Exhibit 1.1
1,600,000 TRUST PREFERRED SECURITIES(1)
WESTCOAST HOSPITALITY CAPITAL TRUST
(LIQUIDATION AMOUNT OF $25 PER TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
WESTCOAST HOSPITALITY CORPORATION
UNDERWRITING AGREEMENT
February __, 2004
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
as Representative of the several Underwriters
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
WestCoast Hospitality Capital Trust, a statutory trust formed under the
laws of the State of Delaware (the "Trust"), and WestCoast Hospitality
Corporation, a Washington corporation (the "Company"), each confirms its
agreement with each of the underwriters listed on Schedule I hereto (each an
"Underwriter"; collectively, the "Underwriters"), for whom Friedman, Billings,
Xxxxxx & Co., Inc. is acting as representative (in such capacity, the
"Representative"), with respect to (i) the sale by the Trust of 1,600,000 (the
"Initial Securities") of its % Trust Preferred Securities (Liquidation
Amount of $25 per Trust Preferred Security) (the "Trust Preferred Securities"),
representing undivided preferred beneficial interests in the assets of the
Trust, guaranteed on a subordinated basis by the Company as to the payment of
distributions, and as to payments on liquidation and redemption, to the extent
set forth in the Trust Preferred Securities Guarantee Agreement (the "Preferred
Guarantee") between the Company and Wilmington Trust Company, as guarantee
trustee (the "Guarantee Trustee"), and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of Trust Preferred
Securities set forth opposite their names in Schedule I hereto, and (ii) the
grant by the Trust to the Underwriters, acting severally and not jointly, of the
option described in Section 1(b) hereof to purchase all or any part of an
additional 240,000 Trust Preferred Securities to cover over-allotments (the
"Option Securities"), if any, in the respective number of Trust Preferred
Securities set forth opposite their names in Schedule I hereto. The Initial
Securities and such portion of the Option Securities as are purchased pursuant
to Section l(b) hereof are hereinafter called, collectively, the "Preferred
Securities." The Trust will purchase, with the proceeds of the sale of the
Preferred Securities and 49,486 (or 56,908 assuming full exercise by the
Underwriters of the over-allotment option described herein) of its % Trust
Common Securities (Liquidation Amount of $25 per Trust Common Security) (the
"Common Securities"), $41,237,150 aggregate principal amount (or $47,422,700
aggregate principal amount assuming full exercise by the Underwriters of the
over-allotment option described herein) of % Junior Subordinated Debentures due
_____ __, 2044 (the "Debentures") of the Company, to be issued pursuant to an
Indenture to be dated as
--------
(1) Plus an option from the Trust to purchase up to an additional 240,000
Trust Preferred Securities.
of the Closing Time (as hereinafter defined) (the "Indenture") between the
Company and Wilmington Trust Company, as trustee (the "Indenture Trustee").
Immediately after the Closing Time, the Company will be the holder of all
of the Common Securities. The Common Securities will represent subordinated
undivided common beneficial interests in the assets of the Trust, guaranteed on
a subordinated basis by the Company as to the payment of distributions, and as
to payments on liquidation and redemption, to the extent set forth in the Trust
Common Securities Guarantee Agreement (the "Common Guarantee") between the
Company and Wilmington Trust Company. The Trust will be subject to the
provisions of an Amended and Restated Declaration of Trust (the "Declaration")
to be dated as of the Closing Time among the Company, as sponsor of the Trust,
Wilmington Trust Company, as property trustee (the "Property Trustee"),
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee"), two
individual trustees who are officers of the Company (the "Administrative
Trustees") and the holders, from time to time, of undivided beneficial interests
of the Trust. The Property Trustee, the Delaware Trustee and the Administrative
Trustees are collectively referred to herein as the "Trustees."
The Trust and the Company understand that the Underwriters propose to make
a public offering of the Preferred Securities as soon as the Underwriters deem
advisable after this Underwriting Agreement (the "Agreement") has been executed
and delivered and the Declaration, the Indenture and the Preferred Guarantee
have been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act").
The Trust and the Company have filed with the Securities and Exchange
Commission (the "Commission") a joint registration statement on Form S-1 (Nos.
333-110214 and 333-110214-01) and a related preliminary prospectus for the
registration of the Preferred Securities, the Debentures and the Preferred
Guarantee under the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations thereunder (the "Securities Act Regulations"). The
Trust and the Company have prepared and filed such amendments thereto, if any,
and such amended preliminary prospectuses, if any, as may have been required to
the date hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required. The registration statement
has been declared effective under the Securities Act by the Commission. The
registration statement, as amended at the time it became effective (including
all information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 430A of the Securities Act Regulations), is
hereinafter called the "Registration Statement," except that, if the Trust and
the Company file a post-effective amendment to such registration statement which
becomes effective prior to the Closing Time, "Registration Statement" shall
refer to such registration statement as so amended. Any registration statement
filed pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter
called the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the 462(b) Registration Statement. Each
prospectus included in the Registration Statement, or amendments thereof or
supplements thereto, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Trust and the Company with the
consent of the Underwriters pursuant to Rule 424(a) of the Securities Act
Regulations is hereinafter called the "Preliminary Prospectus." The term
"Prospectus" means the final prospectus, as first filed with the Commission
pursuant to Rule 424(b) of the Securities Act Regulations, and any amendments
thereof or supplements thereto. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
The Trust, the Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Securities. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per Trust Preferred Security of $25.00, the Trust agrees
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to sell to the Underwriters the number of Initial Securities set forth in
Schedule I opposite each Underwriter's name, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust the number of Initial
Securities set forth in Schedule I opposite such Underwriter's name, plus any
additional number of Initial Securities that such Underwriter may become
obligated to purchase pursuant to the provisions of Section 8 hereof, subject in
each case, to such adjustments among the Underwriters as the Representative, in
its sole discretion, shall make to eliminate any sales or purchases of
fractional Trust Preferred Securities.
(b) Option Securities. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per Trust Preferred Security set forth in subsection (a) above, the Trust
hereby grants an option to the Underwriters, acting severally and not jointly,
to purchase from the Trust all or any part of the Option Securities, plus any
additional number of Option Securities that such Underwriters may become
obligated to purchase pursuant to the provisions of Section 8 hereof. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representative to the
Trust setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representative, but shall not be later
than three full business days (or earlier, without the consent of the Company,
than two full business days) after the exercise of such option, nor in any event
prior to the Closing Time. If the option is exercised as to all or any portion
of the Option Securities, the Trust will sell and each Underwriter, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased, which the number of Initial Securities
set forth in Schedule I opposite the name of such Underwriter bears to the total
number of Initial Securities, plus any additional number of Option Securities
that such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof, subject in each case to such adjustments among
the Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional Trust Preferred Securities.
(c) Underwriting Compensation. As compensation to the Underwriters for
their commitments hereunder, and in view of the fact that the proceeds of the
sale of the Preferred Securities and Common Securities will be used by the Trust
to purchase the Debentures, the Company at the Closing Time or any Date of
Delivery (as hereinafter defined) shall pay to Friedman, Billings, Xxxxxx & Co.,
Inc., for the respective accounts of the several Underwriters, an amount equal
to $_______ per Trust Preferred Security for the Preferred Securities delivered
by the Trust pursuant hereto at the Closing Time or any Date of Delivery. In
addition, the Company shall, for a period of six months from the Closing Time,
appoint Friedman, Billings, Xxxxxx & Co., Inc. to act as lead underwriter or
placement agent in connection with any public or private offering of equity or
corporate debt securities (other than Excluded Securities) of the Company or any
Subsidiary (as hereinafter defined) or other capital market financing, to act as
dealer manager with respect to any self-tender offer by the Company and to act
as financial advisor in connection with any sale of all or substantially all of
the assets of the Company or a sale of equity of the Company which constitutes a
controlling equity interest in the Company. The term "Excluded Securities" means
any securities offered, sold or issued pursuant to or in connection with (i)
employee benefit plans of the Company, (ii) the acquisition by the Company or
any Subsidiary (as hereinafter defined) of any asset or entity, (iii) the
refinancing by the Company or any Subsidiary from time to time of any owned or
leased hotel or hotels, (iv) the consummation by the Company or any Subsidiary
with a third party of any credit facility or revolving credit line or (v)
registration by the Company of any existing unregistered securities of the
Company.
2. Payment and Delivery:
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(a) Initial Securities. The Initial Securities to be purchased by each
Underwriter hereunder, in definitive form, shall be delivered by or on behalf of
the Trust to the Representative, in the form of one or more global securities
(or an interest therein) through the facilities of The Depository Trust Company
("DTC") for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representative by the Trust
upon at least 48 hours' prior notice. The Trust will cause the certificate or
certificates representing the Initial Securities to be made available for
checking at least 24 hours prior to the Closing Time at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on the third
(fourth, if pricing occurs after 4:30 p.m., New York City time) business day
after the date hereof (unless another time and date shall be agreed to by the
Representative and the Trust). The time at which such payment and delivery are
actually made is hereinafter sometimes called the "Closing Time" and the date of
delivery of both Initial Securities and Option Securities is hereinafter
sometimes called the "Date of Delivery." Interests in the Preferred Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus.
(b) Option Securities. Any Option Securities to be purchased by each
Underwriter hereunder, in definitive form, shall be delivered by or on behalf of
the Trust to the Representative, in the form of one or more global securities
(or an interest therein) through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified in writing to the Representative by the Trust upon at least 48 hours'
prior notice. The Trust will cause the certificate or certificates representing
the Option Securities to be made available for checking at least 24 hours prior
to the Date of Delivery with respect thereto at the Designated Office. The time
and date of such delivery and payment shall be 9:30 a.m., New York City time, on
the date specified by the Representative in the notice given by the
Representative to the Trust of the Underwriters' election to purchase such
Option Securities (unless another time and date shall be agreed to by the
Representative and the Trust).
(c) Documents. The documents to be delivered at Closing Time or any Date
of Delivery on behalf of the parties hereto pursuant to Section 6 hereof, shall
be delivered at the offices of Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, and the Preferred Securities will be delivered at the Designated
Office, all at Closing Time or such Date of Delivery, as the case may be.
3. Representations and Warranties of the Trust and the Company:
The Trust and the Company, jointly and severally, represent and warrant to
each Underwriter that:
(a) the Company has an authorized capitalization as of September 30, 2003
as set forth in the Prospectus (and there have not been any subsequent issuances
of capital stock of the Company except for issuances pursuant to stock options
held by employees and directors of the Company and the Subsidiaries); the
outstanding shares of capital stock, the partnership interests, membership
interests or other equity interests, as the case may be, of the Company and each
direct or indirect subsidiary of the Company other than the Trust that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
promulgated by the Commission, all of which subsidiaries are named in Exhibit 21
to the Registration Statement (each, a "Subsidiary"; collectively,
"Subsidiaries") have been duly and validly authorized and issued and are fully
paid and nonassessable; except as disclosed in the Prospectus, all of the
outstanding shares of capital stock of, or the partnership interests, membership
interests or other equity interests in, as the case may be, any Subsidiary are
directly or indirectly owned of record and beneficially by the Company; except
as disclosed in the Prospectus and except for outstanding stock options held by
employees and directors of the Company and the Subsidiaries, there are no
outstanding (i) securities or obligations of the Company or of any Subsidiary
convertible into or exchangeable for any
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capital stock of or partnership interests, membership interests or other equity
interests, as the case may be, in the Company or any such Subsidiary, (ii)
warrants, rights or options to subscribe for or purchase from the Company or any
such Subsidiary any such capital stock, partnership interests, membership
interests or other equity interests, as the case may be, or any such convertible
or exchangeable securities or obligations or (iii) obligations of the Company or
any such Subsidiary to issue any securities or obligations, any such convertible
or exchangeable securities or obligations, or any such warrants, rights or
options;
(b) each of the Company and the Subsidiaries has been duly incorporated or
formed and is validly existing as a corporation, general or limited partnership,
limited liability company or trust, as the case may be, in good standing under
the laws of its respective jurisdiction of incorporation or formation with full
corporate, partnership, limited liability company or trust power and authority
to own, lease and operate its respective properties and to conduct its
respective businesses as described in the Registration Statement and the
Prospectus and to execute and deliver this Agreement, the Guarantor Agreements
(as hereinafter defined) and the Debentures (to the extent a party thereto) and
to consummate the transactions contemplated hereby and thereby;
(c) each of the Company and the Subsidiaries is duly qualified or licensed
and is in good standing in each jurisdiction in which it conducts its business
or in which it owns or leases real property or otherwise maintains an office and
in which the failure, individually or in the aggregate, to be so qualified or
licensed could have a material adverse effect on the assets, business,
operations, earnings, prospects, properties or condition (financial or
otherwise), present or prospective, of the Company and the Covered Entities (as
defined below), taken as a whole (any such effect or change, where the context
so requires, is hereinafter called a "Material Adverse Effect" or "Material
Adverse Change"); except as disclosed in the Prospectus, no Subsidiary is
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such Subsidiary's
capital stock, partnership interests, membership interests or other equity
interests, as the case may be, or from repaying to the Company or any other
Subsidiary any amounts which may from time to time become due under any loans or
advances to such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or to any
other Subsidiary; except as disclosed in the Registration Statement, the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, limited liability company, trust, joint venture or other entity;
(d) the Trust has been duly established and is validly existing as a
statutory trust in good standing under the Delaware Statutory Trust Act with the
trust power and authority to own property and conduct its business as described
in the Registration Statement and the Prospectus and to enter into and perform
its obligations under this Agreement and the Declaration and to consummate the
transactions herein contemplated; the Trust has conducted and will conduct no
business other than as contemplated by this Agreement and described in the
Prospectus; the Trust is duly qualified to transact business as a foreign
company and is in good standing in each jurisdiction in which the conduct of its
business or the ownership of its property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would not
materially and adversely effect the Trust; the Trust is not a party to or
otherwise bound by any agreement or instrument other than those described in the
Registration Statement and the Prospectus; based on expected operations and
current law, the Trust will be classified for U.S. federal income tax purposes
as a grantor trust and will not be taxable as a corporation; the Trust is, and
at the Closing Time or any Date of Delivery will be, treated as a
non-consolidated subsidiary of the Company pursuant to generally accepted
accounting principles as applied in the United States; the Trust is not a party
to or subject to any action, suit or proceeding of any nature; the Trust has no
liabilities or obligations other than those arising out of the transactions
contemplated by this Agreement and the Declaration and described in the
Registration Statement and the Prospectus;
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(e) the Trust, the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders, decrees
and judgments, including those relating to transactions with affiliates, except
for any failure to comply which could not have a Material Adverse Effect;
(f) none of the Trust, the Company or any of the Subsidiaries is in breach
of or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its respective
organizational documents, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to
which the Trust, the Company or any Subsidiary is a party or by which any of
them or their respective properties is bound, except, in the case of the Company
and the Subsidiaries, for such breaches or defaults which could not have a
Material Adverse Effect;
(g) the execution, delivery and performance of this Agreement by the
Trust, the compliance by the Trust with all the provisions of this Agreement and
the Declaration and the consummation by the Trust of the transactions
contemplated hereby and thereby, including the issuance and sale of the
Preferred Securities and the Common Securities by the Trust, the purchase of the
Debentures by the Trust and the distribution of the Debentures by the Trust in
the circumstances contemplated by the Declaration and described in the
Registration Statement and the Prospectus, and the execution, delivery and
performance of this Agreement, the Debentures and each of the Guarantor
Agreements by the Company, the compliance by the Company with all the provisions
hereof and thereof and the consummation of the transactions contemplated hereby
and thereby including the sale of the Debentures by the Company to the Trust and
the issuance by the Company of the Preferred Guarantee and the Common Guarantee,
have been duly authorized by all necessary action on the part of the Trust and
do not and will not (i) result in any violation of the Declaration or the
Certificate of Trust of the Trust, (ii) conflict with, or result in any breach
of, or constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of, or default under) (A) any
provision of the Declaration or the Certificate of Trust of the Trust or (B) any
provision of any contract, license, indenture, mortgage, note, lease, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Trust is a party or by which it or its properties may be bound or affected, or
under any U.S. federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Trust, (iii) conflict with, or
result in any breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both would constitute a breach of, or
default under) (A) any provision of the organizational documents of the Company
or any Subsidiary or (B) any provision of any contract, license, indenture,
mortgage, note, lease, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them or their respective properties may be bound or affected, or
under any U.S. federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any Subsidiary, (iv)
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Trust, or (v) result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or asset
of the Company or the Subsidiaries, except such violations, conflicts, breaches,
defaults or creations or impositions that could not, individually or in the
aggregate, have a Material Adverse Effect and could not, individually or in the
aggregate, be materially adverse to the Trust;
(h) this Agreement has been duly authorized, executed and delivered by the
Trust and the Company and is a legal, valid and binding agreement of the Trust
and the Company enforceable in accordance with its terms, except as may be
limited by (A) bankruptcy, insolvency, moratorium, receivership, liquidation,
fraudulent conveyance, reorganization, and other similar laws relating to or
affecting the remedies and rights of creditors, (B) principles of equity,
including applicable law relating to fiduciary duties (regardless of whether
considered or applied in a proceeding in equity or at law) and (C)
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the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution;
(i) each of the Preferred Guarantee, the Common Guarantee, the Declaration
and the Indenture (collectively, the "Guarantor Agreements") has been duly
authorized, executed and delivered by the Company and constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by (A) bankruptcy,
insolvency, moratorium, receivership, liquidation, fraudulent conveyance,
reorganization, and other similar laws relating to or affecting the remedies and
rights of creditors, and (B) principles of equity (regardless of whether
considered or applied in a proceeding in equity or at law); each of the
Guarantor Agreements will conform in all material respects to all statements
relating thereto contained in the Prospectus; each of the Preferred Guarantee,
the Declaration and the Indenture has been duly qualified under the 1939 Act and
is in substantially the form filed as an exhibit to the Registration Statement;
(j) the Debentures have been duly authorized and at Closing Time and on
each Date of Delivery, if any, will have been validly executed and delivered by
the Company; when the Debentures have been executed and authenticated in
accordance with the provisions of the Indenture and delivered to the Trust
against payment therefor as described in the Prospectus, the Debentures will be
in the form contemplated by, and entitled to the benefits of, the Indenture,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as may be limited by
(A) bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity (regardless of
whether considered or applied in a proceeding in equity or at law); will conform
in all material respects to all statements relating thereto contained in the
Prospectus and will be owned by the Trust free and clear of any security
interest, mortgage, pledge, lien, encumbrance, restriction upon transfer,
preemptive rights, claim or equity; the Debentures are in substantially the form
filed as an exhibit to the Registration Statement;
(k) no approval, authorization, consent, license, order, registration,
qualification or decree of or filing with any U.S. federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency
(each, a "Governmental Authority") is required in connection with the execution,
delivery and performance of this Agreement or any of the Guarantor Agreements by
the Company or the Trust (to the extent a party thereto) and the consummation of
the transactions contemplated herein or therein, other than (i) such as have
been obtained, or will have been obtained at or prior to the Closing Time or the
relevant Date of Delivery, as the case may be, under the Securities Act, the
Securities Exchange Act of 1934 (the "Exchange Act") and the 1939 Act, and (ii)
such approvals as have been obtained in connection with the approval of the
listing of the Preferred Securities on the New York Stock Exchange, Inc. (the
"NYSE");
(l) each of the Company and the Subsidiaries has all necessary permits,
licenses, authorizations, consents and approvals and has made all necessary
filings required under any U.S. federal, state, local or foreign law, regulation
or rule, and has obtained all necessary permits, licenses, authorizations,
consents and approvals from other persons, required to conduct its business as
described in the Prospectus, except to the extent that the failure to have any
such permits, licenses, authorizations, consents or approvals, to make any such
filings or to obtain any such permits, licenses, authorizations, consents or
approvals could not, individually or in the aggregate, have a Material Adverse
Effect; neither the Company nor any Subsidiary is required by any applicable law
to obtain accreditation or certification from any Governmental Authority in
order to provide the products and services which it currently provides or which
it proposes to provide as set forth in the Prospectus; neither the Company nor
any Subsidiary is in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such permit,
license, authorization, consent or approval or any U.S. federal, state, local
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or foreign law, regulation or rule or any decree, order or judgment applicable
to the Company or any Subsidiary, the effect of which could result in a Material
Adverse Change; and no such permit, license, authorization, consent or approval
contains a materially burdensome restriction that is not adequately disclosed in
the Registration Statement and the Prospectus;
(m) the Registration Statement has become effective under the Securities
Act and no stop order suspending the effectiveness of the Registration Statement
has been issued under the Securities Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Trust and the
Company, are threatened by the Commission, and the Trust and the Company have
complied with any request on the part of the Commission for additional
information;
(n) the Preliminary Prospectus and the Registration Statement comply, and
the Prospectus and any further amendments or supplements thereto will, when they
have become effective or are filed with the Commission, as the case may be,
comply, in all material respects with the requirements of the Securities Act and
the Securities Act Regulations; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
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 (with
respect to the Prospectus only, in the light of the circumstances under which
they were made) not misleading; and the Preliminary Prospectus does not, and the
Prospectus or any amendment or supplement thereto will not, as of the applicable
filing date and at the Closing Time and on each later Date of Delivery (if any),
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 the Company and the Trust make no warranty or
representation with respect to any statement contained in the Registration
Statement, the Prospectus or the Preliminary Prospectus in reliance upon and in
conformity with the information concerning the Underwriters and furnished in
writing by or on behalf of the Underwriters through the Representative to the
Company and the Trust expressly for use in the Registration Statement, the
Prospectus or the Preliminary Prospectus (that information being limited to that
described in the penultimate sentence of Section 9(c) hereof);
(o) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
respective version of the Preliminary Prospectus or the Prospectus created to be
transmitted to the Commission for filing via the Electronic Data Gathering
Analysis and Retrieval System ("XXXXX"), except to the extent permitted by
Regulation S-T;
(p) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary or any of their respective officers, directors, partners, members
or trustees, as applicable, or to which the properties, assets or rights of any
such entity are subject, at law or in equity, before or by any Governmental
Authority or arbitral panel which are required to be disclosed in the
Registration Statement and the Prospectus or which could result in a judgment,
decree, award or order having a Material Adverse Effect;
(q) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and the other entities to which such financial
statements relate (such other entities, the "Covered Entities") as of the dates
indicated and the consolidated results of operations and changes in financial
position and cash flows of the Company and the Covered Entities for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States and on
a consistent basis during the periods involved and in accordance with Regulation
S-X promulgated by the Commission; the amounts in the Prospectus under the
captions "Summary - Summary Consolidated Financial and Other Data," "Ratios of
Consolidated Earnings and EBITDA to Combined Fixed Charges
8
and Preferred Stock Dividends" and "Selected Consolidated Financial Data" fairly
present the information shown therein and have been compiled on a basis
consistent with the financial statements included in the Registration Statement
and the Prospectus;
(r) BDO Xxxxxxx, LLP and PricewaterhouseCoopers LLP, whose reports on the
consolidated financial statements of the Company and the Covered Entities are
filed with the Commission as part of the Registration Statement and the
Prospectus, and any other accounting firm that has certified Company financial
statements and delivered its reports with respect thereto, are, and were during
the periods covered by their reports, independent public accountants as required
by the Securities Act and the Securities Act Regulations;
(s) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or the Prospectus, there has not been (i)
any Material Adverse Change or any development that could result in a Material
Adverse Change, whether or not arising in the ordinary course of business, (ii)
any transaction that is material to the Company and the Covered Entities, taken
as a whole, contemplated or entered into by the Company or any of the
Subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any Subsidiary that is material to the
Company and the Covered Entities, taken as a whole or (iv) except for the
regular quarterly dividends on the Series A Preferred Stock and Series B
Preferred Stock of the Company in amounts per share that are consistent with
past practice, any dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock or any Subsidiary on any of its
equity interests;
(t) except for registration rights held by Doubletree Corporation with
respect to Series A Preferred Stock and Series B Preferred Stock of the Company
held by it, 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 Statement or otherwise registered by the Company under the
Securities Act;
(u) the Preferred Securities have been duly and validly authorized by the
Trust and, when issued and delivered to the Underwriters against payment
therefor as provided herein, will be duly and validly issued and fully paid and
nonassessable undivided preferred beneficial interests in the assets of the
Trust, and, except as described in the Prospectus, will be free and clear of any
pledge, lien, encumbrance, security interest or other claim created by the
Company, the Covered Entities or the Trust, and will conform in all material
respects to the description thereof contained in the Prospectus; the issuance of
the Preferred Securities by the Trust is not subject to preemptive or other
similar rights arising by operation of law, under the organizational documents
of the Trust, the Company or any Subsidiary or under any agreement to which the
Trust, the Company or any Subsidiary is a party or otherwise; the Preferred
Securities will have the rights set forth in the Declaration, and the terms of
the Preferred Securities are valid and binding on the Trust;
(v) the Common Securities have been duly and validly authorized by the
Trust and, when issued and delivered by the Trust to the Company against payment
therefor as described in the Registration Statement and the Prospectus, will be
duly and validly issued, fully paid and nonassessable undivided subordinated
beneficial interests in the assets of the Trust and will conform in all material
respects to the description thereof contained in the Prospectus; the issuance of
the Common Securities by the Trust is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Trust, the Company or any Subsidiary or under any agreement to which the Trust,
the Company or any Subsidiary is a party or otherwise; and at the Closing Time
and each Date of Delivery, if any, all of the issued and outstanding Common
Securities of the Trust will be directly owned by the
9
Company; the Common Securities and the Preferred Securities are the only
interests authorized to be issued by the Trust;
(w) the Preferred Securities have been approved for listing on the NYSE,
subject to official notice of issuance, and the form of certificate used to
evidence the Preferred Securities complies in all material respects with all
applicable statutory requirements, with any applicable requirements of the
organizational documents of the Trust and the requirements of the NYSE;
(x) none of the Trust, the Company, nor the Subsidiaries and their
respective directors, officers, affiliates, and controlling persons has taken,
or will 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 Trust or the
Company to facilitate the sale or resale of the Preferred Securities;
(y) none of the Trust, the Company or any of their affiliates (i) is
required to register as a "broker" or "dealer" in accordance with the provisions
of the Exchange Act, or the rules and regulations thereunder (the "Exchange Act
Regulations"), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")) any member firm of the NASD;
(z) neither the Trust nor the Company has relied upon the Representative
or legal counsel for the Representative for any legal, tax or accounting advice
in connection with the offering and sale of the Preferred Securities;
(aa) the Company and the Subsidiaries have good and marketable title in
fee simple to, or a valid leasehold interest in, all real property described in
the Prospectus as owned or leased by them, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, claims, charges, restrictions, encumbrances, mortgages and
defects of any kind, except such as secure obligations of the Company and the
Covered Entities disclosed in the Prospectus or such as do not materially and
adversely affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company and the
Subsidiaries; and any real property improvements, equipment and personal
property held under lease by the Company or any Subsidiary are held under valid,
existing and enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the use made or
proposed to be made of such property improvements, equipment and personal
property by the Company or such Subsidiary; the Company or a Subsidiary has
obtained an owner's or leasehold title insurance policy, from a title insurance
company licensed to issue such policy, on any real property owned in fee or
leased, as the case may be, by the Company or any Subsidiary, that insures the
Company's or the Subsidiary's fee or leasehold interest, as the case may be, in
such real property, 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 a lender's title
insurance policy insuring the lien of its mortgage securing the real property
with coverage equal to the maximum aggregate principal amount of indebtedness
held by the Company or a Subsidiary and secured by the real property, except
where the failure to obtain any such policy could not have a Material Adverse
Effect; all of the leases and subleases material to the business of the Company
and the Subsidiaries are in full force and effect, and neither the Company nor
any of the Subsidiaries has received any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company or
any of the Subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary of the
continued possession of the leased or subleased premises;
10
(bb) all real property owned or leased by the Company or a Subsidiary is
free of material structural defects and all building systems contained therein
are in good working order in all material respects, subject to ordinary wear and
tear or, or, in each instance, the Company or a Subsidiary, as the case may be,
has created an adequate reserve to effect reasonably required repairs,
maintenance and capital expenditures; to the knowledge of the Company and such
Subsidiary, water, storm water, sanitary sewer, electricity and telephone
service are all available at the property lines of such property over duly
dedicated streets or perpetual easements of record benefiting such property;
except as described in the Prospectus, to the knowledge of the Company and such
Subsidiary, there is no pending or threatened special assessment, tax reduction
proceeding or other action that, individually or in the aggregate, could
reasonably be expected to increase or decrease the real property taxes or
assessments of any of such property, that, individually or in the aggregate,
could have a Material Adverse Effect;
(cc) the mortgages and deeds of trust encumbering any real property owned
in fee or leased by the Company or a Subsidiary (i) are not convertible (in the
absence of foreclosure) into an equity interest in the Real Property (as
hereinafter defined) or in the Company or any Subsidiary, and none of the
Company or the Subsidiaries hold a participating interest therein, (ii) except
as set forth in the Prospectus, are not cross-defaulted to any indebtedness
other than indebtedness of the Company or any of the Covered Entities and (iii)
are not cross-collateralized to any real property not owned by the Company or
any of the Covered Entities;
(dd) the descriptions in the Registration Statement and the Prospectus of
the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be shown,
and there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required; all agreements between the Company or
any of the Subsidiaries and third parties expressly referenced in the Prospectus
are legal, valid and binding obligations of the Company or one or more of the
Subsidiaries, and to the knowledge of the Company and such Subsidiaries, with
respect to third parties, enforceable in accordance with their respective terms,
except to the extent enforceability may be limited by (A) bankruptcy,
insolvency, moratorium, receivership, liquidation, fraudulent conveyance,
reorganization, and other similar laws relating to or affecting the remedies and
rights of creditors, and (B) principles of equity (regardless of whether
considered or applied in a proceeding in equity or at law);
(ee) the Company and each of the Subsidiaries owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and each Subsidiary to conduct
its business as described in the Prospectus, and neither the Company nor any
Subsidiary has received notice of infringement of or conflict with (and the
Company or such Subsidiary knows of no such infringement of or conflict with)
asserted rights of others with respect to any Intangibles which could have a
Material Adverse Effect;
(ff) each of the Company and the Subsidiaries makes and keeps books,
records, and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of its assets; and each of the Company
and the Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
11
(gg) as required by Rule 13a-15 under the Exchange Act, the Company's
principal executive officer, principal financial officer, and other members of
senior management have evaluated the design and operations of the disclosure
controls and procedures of the Company. Based on this evaluation, the Company's
Chief Executive Officer and Chief Financial Officer have concluded that the
disclosure controls and procedures effectively ensure that information required
to be disclosed in the Company's filings and submissions with the Commission
under the Exchange Act, is collected and communicated to the Company's
management (including, without limitation, the principal executive officer and
principal financial officer of the Company) and is recorded, processed,
summarized and reported within the time periods specified by the Commission. In
addition, there have not been any changes in the Company's internal control over
financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely
to materially affect, the Company's internal control over financial reporting;
(hh) the Company has not, directly or indirectly, including through any
Subsidiary, extended credit, arranged to extend credit, or renewed any extension
of credit, in the form of a personal loan, to or for any director or executive
officer of the Company, or to or for any family member or affiliate of any
director or executive officer of the Company;
(ii) any statistical and market-related data included in the Registration
Statement and the Prospectus are based on or derived from sources that the
Company believes to be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to the extent
required;
(jj) neither the Company nor any Subsidiary nor, to the Company's
knowledge after due inquiry, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Registration Statement or the Prospectus;
(kk) to the Company's knowledge after due inquiry, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement and the Prospectus;
(ll) to the Company's knowledge after due inquiry, the Company and its
directors and officers, in their capacity as such, are in compliance with all
presently applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations promulgated thereunder;
(mm) each of the Company and the Subsidiaries maintains insurance (issued
by insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and consistent
with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect;
(nn) neither the Company nor any of the Subsidiaries is in violation, or
has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the Company
or any of the Subsidiaries; the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable U.S.
federal, state, local and foreign occupational safety and health and
environmental laws and regulations to conduct their respective businesses, and
the Company and the Subsidiaries are in compliance with all terms and conditions
of any such permit, license or approval, except any such violation of law or
regulation, failure to receive required
12
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which could not, individually
or in the aggregate, result in a Material Adverse Change;
(oo) each of the Company and the Subsidiaries has filed on a timely basis
all necessary U.S. federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all taxes
shown as due thereon; and no tax deficiency has been asserted against any such
entity, nor does any such entity know of any tax deficiency which is likely to
be asserted against any such entity which, if determined adversely to any such
entity, could materially and adversely affect the business, prospects,
properties, assets, results of operations or condition (financial or otherwise)
of any such entity, respectively; all tax liabilities are adequately provided
for on the respective books of such entities;
(pp) neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any U.S. federal, state, local
or foreign law relating to discrimination in the hiring, promotion or pay of
employees, or any applicable U.S. federal, state, local or foreign wages and
hours law, which violation could have a Material Adverse Effect;
(qq) each of the Company and the Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any
liability; each of the Company and the Subsidiaries has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412 or
4971 of the Internal Revenue Code of 1986, as amended (the "Code"); and each
"pension plan" for which each of the Company and the Subsidiaries would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification;
(rr) neither the Company nor any of the Subsidiaries nor any officer,
director, partner, member or trustee, as applicable, purporting to act on behalf
of the Company or any of the Subsidiaries has at any time (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law, (ii) made any payment to any U.S.
federal, state, local or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law, or (iii) engaged in any transactions,
maintained any bank account or used any corporate funds except for transactions,
bank accounts and funds which have been and are reflected in the normally
maintained books and records of the Company and the Subsidiaries;
(ss) there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of the Subsidiaries to or for
the benefit of any of the officers, directors, partners, members or trustees, as
applicable, of the Company or any of the Subsidiaries or any of the members of
the families of any of them;
(tt) all securities issued by the Company, any of the Subsidiaries or any
trusts established by the Company or any Subsidiary, have been issued and sold
in compliance with (i) all applicable U.S. federal and state securities laws,
(ii) the laws of the applicable jurisdiction of organization of the issuing
entity and (iii) to the extent applicable to the issuing entity, the
requirements of the NYSE;
13
(uu) neither the Company nor any Subsidiary knows of any violation of any
U.S. federal, state, local or foreign law, rule or regulation (including those
pertaining to environmental matters) concerning the Real Property or any part
thereof that, individually or in the aggregate, could have a Material Adverse
Effect; each Real Property complies with all applicable zoning laws, ordinances,
regulations and deed restrictions or other covenants in all material respects
and, if and to the extent there is a failure to comply, such failure does not
materially impair the value of any of the Real Properties and will not result in
a forfeiture or reversion of title; neither the Company nor any of the
Subsidiaries has received from any Governmental Authority having or claiming
jurisdiction over the properties and assets described in the Prospectus any
written notice of any condemnation of or zoning change affecting the Real
Property or any part thereof, and neither the Company nor any of the
Subsidiaries knows of any such condemnation or zoning change which is threatened
and which if consummated could have a Material Adverse Effect; all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Real Property) of the Company or any of the other
Subsidiaries that are required to be described in the Prospectus (or, the most
recent Preliminary Prospectus) are disclosed therein; no lessee of any portion
of any of the Real Property is in default under any of the leases governing such
Real Property and there is no event which, but for the passage of time or the
giving of notice or both would constitute a default under any of such leases,
except such defaults that could not have a Material Adverse Effect; and no
tenant under any lease pursuant to which any of the Subsidiaries leases the Real
Property (as hereinafter defined) has an option or right of first refusal to
purchase the premises leased thereunder or the building of which such premises
are a part, except as such options or rights of first refusal which, if
exercised, could not have a Material Adverse Effect, and except as provided by
law;
(vv) (i) except as would not have a Material Adverse Effect, neither the
Company nor any Subsidiary nor, to the best knowledge of the Company and such
Subsidiary, any other owners of the property 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 leased, owned or controlled, including any real property underlying any
loan held or to be held by the Company or any of the Subsidiaries (collectively,
the "Real Property"), other than by any such action taken in compliance with all
applicable Environmental Statutes (as hereinafter defined) or by the Company,
any of the Subsidiaries or any other party in connection with the ordinary use
of residential, retail or commercial properties leased, owned or controlled by
the Company or any Subsidiary; (ii) the Company and the 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 Statues or by the Company, any of the Subsidiaries
or any other party in connection with the ordinary use of residential, retail or
commercial properties leased, owned or controlled by the Company or any
Subsidiary; (iii) neither the Company nor any Subsidiary knows of any seepage,
leak, discharge, release, emission, spill, or dumping of Hazardous Materials
into waters on or adjacent to the Real Property or any other real property owned
or occupied by any such party, or onto lands from which Hazardous Materials
might seep, flow or drain into such waters; (iv) neither the Company, nor any
Subsidiary has received any notice of, or has any knowledge of any occurrence or
circumstance which, with notice or passage of time or both, would give rise to a
claim under or pursuant to any U.S. federal, state, local or foreign
environmental statute or regulation or under common law, pertaining to Hazardous
Materials on or originating from any of the Real Property or any assets
described in the Prospectus (or, the most recent Preliminary Prospectus) or any
other real property owned or occupied by any such party or arising out of the
conduct of any such party, including without limitation a claim under or
pursuant to any Environmental Statute; (v) neither the Real Property nor any
other land owned by any Subsidiary is included or, to the best of such
Subsidiary's knowledge, proposed for inclusion on the National Priorities List
issued pursuant to CERCLA (as hereinafter defined) by the United States
Environmental Protection Agency or, to the best of such Subsidiary's and the
Company's
14
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Statute or issued by any other Governmental
Authority; and (vi) in the operation of the Company's and any of the
Subsidiaries' businesses, the Company or any of the Subsidiaries acquires,
before acquisition of any real property, an environmental assessment of the real
property (the "Phase I Environmental Assessment") and to the extent they become
aware of any condition that could reasonably be expected to result in liability
associated with the presence or release of a Hazardous Material, or any
violation or potential violation of any Environmental Statute, the Company and
the Subsidiary, as the case may be, take all commercially reasonable action
necessary or advisable (including any capital improvements) for clean-up,
closure or other compliance with such Environmental Statute;
As used herein, "Hazardous Material" 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, local or foreign 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-300j-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;
(ww) there are no costs or liabilities associated with the Real Property
pursuant to any Environmental Statute (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with any Environmental Statute or any permit, license or approval,
any related constraints on operating activities and any potential liabilities to
third parties) that, individually or in the aggregate, could have a Material
Adverse Effect;
(xx) none of the entities that prepared Phase I Environmental Assessments
or other environmental assessments with respect to the Real Property was
employed for such purpose on a contingent basis or had at the time of such
preparation any substantial interest in the Company or any of the Subsidiaries,
and none of the directors, officers or employees of any such entity was at the
time of such preparation connected with the Company or any of the Subsidiaries
as a promoter, selling agent, trustee, officer, director, partner, member or
employee;
(yy) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated;
(zz) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, officers,
partners, members, trustees, shareholders, customers or suppliers of the Company
or any of the Subsidiaries on the other hand, which is required by the
Securities Act and the Securities Act Regulations to be described in the
Registration Statement and the Prospectus and which is not so described;
(aaa) each of the Administrative Trustees is an officer of the Company and
has been duly authorized by the Company to act in such trustee capacity and to
execute and deliver the Declaration; the Declaration has been duly executed and
delivered by such Administrative Trustees and is a valid and
15
binding obligation of each such Administrative Trustee, enforceable against such
Administrative Trustee in accordance with its terms, except as may be limited by
(A) bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered or
applied in a proceeding in equity or at law) ;
(bbb) none of the Trust, the Company or any of the Subsidiaries is or,
after giving effect to the offering and sale of the Preferred Securities, will
be an "investment company" or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
(ccc) there are no existing or, to the knowledge of the Company or any of
the Subsidiaries, threatened labor disputes with the employees of the Company or
any of the Subsidiaries which are required to be disclosed in the Prospectus or
which are likely to have individually or in the aggregate a Material Adverse
Effect.
4. Certain Covenants:
The Trust and the Company hereby, jointly and severally, agree with each
Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in any filings required with respect to the Preferred Securities, the
Preferred Guarantee and the Debentures under the securities or "blue sky" laws
of such jurisdictions (both domestic and foreign) as the Representative may
designate;
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Preferred Securities may commence,
the Trust and the Company will endeavor to cause such post-effective amendment
to become effective as soon as possible and will advise the Representative
promptly and, if requested by the Representative, will confirm such advice in
writing, when such post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus with the Commission pursuant to Rule 424(b) under the
Securities Act and to furnish promptly to the Underwriters copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) in such quantities and at such locations as the
Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the version created
to be transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
(d) to comply with the requirements of Rule 430A of the Securities Act
Regulations, if and as applicable, and to advise the Representative promptly and
(if requested by the Representative) to confirm such advice in writing, when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective under the Securities Act Regulations;
(e) to advise the Representative immediately of (i) the receipt of any
comments from, or any request by, the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information
with respect thereto or (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, or of the suspension of the
16
qualification of the Preferred Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes and, if the Commission or any Governmental Authority should issue
any such order, to use commercially reasonable efforts to obtain the lifting or
removal of such order as soon as possible and to advise the Representative
promptly of the lifting or removal of such order; to advise the Representative
promptly of any proposal to amend or supplement the Registration Statement or
the Prospectus and to file no such amendment or supplement to which the
Representative shall reasonably object in writing;
(f) to furnish to the Underwriters for a period of five years from the
date of this Agreement (i) as soon as available, copies of all annual, quarterly
and current reports or other communications supplied to holders of the Preferred
Securities, (ii) as soon as practicable after the filing thereof, copies of all
reports filed by the Trust or the Company with the Commission (other than
reports filed via XXXXX), the NASD or any securities exchange and (iii) such
other information as the Underwriters may reasonably request regarding the
Trust, the Company and the Subsidiaries;
(g) to advise the Underwriters promptly of the happening of any event
known to the Trust, the Company or any of the Subsidiaries within the time
during which a Prospectus relating to the Preferred Securities is required to be
delivered under the Securities Act Regulations which, in the judgment of the
Company or in the reasonable opinion of the Representative or counsel for the
Underwriters, would require the making of any change in the Prospectus then
being used so that the Prospectus would not include 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, or if it is necessary at any time to
amend or supplement the Prospectus to comply with any law and, during such time,
to promptly prepare and furnish to the Underwriters copies of the proposed
amendment or supplement before filing any such amendment or supplement with the
Commission and thereafter promptly furnish at the Company's own expense to the
Underwriters and to dealers, copies in such quantities and at such locations as
the Representative may from time to time reasonably request of an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the Securities Act and the Securities Act Regulations;
(h) to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
reasonable judgment of the Trust, the Company or the Representative, be required
by the Securities Act or requested by the Commission;
(i) to furnish promptly to the Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Representative may reasonably request;
(j) to apply the net proceeds of the sale of the Preferred Securities, the
Common Securities and the Debentures in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus;
(k) in the case of the Company, to make generally available to its
security holders and to deliver to the Representative as soon as practicable,
but in any event not later than forty-five (45) days after the end of the fiscal
quarter first occurring after the first anniversary of the effective date of the
Registration Statement an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in such form, at the option of the Company,
as complies with Rule 158 of the Securities Act Regulations), covering a period
of 12 months beginning after the effective date of the Registration Statement;
17
(l) for so long as the Preferred Securities or the Debentures shall remain
outstanding, to fulfill all registration, reporting and filing requirements
under the Exchange Act as applicable to companies having a class of securities
registered under Section 12(b) or 12(g) thereof;
(m) for so long as the Preferred Securities are outstanding, to use its
commercially reasonable efforts to maintain the listing of the Preferred
Securities on the NYSE and to file with the NYSE all documents and notices
required by the NYSE of companies that have securities that are traded on the
NYSE; if the Preferred Securities are exchanged for Debentures, the Company will
use its best efforts to promptly effect the listing of the Debentures on the
NYSE or other national securities exchange or automated quotation system on
which the Preferred Securities are then listed, to have the Debentures promptly
registered under the Exchange Act and to maintain such listing for as long as
the Debentures remain outstanding;
(n) to engage and maintain, at its expense, a registrar and transfer agent
for the Preferred Securities;
(o) to prepare and file any instruments required to be filed by the Trust
or the Company in order to permit the Preferred Securities to be eligible for
clearance and settlement through the facilities of DTC;
(p) to refrain during a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representative, from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, (or entering into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any time in
the future of), any Preferred Securities or Debentures (or any equity or debt
securities substantially similar to the Preferred Securities or Debentures,
respectively), including any guarantee of such beneficial interests or
substantially similar securities, or any securities convertible into or
exercisable or exchangeable for Preferred Securities or Debentures (or any
equity or debt securities substantially similar to the Preferred Securities or
Debentures, respectively) or filing any registration statement under the
Securities Act with respect to any of the foregoing or (ii) entering into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of Preferred
Securities or Debentures (or any equity or debt securities substantially similar
to the Preferred Securities or Debentures, respectively), whether any such swap
or transaction described in clause (i) or (ii) above is to be settled by
delivery of Preferred Securities or Debentures (or any equity or debt securities
substantially similar to the Preferred Securities or Debentures, respectively)
or such other securities, in cash or otherwise. The foregoing sentence shall not
apply to the Preferred Securities or Debentures to be sold hereunder;
(q) in the case of the Company, to issue the Preferred Guarantee and the
Debentures concurrently with the issuance and sale of the Preferred Securities
as contemplated herein;
(r) prior to the Closing Time (and, if applicable, any Date of Delivery),
not to, and to use its best efforts to cause their respective trustees,
officers, directors, partners, members and affiliates, as applicable, not to,
directly or indirectly, issue any press release or other communication or hold
any press conference with respect to the financial results of the Company or the
Subsidiaries or the offering of the Preferred Securities which the
Representative shall not previously have been provided a copy a reasonable time
prior to the release thereof or provided reasonable notice thereof and the
Representative shall not have reasonably objected thereto;
(s) not to, and to use its best efforts to cause their respective
trustees, officers, directors, partners, members and affiliates, as applicable,
not to, (i) take, directly or indirectly prior to termination of the
18
underwriting syndicate contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the Trust or the Company,
or which may cause or result in, or which might in the future reasonably be
expected to cause or result in, the stabilization or manipulation of the price
of any security of the Company, to facilitate the sale or resale of any of the
Preferred Securities, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Preferred Securities or (iii) pay
or agree to pay to any person any compensation for soliciting any order to
purchase any other securities of the Trust or the Company;
(t) that the Trust and the Company will comply with all of the provisions
of any undertakings in the Registration Statement;
(u) that the Trust and the Company will not invest or otherwise use the
proceeds received by the Trust or the Company from its sale of the Preferred
Securities or the Debentures, as the case may be, in such a manner as would
require the Trust, the Company or any Subsidiary to register as an investment
company under the Investment Company Act; and
(v) not to voluntarily claim and to actively resist any attempts to claim
the benefit of any usury laws against the holders of the Preferred Securities or
the Debentures.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance by it and by the Trust of its and the Trust's respective and joint
obligations under this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including expenses,
fees and taxes in connection with (i) the preparation and filing of the
Registration Statement (including financial statements and exhibits thereto),
each Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing (or reproduction) and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the preparation, issuance and delivery of the certificates for
the Preferred Securities to the Underwriters, including any stock or other
transfer taxes or duties payable upon the sale, issuance or delivery of the
Preferred Securities to the Underwriters, (iii) the preparation, printing (or
reproduction), execution and delivery of this Agreement, the Debentures, each of
the Guarantor Agreements and the Certificate of Trust of the Trust and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Preferred Securities for offering and sale under state laws that the Company and
the Representative have mutually agreed are appropriate and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters and the printing and furnishing of copies of any "blue sky" surveys
or legal investment surveys to the Underwriters and to dealers), (v) filing for
review of the public offering of the Preferred Securities by the NASD (including
the legal fees and filing fees and other disbursements of counsel for the
Underwriters relating thereto), (vi) the fees and expenses of any transfer
agent, registrar or depository (including DTC) for the Preferred Securities and
the fees and expenses of counsel for any such person and miscellaneous expenses
referred to in the Registration Statement, (vii) the printing of the Debentures
in certificated form, if required, (viii) the fees and expenses associated with
obtaining ratings for the Preferred Securities and the Debentures from 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) to
the extent any such ratings are sought; (ix) the fees and expenses incurred in
connection with the listing of the Preferred Securities and, to the extent
required or advisable, the Preferred Guarantee and the Debentures on the NYSE,
(x) the fees and expenses of the Trust, the Trustees, the Guarantee Trustee, the
Indenture Trustee and the Company and their respective counsel, accountants and
other advisors in connection with any of the Guarantor Agreements, the
Debentures, the Certificate of Trust of the Trust or the offering, issuance and
delivery of
19
the Preferred Securities, the Common Securities, the Preferred Guarantee, the
Common Guarantee and/or the Debentures, (xi) the fees and expenses incurred by
the Company and the Underwriters in making road show presentations with respect
to the offering of the Preferred Securities, (xii) preparing and distributing
bound volumes of transaction documents for the Representative and its legal
counsel and (xiii) the performance of the Trust's and the Company's other
obligations under this Agreement and the Guarantor Agreements that are not
otherwise specifically provided for in this Section 5(a). Upon the request of
the Representative, the Company will provide funds in advance for filing fees.
(b) Whether or not the transactions contemplated by this Agreement are
consummated, the Company agrees to reimburse the Representative for its
reasonable out-of-pocket expenses (not to exceed $250,000) paid to unaffiliated
third parties in connection with the transactions contemplated by this
Agreement, including the reasonable fees and expenses of the Representative's
legal counsel (other than the fees and expenses of counsel with respect to state
securities or "blue sky" laws and obtaining the filing for review of the public
offering of the Preferred Securities by the NASD, and any of the fees and
expenses incurred by the Underwriters in making road show presentations with
respect to the offering of the Preferred Securities, all of which shall be
reimbursed by the Company pursuant to the provisions of subsection (a) above).
6. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Preferred
Securities at the Closing Time or on each Date of Delivery, as applicable, are
subject to the accuracy of the representations and warranties on the part of the
Trust and the Company hereunder on the date hereof and at the Closing Time and
on each Date of Delivery, as applicable, the performance by the Trust and the
Company of their respective obligations hereunder and to the satisfaction of the
following further conditions at the Closing Time or on each Date of Delivery, as
applicable:
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Xxxxxxx Xxxxxxxx X.X., counsel for the
Trust and the Company, addressed to the Underwriters and dated the Closing Time
and each Date of Delivery and in form and substance satisfactory to Xxxxxxxx
Chance US LLP, counsel for the Underwriters, stating that:
(i) the Company has an authorized capitalization as of September 30,
2003 as set forth in the Prospectus (and to the best knowledge of such
counsel, there have not been any subsequent issuances of capital stock of
the Company except for issuances pursuant to stock options held by
employees and directors of the Company and the Subsidiaries); the
outstanding shares of capital stock, the partnership interests, membership
interests or other equity interests, as the case may be, of the Company
and, to the best knowledge of such counsel, each Subsidiary have been duly
and validly authorized and issued and are fully paid and nonassessable;
except as disclosed in the Prospectus, all of the outstanding shares of
capital stock of, or the partnership interests, membership interests or
other equity interests, as the case may be, in any Subsidiary are, to the
best knowledge of such counsel, directly or indirectly owned of record by
the Company; except as disclosed in the Prospectus, and except for
outstanding stock options held by employees and directors of the Company
and the Subsidiaries, and to the best knowledge of such counsel, there are
no outstanding (i) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any capital stock of or
partnership interests, membership interests or other equity interests, as
the case may be, in the Company or any such Subsidiary, (ii) warrants,
rights or options to subscribe for or purchase from the Company or any
such Subsidiary any such capital stock, partnership interests, membership
interests or other equity interests, as the case may be, or any such
convertible or exchangeable securities or obligations or (iii) obligations
20
of the Company or any such Subsidiary to issue any securities or
obligations, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options;
(ii) each of the Company and the Subsidiaries (all of which
Subsidiaries are named in Exhibit 21 to the Registration Statement) has
been duly incorporated or formed and is validly existing as a corporation,
general or limited partnership, limited liability company or trust, as the
case may be, in good standing under the laws of its respective
jurisdiction of incorporation or formation with full corporate,
partnership, limited liability company or trust power and authority to
own, lease and operate its respective properties and to conduct its
respective businesses as described in the Registration Statement and the
Prospectus and to execute and deliver this Agreement, the Guarantor
Agreements and the Debentures (to the extent a party thereto) and to
consummate the transactions contemplated hereby and thereby;
(iii) each of the Company and the Subsidiaries is duly qualified or
licensed and is in good standing in each jurisdiction in which it conducts
its business or in which it owns or leases real property or otherwise
maintains an office and in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a Material Adverse
Effect; except as disclosed in the Prospectus, to the best knowledge of
such counsel, no Subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making any other
distribution with respect to such Subsidiary's capital stock, partnership
interests, membership interests or other equity interests, as the case may
be, or from repaying to the Company or any other Subsidiary any amounts
which may from time to time become due under any loans or advances to such
Subsidiary from the Company or such other Subsidiary, or from transferring
any such Subsidiary's property or assets to the Company or to any other
Subsidiary; except as disclosed in the Registration Statement, to the best
knowledge of such counsel, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, limited
liability company, trust, joint venture or other entity;
(iv) to the best knowledge of such counsel, the Trust, the Company
and the Subsidiaries are in compliance in all respects with all applicable
laws, rules, regulations, orders, decrees and judgements, including those
relating to transactions with affiliates, except for any failure to comply
that could have a Material Adverse Effect;
(v) to the best knowledge of such counsel, none of the Trust, the
Company or any of the Subsidiaries is in breach of or in default under
(nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its respective
organizational documents, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Trust, the Company or any Subsidiary
is a party or by which any of them or their respective properties is
bound, except, in the case of the Company and the Subsidiaries, for such
breaches or defaults which could not have a Material Adverse Effect;
(vi) the execution, delivery and performance of this Agreement by
the Trust, the compliance by the Trust with all the provisions of this
Agreement and the Declaration and the consummation by the Trust of the
transactions contemplated hereby and thereby, including the issuance and
sale of the Preferred Securities and the Common Securities by the Trust,
the purchase of the Debentures by the Trust and the distribution of the
Debentures by the Trust in the circumstances contemplated by the
Declaration and described in the Registration Statement and the
Prospectus, and the execution, delivery and performance of this Agreement,
the Debentures and each of the Guarantor Agreements by the Company, the
compliance by the Company with all
21
the provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby including the sale of the Debentures by
the Company to the Trust and the issuance by the Company of the Preferred
Guarantee and the Common Guarantee, have been duly authorized by all
necessary action on the part of the Trust and do not and will not (i)
result in any violation of the Declaration or the Certificate of Trust of
the Trust, (ii) conflict with, or result in any breach of, or constitute a
default under (nor constitute any event which with notice, lapse of time,
or both would constitute a breach of, or default under) (A) any provision
of the Declaration or the Certificate of Trust of the Trust or (B) to the
best knowledge of such counsel, any provision of any contract, license,
indenture, mortgage, note, lease, deed of trust, loan or credit agreement
or other agreement or instrument to which the Trust is a party or by which
it or its properties may be bound or affected, or under any U.S. federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Trust, (iii) conflict with, or result in any
breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would constitute a breach of, or
default under) (A) any provision of the organizational documents of the
Company or any Subsidiary or (B) to the best knowledge of such counsel,
any provision of any contract, license, indenture, mortgage, note, lease,
deed of trust, loan or credit agreement or other agreement or instrument
to which the Company or any Subsidiary is a party or by which any of them
or their respective properties may be bound or affected, or under any U.S.
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any Subsidiary, (iv) to the
best knowledge of such counsel, result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or asset of the
Trust, or (v) to the best knowledge of such counsel, result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or the Subsidiaries, except such
violations, conflicts, breaches, defaults or creations or impositions that
could not, individually or in the aggregate, have a Material Adverse
Effect, and could not, individually or in the aggregate, be materially
adverse to the Trust;
(vii) this Agreement has been duly authorized, executed and
delivered by the Trust and the Company and is a legal, valid and binding
agreement of the Trust and the Company enforceable in accordance with its
terms, except as may be limited by (A) bankruptcy, insolvency, moratorium,
receivership, liquidation, fraudulent conveyance, reorganization, and
other similar laws relating to or affecting the remedies and rights of
creditors, (B) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered or applied in a
proceeding in equity or at law) and (C) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution;
(viii)each of the Guarantor Agreements has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by (A) bankruptcy,
insolvency, moratorium, receivership, liquidation, fraudulent conveyance,
reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity (regardless
of whether considered or applied in a proceeding in equity or at law);
each of the Guarantor Agreements conforms in all material respects to all
statements relating thereto contained in the Prospectus; each of the
Preferred Guarantee, the Declaration and the Indenture has been duly
qualified under the 1939 Act and is in substantially the form filed as an
exhibit to the Registration Statement;
(ix) the Debentures have been duly authorized, executed and
delivered by the Company; when the Debentures have been executed and
authenticated in accordance with the provisions of the Indenture and
delivered to the Trust against payment therefor as described in the
Prospectus, the Debentures will be in the form contemplated by, and
entitled to the benefits of,
22
the Indenture, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as may be limited by (A) bankruptcy, insolvency, moratorium,
receivership, liquidation, fraudulent conveyance, reorganization, and
other similar laws relating to or affecting the remedies and rights of
creditors, and (B) principles of equity (regardless of whether considered
or applied in a proceeding in equity or at law), and conform in all
material respects to all statements relating thereto contained in the
Prospectus; the Debentures are in substantially the form filed as an
exhibit to the Registration Statement;
(x) no approval, authorization, consent, license, order,
registration, qualification or decree of or filing with any Governmental
Authority is required in connection with the execution, delivery and
performance of this Agreement or any of the Guarantor Agreements by the
Company or the Trust (to the extent a party thereto) and the consummation
of the transactions contemplated herein or therein, other than (A) such as
have been obtained under the Securities Act, the Exchange Act and the 1939
Act, and (B) such approvals as have been obtained in connection with the
listing of the Preferred Securities on the NYSE;
(xi) to the best knowledge of such counsel, each of the Company and
the Subsidiaries has all necessary permits, licenses, authorizations,
consents and approvals and has made all necessary filings required under
any U.S. federal, state, local or foreign law, regulation or rule, and has
obtained all necessary permits, licenses, authorizations, consents and
approvals from other persons, required to conduct its business as
described in the Prospectus, except to the extent that the failure to have
any such permits, licenses, authorizations, consents or approvals, to make
any such filings or to obtain any such permits, licenses, authorizations,
consents or approvals could not, individually or in the aggregate, have a
Material Adverse Effect; neither the Company nor any Subsidiary is
required by any applicable law to obtain accreditation or certification
from any Governmental Authority in order to provide the products and
services which it currently provides or which it proposes to provide as
set forth in the Prospectus; to the best knowledge of such counsel,
neither the Company nor any Subsidiary is in violation of, in default
under, or has received any notice regarding a possible violation, default
or revocation of any such permit, 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, the effect of which could result in a Material Adverse Change;
and to the best knowledge of such counsel, no such permit, license,
authorization, consent or approval contains a materially burdensome
restriction that is not adequately disclosed in the Registration Statement
and the Prospectus;
(xii) neither the Trust nor the Company is or, after giving effect
to the offering and sale of the Preferred Securities, will be an
"investment company" or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company Act;
(xiii) the Preferred Securities have been duly and validly
authorized by the Trust are duly and validly issued and fully paid and
nonassessable undivided preferred beneficial interests in the assets of
the Trust, and conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Preferred Securities by
the Trust is not subject to preemptive or other similar rights arising by
operation of law, under the organizational documents of the Trust, the
Company or any Subsidiary or under any agreement known to such counsel to
which the Trust, the Company or any Subsidiary is a party or otherwise;
(xiv) to the best knowledge of such counsel, except for registration
rights held by Doubletree Corporation with respect to Series A Preferred
Stock and Series B Preferred Stock of the Company as held by it, there are
no persons with registration or other similar rights to have
23
any equity or debt securities, including securities that are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act;
(xv) the form of certificate used to evidence the Preferred
Securities complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the organizational
documents of the Trust and with the requirements of the NYSE;
(xvi) the Registration Statement has become effective under the
Securities Act; all filings with the Commission required by Rule 424 under
the Securities Act to have been filed by the Closing Time have been made
within the applicable time period prescribed for such filing by such Rule;
no stop order suspending the effectiveness of the Registration Statement
has been issued; and, to the best knowledge of such counsel, no
proceedings for that purpose are pending or threatened;
(xvii) as of the effective date of the Registration Statement, the
Registration Statement and the Prospectus (except as to the financial
statements and other financial and statistical data contained therein or
omitted therefrom and the three Trustees' Statements of Eligibility on
Form T-1, included as exhibits to the Registration Statement, as to which
such counsel need express no opinion) complied as to form in all material
respects with the requirements of the Securities Act, the Exchange Act,
the Securities Act Regulations and the Exchange Act Regulations;
(xviii) the statements in the Prospectus under the captions
"Description of Securities," "Material U.S. Federal Income Tax
Consequences" and "Employee Benefit Plan Considerations," insofar as such
statements constitute a summary of the legal matters or documents referred
to therein, constitute accurate summaries thereof in all material
respects;
(xix) the Registration Statement on Form 8-A complied as to form in
all material respects with the requirements of the Exchange Act; the
Registration Statement on Form 8-A has become effective under the Exchange
Act; and the Preferred Securities have been validly registered under the
Securities Act, the Exchange Act and the Securities Act Regulations and
the Exchange Act Regulations;
(xx) to the best knowledge of such counsel, there are no actions,
suits, proceedings, inquiries or investigations pending or threatened
against the Company or any of the Subsidiaries or any of their respective
officers, directors, partners, members or trustees, as applicable, or to
which the properties, assets or rights of any such entity are subject, at
law or in equity, before or by any Governmental Authority or arbitral
panel which are required to be described in the Prospectus but are not so
described;
(xxi) to the best knowledge of such counsel, there are no contracts
or documents of a character which are required to be filed as exhibits to
the Registration Statement or required to be described or summarized in
the Prospectus which have not been so filed, summarized or described, and
all such summaries and descriptions, in all material respects, fairly and
accurately set forth the material provisions of such contracts and
documents;
(xxii) to the best knowledge of such counsel, the Company and each
of the Subsidiaries owns or possesses adequate licenses or other rights to
use all Intangibles necessary to entitle the Company and each Subsidiary
to conduct its business as described in the Prospectus, and to the best
knowledge of such counsel, neither the Company nor any Subsidiary has
received notice of infringement of or conflict with (and to the best
knowledge of such counsel there is no such
24
infringement of or conflict with) asserted rights of others with respect
to any Intangibles which could have a Material Adverse Effect;
(xxiii) to the best knowledge of such counsel, each of the Company
and the Subsidiaries has filed on a timely basis all necessary U.S.
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and has paid all taxes shown
as due thereon; to the best knowledge of such counsel, no tax deficiency
has been asserted against any such entity, and to the best knowledge of
such counsel there is no tax deficiency which is likely to be asserted
against any such entity which, if determined adversely to any such entity,
could materially and adversely affect the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of any
such entity, respectively; and
(xxiv) such counsel has participated in conferences with officers
and other representatives of the Trust and the Company, independent public
accountants of the Company, representatives of the Underwriters, at which
the contents of the Registration Statement and the Prospectus were
discussed and, although such counsel is not passing upon and does not
assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, and
such counsel has no reason to believe that the Registration Statement, the
Preliminary Prospectus or the Prospectus, as of their respective effective
or issue dates, and as of the date of such counsel's opinion, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that, in each case, such
counsel need express no view with respect to the financial statements and
other financial and statistical data included in the Registration
Statement, Preliminary Prospectus or the Prospectus, or the three
Trustees' Statements of Eligibility on Form T-1 included as exhibits to
the Registration Statement).
(c) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Xxxxxxxx, Xxxxxx & Finger, P.A., special
Delaware counsel for the Trust and the Company, addressed to the Underwriters
and dated the Closing Time and each Date of Delivery and in form and substance
satisfactory to Xxxxxxxx Chance US LLP, counsel for the Underwriters, stating
that:
(i) The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, and
all filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Trust as a statutory trust have
been made;
(ii) Under the Delaware Statutory Trust Act and the Declaration, the
Trust has the trust power and authority (A) to own property and conduct
its business as described in the Prospectus, (B) to execute and deliver,
to perform its obligations under and to consummate the transactions
contemplated by, this Agreement and (C) to issue and sell, and to perform
its obligations under, the Preferred Securities and the Common Securities;
(iii) The execution and delivery by the Trust of this Agreement, and
the performance by the Trust of its obligations hereunder, have been duly
authorized by all necessary trust action on the part of the Trust;
(iv) The Declaration constitutes a valid and binding obligation of
the Company and the Trustees, enforceable against the Company and the
Trustees in accordance with its terms, subject, as to enforcement, to the
effect upon the Declaration of (A) bankruptcy, insolvency, moratorium,
receivership, liquidation, fraudulent conveyance, reorganization and other
similar
25
laws relating to or affecting the remedies and rights of creditors, (B)
principles of equity, including applicable law relating to fiduciary
duties (regardless of whether considered or applied in a proceeding in
equity or at law) and (C) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution;
(v) The Preferred Securities have been duly authorized by the
Declaration and, when delivered to and paid for by the Underwriters
pursuant to this Agreement, will be duly and validly issued, fully paid
and, subject to the qualifications set forth herein, nonassessable
undivided beneficial interests in the assets of the Trust; the holders of
the Preferred Securities, as beneficial owners of the Trust (the
"Securityholders"), are entitled to the same limitation of personal
liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware, except that such counsel may note that the Securityholders may
be obligated, pursuant to the Declaration, to (A) provide indemnity and/or
security in connection with and pay a sum sufficient to cover any taxes or
governmental charges arising from transfers or exchanges of Preferred
Securities certificates and the issuance of replacement Preferred
Securities certificates and (B) provide security and/or indemnity in
connection with requests of or directions to the Property Trustee to
exercise its rights and powers under the Declaration; under the Delaware
Statutory Trust Act and the Declaration, the issuance of the Preferred
Securities is not subject to preemptive or other similar rights; and the
form of certificates to evidence the Preferred Securities has been
approved by the Trust and is in due and proper form and complies with the
Declaration and all applicable requirements, if any, of the Delaware
Statutory Trust Act;
(vi) The Common Securities have been duly authorized by the
Declaration and are duly and validly issued and fully paid undivided
beneficial interests in the assets of the Trust; and under the Delaware
Statutory Trust Act and the Declaration, the issuance of the Common
Securities is not subject to preemptive or other similar rights;
(vii) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the execution, delivery and performance by the
Trust of this Agreement, the consummation by the Trust of the transactions
contemplated herein and the compliance by the Trust with its obligations
hereunder do not violate (A) any of the provisions of the Certificate of
Trust of the Trust or the Declaration or (B) any applicable law, rule or
regulation of the State of Delaware;
(viii)Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets, activities
(other than having a Delaware trustee as required by the Delaware
Statutory Trust Act and the filing of documents with the Secretary of
State of the State of Delaware) or employees in the State of Delaware, no
authorization, approval, consent or order of any Delaware court or
Delaware governmental authority or Delaware agency is required to be
obtained by the Trust solely as a result of the issuance and sale of the
Preferred Securities, the consummation by the Trust of the transactions
contemplated herein or the compliance by the Trust of its obligations
hereunder;
(ix) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets, activities
(other than having a Delaware trustee as required by the Delaware
Statutory Trust Act and the filing of documents with the Secretary of
State of the State of Delaware) or employees in the State of Delaware, and
assuming that the Trust is treated as a grantor trust for U.S. federal
income tax purposes, the Securityholders (other than those holders of the
Preferred Securities who reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by the State of Delaware
solely as a
26
result of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware (in rendering
the opinion expressed in this subsection (ix), such counsel need express
no opinion concerning the securities laws of the State of Delaware); and
(x) Such counsel has reviewed the statements in the Prospectus under
the captions "WestCoast Hospitality Capital Trust" and "Description of
Securities" and, insofar as they contain statements of Delaware law, such
statements are fairly presented.
(d) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Xxxxxxx Xxxxxxxx X.X., special tax
counsel for the Trust and the Company, addressed to the Underwriters and dated
the Closing Time and each Date of Delivery and in form and substance
satisfactory to Xxxxxxxx Chance US LLP, counsel for the Underwriters, stating
that:
(i) the Trust is and will be classified for U.S. federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation;
(ii) the Debentures will be treated as debt of the Company for U.S.
federal income tax purpose; and
(iii) the statements set forth in the Prospectus under the caption
"Material U.S. Federal Income Tax Consequences" constitute a fair and
accurate summary of the anticipated U.S. federal income tax consequences
of the ownership and disposition of the Preferred Securities under current
law.
(e) The Representative shall have received from each of BDO Xxxxxxx, LLP
and PricewaterhouseCoopers LLP, letters dated, respectively, as of the date of
this Agreement, the Closing Time and each Date of Delivery, as the case may be,
addressed to the Representative, in form and substance satisfactory to the
Representative, relating to the financial statements, including any pro forma
financial statements, of the Company and the Covered Entities, and such other
matters customarily covered by comfort letters issued in connection with
registered public offerings.
In the event that the letters referred to above set forth any changes in
indebtedness, decreases in total assets or retained earnings or increases in
borrowings, it shall be a further condition to the obligations of the
Underwriters that (i) such letters shall be accompanied by a written explanation
of the Company as to the significance thereof, unless the Underwriters deems
such explanation unnecessary and (ii) such changes, decreases or increases do
not, in the sole judgment of the Representative, make it impractical or
inadvisable to proceed with the purchase and delivery of the Preferred
Securities as contemplated by the Registration Statement.
(f) The Representative shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of Xxxxxxxx Chance US LLP, dated the
Closing Time or such Date of Delivery, addressed to the Representative and in
form and substance satisfactory to the Representative.
(g) No amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(h) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
has been issued, and no proceedings for such purpose shall have been initiated
or threatened, by the Commission, and no suspension of the qualification of the
Preferred Securities for offering or sale in any jurisdiction, or the initiation
or threatening of any proceedings for
27
any of such purposes, has occurred; (ii) all requests for additional information
on the part of the Commission shall have been complied with to the reasonable
satisfaction of the Underwriters; and (iii) the Registration Statement and the
Prospectus shall 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.
(i) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.
(j) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery there shall not have been any Material Adverse
Change, and no transaction which is material and unfavorable to the Trust, the
Company or any Subsidiary shall have been entered into by the Trust, the Company
or any of the Subsidiaries, in each case, which in the Representative's sole
judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Preferred Securities as contemplated by the Registration
Statement.
(k) At the Closing Time, each of the Guarantor Agreements shall have been
entered into by the Company and the other parties thereto and shall be in a form
reasonably satisfactory to the Representative.
(l) The Preferred Securities shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(m) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(n) The Trust and the Company will, at the Closing Time and on each Date
of Delivery, deliver to the Underwriters, in the case of the Trust, a
certificate of an Administrative Trustee, and in the case of the Company, a
certificate of its Chief Executive Officer and Chief Financial Officer, in each
case to the effect that:
(i) the representations and warranties of the Trust or the Company,
as the case may be, in this Agreement are true and correct, as if made on
and as of the date hereof, and the Trust or the Company, as the case may
be, has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Time;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Securities Act;
(iii) when the Registration Statement became effective and at all
times subsequent thereto up to the date hereof, the Registration Statement
and the Prospectus, and any amendments or supplements thereto contained
all material information required to be included therein by the Securities
Act or the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material respects
conformed to the requirements of the Securities Act or the Exchange Act
and the applicable rules and regulations of the Commission thereunder, as
the case may be; the Registration Statement and the Prospectus, and any
amendments or supplements thereto, did not and do not include any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
28
and, since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amendment or supplement
to the Prospectus which has not been so set forth; and
(iv) in the case of the certificate delivered by the Company,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may have occurred in
connection with dividends paid on, or the redemption or proposed
redemption of the Company's Series A Preferred Stock and Series B
Preferred Stock, there has not been (A) any Material Adverse Change, (B)
any transaction that is material to the Company and the Covered Entities
considered as one enterprise, except transactions entered into in the
ordinary course of business, (C) any obligation, direct or contingent,
that is material to the Company and the Covered Entities considered as one
enterprise, incurred by the Company or the Subsidiaries, except
obligations incurred in the ordinary course of business, (D) any change in
the capital stock or outstanding indebtedness of the Company or any
Subsidiary that is material to the Company and the Covered Entities
considered as one enterprise, (E) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any
Subsidiary or (F) any loss or damage (whether or not insured) to the
property of the Company or any subsidiary which has been sustained or will
have been sustained which has a Material Adverse Effect.
(o) The Trust and the Company shall have furnished to the Underwriters
such other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Trust and the Company contained herein and in
the Guarantor Agreements, the performance by the Trust and the Company of their
respective covenants contained herein and therein and the fulfillment of any
conditions contained herein and therein, as of the Closing Time or any Date of
Delivery, as the Underwriters may reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representative, at any time prior
to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 hereof shall not have been fulfilled when and as required
by this Agreement to be fulfilled, (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
Material Adverse Change, or any development involving a prospective Material
Adverse Change, or material change in management of the Company, whether or not
arising in the ordinary course of business, (iii) if there has occurred any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic, political or other conditions the
effect of which on the financial markets of the United States is such as to make
it, in the judgment of the Underwriters, impracticable to market the Preferred
Securities or enforce contracts for the sale of the Preferred Securities, (iv)
if trading in any securities of the Trust or the Company has been suspended by
the Commission or by the NYSE, or if trading generally on the NYSE or in the
Nasdaq over-the-counter market has been suspended (including an automatic halt
in trading pursuant to market-decline triggers, other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or the NASD or the Nasdaq over-the-counter market or by order of the Commission
or any other Governmental Authority, (v) if there has been any downgrade in the
rating of the Preferred Securities or any of the Company's debt securities or
preferred stock 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), (vi) any U.S. federal, state, local or foreign statute,
regulation, rule or order of any court or Governmental Authority has been
enacted, published, decreed or otherwise promulgated which, in the reasonable
opinion of the Representative, materially adversely affects or will materially
adversely affect the business or operations of the Company, (vii) any action has
been taken by any Governmental Authority or agency in respect of
29
its monetary or fiscal affairs which, in the reasonable opinion of the
Underwriters, has a material adverse effect on the securities markets in the
United States, or (viii) 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 (iii) or (vii) in the
Underwriters' judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Preferred Securities on the terms and in
the manner contemplated in the Registration Statement and the Prospectus.
If the Representative elects to terminate this Agreement as provided in
this Section 7, the Trust, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Preferred Securities, as
contemplated by this Agreement, is not carried out by the Underwriters for any
reason permitted under this Agreement or if such sale is not carried out because
the Trust or the Company shall be unable to comply in all material respects with
any of the terms of this Agreement, the Company shall not be under any
obligation or liability under this Agreement (except to the extent provided in
Sections 5 and 9 hereof) and the Underwriters shall be under no obligation or
liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Preferred Securities to be
purchased by it under this Agreement on such date, the Representative shall have
the right, within 36 hours after such default, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Preferred Securities which such Underwriter
shall have agreed but failed to take up and pay for (the "Defaulted
Securities"). Absent the completion of such arrangements within such 36-hour
period, (i) if the total number of Defaulted Securities does not exceed 10% of
the total number of Preferred Securities to be purchased on such date, each
non-defaulting Underwriter shall take up and pay for (in addition to the number
of Preferred Securities which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Preferred
Securities agreed to be purchased by the defaulting Underwriter on such date in
the proportion that its underwriting obligation hereunder bears to the
underwriting obligations of all non-defaulting Underwriters and (ii) if the
total number of Defaulted Securities exceeds 10% of such total, the
Representative may terminate this Agreement by notice to the Company, without
liability of any party to any other party except that the provisions of Sections
5 and 9 hereof shall at all times be effective and shall survive such
termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Trust and the Company agree with the non-defaulting Underwriters
that the Trust will not sell any Preferred Securities hereunder on such date
unless all of the Preferred Securities to be purchased on such date are
purchased on such date by the Underwriters (or by substituted Underwriters
selected by the Representative with the approval of the Company or selected by
the Company with the approval of the Representative).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
30
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the same effect as
if such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Trust, the Company and the
Underwriters:
(a) The Trust and the Company, jointly and severally, agree to indemnify,
defend and hold harmless each Underwriter and any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any loss, expense, liability, damage or
claim (including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, expense,
liability, damage or claim arises out of or is based upon (i) any breach of any
representation, warranty or covenant of the Trust or the Company contained
herein, (ii) any failure on the part of the Trust or the Company to comply with
any applicable law, rule or regulation relating to the offering of securities
being made pursuant to the Prospectus or the offering of the Common Securities,
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Trust and the Company),
the Prospectus (the term Prospectus for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Trust and the Company), (iv) any application
or other document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction (domestic or foreign) in order to qualify the
Preferred Securities under the securities or "blue sky" laws thereof or filed
with the Commission or any securities association or securities exchange (each
an "Application"), (v) any omission or alleged omission to state a material fact
required to be stated in any such Registration Statement, Prospectus or any
Application or necessary to make the statements made therein (with respect to
the Prospectus only, in the light of the circumstances under which they were
made) not misleading or (vi) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in connection
with the marketing of the Preferred Securities, including, without limitation,
slides, videos, films and tape recordings; except insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and in conformity with information furnished in
writing by the Underwriters through the Representative to the Trust and the
Company expressly for use in such Registration Statement, Prospectus or
Application. The Company agrees to indemnify the Trust against all loss,
expense, liability, damage and claim whatsoever as due from the Trust under this
Section 9(a). The indemnity agreement set forth in this Section 9(a) shall be in
addition to any liability which the Trust or the Company may otherwise have.
(b) If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Trust or the Company
pursuant to subsection (a) above, such Underwriter shall promptly notify the
Company in writing of the institution of such action, and the Company shall
assume the defense of such action, including the employment of counsel and
payment of expenses; provided, however, that any failure or delay to so notify
the Company will not relieve the Trust or the Company of any obligation
hereunder, except to the extent that its ability to defend is actually impaired
by such failure or delay. Such Underwriter or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action, or the Company shall not have employed counsel reasonably satisfactory
to the Underwriter or controlling person, as the case may be, to have charge of
the defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company
31
(in which case the Company shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and paid as incurred
(it being understood, however, that the Company shall not be liable for the
expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action). Anything in this
subsection to the contrary notwithstanding, neither the Trust nor the Company
shall be liable for any settlement of any such claim or action effected without
the written consent of the Company.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Trust, the Trustees, the Company, the Company's
directors, the Company's officers that signed the Registration Statement, and
any person who controls the Trust, the Trustees or the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, the Trust, the
Company or any such person may incur under the Securities Act, the Exchange Act
or otherwise, but only insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriters through the Representative to the
Company expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Trust and
the Company), the Prospectus or any Application or (ii) any omission or alleged
omission to state a material fact in connection with such information either
required to be stated in such Registration Statement, Prospectus or any
Application or necessary to make such information, in the light of the
circumstances under which made, not misleading. The statements set forth in the
fourth and fifteenth paragraphs under the caption "Underwriting" in the
Preliminary Prospectus and the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by or on behalf
of any Underwriter through the Representative to the Company for purposes of
Section 3(n) and this Section 9. The indemnity agreement set forth in this
Section 9(c) shall be in addition to any liabilities that such Underwriter may
otherwise have.
(d) If any action is brought against the Trust, the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing subsection, the Trust, the Company or such person
shall promptly notify the Representative in writing of the institution of such
action, and the Representative, on behalf of the Underwriters, shall assume the
defense of such action, including the employment of counsel and payment of
expenses. The Trust, the Company or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Trust, the Company or such person unless the
employment of such counsel shall have been authorized in writing by the
Representative in connection with the defense of such action or the
Representative shall not have employed counsel to have charge of the defense of
such action within a reasonable time or such indemnified party or parties shall
have reasonably concluded (based on the advice of counsel) that there may be
defenses available to it or them which are different from or additional to those
available to the Underwriters (in which case the Representative shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however, that the
Underwriters shall not be liable for the expenses of more than one separate firm
of attorneys in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action). Anything in this
subsection to the contrary notwithstanding, no Underwriter shall be liable for
any settlement of any such claim or action effected without the written consent
of the Representative.
(e) If the indemnification provided for in this Section 9 is unavailable
or insufficient to hold harmless an indemnified party under subsections (a), (b)
and (c) of this Section 9 in respect of any losses,
32
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Company, on the one hand, and the Underwriters, on the other hand,
from the offering of the Preferred Securities or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Trust and the
Company, on the one hand, and of the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Trust and the
Company, on the one hand, and the Underwriters, on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Trust and the Company bear to the underwriting discounts and
commissions received by the Underwriters. The relative fault of the Trust and
the Company, on the one hand, and of the Underwriters, on the other hand, shall
be determined by reference to, among other things, whether the untrue statement
or alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Trust and the Company, or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(f) The Trust, the Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 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 in subsection (e)(i) and, if
applicable, (ii), above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions, applicable to the Preferred Securities
purchased by such Underwriter. 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 to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Survival:
The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Trust and the Company contained
in Sections 3, 4 and 5 of this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, or any
person who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Trust, the Trustees, the Company, the Company's directors and officers or any
person who controls the Trust, the Trustees or the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Preferred Securities. The Trust, the Company and each Underwriter agree promptly
to notify the others of the commencement of any litigation or proceeding against
it and, in the case of the Trust and the Company, against any of the Trustees or
the Company's officers or directors, in connection with the sale and delivery of
the Preferred Securities or the Common Securities or in connection with the
Registration Statement or the Prospectus.
11. Notices:
33
Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram and, if to the Underwriters, shall
be sufficient in all respects if delivered to Friedman, Billings, Xxxxxx & Co.,
Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Syndicate
Department, with a copy to Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention: Xxx X. Xxxxxxxxx, Esq. and Xxxxxx Xxxxxxx, Esq.; if to the
Company or the Trust, shall be sufficient in all respects if delivered to the
Company or the Trust at the offices of the Company at 000 X. Xxxxx Xxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, with a copy to Xxxxxxx Xxxxxxxx, X.X.,
0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxx,
Esq.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit
of the Underwriters, the Trust, the Company and the trustees, controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which together
shall constitute one and the same agreement among the parties. A facsimile
signature shall constitute an original signature for all purposes.
[Signature page follows.]
34
If the foregoing correctly sets forth the understanding among the Trust,
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this Agreement shall constitute a binding agreement
among the Trust, the Company and the Underwriters.
Very truly yours,
WESTCOAST HOSPITALITY CAPITAL TRUST
By: ___________________________________
Xxxxx X. Xxxxxxxx
Administrative Trustee
By: ___________________________________
Xxxxxx X. XxXxxxxxx
Administrative Trustee
WESTCOAST HOSPITALITY CORPORATION
By: ____________________________________
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
For itself and as Representative of the other
Underwriters named on Schedule I hereto
By: ____________________________________
Name: ______________________________
Title: _______________________________
35
`
SCHEDULE I
NUMBER OF INITIAL
SECURITIES TO BE
UNDERWRITERS PURCHASED
Friedman, Billings, Xxxxxx & Co., Inc. [ ]
Xxxxx Fargo Securities, LLC [ ]
Total.................................... 1,600,000
