EXECUTION COPY
STRATEGIC HOTEL CAPITAL, INC.
18,027,513 SHARES OF
COMMON STOCK,
PAR VALUE $0.01 PER SHARE
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UNDERWRITING AGREEMENT
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January 24, 2006
Deutsche Bank Securities Inc.,
Wachovia Capital Markets, LLC
as Representatives of the Underwriters
named on Schedule I hereto
c/o Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Strategic Hotel Capital, Inc., a Maryland corporation (the "Company"),
and those stockholders of the Company named on Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 18,027,513 shares (the "Firm Shares") of Common Stock, par value
$0.01 per share ("Stock"), of the Company. The Firm Shares consist of 7,500,000
shares of Stock to be issued and sold by the Company (the "Company Firm Shares")
and 10,527,513 outstanding shares of Stock to be sold by the Selling
Stockholders (the "Selling Stockholders' Firm Shares"). Additionally, the
Selling Stockholders propose, subject to the terms and conditions stated herein,
to sell to the Underwriters, at the election of the Underwriters, up to
2,204,127 additional outstanding shares of Stock (collectively, the "Selling
Stockholders' Optional Shares" and together with the Selling Stockholders' Firm
Shares, the "Selling Stockholders' Shares") and the Company proposes, subject to
the terms and conditions stated herein, to issue and sell to the Underwriters,
at the election of the Underwriters, up to 500,000 additional shares of Stock
(the "Company Optional Shares," and together with the Company Firm Shares, the
"Company Shares"). The Selling Stockholders' Optional Shares and the Company
Optional Shares are herein collectively referred to as the "Optional Shares."
The Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 3 hereof are herein collectively called the "Shares."
On January 21, 2006, SHC Washington, L.L.C., a Delaware limited
liability company ("SHC Washington,") a wholly owned subsidiary of Strategic
Hotel Funding, L.L.C., a Delaware limited liability company (the "Operating
Company"), entered into a Purchase and Sale Agreement to acquire the Four
Seasons Washington, D.C. Hotel from an entity controlled by the Xxxxx Xxxxxxx
Property Group (such agreement, together with all other documents related to the
transaction, are hereinafter referred to as the "Four Seasons Agreements") for
an agreed upon purchase price of $168.9 million (such acquisition and any
related financing are hereafter
referred to as the "Four Seasons Transaction"). The Company intends to use the
net proceeds of the offering of the Shares in the manner described in the
section entitled "Use of Proceeds" in the Prospectus (as defined below) relating
to the Shares filed with the Securities Exchange Commission (the "Commission")
pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the
"Securities Act"). This includes, among other things, applying a portion of the
net proceeds to consummate the Four Seasons Transaction.
The Company and the Selling Stockholders acknowledge and agree that
each Underwriter in providing underwriting services to the Company and the
Selling Stockholders in connection with the offering of the Shares, including in
acting pursuant to the terms of this Agreement, has acted and is acting as an
independent contractor on an arm's length basis and not as a fiduciary and the
Company and the Selling Stockholders do not intend any Underwriter to act in any
capacity other than as an independent contractor, including as a fiduciary or in
any other position of higher trust. The Company and the Selling Stockholders
shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated by this Agreement and the
Underwriters shall have no responsibility or liability with respect thereto.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) (i) a registration statement on Form S-3 (File No. 333-126314) (the
"Company's Initial Registration Statement"), in respect of the Company Shares
was filed with the Commission on June 30, 2005 and (ii) a registration statement
on Form S-3 (File No. 333-123612) (the "Selling Stockholders' Initial
Registration Statement" and together with the Company's Initial Registration
Statement, the "Initial Registration Statements"), in respect of the Selling
Stockholders' Shares was filed with the Commission on June 30, 2005; the Initial
Registration Statements and any post-effective amendment thereto, each in the
forms heretofore delivered to you and, excluding exhibits to the Initial
Registration Statements, but including all documents incorporated by reference
in the prospectus included therein, were declared effective by the Commission in
such forms on July 13, 2005; other than prospectus supplements filed with the
Commission on August 3 and 11, 2005 and January 11, 12 and 24, 2006 pursuant to
Rule 424(b)(5) or Rule 424(b)(3) under the Securities Act, an issuer free
writing prospectus filed on January 12, 2006 and January 24, 2006 and a
registration statement (No. 333-131264) increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act, which became effective upon filing, no other document with
respect to the Initial Registration Statements or document incorporated by
reference therein has heretofore been filed, or transmitted for filing, with the
Commission, each in the forms heretofore delivered to the Underwriters); the
Initial Registration Statements, including the Base Prospectuses (as defined
below) were prepared by the Company in conformity with the requirements of the
Securities Act and the rules and regulations of the Commission promulgated
thereunder (the "Securities Act Regulations"); and no stop order suspending the
effectiveness of the Initial Registration Statements, any post-effective
amendment thereto or any part thereof or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission; the base prospectus filed as part of the Company's
Initial Registration Statement, in the form in which it has most recently been
filed with the Commission on or prior to the date of this Agreement relating to
the Company Shares, is
hereinafter called the "Company's Base Prospectus"; the base prospectus filed as
part of the Selling Stockholders' Initial Registration Statement, in the form in
which it has most recently been filed with the Commission on or prior to the
date of this Agreement relating to the Selling Stockholders' Shares, is
hereinafter called the "Selling Stockholders' Base Prospectus" and together with
the Company's Base Prospectus, the "Base Prospectuses"); each preliminary
prospectus (including each preliminary prospectus supplement) relating to the
Shares filed with the Commission pursuant to Rule 424(b) under the Securities
Act) is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statements and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including any prospectus supplement
relating to the Shares that is filed with the Commission and deemed by virtue of
Rule 430B under the Securities Act to be part of the Initial Registration
Statements, each as amended at the time such part of the Initial Registration
Statements became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statements"; the Base Prospectuses, as
amended and supplemented immediately prior to the Applicable Time (as defined in
Section 1(c) hereof), is hereinafter called the "Pricing Prospectus"; the form
of the final prospectus relating to the Shares filed with Commission pursuant to
Rule 424(b) under the Securities Act in accordance with Section 6(a) hereof is
hereinafter called the "Prospectus"; any reference herein to the Base
Prospectuses, the Pricing Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3, as of the date of such
prospectus; any reference to any amendment or supplement to the Base
Prospectuses, any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any post-effective amendment to the Registration
Statements, any prospectus supplement relating to the Shares filed with the
Commission pursuant to Rule 424(b) under the Securities Act and any documents
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated therein, in each case after the date of the Base
Prospectuses, such Preliminary Prospectus or the Prospectus, as the case may be;
any reference to any amendment to the Registration Statements shall be deemed to
refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Registration
Statements that is incorporated by reference in the Registration Statements; and
any "issuer free writing prospectus" as defined in Rule 433 under the Securities
Act relating to the Shares is hereinafter called an "Issuer Free Writing
Prospectus");
(b) no order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the Company,
and each Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Securities Act and the Securities
Act Regulations, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters through Deutsche Bank Securities Inc. ("DBS") and Wachovia Capital
Markets, LLC ("WCM") expressly for use therein. It is understood and agreed that
the only information furnished by the Underwriters for use in the Preliminary
Prospectus, Pricing Prospectus and the Prospectus consists of: (i) the names and
corresponding share amounts set forth in the table of Underwriters in the first
paragraph of text under the
caption "Underwriters" in such prospectus; (ii) the third paragraph of text
under the caption "Underwriters" in such prospectus concerning the terms of the
offering by the Underwriters; (iii) the 10th paragraph of text under the caption
"Underwriters" in such prospectus concerning short sales, purchases to cover
positions created by short sales and stabilizing transactions; (iv) the 13th
paragraph of text under the caption "Underwriters" in such prospectus concerning
penalty bids; and (v) the 15th paragraph of text under the caption
"Underwriters" in such prospectus concerning the availability of such prospectus
in electronic format;
(c) for the purposes of this Agreement, the "Applicable Time" is 5:00
p.m. (Eastern time) on the date of this Agreement; the Pricing Prospectus (as
supplemented by those Issuer Free Writing Prospectuses and other information, if
any, listed in Schedule III(b) hereto, taken together (collectively, the
"Pricing Disclosure Package")) as of the Applicable Time, 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; and each Issuer Free Writing Prospectus
listed on Schedule III(a) or Schedule III(b) hereto does not conflict with the
information contained in the Registration Statements, the Pricing Prospectus or
the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by
and taken together with the Pricing Disclosure Package as of the Applicable
Time, 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; provided,
however, that this representation and warranty shall not apply to statements or
omissions made in an Issuer Free Writing Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters through DBS and WCM expressly for use therein;
(d) the Registration Statements conform, and the Prospectus and any
further amendments or supplements to the Registration Statements or the
Prospectus will conform, in all material respects to the requirements of the
Securities Act and the Securities Act Regulations and do not and will not, as of
the applicable effective date as to the Registration Statements and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by the Underwriters through DBS and WCM expressly for use therein (which
such information is described in Section 1(b) hereof);
(e) neither the Company nor any of its subsidiaries (collectively, the
"subsidiaries" and each a "subsidiary") that would be required to be listed on
Exhibit 21 of an Annual Report on Form 10-K of the Company (the "Significant
Subsidiaries"), including the Operating Company, has sustained since the date of
the latest audited financial statements included in the Pricing Disclosure
Package and the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Disclosure Package and the
Prospectus or as would not have, individually or in the aggregate, a Material
Adverse Effect (as defined below); and, since the respective dates as of which
information is given in the Pricing Disclosure Package and the
Prospectus, there has not been (i) any change in the capital stock or members'
equity, as applicable, or long-term debt of the Company or any of its
subsidiaries or (ii) any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' or members' equity, as applicable,
or results of operations of the Company and its subsidiaries, taken as a whole
(a "Material Adverse Effect"), other than as set forth or contemplated in the
Pricing Disclosure Package and the Prospectus;
(f) the Company and its subsidiaries have good and marketable title in
fee simple to, or a valid leasehold interest in, all real property described in
the Pricing Disclosure Package and the Prospectus as owned by them (the "Real
Property"), and good and marketable title to all personal property owned by them
that are material to the business of the Company; Hotel del Partners, LP (the
"HDC Owner"), together with its wholly owned direct and indirect subsidiaries,
has good and marketable title in fee simple to all Hotel del Coronado real
property and good and marketable title to all personal property necessary to the
business of the Hotel del Coronado, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Pricing Disclosure
Package and the Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real
property, buildings and equipment held under lease by the Company and its
subsidiaries and described in the Pricing Disclosure Package and the Prospectus
are held by them under valid, subsisting and enforceable leases (each such
lease, a Company Lease") with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries; upon consummation of the Four
Seasons Transaction, the Company will have good and marketable title in fee
simple to all Four Seasons Washington D.C. Hotel real property and good and
marketable title to all personal property (other than the artwork contained
therein as to which the Company has a valid and enforceable license) necessary
to the business of the Four Seasons Washington D.C. Hotel, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
Pricing Disclosure Package and the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries;
(g) (i) except for the vacant parcel of land owned by SHC Santa Xxxxxx
Land, L.L.C., the Company or its subsidiaries has either (x) an owner's or
leasehold title insurance policy, from a nationally recognized title insurance
company licensed to issue such policy, on any Real Property located in the
United States or Mexico (the "North American Properties"), as the case may be,
by the Company or its subsidiaries, that insures the fee or leasehold interest,
as the case may be, in the North American Properties, which policies include
only commercially reasonable exceptions, and with coverages in amounts at least
equal to amounts that are generally deemed in the Company's industry to be
commercially reasonable in the markets where the Company's properties are
located, or (y) one or more lender's title insurance policies insuring the lien
of the mortgages encumbering the North American Properties with coverages, in
the aggregate, equal to the maximum aggregate principal amount of indebtedness
incurred by the Company or its subsidiaries and secured by the North American
Properties; (ii) the HDC Owner has an owner's title insurance policy on the
Hotel del Coronado; and (iii) upon
consummation of the Four Seasons Transaction, either the Company or SHC
Washington will obtain an owner's title insurance policy on the Four Seasons
Washington D.C. Hotel property;
(h) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Maryland, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Pricing Disclosure Package and the Prospectus;
(i) the Operating Company has been duly organized and is validly
existing as a limited liability company, in good standing under the laws of
Delaware, with power and authority (limited liability company and other) to own
its properties and conduct its business as described in the Pricing Disclosure
Package and the Prospectus;
(j) each of the Company and its subsidiaries has been duly qualified as
a foreign entity for the transaction of business and is in good standing under
the laws of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except to the extent that the
failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
(k) (x) each corporate subsidiary of the Company that is a Significant
Subsidiary (a "Corporate Significant Subsidiary") and each limited liability
company in which the Company or one of its subsidiaries is a managing member
that is a Significant Subsidiary (an "LLC Significant Subsidiary") and SHC KSL
Partners, LP ("HDC Joint Venture") and the HDC Owner have been duly incorporated
or organized, as the case may be, and is validly existing as a corporation or
limited liability company, as the case may be, in good standing under the laws
of its jurisdiction of incorporation or organization, as the case may be, with
the power (corporate or limited liability company, as the case may be) and
authority to own its properties and conduct its business as described in the
Pricing Disclosure Package and the Prospectus, (y) all of the issued shares of
capital stock of each Corporate Significant Subsidiary and all of the membership
interests in each LLC Significant Subsidiary have been duly and validly
authorized and issued, are fully paid and are non-assessable and (except for
membership interests in SHCI Santa Xxxxxx Beach Hotel, L.L.C.) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims except as described in the Pricing Disclosure
Package and the Prospectus or as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect and (z) SDC owns
45% of the equity interests in the HDC Joint Venture and the HDC Joint Venture
owns indirectly 100% of the partnership interests in the HDC Owner, free and
clear of all liens, encumbrances, equities or claims except as described in the
Pricing Disclosure Package and the Prospectus or as would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect;
(l) the Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and the Shares conform to the description of the Stock contained in the Pricing
Disclosure Package and the Prospectus;
(m) the Company Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against
payment therefor as provided herein, will be duly and validly issued and fully
paid and non-assessable and will conform to the description of the Stock
contained in the Pricing Disclosure Package and the Prospectus; the Selling
Stockholders' Shares to be sold by the Selling Stockholders to the Underwriters
hereunder have been duly and are validly authorized and fully paid and
non-assessable and conform to the description of the Stock contained in the
Pricing Disclosure Package and the Prospectus;
(n) except as disclosed in the Pricing Disclosure Package and the
Prospectus, there are no outstanding (i) securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for any
capital stock, partnership interests, membership interests or other equity
interests, as the case may be, in the Company or any of its Significant
Subsidiaries, other than the limited liability company units of the Operating
Company, which, upon their redemption by the holders thereof, the redemption
price therefore, in the Company's discretion, may be paid in cash or in shares
of Stock, or (ii) obligations of the Company or any of its subsidiaries to issue
any such securities or obligations;
(o) except as disclosed in the Pricing Disclosure Package and the
Prospectus, there are no persons with registration or other similar rights to
have any equity or debt securities, including securities that are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statements or otherwise registered by the Company under the
Securities Act, other than (x) the holders of the 8.50% Series A Cumulative
Redeemable Preferred Stock of the Company and (y) the Selling Stockholders and
other the investors listed on the Selling Stockholder table on the Registration
Statement on Form S-3 (File No. 333-126312) filed with the Commission on June
30, 2005 which was declared effective on July 13, 2005 pursuant to the
Registration Rights Agreement (as defined below);
(p) the issuance and sale of the Company Shares to be sold by the
Company, the sale of the Selling Stockholders' Shares sold by the Selling
Stockholders and compliance by the Company, the Selling Stockholders and the
Operating Company with all of the provisions of this Agreement and the Four
Seasons Agreements (to the extent a party thereto) and all other transactions
therein contemplated by the Company or the Operating Company (to the extent a
party thereto) and the consummation of the transactions contemplated herein and
therein will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any Company Lease,
indenture, mortgage, deed of trust, loan agreement, operating agreement,
property management agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or bylaws of the Company or the certificate of
formation or limited liability company agreement of the Operating Company or
(iii) result in any violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company or
its subsidiaries or any of their properties ("Governmental Authority"), except
in the case of clauses (i) and (iii) for such conflicts, breaches, defaults or
violations as would not, individually or in the aggregate, reasonably be
expected to (x) result in a Material Adverse Effect or (y) adversely affect the
validity, performance or consummation of the transactions contemplated by this
Agreement;
(q) no consent, approval, authorization, order, registration or
qualification of or with any such Governmental Authority is required for sale of
the Shares or the consummation by the Company and the Selling Stockholders of
the transactions contemplated by this Agreement or the consummation by the
Company of the Four Seasons Agreements, except the registration under the
Securities Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(r) neither the Company nor any of its Significant Subsidiaries is in
(i) violation of its organizational documents, or (ii) default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any Company Lease, indenture, mortgage, deed of trust, loan
agreement, operating agreement, property management agreement or other agreement
or instrument to which it is a party or by which it or any of its properties may
be bound, except in the case of clause (ii) to the extent that such default
would not, individually or in the aggregate, reasonably be expected to (x)
result in a Material Adverse Effect, or (y) adversely affect the validity,
performance or consummation of the transactions contemplated by this Agreement;
(s) each of the Company and the Operating Company has the power and
authority to enter into and perform this Agreement, and to the extent a party
thereto the Four Seasons Agreements, and to consummate the transactions
contemplated herein and therein; this Agreement and the Four Seasons Agreements
have been duly authorized, executed and delivered by the Company (to the extent
a party thereto) and the Operating Company (to the extent a party thereto) and
are legal, valid and binding agreements of the Company (to the extent a party
thereto) and the Operating Company (to the extent a party thereto), enforceable
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general equitable principles, and except to
the extent that the indemnification and contribution provisions may be limited
by U.S. federal or state securities laws and public policy considerations in
respect thereof;
(t) each of the Company and its subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any U.S. federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct its business as described in the Pricing
Disclosure Package and the Prospectus, except to the extent that any failure to
have any such licenses, authorizations, consents or approvals, to make any such
filings or to obtain any such authorizations, consents or approvals would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect; neither the Company nor any of its subsidiaries is in violation
of, in default under, or has received any notice regarding a possible violation,
default or revocation of any such license, authorization, consent or approval or
any U.S. federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or any subsidiary, other than any
such violations, defaults, or revocations that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
(u) the statements set forth in the Pricing Disclosure Package and the
Prospectus under the captions "Risk Factors - Tax Risks" and "Certain United
States Federal Tax
Considerations," insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate and complete and fairly
summarize the federal income tax considerations described therein;
(v) the statements set forth in the Pricing Disclosure Package and the
Prospectus under the caption "Description of Common Stock" insofar as they
purport to constitute a summary of the terms of the Common Stock, are accurate,
complete and fair;
(w) the issuance and sale of the Company Shares by the Company are not
subject to preemptive or other similar rights arising by operation of law under
the organizational documents of the Company;
(x) other than as set forth in the Pricing Disclosure Package and the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect; and,
to the best of the Company's knowledge, no such proceedings are threatened or
contemplated by any Governmental Authority or threatened by others;
(y) neither the Company nor the Operating Company is and, after giving
effect to the offering and sale of the Shares, will be an "investment company,"
as such term is defined in the Investment Company Act of 1940, as amended;
(z) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent registered
public accountants as required by the Securities Act and the Securities Act
Regulations;
(aa) at the First Time of Delivery, the Shares will have been approved
for listing on the New York Stock Exchange (the "NYSE"), subject to official
notice of issuance;
(bb) the Company has not taken, and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares in violation of applicable law;
(cc) the form of certificate used to represent the Stock complies in
all material respects with (i) all applicable statutory requirements, (ii) any
applicable requirements of the organizational documents of the Company, and
(iii) the requirements of the NYSE;
(dd) the Company has been and is properly taxed as a real estate
investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "Code")
commencing with the taxable year ending December 31, 2004, and the Company is
organized and is being operated in conformity with the requirements for
qualification as a REIT under the Code and the method of operation of the
Company and its subsidiaries enables the Company to meet the requirements for
qualification and taxation as a REIT under the Code; the Operating Company is
treated as a partnership for U.S. federal income tax purposes and not as a
corporation or association taxable as a corporation;
and the Company intends to continue to qualify as a REIT under the Code for all
subsequent years, and the Company does not know of any event that could
reasonably be expected to cause the Company to fail to qualify as a REIT under
the Code at any time;
(ee) there are no outstanding loans, advances or guarantees of
indebtedness by the Company or any of its subsidiaries to or for the benefit of
any of the officers or directors of the Company or any of the officers or
directors of any of its subsidiaries or any of the members of the families of
any of them;
(ff) the Company has obtained Phase I Environmental Audits with respect
to the North American Properties and the Four Seasons Washington D.C. Hotel
property and a Building Survey Report with respect to the Inter.Continental
Prague dated June 2003 (the "Building Survey Report") and, except as otherwise
disclosed in the Pricing Disclosure Package and the Prospectus or in the Phase I
Environmental Audits, the Building Survey Report and other environmental
documents previously delivered to the Underwriters and except to an extent that
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect or as related to the Company's Hyatt Regency hotel in
New Orleans: (i) neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any other owners of the Real Property (which such term
for purposes of this Section 1(ff) shall include the Four Seasons Washington
D.C. Hotel and the Hotel del Coronado) 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 any Real Property,
other than by any such action taken in material compliance with all applicable
Environmental Statutes (as defined below) or by the Company, any of its
subsidiaries or any other party in connection with the ordinary use of
residential, retail or commercial properties owned by the Company or any
subsidiary; (ii) the Company and its subsidiaries do not intend to use the Real
Property 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 other than by any such action taken in compliance with all applicable
Environmental Statutes or by the Company, any of its subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company or any subsidiary; (iii) the Company does not
know of any seepage, leak, discharge, release, emission, spill, or dumping of
Hazardous Materials from the Real Property into waters on or adjacent to the
Real Property or from the Real Property onto any real property owned or occupied
by any other party, or onto lands from which Hazardous Materials might seep,
flow or drain into such waters other than in substantial compliance with
Environmental Statutes; (iv) the Company has not received any notice of, and has
no 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 U.S. federal,
state or local environmental statute or regulation or under common law,
pertaining to Hazardous Materials on or originating from any of the Real
Property or arising out of the conduct of the Company, including without
limitation a claim under or pursuant to any Environmental Statute; and (v)
neither the Real Property is included nor, to the Company's knowledge, is
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
(as defined below) by the United States Environmental Protection Agency or, to
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 used herein, "Hazardous Materials" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, toxic substances, or related materials,
asbestos or any hazardous material as defined by any U.S. federal, state or
local environmental law, ordinance, rule or regulation including without
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675 ("CERCLA"),
the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections
1801-1819, the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Sections 6901-6992K, the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. Sections 2601-2671, the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136-136y, the
Clean Air Act, 42 U.S.C. Sections 7401-7642, the Clean Water Act (Federal
Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe
Drinking Water Act, 42 U.S.C. Sections 300f-330j-26, and the Occupational
Safety and Health Act, 29 U.S.C. Sections 651-678, as any of the above
statutes may be amended from time to time, and in the regulations
promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any Governmental Authority.
(gg) to the Company's knowledge, except as described in the Pricing
Disclosure Package and the Prospectus or where such will not have a Material
Adverse Effect on any of the properties (which such term for purposes of this
Section 1(gg) shall include the Four Seasons Washington D.C. Hotel and the Hotel
del Coronado) or on the Company or as related to the Company's Hyatt Regency
hotel in New Orleans: (a) there have been no complaints relating to air quality
or Microbial Matter at any of the properties; (b) there have been no significant
incidents of water damage at any of the properties or visual evidence of
Microbial Matter in any structure or system at any of the properties; (c) there
have been no indications of improper design or construction of any structure at
any of the properties or any system contained therein that has led or could
reasonably be expected to lead to the growth of Microbial Matter; (d) there is
no pending, or to Company's knowledge, threatened claim, governmental
investigation or proceeding pending relating to Microbial Matter; and (e) the
Company has provided true and complete copies to the Underwriters of all
reports, surveys, assessments and material documents relating to Microbial
Matter at any of the properties;
For purposes of this Section 1(gg), the term "Microbial Matter" shall
mean: fungi, bacterial or viral matter which reproduces through the release
of spores or the splitting of cells or other means, including, but not
limited to, mold, mildew and viruses, whether or not such Microbial Matter
is living;
(hh) the consolidated financial statements of the Company, together
with related notes and schedules, contained in or incorporated by reference in
the Pricing Disclosure Package and the Prospectus present fairly in all material
respects the financial position and the results of operations, stockholders'
equity and cash flows of the Company, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results for
such periods have been made. The summary financial and statistical data included
or incorporated by reference in the Pricing Disclosure Package and the
Prospectus
present fairly in all respects the information shown therein and such data has
been compiled on a basis consistent with the financial statements presented
therein and the books and records of the Company. The pro forma financial
statements and other pro forma financial information included or incorporated by
reference in the Pricing Disclosure Package and the Prospectus present fairly in
all material respects the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements, have been properly compiled on the pro forma bases
described therein, and, in the opinion of the Company, the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein;
(ii) the Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its subsidiaries, is made known
to the Company's chief executive officer and its chief financial officer by
others within those entities, and such disclosure controls and procedures are
effective to perform the functions for which they were established; since the
date of the most recent evaluation of such disclosure controls and procedures,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses; the
principal executive officer and principal financial officer of the Company have
timely and properly made all certifications required by the Xxxxxxxx-Xxxxx Act
of 2002 (the "Xxxxxxxx-Xxxxx Act") and any related rules and regulations
promulgated by the Commission, and the statements contained in any such
certification are complete and correct; and the Company is and, to the knowledge
of the Company, all of its directors and executive officers (in their capacity
as such) are, otherwise in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act that are effective;
(jj) nothing has come to the attention of the Company that has caused
the Company to believe that the statistical and market-related data included or
incorporated by reference in the Pricing Disclosure Package and the Prospectus
and the Prospectus is not based on or derived from sources that are reliable and
accurate in all material respects;
(kk) any certificate signed by any officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby;
(ll) with respect to the Hyatt Regency hotel in New Orleans, (i) the
Company's insurance policy is in full force and effect, (ii) the Company is not
in default under any provision of such insurance policy; (iii) neither the
Company nor any of its subsidiaries has received from any insurer any notice of
cancellation of such insurance or any denial of insurance coverage; (iv) neither
the Company nor any subsidiary is aware of any event, circumstance or occurrence
that could reasonably be expected to result in the cancellation of such
insurance policy or the denial of any insurance coverage with respect to the
claims made by the Company or its subsidiaries regarding the property damage
caused by Hurricane Xxxxxxx and any resulting business interruption; and (v) the
Company and its subsidiaries have timely and properly complied with any
applicable notice or procedural provisions contained in the insurance policy
when submitting
the claims to the insurers or agents thereof regarding the property damage
caused by Hurricane Xxxxxxx and any resulting business interruption; and
(mm) at the earliest time after the filing of the Initial Registration
Statements that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the
Shares, the Company was not an "ineligible issuer" as defined in Rule 405 under
the Securities Act.
2. Each of the Selling Stockholders, severally but not jointly,
represents and warrants to, and agrees with, the Underwriters that:
(a) Upon payment of the purchase price by the Underwriters for the
Shares to be sold by such Selling Stockholder and the delivery by such Selling
Stockholder to Cede & Co. ("Cede") or such other nominee as may be designated by
The Depository Trust Company ("DTC") of the Shares being sold by such Selling
Stockholder registered in the name of Cede or such other nominee designated by
DTC, both as provided for herein, and the crediting of such Shares to the
Underwriters' account with DTC, Cede & Co. or such other nominee designated by
DTC will be a "protected purchaser" (as defined in Section 8-303 of the New York
Uniform Commercial Code (the "UCC") of such Shares, the Underwriters will
acquire a valid "security entitlement" (within the meaning of Section 8-501 of
the UCC) to such Shares, and no action based on an "adverse claim" (as defined
in Section 8-102 of the UCC) may be asserted against the Underwriters with
respect to such security entitlement (assuming that the Underwriters are without
notice of such adverse claim);
(b) such Selling Stockholder has, and immediately prior to the Time of
Delivery (as defined in Section 5 hereof), such Selling Stockholder will have,
good and valid title to the Shares to be sold by such Selling Stockholder, free
and clear of all liens, encumbrances, equities or claims; such Selling
Stockholder has full right, power and authority to enter into this Agreement and
to sell, assign, transfer and deliver the Shares to be sold by such Selling
Stockholder;
(c) the execution and delivery of this Agreement by such Selling
Stockholder, the sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement and the consummation of the transactions herein
contemplated by such Selling Stockholder will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, (i) the organizational documents of such Selling Stockholder or
(ii) except in each case for violations that would not materially and adversely
affect the consummation by such Selling Stockholder of the transactions
contemplated by this Agreement, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling Stockholder is
a party or by which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor will such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property of such Selling Stockholder, except in
each case for violations that would not materially and adversely affect the
consummation by such Selling Stockholder of the transactions contemplated by
this Agreement;
(d) all consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement and for
the sale and delivery of the Shares to be sold by such Selling Stockholder
hereunder have been obtained;
(e) such Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to, or which has constituted, or which might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Stock and such Selling Stockholder has not distributed and
will not distribute any prospectus or other offering material in connection with
the offering and sale of the Shares contemplated hereby other than the Pricing
Disclosure Package or the Prospectus;
(f) the Selling Stockholders' Registration Statement, when effective,
did not contain and any post-effective amendments thereto will not contain, an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and the Pricing Disclosure Package and Prospectus do not contain, and any
amendments or supplements thereto will not contain, an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the representations and warranties set forth
in this Section 2(f) are limited to statements or omissions made in reliance
upon and in conformity with information furnished to the Company in writing by
such Selling Stockholder expressly for use in the Selling Stockholders'
Registration Statement, the Pricing Disclosure Package and Prospectus or any
amendments or supplements thereto. It is understood and agreed that the only
information furnished by such Selling Stockholder consists of the information
regarding such Selling Stockholder set forth in the section of the Pricing
Disclosure Package and the Prospectus entitled "Selling Stockholders"; and
(g) this Agreement has been duly executed and delivered by or on behalf
of such Selling Stockholder.
3. (a) Subject to the terms and conditions herein set forth, (i) the
Company agrees to issue and sell to the Underwriters the Company Firm Shares,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, the number of Company Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto and (ii) each of the Selling Stockholders
agrees, severally and not jointly, to sell to the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from each of the
Selling Stockholders, the number of Selling Stockholders' Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the total number of Selling Stockholders' Firm Shares to be sold by each Selling
Stockholder as set forth opposite its respective name in Schedule II hereto by a
fraction, the numerator of which is the total number of Firm Shares to be
purchased by such Underwriter as set forth opposite the name of such Underwriter
in Schedule I hereto and the denominator of which is the total number of Firm
Shares to be purchased by all of the Underwriters hereunder. The purchase price
for each Firm Share shall be $19.05 per share.
(b) Subject to the terms and conditions herein set forth, in the event
and to the extent that the Underwriters shall exercise an election to purchase
Optional Shares, (i) the Company agrees to issue and sell the Company Optional
Share Number of Company Optional Shares with
respect to such election, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
above in Section 3(a) for each Firm Share, the number of the Company Optional
Shares, if any, (to be adjusted by you as to eliminate fractional shares)
determined by multiplying such Company Optional Share Number by a fraction, the
numerator of which is the total number of Optional Shares which such Underwriter
may purchase as set forth opposite the name of such Underwriter in Schedule I
hereto and the denominator of which is the total number of Optional Shares that
all of the Underwriters may purchase hereunder and (ii) each of the Selling
Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agree, severally and not jointly, to
purchase from each of the Selling Stockholders, at the purchase price per share
set forth above in this Section 3(a) for each Firm Share, that portion of the
number of the Selling Stockholders' Optional Shares, if any, (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying the Total
Selling Stockholders' Optional Share Number with respect to which such election
is made by (x) a fraction the numerator of which is the total maximum number of
Optional Shares that may be sold by such Selling Stockholder as set forth
opposite its name on Schedule II hereto and the denominator of which is the
total maximum of the Selling Stockholders' Optional Shares that may be sold by
all Selling Stockholders hereunder and by (y) a fraction the numerator of which
is the maximum number of the Selling Stockholders' Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of the Selling Stockholders' Optional Shares that all of the Underwriters
are entitled to purchase hereunder. For purposes of this Agreement, "Total
Selling Stockholders' Optional Share Number" shall mean, with respect to any
exercise by the Underwriters of their option to purchase Optional Shares, (x)
all the Optional Shares with respect to such option being exercised if the sum
of (1) the Optional Shares with respect to which such option is being exercised
and (2) all Optional Shares, if any, previously purchased by the Underwriters
under this Agreement is less than or equal to 2,204,127, and (y) the excess, if
any, of 2,204,127 over the aggregate number of Optional Shares previously
purchased by the Underwriters under this Agreement, if the sum of the Optional
Shares with respect to which such option is being exercised and the aggregate
number of Optional Shares previously purchased by the Underwriters under this
Agreement is more than 2,204,127. For purposes of this Agreement, "Company
Optional Share Number" shall mean, with respect to any exercise by the
Underwriters of their option to purchase Optional Shares, the excess, if any, of
(x) the sum of (1) the Optional Shares with respect to which to such option is
being exercised and (2) all Optional Shares, if any, previously purchased by the
Underwriters under this Agreement over (y) 2,204,127.
(c) The Selling Stockholders, as and to the extent indicated in
Schedule II hereto, hereby grant, severally and not jointly, to the Underwriters
the right to purchase at their election up to 2,204,127 Selling Stockholders'
Optional Shares, and the Company hereby grants to the Underwriters the right to
purchase at their election up to 500,000 Company Optional Shares, at the
purchase price per share set forth in the paragraph above, for the sole purpose
of covering sales of shares in excess of the number of Firm Shares, provided
that the purchase price per Optional Share shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Firm Shares but not payable on the Optional Shares. Any such
election to purchase the Optional Shares may be exercised in whole or in part
from time to time only by written notice from you to the Company, given within a
period of 30 calendar days after the date of this Agreement and setting forth
the aggregate number of
Company Optional Shares and Selling Stockholders' Optional Shares to be
purchased and the date on which such the Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery or,
unless you and the Company otherwise agree in writing, no earlier than two or
later than 10 business days after the date of such notice.
4. Upon the authorization by you of the release of the Firm Shares, the
Underwriters propose to offer the Firm Shares for sale upon the terms and
conditions set forth in the Prospectus.
5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as DBS and WCM may request upon at least 48 hours' prior notice to the
Company and the Selling Stockholders shall be delivered by or on behalf of the
Company and the Selling Stockholders to DBS and WCM, through the facilities of
DTC, for the account of such Underwriters, against payment by or on behalf of
such Underwriters of the purchase price therefor by wire transfer of federal
(same-day) funds to the account specified by the Company and the Selling
Stockholders to DBS and WCM at least 48 hours in advance. The Company and the
Selling Stockholders will cause the certificates or other evidence otherwise
acceptable to DBS and WCM representing the Shares to be made available for
checking and packaging at least 24 hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of Deutsche Bank Securities
Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to the Firm
Shares, 9:30 a.m., New York time, on January 30, 2006 or such other time and
date as DBS, WCM and the Company may agree upon in writing, and, with respect to
the Company Optional Shares, 9:30 a.m., New York time, on the date specified by
DBS and WCM in the written notice given by DBS and WCM of the Underwriters'
election to purchase such the Company Optional Shares, or such other time and
date as DBS and WCM and the Company may agree upon in writing. Such time and
date for delivery of the Firm Shares is herein called the "First Time of
Delivery," such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called an "Additional Time of Delivery," and
each such time and date for delivery is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 10 hereof, including the
cross-receipts for the Shares and any additional documents requested by the
Underwriters pursuant to Section 10(o) hereof, will be delivered at the offices
of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP (the "Closing Location"), and the
Shares will be delivered at the Designated Office, all at such Time of Delivery.
A meeting will be held at the Closing Location at 3:00 p.m., New York City time,
on the New York Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 5, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
6. The Company agrees with each of the Underwriters:
(a) to prepare a prospectus supplement in a form approved by you and to
file such prospectus supplement and the Base Prospectuses pursuant to Rule
424(b) under the Securities Act not later than the Commission's close of
business on the second New York Business Day following the execution and
delivery of this Agreement; to make no further amendment or any supplement to
the Registration Statements, any Preliminary Prospectus or Prospectus if such
amendment or supplement shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statements have been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to file
promptly all material required to be filed by the Company with the Commission
pursuant to Rule 433(d) under the Securities Act within the time required by
such Rule; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or other prospectus in respect
of the Shares, of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statements or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or other
prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) if by the third anniversary (the "Renewal Deadline") of the initial
effective date of the Registration Statements, any of the Shares remain unsold
by the Underwriters, the Company will file, if it has not already done so and is
eligible to do so, new shelf registration statements relating to the Shares, in
a form satisfactory to the Underwriters and will use commercially reasonable
efforts to cause such registration statements to be declared effective within
180 days after the Renewal Deadline. The Company will take all other action
necessary or appropriate to permit the public offering and sale of the Shares to
continue as contemplated in the expired registration statements relating to the
Shares. References herein to the Registration Statements shall include such new
automatic shelf registration statements or such new shelf registration
statements, as the case may be;
(d) prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of each of the Preliminary Prospectus and
Prospectus and from
time to time, to furnish the Underwriters with written and electronic copies of
such Preliminary Prospectus and Prospectus in New York City in such quantities
as you may reasonably request, and, if at any time when the delivery of a
prospectus is required (or in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act) in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act) is delivered, not misleading, or, if for any
other reason it shall be necessary during such period to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify you and upon
your request to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many written and electronic copies as you may from
time to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Shares at any such time, upon your request
but at the expense of such Underwriters, to prepare and deliver to such
Underwriters as many written and electronic copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the
Securities Act;
(e) to make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statements (as defined in Rule 158(c) under the
Securities Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities Act
and the Securities Act Regulations (including, at the option of the Company,
Rule 158);
(f) during the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Prospectus (the "Lock-up
Period"), not to offer, sell, contract to sell or otherwise dispose of, except
as provided hereunder, any Stock or securities of the Company that are
substantially similar to the Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities, (other than (i)
pursuant to the 2004 Incentive Plan, the Employee Stock Purchase Plan and
employee stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the Time of Delivery,
(ii) pursuant to that certain Employment Agreement, dated as of November 29,
2004, among the Company, the Operating Company and Xxxxx X. Xxxx (which shares
when issued shall be subject to the terms of the Lockup Agreement, dated as of
the date hereof, of Xxxxx X. Xxxx), and that certain Amended and Restated
Employment Agreement dated June 8, 2004, between Xxxxxxxx X. Xxxxxx and the
Company (which shares when issued shall be subject to the terms of the Lockup
Agreement, dated as of the date hereof, of Xxxxxxxx X. Xxxxxx) or (iii) in
consideration for the redemption or exchange of limited liability company
interests in the Operating Company in accordance with the Limited Liability
Company Agreement, as amended, of the Operating Company);
(g) to furnish to its stockholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and statements
of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statements), to make available to its stockholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(h) unless otherwise publicly available in electronic format on the
website of the Company or the Commission, during a period of three years from
the effective date of the Registration Statements, to furnish to you copies of
all reports or other communications (financial or other) furnished to
stockholders generally, and to deliver to you (i) as soon as they are publicly
available, copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed and (ii) such additional non-confidential
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(i) to use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds;"
(j) to list, subject to notice of issuance, the Shares on the NYSE;
(k) to continue to use its best efforts to meet the requirements to
qualify as a REIT under the Code and to cause the Operating Company to continue
to use its best efforts to meet the requirements to qualify as a partnership
under the Code, in each case unless otherwise determined by the Company's Board
of Directors;
(l) to, if requested by DBS or WCM (in their sole and reasonable
discretion) in writing at least 2 Business Days prior to the Selling
Stockholders' End Date (as defined below), invoke the Company's existing right
under the Registration Rights Agreement (Principal Investors), dated as of June
29, 2004, with the Selling Stockholders (the "Registration Rights Agreement") to
postpone a Shelf Takedown (as such term is defined in the Registration Rights
Agreement) by any Selling Stockholder for an additional 45 days commencing on
the date immediately following the Selling Stockholders' End Date (defined
below) (or such shorter period as DBS and WCM may from time to time jointly
designate); and
(m) to not, prior to the date immediately following the Selling
Stockholders' End Date, exercise the Company's existing right under the
Registration Rights Agreement to postpone a Shelf Takedown by any Selling
Stockholder unless so requested by DBS or WCM in accordance with Section 6(1)
hereof.
7. Each Selling Stockholder agrees with the Underwriters:
(a) that except as otherwise agreed to by the Company and such Selling
Stockholder, such Selling Stockholder will pay all taxes, if any, on the
transfer and sale, respectively, to the Underwriters of the Shares being sold by
such Selling Stockholder, and the fees of counsel to such Selling Stockholder
and all other costs and expenses incident to the performance of such Selling
Stockholder's obligations hereunder that are not otherwise specifically provided
for in this Agreement;
(b) that if the sale of the Shares being sold by such Selling
Stockholder is not consummated by reason of any willful failure, refusal or
inability on the part of such Selling Stockholder to perform any agreement
hereunder to be performed by such Selling Stockholder, such Selling Stockholder
will reimburse the Underwriters for all out-of-pocket disbursements (including
reasonable fees and disbursements of counsel for the Underwriters) incurred by
the Underwriters in connection with their investigation, preparing to market,
sell and deliver such Selling Stockholder's Shares and marketing such Selling
Stockholder's Shares or in contemplation of performing their obligations
hereunder;
(c) that the obligations of such Selling Stockholder hereunder are
irrevocable and shall not be terminated, except as provided in this Agreement,
by any act of such Selling Stockholder, by operation of law, whether by the
liquidation, dissolution or merger of such Selling Stockholder, or by the
occurrence of any other event. If such Selling Stockholder should liquidate,
dissolve, be a party to a merger or if any other such event should occur before
the delivery of the Shares being sold by such Selling Stockholder hereunder,
certificates for such Shares will be delivered in accordance with the terms and
conditions of this Agreement as if such liquidation, dissolution, merger, death
or other event had not occurred;
(d) that such Selling Stockholder will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Stock to
facilitate the sale or resale of the Shares being sold by such Selling
Stockholder, and has not effected any sales of Stock which, if effected by the
Company, would be required to be disclosed in response to Item 701 of Regulation
S-K;
(e) that such Selling Stockholder will immediately notify you if any
event occurs, or of any change in information relating to such Selling
Stockholder (as identified in Section 2(f) hereof), which results in the Pricing
Disclosure Package or the Prospectus including an untrue statement of a material
fact relating to such Selling Stockholder or omitting to state any material fact
relating to such Selling Stockholder necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(f) that in order to document the Underwriters' compliance with the
reporting and withholding provisions of the Code and applicable Treasury
Department Regulations with respect to the transactions herein contemplated,
such Selling Stockholder agrees to deliver to you prior to or at the Time of
Delivery, a properly completed and executed United States Treasury Department
Form W-8 or W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof); and
(g) during the period beginning on the date hereof and continuing to
and including the 45th day after the date of the Prospectus (the "Selling
Stockholders' End Date"), without the consent of DBS and WCM, not to offer,
sell, contract to sell, pledge, grant any option to purchase, make any short
sale or otherwise dispose of any shares of Stock, or any options or warrants to
purchase any shares of Stock, or any securities convertible into, exchangeable
for or that represent the right to receive shares of Stock, whether now owned or
hereinafter acquired, owned directly by such Selling Stockholder (including
holding as a custodian) or with respect to which such Selling Stockholder has
beneficial ownership within the rules and regulations of the Commission (other
than (i) pursuant to this Agreement or (ii) in connection with the redemption or
exchange of limited liability company interests in the Operating Company in
accordance with the Limited Liability Company Agreement, as amended, of the
Operating Company).
8. The Company covenants and agrees with the Underwriters that (a) the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Securities Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statements, any Preliminary Prospectus, the Pricing Prospectus, any Issuer Free
Writing Prospectus and the Prospectus and amendments and supplements thereto and
the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) the cost of printing or producing any Agreement among Underwriters, this
Agreement, the Blue Sky Memorandum (if any), closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 6(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey (if any) and the filing fees and expenses
(including legal fees and disbursements) incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; and (iv) all fees and expenses in connection with
listing the Shares on the NYSE; and (b) the Company will pay or cause to be
paid: (i) the cost of preparing stock certificates; (ii) the cost and charges of
any transfer agent or registrar; and (iii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that
except as provided in this Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, stock transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers the Underwriters may make. To the
extent, if at all, that any of the Selling Stockholders engages legal counsel to
represent them in connection with this offering, the fees and expenses of such
counsel shall be borne by such Selling Stockholder.
9. (a) The Company represents and agrees that, without the prior
consent of the Underwriters, it has not made and will not make any offer
relating to the Shares that would constitute a "free writing prospectus" as
defined in Rule 405 under the Securities Act; each Underwriter represents and
agrees that, without the prior consent of the Company, DBS and WCM, it has not
made and will not make any offer relating to the Shares that would constitute a
free writing prospectus required to be filed with the Commission; any such free
writing prospectus the use of which has been consented to by the Company and the
Underwriters is listed on Schedule III(a) or Schedule III(b) hereto (each, a
"Permitted Free Writing Prospectus");
(b) The Company has complied and will comply with the requirements of
Rule 433 under the Securities Act applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission or retention where
required and legending;
(c) The Company agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of which
such Issuer Free Writing Prospectus would conflict with the information in the
Registration Statements, the Pricing Prospectus or the Prospectus or would
include an 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 then prevailing, not misleading, the Company will give prompt
notice thereof to Underwriters and, if requested by the Underwriters, will
prepare and furnish without charge to the Underwriters an Issuer Free Writing
Prospectus or other document which will correct such conflict, statement or
omission; provided, however, that this representation and warranty shall not
apply to any statements or omissions in an Issuer Free Writing Prospectus made
in reliance upon and in conformity with information furnished in writing to the
Company by the Underwriters expressly for use therein; and
(d) Notwithstanding Section 9(a), the Company consents to the use by
any Underwriter of a "free writing prospectus" that (i) does not trigger a
filing requirement under Rule 433 of the Securities Act because (x) it is
distributed to a restricted audience, and (y) contains no new material
information not already included in the Base Prospectuses, Pricing Prospectus,
Preliminary Prospectus or a previously filed free writing prospectus for the
offering; the Company agrees that (A) it has treated and will treat, as the case
may be, each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus and (B) it has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 of the Securities Act applicable to any
Permitted Free Writing Prospectus, including in respect of timely filing with
the Commission, legending and record keeping.
10. The obligations of the Underwriters hereunder as to the Shares to
be delivered at each Time of Delivery shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company are, at and as of such Time of Delivery, true and correct, the
condition that the Company and the Operating Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) the Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the Securities Act Regulations in accordance with Section 6(a) hereof; all
material required to be filed by the Company pursuant to Rule 433(d) under the
Securities Act shall have been filed with the Commission within the applicable
time period prescribed for such filings by Rule 433; if the Company has elected
to rely upon Rule 462(b) under the Securities Act, the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m., Washington, D.C. time, on
the date of this Agreement; no stop order suspending the effectiveness of the
Registration Statements or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; no stop order suspending or preventing the use of the Pricing
Prospectus, the Prospectus or any Issuer Free Writing Prospectus shall have been
initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel for the Underwriters, shall
have furnished to you its written opinion, each dated such Time of Delivery,
with respect to the issuance and sales of the Shares and other related matters
as you may reasonably require;
(c) the General Counsel of the Company shall have furnished to you her
written opinion, dated such Time of Delivery, in the form attached as Exhibit A
hereto;
(d) Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Company,
shall have furnished to you its written opinion and letter, each dated such Time
of Delivery, in the form attached as Exhibit B hereto;
(e) Xxxxxxx LLP, special Maryland counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in the form
attached as Exhibit C hereto;
(f) Xxxxxxxx & Xxxxxxxx LLP, counsel for WHSHC, L.L.C. and W9/WHSHC,
L.L.C. I, shall have furnished to you its written opinion, dated the Time of
Delivery, in the form substantially acceptable to Xxxxxxxx & Xxxxxxxx LLP and
the Underwriters;
(g) Xxxxxxx Procter LLP, counsel for Strategic Value Investors, LLC,
The Prudential Insurance Company of America, Prudential Investment Management,
Inc., PIC Realty Corporation, Prudential Assets LLC, (SHC/Olayan) Redemption
Vehicle, LLC and SVI (SHC/Houston) Redemption Vehicle, LLC, shall have furnished
to you its written opinion, dated the Time of Delivery, in the form in the form
substantially acceptable to Xxxxxxx Xxxxxxx LLP and the Underwriters;
(h) on the date of the prospectus supplement, at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statements filed
subsequent to the date of this Agreement and also at each Time of Delivery,
Deloitte & Touche LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in the form attached as Exhibit D hereto;
(i) (i) neither the Company nor any of its Significant Subsidiaries
shall have sustained since the date of the latest audited financial statements
included in the Pricing Disclosure Package and the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Disclosure Package and the Prospectus, and (ii)
since the respective dates as of which information is given in the Pricing
Disclosure Package and the Prospectus there shall not have been any change in
the capital stock or members' equity, as applicable, or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general
affairs, management, financial position, stockholders' or members' equity, as
applicable, or results of operations of the Company and its subsidiaries, taken
as a whole, otherwise than as set forth or contemplated in the Pricing
Disclosure Package and the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at such Time of Delivery on the terms
and in the manner contemplated in the Pricing Disclosure Package and the
Prospectus;
(j) on or after the Applicable Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(k) on or after the Applicable Time there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the NYSE; (ii) a suspension or material limitation in
trading in the Company's securities on the NYSE; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war; or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic conditions
in the United States or elsewhere, if the effect of any such event specified in
clause (iv) or (v) in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(l) the Shares at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the NYSE;
(m) the National Association of Securities Dealers, Inc. shall not have
raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements;
(n) the Company shall have complied with the provisions of Section 6(d)
hereof with respect to furnishing copies of the Prospectus on the New York
Business Day next succeeding the date of this Agreement;
(o) the Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company reasonably
satisfactory to you as to the accuracy of the representations and warranties of
the Company, herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused
to be furnished certificates as to the matters set forth in subsections (a) and
(g) of this Section 10(o);
(p) each Selling Stockholder shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of such
Selling Stockholder reasonably satisfactory to you as to the accuracy in all
material respects (except if such representation or warranty is qualified by
materiality, then in all respects) of the representations and warranties of such
Selling Stockholder, herein at and as of the Time of Delivery, and as to the
performance by such Selling Stockholder in all material respects of its
obligations hereunder to be performed at or prior to the Time of Delivery;
(q) the Company shall have received lock-up agreements from the
following executive officers and directors in the form attached as Exhibit E
hereto, and such lock-up agreements shall be in full force and effect: Xxxxxxxx
X. Xxxxxx; Xxxxxx X. Xxxxx; Xxxx X. Xxxxxxxxx; Xxxxxx X. Xxxxxxx; Xxxxxx X.
Xxxxxx; Xxxxx Xxxx; Xxxxxxx X. Xxxxxx; Xxxxx X. Xxxxx; Xxxxx X. Xxxxxx; Xxxxxxx
Xxxxxxx; Xxxxxx X. Xxx; Xxxxxxx X. Xxxxxx; and Xxxxxxx X. Xxxxxx; and
(r) the Company shall have received lock-up agreements from Xxxxxx X.
Xxxxxx and Xxxxxxxx X. Xxxxxx in the forms attached at Exhibit F hereto, and
such lock-up agreements shall be in full force and effect.
11. Indemnification and Contribution.
(a) The Company and the Operating Company each, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Prospectus, the Registration
Statements, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Securities Act, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company and the
Operating Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statements, the Pricing Prospectus
or the Prospectus or any such amendment or supplement in reliance upon or any
Issuer Free Writing Prospectus and in conformity with written information
furnished to the Company by any Underwriter through DBS or WCM expressly for use
therein.
(b) Each Selling Stockholder, severally but not jointly, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities to which such Underwriter may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus containing the Selling Stockholders' Base Prospectus, the Pricing
Prospectus, the Selling Stockholders' Registration Statement or the Prospectus,
or any amendment or supplement thereto, any Issuer Free Writing Prospectus or
any "issuer information" filed or required to be filed pursuant to Rule 433(d)
under the Securities Act, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Pricing Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, any Issuer Free Writing Prospectus or any "issuer information" filed or
required to be filed pursuant to Rule 433(d) under the Securities Act, in
reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder specifically for use therein (which
information shall be limited to the information described in Section 2(f)
hereof); provided, however, that in no event shall the liability of any Selling
Stockholder for indemnification under this Section 11(b) exceed the net proceeds
received by such Selling Stockholder in the offering.
(c) Each Underwriter will indemnify and hold harmless the Company, the
Operating Company and the Selling Stockholders against any losses, claims,
damages or liabilities to which the Company, the Operating Company and the
Selling Stockholders may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statements, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statements,
the Pricing Prospectus or the Prospectus or any such amendment or supplement
thereto, or any Issuer Free Writing Prospectus, in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
expressly for use therein (which information shall be limited to the information
described in Section 1(b) hereof); and will reimburse the Company, the Operating
Company and the Selling Stockholders for any legal or other expenses reasonably
incurred by the Company, the Operating Company and the Selling Stockholders in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 11 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party 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 the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which 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 Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters' were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company under this Section 11 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Securities Act; and the obligations of the
Underwriters under this Section 11 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statements as
about to become a director of the Company) and to each person, if any, who
controls the Company or any Selling Stockholder within the meaning of the
Securities Act.
(g) Notwithstanding the foregoing, the indemnification and contribution
obligations of the Company and the Selling Stockholders to each other shall be
determined in accordance with Section 4.2 of the Registration Rights Agreement.
12. Defaulting Underwriters.
(a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling
Stockholders shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to purchase
such Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company and the Selling Stockholders that you have so
arranged for the purchase of such Shares, or the Company or any Selling
Stockholder notifies you that it has so arranged for the purchase of such
Shares, you, the Company or the Selling Stockholders shall have the right to
postpone the Time of Delivery for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the Registration
Statements or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statements or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section 12(a) with like effect as if such person had originally been
a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you, the Company and the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you, the Company and the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, or if the
Company and the Selling Stockholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Shares
of a defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to an Additional Time of Delivery, the obligations of the Underwriters
to purchase and of the Company and the Selling Stockholders to sell the Company
Optional Shares and Selling Stockholders' Optional Shares, respectively, shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriters or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 8 hereof and the indemnity and
contribution agreements in Section 11 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
13. Full Force and Effect. The respective indemnities, agreements,
representations, warranties and other statements of the Company, the Selling
Stockholders and the several Underwriters, as 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
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, any
Selling Stockholder or the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company and the Selling Stockholders in subsection (a) of
Section 11 hereof, the representations and warranties in subsections (b) and (d)
of Section 1 hereof and subsections (g) and (h) of Section 2 hereof and any
representation or warranty as to the accuracy of the Registration Statements or
the Prospectus contained in any certificate furnished by the Company or the
Selling Stockholders pursuant to Section 8 hereof, insofar as they may
constitute a basis for indemnification for liabilities (other than payment by
the Selling Stockholders and the Company of expenses incurred or paid in the
successful defense of any action, suit or proceeding) arising under the
Securities Act, shall not extend to the extent of any interest therein of a
controlling person or partner of an Underwriter who is a director, officer or
controlling person of the Company when the Registration Statements became
effective or who, with his or her consent, is named in the Registration
Statements as about to become a director of the Company, except in each case to
the extent that an interest of such character shall have been determined by a
court of appropriate jurisdiction as not against public policy as expressed in
the Securities Act. Unless in the opinion of counsel for the Company the matter
has been settled by controlling precedent, the Company will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question of whether such interest is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by DBS and WCM on behalf of you as the representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Deutsche Bank
Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Equity
Capital Markets, if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statements, Attention: General Counsel; provided, however, that any
notice to an Underwriter pursuant to Section 9(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company by you on request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
15. If this Agreement shall be terminated pursuant to Section 12
hereof, the Company shall not be under any liability to any Underwriter except
as provided in Sections 8 and 11 hereof; but, if for any other reason any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 8
and 11 hereof.
16. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Selling Stockholders and, to the
extent provided in Sections 11 and 13 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
17. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
18. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
19. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts (including by facsimile), each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
20. The Company and the Selling Stockholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without any party hereto imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Operating Company and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Operating Company for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Very truly yours,
STRATEGIC HOTEL CAPITAL, INC.
By: /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Executive Vice President and
Chief Financial Officer
STRATEGIC HOTEL FUNDING, L.L.C.
By: Strategic Hotel Capital, Inc.,
its Managing Member
By /s/ Xxxxx Xxxx
---------------------------------------------------
Name: Xxxxx Xxxx
Title: Executive Vice President and Chief Financial Officer
Accepted as of the date hereof on behalf of each of the Underwriters:
DEUTSCHE BANK SECURITIES INC.,
By: /s/ Xxxx Xxxxxxx
---------------------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
WACHOVIA CAPITAL MARKETS LLC,
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
Equity Capital Markets
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
PRUDENTIAL ASSETS, LLC
PIC REALTY CORPORATION
STRATEGIC VALUE INVESTORS, LLC
SHC/OLAYAN REDEMPTION VEHICLE, LLC
SVI (SHC/HOUSTON) REDEMPTION VEHICLE, LLC
By: Prudential Investment Management, Inc.,
its Attorney-in-Fact
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
WHSHC, L.L.C.
By: WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP VII, Managing Member
By: WH Advisors, L.L.C. VII, general partner
By: /s/ Xxxxxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
W9/WHSHC, L.L.C.
By: WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP IX, Managing Member
By: WH Advisors, L.L.C. IX, general partner
By: /s/ Xxxxxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
SCHEDULE I
----------
NUMBER OF
NUMBER OF SELLING
COMPANY STOCKHOLDERS'
OPTIONAL OPTIONAL
TOTAL NUMBER SHARES TO BE SHARES TO BE NUMBER OF
TOTAL NUMBER OF OF SELLING PURCHASED IF PURCHASED IF OPTIONAL SHARES TO
COMPANY FIRM STOCKHOLDERS' TOTAL NUMBER MAXIMUM MAXIMUM BE PURCHASED IF
SHARES TO BE FIRM SHARES TO OF FIRM SHARES OPTION OPTION MAXIMUM OPTION
UNDERWRITER PURCHASED BE PURCHASED TO BE PURCHASED EXERCISED EXERCISED EXERCISED
----------------------------------------------------------------------------------------------------------------------------------
DEUTSCHE BANK
SECURITIES INC. 4,631,250 6,500,739 11,131,989 308,750 1,361,049 1,669,799
WACHOVIA CAPITAL
MARKETS, LLC 2,493,750 3,500,398 5,994,148 166,250 732,872 899,122
XXXXXXX XXXXX & CO. 375,000 526,376 901,376 25,000 110,206 135,206
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 7,500,000 10,527,513 18,027,513 500,000 2,204,127 2,704,127
SCHEDULE II
-----------
NUMBER OF SELLING
STOCKHOLDERS' OPTIONAL SHARES
TOTAL NUMBER OF TO BE SOLD IF MAXIMUM OPTION
SELLING STOCKHOLDERS' IS EXERCISED
SELLING STOCKHOLDER FIRM SHARES TO BE SOLD
------------------------------------------------------------------------------------------------------------------
The Prudential Insurance Company of America 212,002 44,387
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
Prudential Investment Management, Inc. 16,334 3,421
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
Strategic Value Investors, LLC 2,901,449 607,471
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
Prudential Assets, LLC 624,614 130,774
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
PIC Realty Corporation 484,060 101,347
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
(SHC/Olayan) Redemption Vehicle, LLC 154,140 32,272
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
SVI (SHC/Houston) Redemption Vehicle, LLC 199,462 41,760
c/o Prudential Financial, Inc.
0 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000
NUMBER OF SELLING
STOCKHOLDERS' OPTIONAL SHARES
TOTAL NUMBER OF TO BE SOLD IF MAXIMUM OPTION
SELLING STOCKHOLDERS' IS EXERCISED
SELLING STOCKHOLDER FIRM SHARES TO BE SOLD
------------------------------------------------------------------------------------------------------------------
WHSHC, L.L.C. 3,067,810 642,302
c/o Whitehall Street Real Estate Limited Partnership VII
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
W9/WHSHC, L.L.C. I 2,867,642 600,393
c/o Whitehall Street Real Estate Limited Partnership IX
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
------------------------------------------------------------------------------------------------------------------
TOTAL 10,527,513 2,204,127
SCHEDULE III
------------
(A) ISSUER FREE WRITING PROSPECTUSES NOT INCLUDED IN THE PRICING DISCLOSURE
PACKAGE
None.
(B) MATERIAL OTHER THAN THE PRICING PROSPECTUS THAT COMPRISE THE PRICING
DISCLOSURE PACKAGE
Pricing Term Sheet.
