid or otherwise made
any dividend or distribution of any kind on its shares of beneficial interest;
and (3) there has not been any material change in the beneficial interests, or
partnership interests (as the case may be), short-term debt or long-term debt of
the
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Company and the Operating Partnership, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(y) Upon consummation of the Formation Transactions (including, for
purposes of this Agreement, the consummation of the issuance and sale of the
Firm Securities pursuant to Section 3 hereof and the application of the proceeds
from such issuance and sale (which application shall occur concurrently with
such issuance and sale) as set forth under the caption "Use of Proceeds" in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), the Company or the Operating
Partnership, will have, and will have obtained title insurance policies
insuring, good and marketable title in fee simple, or with respect to those
Initial Hotels subject to a ground lease, leasehold interest, to all items of
real property comprising part of the Initial Hotels and, good and marketable
title to all personal property comprising part of the Initial Hotels, in each
case free and clear of any security interests, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely affect
the value of such property and do not interfere with the use made or proposed to
be made of such property by the Company or the Operating Partnership, and any
real property and buildings comprising part of the Initial Hotels held under
lease by the Company or any such subsidiary are held under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property by the
Company or the Operating Partnership, in each case except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(z) No labor dispute with the employees of the Company or the
Operating Partnership, the Advisor or, to the best knowledge of the Company, any
Initial Hotel, exists or is threatened or imminent that could have a Material
Adverse Effect, except as contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(aa) Upon consummation of the Formation Transactions, the Company and
the Operating Partnership will own or possess, or will be able to acquire on
reasonable terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, including, hotel brand and franchise licenses,
copyrights and proprietary or other confidential information currently employed
or proposed to be employed by them in connection with the business now operated
or proposed to be operated by them, as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), and
none of the Company or the Operating Partnership, or the Advisor has received
any notice of infringement of or conflict with asserted rights of any third
party with respect to any of the foregoing which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
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(bb) As of the Firm Closing Date, the Company and the Operating
Partnership, the Advisor, and each Lessee and Operator will be insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are or will be engaged as described in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus); and neither the
Company nor the Operating Partnership has any reason to believe that the Company
or the Operating Partnership or the Advisor or any Lessee or Operator will not
be able to renew such 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, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(cc) The Operating Partnership is not currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on the Operating Partnership's partnership interests, from repaying
to the Company any loans or advances to the Operating Partnership from the
Company or from transferring any of the Operating Partnership's property or
assets to the Company, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(dd) The Company and the Operating Partnership and the Advisor will
possess, as of the Firm Closing Date, all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and none of the
foregoing entities has received any written notice of proceedings relating to
the revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, would have a Material Adverse Effect, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(ee) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and the Formation Transactions and other transactions
contemplated by this Agreement will not cause the Company to become an
investment company subject to registration under such act.
(ff) Each of the Company and the Operating Partnership, the Advisor,
the LaSalle Contributors and the Hotel Partnerships has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). Except as disclosed in the
12
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), no real estate transfer or similar taxes are or will
become due and payable by the Company or the Operating Partnership as a result
of the acquisition by the Company or the Operating Partnership of any direct or
indirect interest in any Initial Hotel in connection with the Formation
Transactions, other than customary documentary transfer taxes which will be paid
in full on or prior to the Firm Closing Date.
(gg) None of the Company or the Operating Partnership, the Advisor or
any Initial Hotel is in violation of any applicable federal or state law or
regulation relating to occupational safety and health or to the storage,
handling or transportation of hazardous or toxic materials and the Company and
the Operating Partnership have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety and
health and environmental laws and regulations to conduct their respective
businesses or the businesses proposed to be conducted by them as described in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), and the Company and the Operating Partnership, and the
Advisor,(as applicable) is in compliance with all terms and conditions of any
such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which would not have a Material Adverse Effect, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(hh) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters on the Firm
Closing Date or on the Option Closing Date shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
(ii) The Company and the Operating Partnership maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(jj) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease, partnership agreement or other agreement or instrument to which
the Company or the Operating Partnership or the Advisor is a party and will
continue to be a party after the Firm Closing Date or by which the Company or
the
13
Operating Partnership or the Advisor is bound and will continue to be bound
after the Firm Closing Date or may be affected in any material adverse respect
with regard to property, business or operations of the Company and the Operating
Partnership, taken as a whole. No mortgages or deeds of trust encumbering the
properties and assets described in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) will remain in effect
after the Closing.
(kk) The Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance.
(ll) Except as otherwise disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), no
foreclosures have been instituted and none are currently threatened with respect
to any property or assets directly or indirectly owned (whether now or in the
past) by the Company or the Operating Partnership, or the Advisor.
(mm) No relationship, direct or indirect, exists between or among the
Company or the Operating Partnership on the one hand, and any of (i) the Advisor
or affiliates of the Advisor or (ii) the trustees, officers, shareholders (in
the case of the Company), partners (in the case of the Operating Partnership),
tenants, customers or suppliers of the Company or the Operating Partnership on
the other hand, which is required to be described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) which is
not so described.
(nn) Commencing with the Firm Closing Date, after giving effect to the
Formation Transactions, the Company will be organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and will have
no earnings and profits accumulated in a non-REIT year within the meaning of
Section 857(a)(3)(B) of the Code, and the proposed method of operation of the
Company and the Operating Partnership will enable the Company to meet the
requirements for taxation as a REIT under the Code beginning with its taxable
year ending December 31, 1998 and for its subsequent taxable years. All
statements in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) regarding the Company's qualification as a
REIT are true, complete and correct in all material respects.
(oo) (i) Except as disclosed in physical inspection reports, leases,
environments reports and other written materials previously provided by the
Company to the Representatives and their counsel, none of the Company or the
Operating Partnership, the Advisor or the Hotel Partnerships has received any
written notice that any of the Initial Hotels is not in compliance with all
applicable codes, laws, ordinances and regulations (including, without
limitation, building and zoning codes and laws and regulations relating to
access to the Initial Hotels) and deed restrictions or other covenants, except
for such failures to comply with that would not materially impair the value of
any of the Initial Hotels or would not result in a forfeiture or reversion
14
of title; (ii) none of the Company or the Operating Partnership, the Advisor or
the Hotel Partnerships has knowledge of any pending or threatened litigation,
moratorium, condemnation proceedings, zoning change, or other similar proceeding
or action that could in any manner affect the size of, use of, improvements on,
construction on, access to or availability of utilities or other necessary
services to, any Initial Hotel, except such proceeding or actions which are not
reasonably expected to, singly or in the aggregate, have a Material Adverse
Effect; (iii) all liens, charges, encumbrances, claims, or restrictions on or
affecting the properties and assets (including the Initial Hotels) of the
Company or the Operating Partnership that are required to be disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) are disclosed therein; (iv) none of the Company or the
Operating Partnership, any Hotel Partnership or any tenant of an Initial Hotel
is in default under any of the ground leases or other occupancy or license
agreements relating to any of the Initial Hotels and there is no event which,
but for the passage of time or the giving of notice or both, would constitute a
default under any of such documents or agreements except such defaults that
would not, singly or in the aggregate, have a Material Adverse Effect; and (v)
except as described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), upon consummation of the
Formation Transactions, no tenant of an Initial Hotel will have an option or
right of first refusal to purchase the premises leased thereunder or the
building of which such premises are a part with respect to any such Initial
Hotel.
(pp) Each of the Initial Hotels is in substantial compliance with all
presently applicable provisions of the Americans with Disabilities Act and no
failure of the Company or the Operating Partnership or any Initial Hotel to
comply with all presently applicable provisions of the Americans with
Disabilities Act would have a Material Adverse Effect.
(qq) Except as otherwise disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), (i)
none of the Company or the Operating Partnership or the Advisor nor, to the best
knowledge of the Company, the Hotel Partnerships or any other owners of the
Initial Hotels at any time or any other party has at any time, handled, stored,
treated, transported, manufactured, spilled, leaked, or discharged, dumped,
transferred or otherwise disposed of or dealt with, Hazardous Materials (as
hereinafter defined) on, to or from the Initial Hotels, other than by any such
action taken in compliance with all applicable Environmental Statutes; (ii)
neither the Company nor the Operating Partnership intends to use the Initial
Hotels or any subsequently acquired properties for the purpose of handling,
storing, treating, transporting, manufacturing, spilling, leaking, discharging,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials, except as necessary for the conduct of business and in compliance
with applicable environmental statutes; (iii) none of the Company or the
Operating Partnership, the Advisor or any Hotel Partnership knows of any
seepage, leak, discharge, release, emission, spill, or dumping of Hazardous
Materials into waters on or adjacent to the Initial Hotels or any other real
property owned or occupied by any such party, or onto lands from which Hazardous
Materials might seep, flow or drain into such waters; (iv) except as described
in
15
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), none of the Company or the Operating Partnership, the
Advisor or any Hotel Partnership has received written notice of, or has any
knowledge of any occurrence or circumstance which, with notice or passage of
time or both, would give rise to a claim under or pursuant to any federal, state
or local environmental statute or regulation or under common law, pertaining to
Hazardous Materials on or originating from any of the Initial Hotels or any
other assets described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) or any other real property
owned or occupied by any such party, including without limitation a claim under
or pursuant to any Environmental Statute (as hereinafter defined); (v) none of
the Initial Hotels is included or, to the best of the Company's knowledge,
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
(as hereinafter defined) by the United States Environmental Protection Agency
(the "EPA") or, to the best of the Company's knowledge, proposed for inclusion
on any similar list or inventory issued pursuant to any other Environmental
Statute or issued by any other Governmental Authority (as hereinafter defined).
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, toxic substances, asbestos or any hazardous
materials as defined by any federal, state or local environmen tal law,
ordinance, rule or regulation in effect as of the date hereof and as of the Firm
Closing Date, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S)(S)
9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49
U.S.C. (S)(S) 1801-1819, the Resource Conservation and Recovery Act, as amended,
42 U.S.C. (S)(S) 6901-6992K, the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. (S)(S) 11001-11050, the Toxic Substances Control Act, 15
U.S.C. (S)(S) 2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act,
7 U.S.C. (S)(S) 136-136y, the Clean Air Act, 42 U.S.C. (S)(S) 7401-7642, the
Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. (S)(S) 1251-
1387, the Safe Drinking Water Act, 42 U.S.C. (S)(S) 300f-300j-26, and the
Occupational Safety and Health Act, 29 U.S.C. (S)(S) 651-678, and in the
regulations promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and assets
described in the Prospectus (a "Governmental Authority").
(rr) All of the representations and warranties of the Company, the
Operating Partnership, the Advisor, the LaSalle Contributors and the Hotel
Partnerships contained in the Transaction Documents are true and correct in all
material respects. At or prior to the Firm Closing Date, each of the
transactions constituting the Formation Transactions will have occurred in the
manner described in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), including, without limitation, the
acquisition of each of the Initial Hotels (other than the LaGuardia Airport
Marriott) and the closing of the Line of Credit.
16
3. Purchase, Sale and Delivery of the Securities. (a) On the basis
---------------------------------------------
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $______ per Common Share, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule 1 hereto. One or more
certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company to the Representatives
for the respective accounts of the Underwriters, against payment by or on behalf
of the Underwriters of the purchase price therefor by wire transfer in same-day
funds (the "Wired Funds") to the account of the Company. Such delivery of and
payment for the Firm Securities shall be made at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:30
A.M., New York time, on ________, 1998, or at such other place, time or date as
the Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing Date". The Company will
make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representatives at the offices in New York, New
York of the Company's transfer agent or registrar or of Prudential Securities
Incorporated at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3, plus, if the purchase and sale of any Option Securities takes place
after the Firm Closing Date and after the Firm Securities are trading "ex-
dividend", an amount equal to the dividends payable on such Option Securities.
The option granted hereby may be exercised as to all or any part of the Option
Securities from time to time within thirty days after the date of the Prospectus
(or, if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for trading).
The Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed in writing) to the Company setting forth the aggregate
number of Option Securities as to which the several Underwriters are then
exercising the option and the date and time for delivery of and payment for such
Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and Company
may
17
agree upon or as the Representatives may determine pursuant to Section 9 hereof,
is herein called the "Option Closing Date" with respect to such Option
Securities. Upon exercise of the option as provided herein, the Company shall
become obligated to sell to each of the several Underwriters, and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligated to purchase from the Company, the same
percentage of the total number of the Option Securities as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does not
constitute closing of a purchase and sale of the Securities. Only execution and
delivery of a receipt for Securities by the Underwriters indicates completion of
the closing of a purchase of the Securities from the Company. Furthermore, in
the event that the Underwriters wire the Wired Funds to the Company prior to the
completion of the closing of a purchase of Securities, the Company hereby
acknowledges that until the Underwriters execute and deliver a receipt for the
Securities, by facsimile or otherwise, the Company will not be entitled to the
Wired Funds and shall return the Wired Funds to the Underwriters as soon as
practicable (by wire transfer of same-day funds) upon demand. In the event that
the closing of a purchase of Securities is not completed and the Wired Funds are
not returned by the Company to the Underwriters on the same day the Wired Funds
were received by the Company, the Company agrees to pay to the Underwriters in
respect of each day the Wired Funds are not returned by it, in same-day funds,
interest on the amount of such Wired Funds in an amount representing the
Underwriters' cost of financing as reasonably determined by Prudential
Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the
----------------------------
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
18
5. Covenants of the Company. Each of the Company and the Operating
------------------------
Partnership covenants and agrees with each of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required,
the Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required
to be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or supplement to such Prospectus,
Term Sheet or any amendment to the Registration Statement or any Rule 462(b)
Registration Statement of which the Representatives previously have been advised
and furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus that may
be necessary or advisable in connection with the distribution of the Securities
by the several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence satisfactory to the Representatives of each such
filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
19
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
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the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which 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 if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 P.M., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 10:00
A.M., New York City time, on such date or (B) 2:00 P.M., New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Firm Closing Date. The Company will provide or cause to be
provided to each of the Representatives, and to each Underwriter that so
requests in writing, a copy of each report on Form SR filed by the Company as
required by Rule 463 under the Act.
20
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and the Operating Partnership that satisfies
the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any Common Shares or other shares of beneficial
interest of the Company or Units or other partnership interests of the Operating
Partnership, or any securities convertible into, or exchangeable or exercisable
for, Common Shares or other shares of beneficial interest of the Company or
Units or other partnership interests of the Operating Partnership, for a period
of 180 days after the date hereof, except (i) pursuant to this Agreement, (ii)
pursuant to a dividend reinvestment plan of the Company, (iii) pursuant to the
Company's Share Option Plan, (iv) pursuant to the purchase rights in favor of
the Contributors and the option grant to the Advisor and (v) in connection with
the acquisition by the Company or the Operating Partnership of real property or
interests in entities holding real property, provided that the recipient or
--------
transferee of such securities or interests agrees in writing to be subject to
the lock-up contained in this Section 5(h) (without giving effect to clauses
(i), (ii), (iii), (iv) and (v)) for a period ending on the date that is 180 days
after the date hereof.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(j) The Company will obtain the lock-up agreements described in
Section 7(f) hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, 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 Common Stock 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
21
Company will, after notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably satisfactory
to you, responding to or commenting on such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on the
date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly authorized for
listing by the New York Stock Exchange prior to the Firm Closing Date, subject
to official notice of issuance.
(n) The Company will use its best efforts to meet the requirements to
qualify, commencing with the taxable year ending December 31, 1998, as a REIT
under the Code.
(o) The Company will cause the Operating Partnership to operate as a
limited partnership in accordance with the requirements of Delaware law.
6. Expenses. The Company will pay all costs and expenses incident to
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the performance of its and the Operating Partnership's obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 11 hereof, including all
costs and expenses incident to (i) the printing or other production of documents
with respect to the transactions, including any costs of printing the
registration statement originally filed with respect to the Securities and any
amendment thereto, any Rule 462(b) Registration Statement, any Preliminary
Prospectus and the Prospectus and any amendment or supplement thereto, this
Agreement and any blue sky memoranda, (ii) all arrangements relating to the
delivery to the Underwriters of copies of the foregoing documents, (iii) the
fees and disburse ments of the counsel, the accountants and any other experts
or advisors retained by the Company, (iv) preparation, issuance and delivery to
the Underwriters of any certificates evidencing the Securities, including
transfer agent's and registrar's fees, (v) the qualification of the Securities
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association of Securities Dealers, Inc.
relating to the Securities, (vii) any listing of the Securities on the New York
Stock Exchange, (viii) any meetings with prospective investors in the Securities
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters) and (ix) advertising relating to the offering
of the Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of
22
the Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 11 hereof or
because of any failure, refusal or inability on the part of the Company or the
Operating Partnership to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all reasonable out-of pocket expenses (including
reasonable counsel fees and disbursements) that shall have been incurred by them
in connection with the proposed purchase and sale of the Securities. The Company
shall in no event be liable to any of the Underwriters for the loss of
anticipated profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of
-------------------------------------------
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Operating Partnership
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers made pursuant to the provisions hereof, to the
performance by the Company and the Operating Partnership of their respective
covenants and agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or the Representatives, shall be contemplated by the Commission; and the
Company shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxx & Xxxx LLP, counsel for the Company and the
Operating Partnership, to the effect that:
23
(i) the Company has been duly formed and is validly existing as a
real estate investment trust in good standing under the laws of the State of
Maryland and is duly qualified to transact business as a foreign business
trust and is in good standing under the laws of all other jurisdictions where
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not have a Material Adverse Effect. The Operating Partnership has been
duly organized and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware and is duly qualified to
transact business as a foreign limited partnership and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a Material Adverse
Effect. The Advisor has been duly formed and is validly existing as a
corporation in good standing under the laws of Maryland and is duly qualified
to transact business as a foreign corporation and is in good standing under
the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse
Effect. The Affiliated Lessee has been duly formed and is validly existing
as a corporation in good standing under the laws of Illinois and is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect;
(ii) the Company, the Operating Partnership and the Advisor have the
requisite trust, corporate or partnership power (as applicable) to own or
lease their respective properties and conduct their respective businesses as
described in the Registration Statement and the Prospectus, and each of the
Company and the Operating Partnership has the requisite trust or partnership
power (as applicable) to enter into this Agreement and to perform its
obligations hereunder;
(iii) the authorized, issued and outstanding capitalization of the
Company is as set forth under the caption "Capitalization" in the Prospectus;
all necessary and proper trust proceedings have been taken in order to
authorize validly the Common Shares referred to therein; all outstanding
Common Shares (including the Firm Securities, when issued and paid for by the
Underwriters in accordance with the terms of this Agreement) have been (or,
in the case of the Firm Securities, will be) duly and validly issued, are
fully paid and nonassessable, were not issued in violation of or subject to,
under the Company's declaration of trust or Maryland law or any agreement to
which the Company is a party and which is known to such counsel, any
preemptive rights or other rights to subscribe for or purchase any
securities, and conform to the description thereof contained in the
Prospectus; no holders of outstanding shares of capital stock of the Company
are entitled under the Company's
24
declaration of trust or Maryland law or any agreement to which the Company is
a party, to any preemptive or other rights to subscribe for any of the Firm
Securities; and no holders of securities of the Company are entitled to have
such securities registered under the Registration Statement; the Securities
have been duly authorized for listing, subject to official notice of
issuance, on the New York Stock Exchange;
(iv) the OP Units to be issued in connection with the Formation
Transactions, including, without limitation, the OP Units issued to the
Company, were duly authorized for issuance by the Operating Partnership to
the holders thereof; the OP Units issued to the Company, upon contribution of
cash in the amount specified in the Operating Partnership Agreement, will be
validly issued. The terms of the OP Units conform in all material respects
to (x) the description thereof contained in the Prospectus and (y) all
statements related thereto contained in the Prospectus. The issuances of
securities described in Items 31 and 32 of the Registration Statement were
not at the time of issue, and are not as of the Firm Closing Date, required
to be registered under the Act;
(v) except as disclosed in the Registration Statement and the
Prospectus, there are no outstanding (A) securities, equity interests or
obligations of the Company or the Operating Partnership convertible into or
exchangeable for any capital stock or equity interests (as the case may be)
of the Company or the Operating Partnership, (B) warrants, rights or options
to subscribe for or purchase from the Company to or the Operating Partnership
any such capital stock or equity interests or any such convertible or
exchangeable securities, equity interests or obligations, or (C) obligations
of the Company or the Operating Partnership to issue an shares of capital
stock, equity interests, any such convertible or exchangeable securities,
equity interests or obligations, or any such warrants, rights or options;
(vi) the statements in the Prospectus set forth under the headings
"The Initial Hotels - Legal Proceedings," "Shares of Beneficial Interest,"
"Structure and Formation of the Company," "Certain Relationships and
Transactions," "Partnership Agreement," "Certain Provisions of Maryland Law
and of the Company's Declaration of Trust and Bylaws," "Partnership
Agreement," "Shares Eligible for Future Sale," "Principal Shareholders" and
"Federal Income Tax Consequences", insofar as such statements describe
statutes, rules or regulations, legal conclusions with respect to their
application or provisions of the organizational documents of the Company or
the Operating Partnership, are accurate in all material respects and fairly
present the information required to be disclosed therein;
(vii) the execution and delivery of this Agreement have been duly
authorized by all necessary trust or partnership (as applicable) action of
the Company and the Operating
25
Partnership, and this Agreement has been duly executed and delivered by the
Company and the Operating Partnership;
(viii) (A) to such counsel's knowledge and other than as set forth in
the Prospectus, no legal or governmental proceedings are pending to which the
Company or the Operating Partnership is a party or to which the property of
the Company or the Operating Partnership is subject that are required to be
described in the Registration Statement or the Prospectus and are not
described therein, and to such counsel's knowledge, no such proceedings have
been threatened against the Company or the Operating Partnership or with
respect to any of their respective properties and (B) to such counsel's
knowledge, no contract or other document of a character required to be
disclosed in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement is not disclosed therein or filed as
required;
(ix) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company and the Operating Partnership with the other provisions of this
Agreement and the consummation of the other transactions herein contemplated
do not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except the registration
under the Act of the Securities and such as have been obtained and such as
may be required under state securities or blue sky laws, or (B) conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument known to such counsel to which the Company or
the Operating Partnership is a party or by which the Company or the Operating
Partnership or any of their respective properties are bound (the
"Agreements"), or the declaration of trust or certificate of limited
partnership or partnership agreement (as applicable) of the Company or the
Operating Partnership, or any provision of any statute, rule or regulation
applicable to the Company or the Operating Partnership, or any judgment,
decree or order of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company or the
Operating Partnership;
(x) each of the Company and the Operating Partnership and the Advisor
have the requisite trust and corporate, partnership power (as applicable) to
enter into and deliver (as applicable) the Transaction Documents to which it
is party and to perform its obligations thereunder. The execution and
delivery of the Transaction Documents have been duly authorized by the
Company and the Operating Partnership and the Advisor (as applicable) and the
Transaction Documents have been or will be on the Firm Closing Date duly
executed and delivered by the Company and the Operating Partnership and the
Advisor (as applicable), and each such Transaction Document is the valid and
binding agreement of the Company and the Operating Partnership and the
Advisor (as applicable), enforceable against the Company
26
and the Operating Partnership and the Advisor (as applicable) in accordance
with its terms, subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws relating to creditors'
rights generally and to the application of equitable principles in any
proceeding, whether at law or in equity;
(xi) the execution and delivery of the Operative Documents, the
compliance by the Company and the Operating Partnership and the Advisor (as
applicable) with their respective obligations under the Transaction Documents
and the consummation of the Formation Transactions do not (A) require the
consent, approval, authorization, registration or qualification of or with
any governmental authority, except the registration under the Act of the
Securities and such as have been obtained and such as may be required under
state securities or blue sky laws and, if the registration statement filed
with respect to the Securities (as amended) is not effective under the Act as
of the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (B) conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any Agreement, or the declaration of trust or the
charter documents or by-laws or certificate of limited partnership or
partnership agreement (as applicable) of the Company or the Operating
Partnership or the Advisor, or any provision of any statute, rule or
regulation applicable to the Company or the Operating Partnership or the
Advisor, or any judgment, decree or order of any court or other governmental
authority or any arbitrator or known to such counsel and applicable to the
Company or the Operating Partnership or the Advisor;
(xii) the Company is not, and (assuming the application by the Company
of the proceeds of the issue and sale of the Securities as described in the
Prospectus under "Use of Proceeds") after giving effect to the Formation
Transactions and the other transactions contemplated by this Agreement will
not be, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended;
(xiii) the Registration Statement has become effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required thereby; and no stop order
suspending the effectiveness of the Registration Statement has been issued,
and no proceeding for that purpose has been instituted or threatened by the
Commission;
(xiv) the Registration Statement originally filed with respect to the
Securities and each amendment thereto, any Rule 462(b) Registration Statement
and the Prospectus (in each case, other than the financial statements and
related notes thereto and the other financial, statistical and accounting
data included therein or omitted therefrom, as to which
27
such counsel need express no opinion) appeared on their face to be
appropriately responsive in all material respects to the applicable
requirements of the Act and the rules and regulations of the Commission
thereunder; and
(xv) upon completion of the Formation Transactions, the Company will
be organized in conformity with the requirements for qualification as a real
estate investment trust under the Code, and the proposed method of operation
of the Company and the Operating Partnership as described in the Registration
Statement and the Prospectus and a certificate of a responsible officer of
the Company will enable the Company to meet the requirements for taxation as
a real estate investment trust under the Code beginning with the year ended
December 31, 1998.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the Underwriters, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and, although
such counsel is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and has not made any independent check
or verification thereof, during the course of such participation (relying as to
the factual matters upon the statements of officers and other representatives of
the Company and public officials) no facts came to the attention of such counsel
that caused such counsel to believe that the Registration Statement, at the time
it became effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of its date or as
of the Firm Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading[; it being
understood that such counsel need express no belief with respect to the
financial statements and related notes thereto and the other financial,
statistical and accounting data included in the Registration Statement or the
Prospectus or omitted therefrom.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, the Operating Partnership and public officials and, as
to matters involving the application of laws of any jurisdiction other than the
State of New York, the Delaware General Corporation Law and the Delaware Revised
Limited Partnership Act or the United States, to the extent satisfactory in
form, and scope to counsel for the Underwriters, upon the opinion of
______________________ as to Maryland law. The foregoing opinion shall also
state that the Underwriters are justified in relying upon such opinion of
________________, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
28
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxx and Associates, counsel to the Affiliated Lessee,
the Hotel Partnerships and the LaSalle Contributors, to the effect that:
(i) The Affiliated Lessee has been duly formed and is validly
existing as a corporation in good standing under the laws of Illinois and is
duly qualified to transact business as a foreign corporation and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect;
(ii) the Affiliated Lessee, the LaSalle Contributors and the Hotel
Partnerships have the requisite corporate (or other) power to own or lease
their respective properties and conduct their respective businesses as
described in the Registration Statement and the Prospectus;
(iii) the Affiliated Lessee, the LaSalle Contributors and the Hotel
Partnerships have the requisite corporate or partnership power to enter into
and deliver the respective Transaction Documents to which they are party and
to perform their obligations thereunder. The execution and delivery of the
Transaction Documents have been duly authorized by the Affiliated Lessee, the
LaSalle Contributors and the Hotel Partnerships and the Transaction Documents
have been or will be on the Firm Closing Date duly executed and delivered by
the Affiliated Lessee, the LaSalle Contributors and the Hotel Partnerships,
and each such Transaction Document is the valid and binding agreement of the
Affiliated Lessee, the LaSalle Contributors and the Hotel Partnerships
enforceable against the Affiliated Lessee, the LaSalle Contributors and the
Hotel Partnerships in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally and to the application
of equitable principles in any proceeding, whether at law or in equity;
(iv) the execution and delivery of the Transaction Documents, the
compliance by the Affiliated Lessee, the LaSalle Contributors and the Hotel
Partnerships (as applicable) with their respective obligations under the
Transaction Documents and the consummation of the Formation Transactions do
not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except the registration
under the Act of the Securities and such as have been obtained and such as
may be required under state securities or blue sky laws and, if the
registration statement filed with respect to
29
the Securities (as amended) is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained as provided
in this Agreement) under the Act, or (B) conflict with or result in a breach
violation of any of the terms and provisions of, or constitute a default
under, any agreement, or the declaration of trust or the charter documents or
by-laws or certificate of limited partnership or partnership agreement (as
applicable) of the Affiliated Lessee, the LaSalle Contributors and the Hotel
Partnerships or any provision of any statute, rule or regulation applicable
to the Affiliated Lessee, the LaSalle Contributors and the Hotel
Partnerships, or any judgment, decree or order of any court or other
governmental authority or any arbitrator known to such counsel and applicable
to the Affiliated Lessee, the LaSalle Contributors and the Hotel
Partnerships;
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the entities covered in such opinion and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date of
such opinion.
(d) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Representatives shall have received from KPMG Peat Marwick
LLP, a letter or letters dated, respectively, the date hereof and the Firm
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) they are independent accountants with respect to the Company and
its consolidated subsidiaries and the Initial Hotels within the meaning of
the Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
and schedules and pro forma financial statements examined by them and
included in the Registration Statement and the Prospectus comply in form in
all material respects with the applicable accounting requirements of the Act
and the related published rules and regulations;
30
(iii) on the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company and the
Initial Hotels, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of significance with
respect to the comments set forth in this paragraph (iii), a reading of the
minute books of the shareholders, the board of trustees and any committees
thereof of the Company and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that:
(A) at a specific date (not more than five business days prior to the
date of such letter), there were any increases in debt or accumulated
deficit of the Initial Hotels or any decreases in total assets of the
Initial Hotels, in each case as compared with amounts shown in the
_______________________ combined balance sheet included in the
Registration Statement and the Prospectus, or for the period from
__________ to __________________, there were any decreases, as compared
with the corresponding period of the previous year, in rental income,
total revenues or net income (as applicable) of the Initial Hotels except
in all instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may
occur; and
(B) at a specific date (not more than five business days prior to the
date of such letter), with respect to the Initial Hotels, there were any
increases in borrowings as compared with amounts shown in the
_____________ balance sheet included in the Registration Statement and the
Prospectus, except in all instances for changes or increases which the
Registration Statement and the Prospectus disclose have occurred or may
occur.
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information identified by the Representatives that are derived from
the general accounting records of the Company and its consolidated
subsidiaries and are included in the Registration Statement and the
Prospectus and have compared such amounts, percentages and financial
information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have found
them to be in agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro forma condensed
consolidated financial statements included in the Registration Statement and
the Prospectus, carrying out certain specified procedures that would not
necessarily reveal matters of significance with respect to the comments set
forth in this paragraph (v), inquiries of certain
31
officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed consolidated
financial statements, nothing came to their attention that caused them to
believe that the unaudited pro forma condensed consolidated financial
statements do not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters under this Agreement that (A) such letters shall
be accompanied by a written explanation of the Company as to the significance
thereof, unless the Representatives deem such explanation unnecessary, and (B)
such changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to proceed with the purchase
and delivery of the Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(f) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the chief executive officer and the principal financial or
accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company and the
Operating Partnership in this Agreement are true and correct as if made on
and as of the Firm Closing Date; the Registration Statement, as amended as of
the Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented as of
the Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and each of the Company and the Operating Partnership
has performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's or the Operating Partnership's knowledge, are contemplated by the
Commission; and
32
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor the Operating Partnership has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company and the Operating Partnership, taken as a whole, or any Initial
Hotel, except in each case as described in or contemplated by the
Registration Statement and the Prospectus (exclusive of any amendment or
supplement thereto).
(g) The Representatives shall have received from each officer and
trustee of the Company, the Advisor and the Contributors an agreement to the
effect that such person will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of an option to purchase or other
sale or disposition) of any Common Shares or other shares of beneficial interest
of the Company or OP Units or other partnership interests of the Operating
Partnership, or any securities convertible into, or exchangeable or exercisable
for, Common Shares or other shares of beneficial interest of the Company or OP
Units or other partnership interests of the Operating Partnership, for a period
of one year after the date of this Agreement.
(h) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
(j) The Formation Transactions shall have been consummated or shall
occur simultaneously with the closing of the purchase and sale of the Firm
Securities hereunder.
(k) On or before the Firm Closing Date, all necessary consents to the
Formation Transactions shall have been obtained.
(l) On or before the Firm Closing Date, the Company and the Operating
Partnership shall have delivered to you with respect to each of the Initial
Hotels copies of:
33
(i) an owner policy or policies of title insurance insuring that the
Operating Partnership owns fee simple title, or with respect to the Initial
Hotels subject to a ground lease, leasehold interest, to the real property
comprising the Initial Hotels in an amount at least equal to the Insured
Title Amount, which policies shall be issued by a title insurance company or
companies as previously disclosed to you and your counsel (any such person or
persons, the "Title Company"), and contain as exceptions to title only those
exceptions acceptable to the Representatives;
(ii) an as-built survey of each of the Initial Hotels in form
satisfactory to you;
(iii) all assignments of tenant leases, service contracts and similar
rights owned, immediately prior to the Closing;
(iv) all tenant estoppels, third party consents, waivers, licenses,
permits, authorizations, agreements, certificates and the like required to be
delivered to the Company pursuant to the applicable acquisition, contribution
or formation agreements;
(v) all certificates of occupancy in the Company's possession, zoning
compliance letters and evidence of utility availability for each of the
Initial Hotels, to the extent not included in the title insurance policies
and surveys delivered pursuant to clauses (i) and (ii);
(vi) policies or certificates of insurance (including earthquake
insurance) relating to each of the Initial Hotels evidencing coverages and in
amounts as are prudent and customary in the businesses in which they are or
will be engaged;
(vii) UCC, judgment and tax lien searches confirming that the
personal property comprising part of the Initial Hotels is subject to no
liens, charges, encumbrances, claims or restrictions;
(viii) checks payable to the appropriate public officials in payment of
all recording costs and transfer taxes (or checks or wire transfers to the
Title Company in respect of such amounts) due in respect of the recording of
any instruments to be recorded in connection with the Formation Transactions,
together with a check or wire transfer for the Title Company in payment of
the Title Company's premium, search and examination charges, survey costs and
any other amounts due in connection with the issuance of its policy (or
commitment); and
(ix) if any of the Initial Hotels is subject to an existing mortgage
which is contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent
34
Preliminary Prospectus) to be paid and satisfied in full concurrently with
the Closing , a current payoff letter from the holder of such existing
mortgage indicating the principal amount required to satisfy all amounts then
secured by such existing mortgage and the additional amount required for each
day after the date of such letter necessary to satisfy all obligations
secured thereby.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution. (a) Each of the Company and
--------------------------------
the Operating Partnership, jointly and severally, agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934 (the "Exchange Act"), against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company or the Operating Partnership in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order
to qualify the Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities
exchange (each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment
35
or supplement thereto, or any Application a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials used in connection with the
marketing of the Securities, including, without limitation, slides, videos,
films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither the Company nor the
-------- -------
Operating Partnership will be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that neither the Company
-------- -------
nor the Operating Partnership will be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company or the
Operating Partnership with Section 5(d) and (e) of this Agreement. This
indemnity agreement will be in addition to any liability which the Company or
the Operating Partnership may otherwise have. Neither the Company nor the
Operating Partnership will, without the prior written consent of the Underwriter
or Underwriters purchasing, in the aggregate, more than _____ percent (___%) of
the Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its trustees (including any person who, with
his or her consent, is named in the Registration Statement as about to become a
trustee of the Company), each of its
36
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such trustee, officer or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application 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 reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such trustee, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have. No Underwriter will, without the prior written consent of the
Company, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Company, any of its
trustees or officers who signed the Registration Statement or any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional release
of the Company, its trustees and officers who signed the Registration Statement
and such controlling persons from all liability arising out of such claim,
action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from (i) any
liability which it may have to any indemnified party under this Section 8 except
to the extent that the indemnifying party has been materially prejudiced as a
result thereof or (ii) any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
-------- -------
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses
37
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action or actions) or
(ii) the indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Operating
Partnership on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering of the
Securities (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission
38
or alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Operating Partnership and the Underwriters
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
the Company and the Operating Partnership shall be deemed one party and jointly
and severally liable for any obligations to contribute hereunder and each
trustee of the Company, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company and the Operating Partnership.
9. Default of Underwriters. If one or more Underwriters default in
-----------------------
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or
39
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Operating Partnership other than as provided in Section 10
hereof. In the event of any default by one or more Underwriters as described in
this Section 9, the Representatives shall have the right to postpone the Firm
Closing Date or the Option Closing Date, as the case may be, established as
provided in Section 3 hereof for not more than seven business days in order that
any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Firm Securities or Option Securities, as the case
may be. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
--------
agreements, covenants, indemnities and other statements of the Company, its
officers, the Operating Partnership and the several Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
trustees, the Operating Partnership, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect
-----------
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company or
the Operating Partnership shall have failed, refused or been unable to perform
all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder at or prior thereto or, if at or prior to the Firm Closing
Date or such Option Closing Date, respectively,
(i) the Company or the Operating Partnership shall have, in the sole
judgment of the Representatives, sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding or there shall have
been any change, or any development involving a prospective change (including
without limitation a change in management or control of the Company), that
would have a Material Adverse Effect, except in each case as described in or
contemplated by the Registration Statement and the Prospectus (exclusive of
any amendment or supplement thereto);
40
(ii) trading in the Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or minimum or
maximum prices shall have been established on such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an outbreak
or escalation of any other insurrection or armed conflict involving the
United States or (C) any other calamity or crisis or material adverse change
in general economic, political or financial conditions having an effect on
the U.S. financial markets that, in the sole judgment of the Representatives,
makes it impractical or inadvisable to proceed with the public offering or
the delivery of the Securities as contemplated by the Registration Statement,
as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Sections 6 and 10 hereof.
12. Information Supplied by Underwriters. The statements set forth
------------------------------------
in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 8 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
000 Xxxx 00/xx/ Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Executive
Officer, with a copy to _________________________________.
14. Successors. This Agreement shall inure to the benefit of and
----------
shall be binding upon the several Underwriters, the Company, the Operating
Partnership and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit
41
of such persons and for the benefit of no other person except that (i) the
indemnities of the Company and the Operating Partnership contained in Section 8
of this Agreement shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the trustees of the
Company, the officers of the Company who have signed the Registration Statement
and any person or persons who control the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act. No purchaser of Securities from
any Underwriter shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this
--------------
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each of the Company and the
Operating Partnership accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non conveniens and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement.
The Company designates and appoints Xxx X. Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, fax number (000) 000-0000, and the Operating Partnership
designates and appoints Xxx X. Xxxxx, 000 Xxxx 00/xx/ Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, fax number (000) 000-0000, and such other persons as may hereafter be
selected by each of the Company and the Operating Partnership irrevocably
agreeing in writing to so serve, as its agent to receive on its behalf service
of all process in any such proceedings in any such court, such service being
hereby acknowledged by each of the Company and the Operating Partnership to be
effective and binding service in every respect. A copy of any such process so
served shall be mailed by registered mail to each of the Company and the
Operating Partnership at its address provided in Section 13 hereof; provided,
--------
however, that, unless otherwise provided by applicable law, any failure to mail
-------
such copy shall not affect the validity of service of such process. If any
agent appointed by the Company or the Operating Partnership refuses to accept
service, each of the Company and the Operating Partnership hereby agrees that
service of process sufficient for personal jurisdiction in any action against
the Company or the Operating Partnership in the State of New York may be made by
registered or certified mail, return receipt requested, to the Company or the
Operating Partnership at its address provided in Section 13 hereof, and each of
the Company and the Operating Partnership hereby acknowledges that such service
shall be effective and binding in every respect. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall limit
the right of any Underwriter to bring proceedings against each of the Company
and the Operating Partnership in the courts of any other jurisdiction.
42
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
43
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, the
Operating Partnership and each of the several Underwriters.
Very truly yours,
LASALLE HOTEL PROPERTIES
By:
_______________________________________
Name:
Title:
LASALLE HOTEL OPERATING
PARTNERSHIP
By: LASALLE HOTEL PROPERTIES
its general partner
By:
_______________________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
By: PRUDENTIAL SECURITIES INCORPORATED
By:______________________________________________________
Name: Xxxx-Xxxxxx Canfin
Title: Managing Director
For itself and on behalf of the Representatives as
Representatives of the other several Underwriters
named in Schedule I hereto
SCHEDULE 1
UNDERWRITERS
============
Number of
Firm Securities
Underwriter to be Purchased
------------------------------------ ---------------
Prudential Securities Incorporated
1-1
SCHEDULE 2
----------
PARTNERS OF OPERATING PARTNERSHIP
---------------------------------
Number of Percentage of
General Partner OP Units All Units
--------------- -------- ----------------
LaSalle Partners Incorporated %
Limited Partners
----------------
______ ____
Total %
============= ======
2-1
SCHEDULE 3
----------
FORMATION SHARES
----------------
Shareholder Number of Shares
----------- ----------------
_____ ____
Total %
============= ======
3-1
SCHEDULE 4
-------- -
ENVIRONMENTAL SITE ASSESSMENTS AND ENGINEERING REPORTS
------------------------------------------------------
A. Environmental Site Assessments:
------------------------------
B. Engineering Reports;
-------------------
4-1
SCHEDULE 5
----------
TRANSACTION DOCUMENTS
---------------------
5-1
