EXHIBIT 1.1
5,500,000 Shares
AMERICAN GENERAL HOSPITALITY CORPORATION
Common Stock
FORM OF UNDERWRITING AGREEMENT
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February , 1997
XXXXX XXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXXXXXX SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
American General Hospitality Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell an aggregate of 5,500,000 shares (the
"Firm Shares") of its common stock, $0.01 par value per share (the "Common
Stock"), to you and to the other Underwriters named in Schedule I hereto
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(collectively, the "Underwriters") for whom you are acting as representatives
(the "Representatives"). The Company also proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 3 hereof, up to an additional
825,000 shares (the "Additional Shares") of Common Stock. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares,"
and the offering of the Shares pursuant to this Agreement is referred to herein
as the "Offering."
Upon consummation of the transactions contemplated hereby and application
of the net proceeds from the sale of the Firm Shares, the Company, through its
wholly-owned subsidiaries, AGH GP, Inc. ("AGH GP") and AGH LP, Inc. ("AGH LP")
will own an approximately 1.0% general partnership interest and an approximately
86.9% limited partnership interest in American General Hospitality Operating
Partnership, L.P., a Delaware limited partnership (together with its subsidiary
partnerships and limited liability companies, the "Operating Partnership"). The
Operating Partnership currently owns 16 hotels as described in the Prospectus
(as defined below) (the "Current Hotels"). Thirteen of the Current Hotels (the
"Initial Hotels") were acquired in connection with the Company's initial public
offering of Common Stock in July 1996 (the "IPO"), and the remaining three
Current Hotels (the "Acquired Hotels") were acquired
subsequent to, and not in connection with, the IPO. The Operating Partnership
has entered into agreements (the "Purchase Agreements"), as described in the
Prospectus, to acquire four additional hotels (the "Proposed Acquisition
Hotels"). The Current Hotels, the Acquired Hotels and the Proposed Acquisition
Hotels are sometimes referred to collectively herein as the "Hotels". The
Operating Partnership leases the Current Hotels to AGH Leasing, L.P. (the
"Lessee"), pursuant to separate participating leases (the "Leases"). The
Operating Partnership will lease the Proposed Acquisition Hotels to the Lessee
pursuant to leases (the "Proposed Leases") that, except for their economic
terms, will be substantially similar to the Leases. The Current Hotels are
operated by American General Hospitality, Inc. ("XXXX"), pursuant to separate
management agreements between XXXX and the Lessee (the "Management Agreements").
Three of the Proposed Acquisition Hotels are expected to be operated by XXXX
pursuant to management agreements between XXXX and the Lessee (the "Proposed
XXXX Management Agreements") substantially similar to the Management Agreements.
The Four Points by Sheraton-Marietta, Georgia hotel is expected to be operated
by Wyndham Hotel Corporation or a subsidiary thereof ("Wyndham") pursuant to a
management agreement (the "Proposed Wyndham Management Agreement" and,
collectively with the Proposed Leases and the Proposed XXXX Management
Agreements, the "Proposed Operative Documents") to be entered into between the
Lessee and Wyndham.
The Company and the Operating Partnership wish to confirm as follows their
agreements with you and the other several Underwriters on whose behalf you are
acting, in connection with the several purchases of the Shares by the
Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-11 under the Act No. 333-19585 (the
"Initial Registration Statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the Initial Registration Statement (including all financial
schedules and exhibits), as amended at the time it becomes effective, and any
registration statement filed with the Commission pursuant to Rule 462(b) under
the Act (the "Rule 462(b) Registration Statement") or, if the Initial
Registration Statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a post-
effective amendment to the Initial Registration Statement or a Rule 462(b)
Registration Statement will be filed and must be declared effective before the
offering of the Shares may commence, the term "Registration Statement" as used
in this Agreement means the Initial Registration Statement or the Rule 462(b)
Registration Statement as amended by said post-effective amendment. The term
"Prospectus" as used in this Agreement means (X) if the Company relies on Rule
434 under the Act, the Term Sheet (as defined below) relating to the Shares that
is first filed pursuant to Rule 424(b)(7) under the Act together with the
Prepricing Prospectus (as defined below) identified therein that such Term Sheet
supplements, or (Y) if the Company does not rely on Rule 434 under the Act, the
prospectus in the form included in the Registration Statement, or, if the
prospectus included in
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the Registration Statement omits information in reliance on Rule 430A under the
Act and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
to completion in the form included in the Initial Registration Statement at the
time of the initial filing of such registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. The term "Term Sheet" means any term sheet that
satisfies the requirements of Rules 434 and 424(b) under the Act. Any reference
in this Agreement to the "date" of a Prospectus that includes a Term Sheet means
the date of such Term Sheet. Capitalized terms used but not otherwise defined
herein have the meanings given to them in the Prospectus.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject to
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all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company, AGH GP, AGH LP and the Operating Partnership herein
contained and subject to all the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of $ per Share (the "purchase price per share"), the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
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Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set forth
herein, to sell to the Underwriters, and, upon the basis of the representations,
warranties and agreements of the Company, AGH GP, AGH LP and the Operating
Partnership herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right to purchase from the
Company, at the purchase price per share, pursuant to an option (the "over-
allotment option"), which may be exercised at any time and from time to time
prior to 9:00 p.m., New York City time, on the 30th day after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading), up to an aggregate of 825,000 Additional Shares. Additional Shares
may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. Upon any exercise of the over-
allotment option, each Underwriter, severally and not jointly, agrees to
purchase from the Company the number of Additional Shares (subject to such
adjustments as you may determine in order to avoid fractional shares) which
bears the same proportion to the number of Additional Shares to be purchased by
the Underwriters as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number of Firm Shares increased
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as set forth in Section 10 hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that the
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Underwriters propose to make a public offering of their respective portions of
the Shares as soon
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after the Registration Statement and this Agreement have become effective as in
your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
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Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
a.m., New York City time, on February , 1997 (the "Closing Date"). The place
of closing for the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the aforementioned office of
Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 a.m., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 a.m., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer of immediately available funds to the Company.
5. Agreements of the Company and the Operating Partnership. The Company
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and the Operating Partnership jointly and severally agree with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Initial Registration Statement, any Rule
462(b) Registration Statement, any Prepricing Prospectus or the Prospectus or
for additional information; (ii) of the issuance by the
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Commission of any stop order suspending the effectiveness of the Initial
Registration Statement or any Rule 462(b) Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (iii)
within the period of time referred to in paragraph (h) below, of any change in
the Company's condition (financial or other), business, prospects, properties,
net worth or results of operations, or of the happening of any event, which
makes any statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Act or any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Company will furnish to you, without charge, five signed copies of
the Initial Registration Statement and of each amendment thereto, including
financial statements and all exhibits thereto, and any Rule 462(b) Registration
Statement and will also furnish to you, without charge, such number of conformed
copies of the Initial Registration Statement and of each amendment thereto, but
without exhibits, and any Rule 462(b) Registration Statement as you may
reasonably request.
(d) The Company will not (i) file any amendment to the Registration
Statement or any Rule 462(b) Registration Statement or make any amendment or
supplement to the Prospectus or the Term Sheet of which you shall not previously
have been advised or to which, within one business day following your receipt of
a copy of the document proposed to be filed, you shall reasonably object after
being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), without delivering a copy of such information, documents or reports to
you, as Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the Company has
delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Company consents to the
use, in accordance with the provisions of the Act and with the securities or
Blue Sky or real estate syndication laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior to the date
of the Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriters a prospectus is required by the Act to be delivered in
connection with sales by any Underwriter
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or dealer, the Company will expeditiously deliver to each Underwriter and each
dealer, without charge, as many copies of the Prospectus (and of any amendment
or supplement thereto) as you may reasonably request. The Company consents to
the use of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Act and with the securities or Blue Sky or
real estate syndication laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares and for such
period of time thereafter as a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer. If during such period of
time any event shall occur that in the judgment of the Company or in the opinion
of counsel for the Underwriters is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Prospectus in order to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as Representatives of
the several Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky or real estate syndication laws of such jurisdictions as
you may designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will furnish to
you (i) concurrently with mailing or filing, a copy of each report of the
Company mailed to stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as you may reasonably
request, which information you will treat confidentially unless the Company has
publicly disclosed such information.
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(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 hereof) or if this Agreement shall be
terminated by the Underwriters because of any failure or refusal on the part of
the Company to comply with the terms or fulfill any of the conditions of this
Agreement, the Company agrees to reimburse the Representatives for all out-of-
pocket expenses (including reasonable fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the Shares in
accordance with the description set forth under the caption "Use of Proceeds" in
the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file with
the Commission the Prospectus pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.
(m) If Rule 434 of the Act is employed, the Company will timely file with
the Commission a Term Sheet relating to the Shares, which shall identify the
Prepricing Prospectus that it supplements, containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act.
(n) If Rule 462(b) of the Act is employed, the Company shall both file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) and pay the applicable fees in accordance with Rule 111 promulgated under
the Act by the earlier of (i) 10:00 p.m. New York City time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(o) Except as provided in this Agreement, the Company will not sell, offer
to sell, solicit an offer to buy, contract to sell, or otherwise transfer or
dispose of shares of any Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock (whether through the
issuance or granting of any options, warrants, commitments, subscriptions,
rights to purchase or otherwise) until July 25, 1997, without the prior written
consent of Xxxxx Xxxxxx Inc.; provided, however, that the foregoing shall not
prohibit (i) the Company from granting options or restricted shares of Common
Stock to certain officers, employees and directors of the Company and its
affiliates under the Company's 1996 Incentive Plan or its Non-Employee
Directors' Incentive Plan or the issuance of shares of Common Stock upon
exercise of any options granted under such plans, (ii) the Company or the
Operating Partnership from issuing Common Stock, OP Units or other securities
exchangeable for Common Stock that are issued in connection with the acquisition
of a hotel property, or (iii) the Company or the Operating Partnership from
issuing Common Stock or OP Units pursuant to the Master Alliance Agreement,
dated as of January 9, 1997, among the Company, the Operating Partnership, WHC
Franchise Corporation and WHC Development Corporation.
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(p) Except as stated in this Agreement and in the Prepricing Prospectus and
Prospectus, the Company has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(q) The Company will cause the Shares to be listed, subject to notice of
issuance, on the New York Stock Exchange concurrently with the effectiveness of
the registration statement.
(r) The Company qualifies, and intends to make an election to be taxed,
commencing with the fiscal year ended December 31, 1996, as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended (the
"Code").
(s) The Company and the Operating Partnership in good faith will enforce
the terms of any agreements with the Lessee or any parties affiliated with the
Lessee.
6. Representations and Warranties of the Company, AGH GP, AGH LP and the
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Operating Partnership. The Company, AGH GP, AGH LP and the Operating
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Partnership, jointly and severally, represent and warrant to each Underwriter
that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus. No
stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the Commission or
the securities authority of any state or other jurisdiction.
(b) The registration statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus or any Term Sheet that is a
part thereof and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) or Rule 434 under the Act, complied or will comply
in all material respects with the provisions of the Act and did not or will not
at any such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and warranty
does not apply to statements in the registration statement or the prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of Common Stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights; the Shares have been duly authorized
and, when issued and
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delivered to the Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable and free of
any preemptive or similar rights; and the capital stock of the Company conforms
to the description thereof in the Registration Statement and the Prospectus.
Except as disclosed in the Prospectus, there are no outstanding options,
warrants or other rights calling for the issuance of, or any commitment, plan or
arrangement to issue, any capital stock of the Company or any security
convertible into or exchangeable for capital stock of the Company. As of the
Closing Date, the Company will have reserved a sufficient number of shares of
Common Stock for issuance upon (i) the exchange of OP Units held by certain
continuing investors that acquired OP Units in connection with the formation of
the Company, and (ii) the exercise of options for up to 950,000 shares of Common
Stock to be issued under the Company's stock option plans.
(d) Each of the Company, the Operating Partnership, the Subsidiaries (as
defined herein), the Lessee, and XXXX (each such entity, a "Relevant Party") is
a corporation, limited partnership, general partnership or limited liability
company duly organized or formed, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation.
Each such entity has or will have full corporate, partnership or limited
liability company power and authority to own, lease and operate its properties
and the Proposed Acquisition Hotels, to conduct its business and to enter into
this Agreement, the Purchase Agreements and each Operative Document (as defined
herein) to which it is a party. Each such entity is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification.
(e) (i) All of the outstanding OP Units of the Operating Partnership, and
shares of capital stock, partnership interests or membership interests in each
of the other Subsidiaries, the Lessee and XXXX have been validly issued or
created under the agreements forming the Operating Partnership, the other
Subsidiaries, the Lessee and XXXX and are owned or held by the persons in the
percentage amounts set forth and in the manner described in the Prospectus, and
(ii) the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, and the organizational or formation documents of the other
Subsidiaries, the Lessee and XXXX are in full force and effect. None of the
Subsidiaries (other than the Operating Partnership) has issued any ownership
interests since the closing of the IPO. AGH GP is the sole general partner of
the Operating Partnership and owns a 1% general partnership interest in the
Operating Partnership. Upon completion of the Offering, AGH LP will own an
approximate 86.9% limited partnership interest in the Operating Partnership.
AGHL GP, Inc. is the sole general partner of the Lessee. Except as described in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto), there are no outstanding options, warrants or other rights calling for
the issuance of, or any commitment, plan or arrangement to issue, any equity
interests in the Operating Partnership, or any membership or equity interests in
the other Subsidiaries, the Lessee or XXXX or any security convertible into, or
exchangeable or exercisable for, any such interests in the Operating
Partnership, the other Subsidiaries, the Lessee or XXXX.
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(f) The Company has no subsidiaries other than the entities listed on
Schedule 6(f) (the "Subsidiaries"). Other than its interests in the
Subsidiaries, the Company does not own, directly or indirectly, securities of
any corporation, partnership, joint venture, limited liability company,
association or other business association.
(g) There are no actions, suits or proceedings pending or, to the knowledge
of the Company, threatened against or affecting the Company, any of the
Subsidiaries, the Lessee, XXXX or any of their respective partners, directors or
officers in their capacity as such, or to which any of the Hotels is subject,
that are required to be described in the Registration Statement or the
Prospectus but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required by the Act.
(h) Neither the Company, any of the Subsidiaries, the Lessee or XXXX is in
violation of its certificate or articles of incorporation or by-laws,
partnership agreement, or other organizational documents, or of any law,
ordinance, administrative or governmental rule or regulation applicable to such
entities or of any decree of any court or governmental agency or body having
jurisdiction over such entities, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which any such entity is a
party or by which any of them or any of their respective properties may be
bound.
(i) Except as set forth in Schedule 6(i), neither the issuance and sale of
the Shares, the execution, delivery or performance of this Agreement, the
Purchase Agreements and the Operative Documents, nor the consummation of the
transactions contemplated hereby or thereby by the Company, the Subsidiaries,
the Lessee or XXXX, as applicable, (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Shares
under the Act and the Exchange Act and compliance with the securities or Blue
Sky laws of various jurisdictions, all of which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws, partnership agreement or other
organizational documents, of any of such entities or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
any material agreement, indenture, lease or other instrument to which any of
such entities is a party or by which any of them or any of their respective
properties may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to any
of such entities or any of their respective properties, or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of any of such entities pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be bound
or to which any of the property or assets of any of them is subject.
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(j) The offers and sales of OP Units prior to the date hereof are exempt
from the registration requirements of the Act and applicable state securities
and Blue Sky laws. All offers and sales by the Company of Common Stock prior to
the date hereof were either duly registered or exempt from the registration
requirements of the Act and applicable state securities and Blue Sky laws.
(k) The accountants, Coopers & Xxxxxxx L.L.P., who have audited the
financial statements included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), are independent public accountants as
required by the Act.
(l) The financial statements, together with related schedules and notes
included in the Registration Statement or the Prospectus (and any amendment or
supplement thereto), present fairly, in all material respects, the financial
position, results of operations and changes in financial position of the
Company, the Lessee, the AGH Predecessor Hotels, the Other Initial Hotels and
the Days Inn Lake Buena Vista hotel at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; the other financial and statistical information and data
included in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the relevant
entities; the pro forma financial statements of the Company and the Lessee
included in the Registration Statement and the Prospectus comply in all material
respects with the applicable requirements of Rule 11-02 of Regulation S-X of the
Commission, and the pro forma adjustments have been made based upon management's
reasonable good faith estimates of the pro forma adjustments and have been
properly applied to the audited historical amounts in the compilation of such
statements; no other financial statements, data or schedules are required by
Form S-11, Regulation S-K, Regulation S-X or otherwise to be included in the
Registration Statement.
(m) The execution and delivery of, and the performance by the Company, AGH
GP, AGH LP and the Operating Partnership of their respective obligations under,
this Agreement have been duly and validly authorized by each of the Company, AGH
GP, AGH LP and the Operating Partnership, and this Agreement has been duly
executed and delivered by the Company, AGH GP, AGH LP and the Operating
Partnership, and, assuming due authorization, execution and delivery by or on
behalf of the Underwriters, constitutes the valid and legally binding agreement
of each of the Company, AGH GP, AGH LP and the Operating Partnership,
enforceable against the Company, AGH GP, AGH LP and the Operating Partnership in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, moratorium and other laws affecting the
enforceability of creditors' rights and general principles of equity.
(n) Each of the documents listed on Schedule 6(n) attached hereto
-------------
(collectively, the "Operative Documents") has been, and each of the Proposed
Operative Documents will be, duly authorized and executed by each Relevant Party
thereto, and each Operative Document,
11
assuming the due authorization, execution and delivery by the other party or
parties thereto, constitutes, or, in the case of the Proposed Operative
Documents, will constitute, a valid and binding agreement of the Relevant
Parties thereto enforceable in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium and other laws affecting the enforceability of creditors' rights and
general principles of equity.
(o) Except as disclosed in the Prospectus, subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), neither the Company nor
any of the Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiaries taken as a whole,
and there has not been any change in the capital stock, or material increase in
the short-term debt or long-term debt, of the Company or any of the
Subsidiaries, or any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(p) The Purchase Agreements have been duly authorized, executed and
delivered by each of the Relevant Parties thereto and, to the knowledge of the
Company, each of the other parties thereto. The Purchase Agreements give the
Operating Partnership the right (subject only to customary closing deliveries
and other closing conditions set forth therein), upon payment of the amounts
provided in the Purchase Agreements, to acquire the Proposed Acquisition Hotels.
Such Purchase Agreements and all deeds, assignments of leases, assignments of
partnership interests and other documents delivered or to be delivered in
connection therewith are legally sufficient to effect the sale to the Operating
Partnership or the Company of all right, title and interest in and to the
Proposed Acquisition Hotels upon payment of the amounts provided for in the
Purchase Agreements. Upon the consummation of the transactions contemplated by
the Purchase Agreements, the Operating Partnership or the Company (either
directly or through a Subsidiary) will have good and marketable title in fee
simple to each of the items of real property and good and marketable title to
each of the items of personal property which are included in the Hotels, and
valid and enforceable leasehold interests in each of the items of real and
personal property which are included in the Hotels in each case free and clear
of all liens, charges, encumbrances,claims, security interests, defects and
restrictions, other than those described in the Registration Statement and the
Prospectus and those which do not and will not have a material adverse effect on
the properties, business, financial condition or results of operations of the
Company and the Subsidiaries. All leases pursuant to which the Operating
Partnership leases or, in the case of the Proposed Acquisition Hotels, will
lease, any items of real or personal property included in the Hotels, are valid,
binding and enforceable leases. Such leases conform in all material respects to
the description thereof set forth in the Registration Statement and no notice
has been given or material claim asserted by anyone adverse to the rights of
Company or, with respect to the Proposed Acquisition Hotels, the present owners
thereof, under any of such leases or affecting the
12
Operating Partnership's or the present owner's rights to continued possession
of any leased property.
(q) The Company has not distributed and, prior to the later to occur of (i)
the Closing Date and (ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the Act.
(r) (i) Each of the Company, the Operating Partnership, the other
Subsidiaries, the Lessee and XXXX have all permits, licenses, franchises and
authorizations of governmental and regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus, (ii) each of the Company, the Operating
Partnership, the other Subsidiaries, the Lessee and XXXX has fulfilled and
performed all its material obligations with respect to such permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus, and (iii) except as
described in the Prospectus, none of such permits contains any restriction that
is materially burdensome to the Company, the Operating Partnership, any of the
other Subsidiaries, the Lessee or XXXX.
(s) The Company, together with its 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
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (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
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) None of the Company, any of its Subsidiaries or any employee or agent
of any of them, has made any payment of funds of the Company or any Subsidiary
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus.
(u) The Company, each of the Subsidiaries, the Lessee and XXXX have filed
all tax returns required to be filed, which returns are complete and correct in
all material respects, and neither the Company, any Subsidiary, the Lessee or
XXXX is in default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto, other than any taxes being
contested in good faith by the applicable entity.
(v) Except as described in the Prospectus, no person or entity has any
right to require the registration of any shares of Common Stock or any other
securities of the
13
Company because of the filing of the registration statement or sale of the
Shares contemplated by this Agreement.
(w) The Company and its Subsidiaries are organized and intend to operate in
the manner described in the Registration Statement so that the Company will meet
the requirements for qualification as a real estate investment trust under
Sections 856 through 860 of the Code and the rules and regulations thereunder as
currently in effect, commencing with the year ended December 31, 1996. The
Operating Partnership and each Subsidiary that is a partnership or a limited
liability company will be treated as a partnership, and not as an association
taxable as a corporation or a publicly traded partnership, for federal income
tax purposes.
(x) The Company, the Subsidiaries and the Lessee are not now and after the
sale of the Shares to be sold hereunder and application of the net proceeds from
such sale as described in the Prospectus under the caption "Use of Proceeds,"
none of them 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.
(y) The Company, the Subsidiaries, the Lessee and XXXX are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they are
engaged; and neither the Company, nor any Subsidiary has any reason to believe
that it will not be able to renew that coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially and adversely
affect the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries taken as a whole, the Lessee or
XXXX except as described in or contemplated by the Prospectus.
(z) The acquisition of the Proposed Acquisition Hotels, the leasing of the
Proposed Acquisition Hotels by the Lessee, and the management of such Hotels by
either XXXX or Wyndham, will, prior to the acquisition of such Hotels, be
approved by each franchisor that is party to a franchise agreement or license
(together with the franchise agreements and licenses to which the Current Hotels
are subject, the "Franchise Agreements") with respect to the Proposed
Acquisition Hotels (together with the franchisors that are party to the
Franchise Agreements to which the Current Hotels are subject, the
"Franchisors"), and the consummation of the acquisition and leasing of the
Proposed Acquisition Hotels will not result in a material breach of any
Franchise Agreement to which such Hotels are subject. Upon the consummation of
the transactions contemplated by the Purchase Agreements, there will be no
franchise agreements and/or licenses used in connection with the operation of
the Hotels except for the Franchise Agreements with the Franchisors. The
assignment of the Franchise Agreements or the entering into of new Franchise
Agreements in connection with the transactions contemplated by the Purchase
Agreements will, prior to the acquisition of such Hotels, be approved by each
Franchisor that is party to such agreements and there are no requirements or
duties on the part of any party and no understandings as to any required
improvements or other
14
expenditures in connection with the Proposed Acquisition Hotels in connection
with such consents or the entering into of new Franchise Agreements except as
set forth in the Prospectus. The Hotels are in material compliance with all of
the terms of the Franchise Agreements. The Company has no reason to believe that
it cannot complete the proposed renovations and repositionings of certain of the
Hotels in the manner and at the cost described in the Prospectus or that the
proposed new franchise licenses for certain of the Hotels will not be granted as
contemplated by the Prospectus.
(aa) The lenders under the Company's revolving line of credit (the "Line of
Credit") have approved all of the transactions to be entered into in connection
with the acquisition of the Proposed Acquisition Hotels, including, without
limitation, the Proposed Wyndham Management Agreement.
(ab) Except with respect to economic terms, the Leases with respect to the
Acquired Hotels are, and the Proposed Leases will be, substantially similar to
the Leases with respect to the Initial Hotels. The Management Agreements with
respect to the Acquired Hotels are, and the Proposed XXXX Management Agreements
will be, substantially similar to the Management Agreements with respect to the
Initial Hotels.
(ac) To the knowledge of the Company, no lessee, licensee or concessionaire
of any portion of any of the Hotels is in default under any of the leases or
licenses governing such properties 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 or license, except such defaults that would not singly
or in the aggregate, have a material adverse effect on the condition (financial
or otherwise), business, properties, net worth, results of operations or
prospects of the Company or its Subsidiaries taken as a whole. Other than
payments set forth in the Purchase Agreements and payments in respect of any
mortgage indebtedness assumed in connection therewith, none of the Company, any
Subsidiaries nor the Lessee will be required to make any payments to, or on
behalf of, any of the selling entities thereof or any other parties other than
taxing authorities in connection with the acquisition of the Proposed
Acquisition Hotels.
(ad) Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(ae) The Shares are duly authorized for listing, subject to official notice
of issuance, on the New York Stock Exchange.
(af) Neither the Company, any of its Subsidiaries, the Lessee or XXXX is
involved in any material labor dispute nor, to the knowledge of the Company, is
any such dispute threatened. No general labor problem exists or, to the
knowledge of the Company, is imminent with the employees of any of the Hotels,
the Company, any of the Subsidiaries, the
15
Lessee or XXXX. All applicable notification requirements in connection with the
Worker Adjustment and Retraining Notification Act ("WARN") have been or will be
fulfilled in connection with the transfer of the Proposed Acquisition Hotels to
the Operating Partnership.
(ag) The Company, the Subsidiaries, the Lessee and XXXX have sufficient
trademarks, trade names, patent rights, copyrights, licenses, trade secrets,
approvals and governmental authorizations (the "Intangible Rights") necessary to
conduct the business of the Current Hotels as now conducted and as proposed to
be conducted as described in the Prospectus and, upon closing of the acquisition
of the Proposed Acquisition Hotels, will have sufficient Intangible Rights
necessary to conduct the business of the Proposed Acquisition Hotels as proposed
to be conducted as described in the Prospectus; the expiration of any Intangible
Rights other than the use of the franchise names pursuant to the Franchise
Agreements would not, singly or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), business, properties, net worth,
results of operations or prospects of such entity; and the Company does not have
any knowledge of any material infringement of any Intangible Right and there is
no claim being made against the Company, any of the Subsidiaries, the Lessee or
XXXX regarding any Intangible Right which could have a material adverse effect
on the condition (financial or otherwise), business, prospects, properties, net
worth, results of operations or prospects of any of the Company, any of the
Subsidiaries, XXXX, the Lessee or any Current Hotel.
(ah) The personal property (including, but not limited to, furniture,
equipment, and towels) to be acquired in connection with the acquisition of the
Proposed Acquisition Hotels is adequate to enable the Company, the Operating
Partnership, XXXX and the Lessee, as applicable, to continue to conduct the
business of the Proposed Acquisition Hotels in the manner in which such
operations have normally been conducted by the present owners thereof and as
proposed to be conducted as described in the Prospectus. The Company has
provided the Representatives with a replacement schedule for such personal
property (receipt of which the Representatives hereby acknowledge), which the
Company reasonably believes is sufficient to permit the business of the Proposed
Acquisition Hotels to continue to be conducted in the manner in which such
business has been conducted by the present owners thereof, which will comply
with the requirements of the Franchise Agreements and which will permit the
Company to qualify as a real estate investment trust for federal income tax
purposes.
(ai) Except as described in the Prospectus, the mortgages and deeds of
trust encumbering the Current Hotels (and, upon their acquisition, the Proposed
Acquisition Hotels) will not be cross-defaulted or cross-collateralized with any
other property not owned directly or indirectly by the Company or the
Subsidiaries.
(aj) Each of the Hotels, the Company, the Subsidiaries, the Lessee and
XXXX, (i) is in compliance in all material respects with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
has received, or will have received, upon consummation of the transactions
contemplated by
16
the Purchase Agreements, as the case may be, all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective business and (iii) is in material compliance with all terms and
conditions of any such permit, license or approval.
(ak) (i) Except as may be specifically disclosed in the "Phase I"
environmental assessment reports referred to in the Prospectus (the
"Environmental Reports"), the Company, the Subsidiaries, XXXX, the Lessee and,
to the knowledge of the Company, the entities from which the Operating
Partnership acquired the Current Hotels or from which the Operating Partnership
proposes to acquire the Proposed Acquisition Hotels (the "Selling Entities"),
have not at any time, and, to the knowledge of the Company, no other party has
at any time, handled, buried, stored, retained, refined, transported, processed,
manufactured, generated, produced, spilled, allowed to seep, leak, escape or
xxxxx, or be pumped, poured, emitted, emptied, discharged, injected, dumped,
transferred or otherwise disposed of or dealt with, Hazardous Materials (as
hereinafter defined) on, to or from the Hotels. The Company, the Subsidiaries,
the Lessee and XXXX do not intend to use the Hotels or any subsequently acquired
properties for the purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing, spilling,
seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, injecting, dumping, transferring or otherwise disposing of or
dealing with Hazardous Materials, except for such Hazardous Materials as may be
customarily required in hotel operations, stored and used in the quantities
customary for such uses and in compliance with applicable Environmental Laws.
(ii) Except as disclosed in the Environmental Reports, to the
knowledge of the Company, there has been no seepage, leak, escape, xxxxx,
discharge, injection, release, emission, spill, pumping, pouring, emptying
or dumping of Hazardous Materials into waters on or adjacent to the Hotels
or onto lands from which such hazardous or toxic waste of substances might
seep, flow or drain into such waters.
(iii) Except as disclosed in the Environmental Reports, neither
the Company, any Subsidiary, the Lessee or XXXX has received notice of any
occurrence or circumstance which, with notice or passage of time or both,
would give rise to, any claim under or pursuant to any Environmental Law
pertaining to hazardous or toxic waste or substances on or originating from
the Hotels or arising out of the conduct of any such party, including,
without limitation, pursuant to any Environmental Law.
(iv) No environmental engineering firm which prepared the
Environmental Reports (or amendments thereto) or physical condition
(engineering) reports with respect to the Acquired Hotels or the Proposed
Acquisition Hotels was employed for such purpose on a contingent basis or
has any substantial interest in the Company, the Subsidiaries, any of the
Selling Entities, XXXX or the Lessee.
As used herein, "Hazardous Materials" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material as defined
17
by any Federal, state or local environmental law, ordinance, rule, or
regulation including, without limitation, Environmental Laws, the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Section 9601, et seq.) ("CERCLA"), the
-------
Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801,
et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
-------
Section 9601, et seq.) and in the regulations adopted and publications
-------
promulgated pursuant to each of the foregoing or by any Federal, state or
local governmental authority having or claiming jurisdiction over the
Hotels as described in the Prospectus.
(al) To the knowledge of the Company, all physical condition
(engineering) reports obtained for the Acquired Hotels and the Proposed
Acquisition Hotels are materially true and correct. The Operating Partnership
will set aside annually, as a cash reserve account for capital expenditures and
replacement and refurbishment of furniture, fixtures and equipment, an amount
equal to 4.0% of total hotel revenues for each of the Current Hotels and, upon
their acquisition by the Operating Partnership, the Proposed Acquisition Hotels.
Other than as described in the Prospectus, neither the Company, any of the
Subsidiaries, the Lessee nor XXXX is aware of any material capital expenditures
(other than expenditures for maintenance in the ordinary course of business)
which will be required in connection with any of the Hotels prior to the fifth
anniversary of this Agreement.
(am) The assets of the Company and the Subsidiaries do not constitute
"plan assets" under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
(an) The statements set forth in the Prospectus under the caption
"Federal Income Tax Considerations," insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate and
complete in all material respects.
(ao) The Company has complied with all provisions of Florida Statutes,
(S) 517.075 relating to issuers doing business with Cuba.
Any certificate signed by any officer of the Company, AGH GP, AGH LP,
the Operating Partnership, any Subsidiary, the Lessee or XXXX on behalf of any
of such entities and delivered to you or to counsel for the Underwriters shall
be deemed a representation and warranty by such entity to each Underwriter as to
the matters covered thereby.
7. Indemnification and Contribution. (a) The Company, AGH GP, AGH LP and
--------------------------------
the Operating Partnership, jointly and severally, agree to indemnify and hold
harmless each of you and each other Underwriter, the directors, officers,
employees and agents of each Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or
18
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such Underwriter furnished in writing to the
Company by or on behalf of any Underwriter through you expressly for use in
connection therewith; provided, however, that the indemnification contained in
this paragraph (a) with respect to any Prepricing Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending within the time required by the Act. The foregoing indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, AGH GP, AGH LP or the Operating
Partnership, such Underwriter or such controlling person shall promptly notify
in writing the Company, AGH GP, AGH LP or the Operating Partnership, and the
Company, AGH GP, AGH LP or the Operating Partnership shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the Company, AGH GP, AGH LP and the Operating Partnership have agreed in
writing to pay such fees and expenses, (ii) the Company, AGH GP, AGH LP and the
Operating Partnership have failed to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company, AGH GP, AGH LP or the Operating Partnership and such Underwriter or
such controlling person shall have been advised in writing by its counsel that
representation of such indemnified party and the Company, AGH GP, AGH LP or the
Operating Partnership by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the Company, AGH GP, AGH LP and the
Operating Partnership shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). In any event, it is understood, however, that the Company, AGH GP, AGH
LP and the Operating Partnership shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the
19
reasonable fees and expenses of only one separate firm of attorneys (in addition
to any local counsel) at any time for all such Underwriters and controlling
persons not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Xxxxx Xxxxxx Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
Company, AGH GP, AGH LP or the Operating Partnership shall not be liable for any
settlement of any such action, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the Company,
AGH GP, AGH LP and the Operating Partnership agrees to indemnify and hold
harmless any Underwriter, to the extent provided in the preceding paragraph, and
any such controlling person from and against any loss, claim, damage, liability
or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Operating Partnership, AGH GP and AGH LP and
their respective directors and officers who sign the Registration Statement, and
any person who controls the Company, the Operating Partnership, AGH GP or AGH LP
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company, AGH GP, AGH LP
and the Operating Partnership to each Underwriter, but only with respect to
losses, claims, damages,liabilities and expenses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact set forth in
the information relating to such Underwriter furnished in writing by or on
behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, AGH GP, AGH LP or the Operating Partnership, or any of their
respective directors, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter shall
have the rights and duties given to the Company, AGH GP, AGH LP and the
Operating Partnership by paragraph (b) above (except that if the Company, AGH
GP, AGH LP or the Operating Partnership shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company, AGH GP,
AGH LP and the Operating Partnership, their respective directors, any such
officer, and any such controlling person shall have the rights and duties given
to the Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an 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, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, AGH GP, AGH LP and the Operating Partnership on the one hand and the
Underwriters on the other hand from the
20
offering of the Shares, or (ii) 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 Company, AGH GP, AGH LP and the Operating Partnership
on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, AGH GP, AGH LP and the Operating
Partnership on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Shares (before deducting expenses) received by the Company, AGH GP, AGH LP and
the Operating Partnership bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company, AGH GP,
AGH LP and the Operating Partnership on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, AGH GP, AGH LP and the Operating Partnership on the one hand or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Company, AGH GP, AGH LP, the Operating Partnership and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by a pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions
of this Section 7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price of the Shares underwritten by it
and distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 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 7 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule I hereto (or such
----------
numbers of Firm Shares increased as set forth in Section 10 hereof) and not
joint. For purposes of this Section 7(e), each person, if any, who controls a
party to this Agreement within the meaning of the Act, shall have the same
rights to contribution as that party, and each officer of the Company who signed
the Registration Statement shall have the same rights to contributions as the
Company.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding
21
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such action, suit or
proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company, AGH GP, AGH LP and the Operating
Partnership set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or the Company, AGH GP,
AGH LP and the Operating Partnership, their respective directors or officers, or
any person controlling the Company, AGH GP, AGH LP or the Operating Partnership,
(ii) acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, AGH GP, AGH LP and the Operating
Partnership, their respective directors or officers, or any person controlling
the Company, AGH GP, AGH LP and the Operating Partnership, shall be entitled to
the benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Initial Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the Initial Registration Statement or such post-effective amendment shall have
become effective not later than 5:30 p.m., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you; and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m., New York City
time, on the date of this Agreement; all filings, if any, required by Rules 424
and 430A under the Act shall have been timely made; if required, the Prospectus
or any Term Sheet that constitutes a part thereof and any amendment or
supplement thereto shall have been filed with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the Act; no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Company or any Underwriter, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) Subsequent to the effectiveness of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective change,
in or affecting the condition (financial or other), business, properties, net
worth, or results of operations of the
22
Company and the Subsidiaries taken as a whole not contemplated by the
Prospectus, which in your reasonable opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares, or
(ii) any event or development relating to or involving the Company or any
officer or director of the Company, which makes any statement made in the
Prospectus untrue or which, in the reasonable opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your reasonable
opinion, as Representatives of the several Underwriters, materially adversely
affect the market for the Shares.
(c) You shall have received on the Closing Date, opinions of Battle
Xxxxxx, LLP, counsel for the Company, the Subsidiaries, the Lessee and XXXX,
dated the Closing Date and addressed to you, as Representatives of the several
Underwriters, in the form set forth on Exhibit 8(c) attached hereto.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the State of New York, provided that (1) each such local counsel is
acceptable to the Representatives, (2) such reliance is expressly authorized by
each opinion so relied upon, and a copy of each such opinion is delivered to the
Representatives and is, in form and substance, satisfactory to them and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon. In addition, in
rendering the foregoing opinion, such counsel may rely, as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Company, the Operating Partnership, the Lessee, AGH GP, AGH LP and XXXX and
certificates or other written statements of officers or departments of various
jurisdictions having custody of documents respecting the existence or good
standing of the Company, the Operating Partnership, the Lessee, AGH GP, AGH LP
and XXXX, provided that copies of all such opinions, statements or certificates
shall be delivered to Underwriters' counsel.
(d) You shall have received on the Closing Date an opinion of Coopers
& Xxxxxxx L.L.P., special tax advisor to the Company, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, satisfactory
in form and substance to counsel for the Underwriters, to the effect that the
discussion contained in the Prospectus under the caption "Federal Income Tax
Considerations - Other Tax Considerations" fairly summarizes the Texas state tax
considerations that are material to a holder of Shares.
(e) You shall have received on the Closing Date an opinion of Hunton &
Xxxxxxxx, counsel for the Underwriters, dated the Closing Date and addressed to
you, as Representatives of the several Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement and such other related
matters as you may request.
23
(f) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date, from Coopers & Xxxxxxx L.L.P., independent certified public
accountants, substantially in the forms heretofore approved by you and a copy of
the segmentation analysis of such accountants with respect to the bases of the
personal property and real property leased or to be leased by the Operating
Partnership to the Lessee in connection with the Acquired Hotels and the
Proposed Acquisition Hotels.
(g) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company or the Underwriters, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been since the respective dates as of which
information is given in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Proposed
Acquisition Hotels or the Company and the Subsidiaries taken as a whole; (iv)
the Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and the Subsidiaries, taken as a whole, other than
those reflected or contemplated in the Registration Statement or the Prospectus
(or any amendment or supplement thereto); and (v) all the representations and
warranties of the Company, the Operating Partnership, AGH LP and AGH GP
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company, AGH GP and AGH LP (or such other officers as are acceptable to you), to
the effect set forth in this Section 8(g) and in Section 8(h).
(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(i) The Shares shall have been listed or approved for listing, subject
to notice of issuance, on the New York Stock Exchange.
(j) The Company, AGH GP, AGH LP, the Operating Partnership, the Lessee
and XXXX shall have furnished to the Representatives such certificates, in
addition to those specifically mentioned herein, as you shall have reasonably
requested.
24
(k) All actions necessary to permit the Company to increase its
borrowing limit under the Line of Credit, as described in the Prospectus, shall
have been taken.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel in your reasonable discretion.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (g) shall be dated the Option
Closing Date and the opinions and letters called for by paragraphs (c), (d), (e)
and (f) shall be revised to reflect the sale of Additional Shares.
9. Expenses. The Company agrees to pay the following costs and
--------
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), any Rule 462(b) Registration Statement, each
Prepricing Prospectus, the Prospectus, and each amendment or supplement to any
of them; (ii) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the registration statement, each Prepricing Prospectus, the Prospectus, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement,
the Blue Sky Memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v) the
listing of the Shares on the New York Stock Exchange; (vi) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Shares; (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become
---------------------------
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
25
post-effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Company,
by notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Firm Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Firm Shares which the
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the number of
Firm Shares set forth opposite its name in Schedule I hereto bears to the
----------
aggregate number of Firm Shares set forth opposite the names of all non-
defaulting Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Xxxxx
Xxxxxx Inc., to purchase the Firm Shares which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase, in each case upon
the terms set forth in this Agreement. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Shares which it or they are obligated to
purchase on the Closing Date and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares which the Underwriters are obligated to purchase on the
Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
----------
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed within 24 hours by letter.
11. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
Underwriter, by notice to the Company, if prior to the Closing Date or any
Option Closing Date (if different from the Closing Date and then only as to the
Additional Shares), as the case may be, (i) trading in the Common Stock shall
have been suspended by the Commission or the New York Stock Exchange, (ii)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or The Nasdaq Stock Market shall have been suspended or
materially limited, (iii) a general moratorium on commercial banking activities
in New York or Texas shall have been declared
26
by either federal or state authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to make
it, in your reasonable judgment, impracticable or inadvisable to commence or
continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Company by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Information Furnished by the Underwriters. The Company and the
-----------------------------------------
Operating Partnership acknowledge that the statements set forth in the last
paragraph on the cover page, the names of the Underwriters appearing on the
cover page and the back cover page of the Prospectus, the legend with respect to
stabilization and overallotments on the first page of the Prospectus Table of
Contents, the list of Underwriters and their respective allotments appearing
under the caption "Underwriting" in the Prospectus and the statements in the
first and third paragraphs under the caption "Underwriting" in any Prepricing
Prospectus and in the Prospectus, constitute the only information furnished by
or on behalf of the Underwriters through you as such information is referred to
in Section 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 6, 11 and 12
-------------
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, AGH GP, AGH LP or the
Operating Partnership, at the office of the Company at 0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxx, Chairman,
Chief Executive Officer and President; or (ii) if to you, as Representatives of
the several Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, the Operating Partnership, AGH GP and AGH LP and
their respective directors and officers, and the other controlling persons
referred to in Section 7 hereof and their respective successors and assigns, to
the extent provided herein, and no other person shall acquire or have any right
under or by virtue of this Agreement. Neither the term "successor" nor the term
"successors and assigns" as used in this Agreement shall include a purchaser
from any Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by and
----------------------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
27
Please confirm that the foregoing correctly sets forth the agreement
between the Company, AGH GP, AGH LP and the Operating Partnership and the
several Underwriters.
Very truly yours,
AMERICAN GENERAL HOSPITALITY CORPORATION
By
-------------------------------------------
Xxxxxx X. Xxxxx
Chairman of the Board,
Chief Executive Officer and President
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By AGH GP, INC.,
as general partner
By
--------------------------------------------
Name:
Title:
AGH GP, INC.
By
--------------------------------------------
Name:
Title:
AGH LP, INC.
By
--------------------------------------------
Name:
Title:
28
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
----------
hereto.
XXXXX XXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXXXXXX SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
As Representatives of the Several Underwriters
By XXXXX XXXXXX INC.
By
--------------------------------------------
Managing Director
29
SCHEDULE I
Number of
Underwriter Firm Shares
----------- -----------
Xxxxx Xxxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxxxxxxx Securities
Prudential Securities Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
_________
Total . . . . . . . . . . 5,500,000
=========
30
SCHEDULE 6(f)
SUBSIDIARIES
State or Other Jurisdiction
of Incorporation or
Subsidiary Organization/Type of Entity
AGH GP, Inc. Nevada/Corporation
AGH LP, Inc. Nevada/Corporation
American General Hospitality Operating Delaware/Limited Partnership
Partnership, L.P.
AGH UPREIT LLC Delaware/Limited Liability Company
AGH SECAUCUS LLC Delaware/Limited Liability Company
AGH DFW South LLC Delaware/Limited Liability Company
2929 Xxxxxxxx Limited Liability Company Delaware/Limited Liability Company
3100 Glendale Joint Venture Ohio/General Partnership
MDV Limited Partnership Texas/Limited Partnership
Madison Motel Associates Wisconsin/General Partnership
183 Hotel Associates, Ltd. Texas/Limited Partnership
Richmond Williamsburg Associates, Ltd. Texas/Limited Partnership
455 Meadowlands Associates, Ltd. Texas/Limited Partnership
DFW South I Limited Partnership Texas/Limited Partnership
Lake Buena Vista Partners, Ltd. Florida/Limited Partnership
SCHEDULE 6(n)
OPERATIVE DOCUMENTS
(1) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Holiday Inn Park Center Plaza).
(2) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Holiday Inn Mission Valley).
(3) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Days Inn Ocean City).
(4) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Xx Xxxxx Airport Hotel).
(5) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Best Western Albuquerque Airport Hotel).
(6) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Holiday Inn Resort Monterey).
(7) Participating Lease between the Operating Partnership and AGH Leasing,
L.P. (Hilton Hotel Durham).
(8) Participating Lease between 2929 Xxxxxxxx Limited Liability Company and
AGH Leasing, L.P.
(9) Participating Lease between 3100 Glendale Joint Ventures and AGH Leasing,
L.P.
(10) Participating Lease between MDV Limited Partnership and AGH Leasing, L.P.
(11) Participating Lease between Madison Motel Associates and AGH Leasing,
L.P.
(12) Participating Lease between 183 Hotel Associates, Ltd. and AGH Leasing,
L.P.
(13) Participating Lease between Richmond Williamsburg Associates, Ltd. and
AGH Leasing, L.P.
(14) Participating Lease between DFW South I Limited Partnership and AGH
Leasing, L.P.
(15) Participating Lease between 455 Meadowlands Associates, Ltd. and AGH
Leasing, L.P.
2
(16) Participating Lease between Lake Buena Vista Partners, Ltd. and AGH
Leasing, L.P.
(17) Proposed Participating Lease between the Operating Partnership and AGH
Leasing, L.P. (Radisson Arlington Heights).
(18) Proposed Participating Lease between the Operating Partnership and AGH
Leasing, L.P. (Four Points by Sheraton).
(19) Proposed Participating Lease between the Operating Partnership and AGH
Leasing, L.P. (Sheraton Key Largo).
(20) Proposed Participating Lease between the Operating Partnership and AGH
Leasing, L.P. (French Quarters Suites Hotel).
(21) The sixteen Management Agreements between AGH Leasing, L.P. and American
General Hospitality, Inc. with respect to each Current Hotel.
(22) The three Proposed Management Agreements between AGH Leasing, L.P. and
American General Hospitality, Inc. with respect to three of the Proposed
Acquisition Hotels.
(23) The Proposed Wyndham Management Agreement between AGH Leasing, L.P. and
Wyndham Hotel Corporation with respect to the Four Points Sheraton Hotel.
(24) Lease Master Agreement between the Operating Partnership and AGH Leasing,
L.P.
(25) The Partners' Guarantee in favor of the Operating Partnership by the
limited partners of AGH Leasing, L.P.
(26) Pledge Agreement between the limited partners of AGH Leasing, L.P., and
the Operating Partnership.
(27) Management Company Master Agreement among AGH Leasing, L.P., the Company,
Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx.
(28) Second Amendment to Stock Restriction Agreement by and among XXXX and its
shareholders.
(29) Amended and Restated Agreement of Limited Partnership of the Operating
Partnership.
3
(30) Assignment Agreement between AGH Leasing, L.P. and the Operating
Partnership regarding the Management Company Master Agreement.
(31) Supplemental Representations, Warranties and Indemnity Agreement, among
the Operating Partnership, the Company and the other persons a party
thereto.
(32) Exchange Rights Agreement among certain partners of the Operating
Partnership, the Operating Partnership and the Company.
(33) Registration Rights Agreement among certain partners of the Operating
Partnership and the Company.
(34) Lock-up Agreement among certain partners of the Operating Partnership and
the Operating Partnership.
(35) American General Hospitality Corporation 1996 Incentive Plan.
(36) American General Hospitality Corporation Non-Employee Directors'
Incentive Plan.
(37) Employment Agreements between the Company and each of its executive
officers.
(38) Shared Services Office Space Agreement between the Company and XXXX.
(39) Option Agreement and Right of First Offer/Refusal between 1815 Hotel
Associates Limited Partnership and the Operating Partnership (with
respect to the Durham, North Carolina Option Hotels).
(40) Option Agreement and Right of First Offer/Refusal between Broadway
Xxxxxxxx Limited Partnership and the Operating Partnership (with respect
to the Boise, Idaho Option Hotel).
(41) Master Alliance Agreement, dated as of January 9, 1997, by and among
American General Hospitality Corporation, the Operating Partnership, WHC
Franchise Corporation and WHC Development Corporation.
EXHIBIT 8(c)
[Form of Battle Xxxxxx opinion
pursuant to
Underwriting Agreement]
February __, 1997
Xxxxx Xxxxxx Inc.
Xxxxxxxxxx Securities
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Prudential Securities Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
As Representatives of the Several Underwriters
c/o Xxxxx Xxxxxx Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: American General Hospitality Corporation Public
Offering of 5,500,000 shares of Common Stock, $0.01
par value per share, pursuant to Registration
Statement on Form S-11 (Registration No. 333-19585)
--------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to American General Hospitality Corporation,
a Maryland corporation (the "Company"), and American Hospitality Operating
Partnership, L.P., a Delaware limited partnership (the "Operating Partnership"),
in connection with the sale by the Company today of an aggregate of 5,500,000
shares (the "Shares") of common stock, par value $0.01 per share (the "Common
Stock"), of the Company pursuant to that certain Underwriting Agreement, dated
February __, 1997 (the "Underwriting Agreement"), between the Company and Xxxxx
Xxxxxx Inc., Xxxxxxxxxx Securities, Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Prudential Securities Incorporated and The Xxxxxxxx-Xxxxxxxx Company, Inc., as
the Representatives (the "Representatives") of the several Underwriters
2
(together with the Representatives, the "Underwriters") listed in Schedule I to
the Underwriting Agreement.
This opinion is being furnished pursuant to Section 8(c) of the
Underwriting Agreement. Capitalized terms used herein and not defined herein
shall have the meanings ascribed to such terms in the Underwriting Agreement.
In connection with this opinion, we have examined the following
materials:
(a) the Registration Statement of the Company on Form S-11 (File No.
333-19585) relating to the Shares and Amendments Nos. 1, 2, and 3 thereto (said
registration statement in the Form in which it became effective being
hereinafter called the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), and the General Rules and Regulations promulgated
thereunder (the "Rules and Regulations");
(b) the final prospectus relating to the offer and sale of the
Shares, dated February __, 1997 (the "Effective Date"), filed via XXXXX with the
Commission pursuant to Rule 424(b) of the Rules and Regulations (the
"Prospectus") on February __, 1997;
(c) a memorandum to the file regarding telephonic confirmation from
the staff of the Commission of the effectiveness of the Registration Statement;
(d) the Articles of Incorporation of the Registrant and the Second
Amended and Restated Articles of Incorporation of the Company (the "Charter"),
as certified by the State Department of Assessments and Taxation of the State of
Maryland as of a recent date, as being a true and complete copy of such document
as filed in the office of the State Department of Assessments and Taxation (the
"SDAT");
(e) the Articles of Incorporation of AGH GP, Inc., a Nevada
corporation ("AGH GP"), and AGH LP, Inc., a Nevada corporation ("AGH LP"
together with AGH GP the "Corporate Subsidiaries"), as certified by an officer
of State of the State of Nevada as of a recent date as being a true and complete
copy of such documents as filed in such office;
(f) the Certificate of Limited Partnership, as amended (the
"Partnership Certificate"), of the Operating Partnership, as certified as of a
recent date by the Secretary of State of the State of Delaware as of a recent
date as being a true and correct copy of such document as filed in the office of
the Secretary of State;
3
(g) (i) the Limited Partnership Formation Agreement of the Operating
Partnership, dated April 9, 1997, and (ii) the Amended and Restated Agreement of
Limited Partnership (the "Operating Partnership Agreement") of the Operating
Partnership, dated as of February __, 1997, each as certified by the Secretary
of AGH GP, as general partner of the Operating Partnership, on the date hereof
as being complete, correct and in effect;
(h) the partnership agreement, as amended, of each partnership other
than the Operating Partnership (collectively, the "Partnership Subsidiaries")
that is identified as a Property Partnership in Schedule I hereto, in each case,
as certified by a general partner of such partnership as of the date hereof as
being complete, correct and in effect;
(i) the operating agreement, as amended, and the Certificate of
Formation, as amended, of each of the limited liability companies identified on
Schedule I hereto (the "LLC Subsidiaries") as certified by the Secretary of
State of the State of Delaware on the date indicated on such certificate as
being a true and complete copy of such document as filed in such office (LLC
Subsidiaries, the Corporate Subsidiaries and the Partnership Subsidiaries, the
"Subsidiaries");
(j) the Certificate of Incorporation of AGHL GP, Inc., a Delaware
corporation ("AGHL GP"), as certified as of a recent date by the Secretary of
State of the State of Delaware as being a true and correct copy of such document
as filed in the office of the Secretary of State;
(k) the Certificate of Limited Partnership of AGHL Leasing, L.P., a
Delaware limited partnership (the "Lessee"), as certified as of a recent date by
the Secretary of State of the State of Delaware as being a true and correct copy
of such document as filed in the office of the Secretary of State;
(l) the Bylaws of the Company, each Corporate Subsidiary and AGHL GP,
as certified by an officer of the Company or such Corporate Subsidiary or AGHL
GP, as the case may be, as of the date hereof as being complete, correct and in
effect;
(m) certificates of good standing issued by the States of Maryland,
Delaware, Nevada, Texas and Florida, as indicated on Schedule I hereto;
(n) with respect to the Company, the Operating Partnership and the
Subsidiaries, the foreign qualification certificates issued by the States of
California, Louisiana, Ohio, Maryland, Wisconsin, New Jersey, Virginia, New
Mexico, Texas, North Carolina and Florida, each as indicated on Schedule I
hereto;
4
(o) with respect to the Lessee and AGHL GP, foreign qualification
certificates issued by the states of California, Maryland, New Mexico,
Louisiana, Ohio, Wisconsin, Virginia, New Jersey and Texas, each as indicated on
Schedule I hereto;
(p) the record/minute book of the Company as certified by an officer
of the Company as of the date hereof as being complete, correct and in effect;
(q) the record/minute book of each Corporate Subsidiary, as
certified by an officer of such Corporate Subsidiary as of the date hereof as
being true and complete and in effect;
(r) the record/minute book of AGH SECAUCUS LLC, as certified by a
member of AGH SECAUCUS LLC as of the date hereof as being complete, correct and
in effect;
(s) the record/minute book of AGH UPREIT LLC, as certified by a member
of AGH UPREIT LLC as of the date hereof as being complete, correct and in
effect;
(t) the record/minute book of AGH DFW South, LLC, as certified by a
member of AGH DFW South, LLC as of the date hereof as being complete, correct
and in effect;
(u) the record/minute book of AGHL GP, as certified by an officer of
AGHL GP as of the date hereof as being complete, correct and in effect;
(v) the minute books, stock books and stock transfer ledgers of the
Company and each Corporate Subsidiary and AGHL GP and the organizational record
books of each LLC Subsidiary and Partnership Subsidiary as made available for
inspection by the Company;
(w) a certificate of an officer of the Company and of each Subsidiary
and AGHL GP, dated as of the date hereof, as to the incumbency and signatures of
certain officers of the Company or such Subsidiary or AGHL GP;
(x) the other documents listed as exhibits to the Registration
Statement and incorporated by reference thereto;
(y) an executed copy of the Underwriting Agreement;
(z) an executed copy of each of the agreements listed on Schedule II
hereto (the "Operative Documents") and a copy of the form of each of the
agreements listed on Schedule II-A hereto (the "Proposed Operative Documents");
and
5
(aa) the other instruments and documents delivered at today's
closing, including certificates or telegrams of public officials as to matters
set forth therein and certificates of representatives of the Company as to
matters set forth therein.
In rendering this opinion, we have assumed the capacity to sign and
the genuineness of all signatures of all persons executing agreements,
instruments or documents examined or relied upon by us, the authenticity of all
agreements, instruments or documents submitted to us as originals and the
conformity with the original agreements, instruments or documents of all
agreements, instruments or documents submitted to us as copies.
We have also assumed (a) as to all parties other than the Company, the
Operating Partnership, the Subsidiaries, the Lessee, American General
Hospitality, Inc., a Texas corporation ("XXXX") XXXX, and AGHL GP, the due
authorization, execution, acknowledgement as indicated thereon and delivery of
documents referred to herein, and the validity, binding effect and
enforceability thereof against all parties thereto other than the Company, the
Operating Partnership, the Subsidiaries, the Lessee, XXXX and AGHL GP, (b) that
the Company will apply the net proceeds of the sale of the Shares in the manner
described in the Prospectus, and (c) that each of the Underwriters has full
power, authority and legal right, under its charter and other governing
documents and all applicable laws to execute, deliver and perform their
respective obligations under the Underwriting Agreement and the other documents
referred to herein to which it is a party. We have further assumed that the
consideration required to be paid for the issuance of the Shares and the
outstanding shares of stock of the Company pursuant to the resolutions of the
Board of Directors of the Company including authorizing the issuance of those
securities has in fact been paid to and received by the Company.
With respect to matters of fact, we have relied upon the written
statements and certificates of officers of the Company, AGH GP (on behalf of the
Operating Partnership), AGHL GP (on behalf of the Lessee), and authorized
representatives of the members of the LLC Subsidiaries and the general partners
of the Partnership Subsidiaries (referred to herein as the "Officer's
Certificate"), representations made by the Company, the Operating Partnership
and the Corporate Subsidiaries in the Underwriting Agreement, and certificates
of public officials. Where matters are stated to be "to the best of our
knowledge" or "known to us," our knowledge is limited to the actual knowledge of
those attorneys in our office who have directly participated in this engagement,
their review of documents provided to us by the Company, the Operating
Partnership and the Subsidiaries in connection with this engagement and
inquiries of officers of the Company, the Operating Partnership and the
Corporate Subsidiaries, the results of which are reflected in
6
the Officer's Certificate. We have not independently verified the accuracy of
the matters set forth in the written statements or certificates upon which we
have relied, including the organization, existence, good standing, assets,
business or affairs of the Company, the Operating Partnership, or any
Subsidiary, nor have we undertaken any lien, intellectual property, suit or
judgment searches or searches of court dockets in any jurisdiction.
Insofar as our opinion relates to matters of Maryland law in
paragraphs 1, 4, 6, 8 and 14 below we have relied exclusively upon, and such
opinions are subject to the limitations and assumptions contained in, the
opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, dated the date hereof, a copy of
which is attached hereto as Exhibit A.
---------
Insofar as our opinion relates to matters of Ohio, Wisconsin, Texas,
Nevada, Florida, North Carolina, Georgia, California or Illinois law, in
paragraphs 3, 5, 6, 8 and 11, we have relied exclusively upon, and such opinions
are subject to the limitations and assumptions contained in, the opinion of
McDonald, Hopkins, Xxxxx & Xxxxxx Co., Xxxxx & Lardner, Kane, Xxxxxxx, Xxxxxxx &
Xxxxx, XxXxxxxx Carano Xxxxxx XxXxxx Xxxxxx Xxxxxxxxxx & Xxxxx LLP, [North
Carolina counsel], [Georgia counsel], [California counsel] and [Illinois
counsel] copies of which are attached hereto as Exhibit B, Exhibit C, Exhibit D,
--------- --------- ---------
Exhibit E, Exhibit F, Exhibit G, Exhibit H and Exhibit I, respectively.
--------- --------- --------- --------- ---------
Statements in this opinion as to the legality, validity, binding
effect or enforceability of agreements, instruments and documents are subject
(i) to limitations as to enforceability imposed by bankruptcy, reorganization,
moratorium, fraudulent conveyance, insolvency and other similar laws and related
court decisions of general application relating to or affecting creditors'
rights generally, (ii) to equitable principles limiting the availability of
equitable remedies, and (iii) as to rights to indemnity, to limitations that may
exist under federal and state laws or the public policy underlying such laws.
Except for the opinions set forth in paragraphs 1 through 15 below, we
express no opinions and no opinions should be implied.
We are not admitted to practice law in any jurisdiction other than the
State of New York and we do not express any opinion as to the laws of any states
or jurisdictions except as to New York law, the Delaware General Corporation
Law, the Delaware Revised Uniform Limited Partnership Act, the Delaware Limited
Liability Company Act and the Federal law of the United States of America.
Upon the basis of and subject to the foregoing and solely in reliance
thereon, we are of the opinion that:
7
1. All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights under the Maryland General
Corporation Law. The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms of the Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar statutory rights. The stock
of the Company conforms in all material respects to the description thereof in
the Registration Statement and the Prospectus.
2. To the best of our knowledge, except as described in the
Prospectus or the Registration Statement (or any amendment or supplement
thereto), there are no outstanding options, warrants or other written rights
calling for the issuance of, or any written commitment, plan or arrangement to
issue any stock of the Company or any security convertible into or exchangeable
for stock of the Company.
3. Each of the Operating Partnership, the Subsidiaries, the Lessee
and XXXX is a corporation, limited partnership, general partnership or limited
liability company duly incorporated or formed, as the case may be, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation with full corporate, partnership or limited liability
company power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business as described in the Registration
Statement and the Prospectus requires such registration or qualification; except
where the failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or results of operations of the Company,
Operating Partnership, the Lessee, XXXX or any Subsidiary, respectively.
4. The Company is a corporation duly incorporated and validly
existing under and by virtue of the laws of the State of Maryland and is in good
standing with the SDAT with full corporate power to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business as described in the
Registration Statement and the Prospectus requires such registration or
qualification; except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or results of
operations of the Company.
8
5. All of the outstanding limited partnership interests of the
Operating Partnership and the Lessee were created under the agreements forming
the Operating Partnership and the Lessee, as the case may be. All of the
outstanding shares of capital stock of the Corporate Subsidiaries and XXXX have
been duly authorized and validly issued. To the best of our knowledge, based
solely on a review of the documents referred to in clauses (f) and (g) above,
after giving effect to the Offering, AGH GP will be the record owner of a 1%
interest, as a general partner in the Operating Partnership, and AGH LP will be
the record owner of a [86.9]% interest, as a limited partner in the Operating
Partnership. To the best of our knowledge, except as described in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), there are no outstanding options, warrants or other written rights
calling for the issuance of, or any written commitment, plan or arrangement to
issue, any equity interest or any membership interest in the Operating
Partnership, the Corporate Subsidiaries or the Lessee, or any security
convertible into, or exchangeable or exercisable for, any such interests in the
Operating Partnership or the Corporate Subsidiaries or the Lessee.
9
6. Except as set forth on Schedule 6 hereto, with respect to the
Company, the Operating Partnership, the Subsidiaries, the Lessee and XXXX,
neither the issuance and sale of the Shares, the execution, delivery or
performance of the Underwriting Agreement and the Operative Documents (other
than the Proposed Operative Documents, solely in the case of subparagraph (i)
below, and in the case of subparagraph (ii) below assuming the due
authorization, execution and delivery of Proposed Operative Documents by each of
the parties thereto) nor the consummation of the transactions contemplated
thereby by the Company, or the Subsidiaries, the Lessee or XXXX, as applicable,
(i) requires any consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as has been obtained
for the registration of the Shares under the Act and the Securities Exchange Act
of 1934, as amended, and state securities or Blue Sky laws of various
jurisdictions and clearance by the National Association of Securities Dealers
("NASD") in connection with the purchase and sale of the Shares by the
Underwriters (as to which we express no opinion)) (except that no opinion is
given with respect to liquor laws, statutes, rules or regulations), (ii)
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under the Charter or the certificate or articles of incorporation,
or bylaws, partnership agreement or other organizational documents, of any of
such entities or (iii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement, indenture, lease or
other instrument known to us to which any of such entities is a party or by
which any of them or any of their respective properties may be bound, which in
each case has been filed as an exhibit to the Registration Statement or
incorporated by reference as an exhibit to the Registration Statement, or
violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to any of such entities, any of their
respective properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of such entities
pursuant to the terms of any agreement or instrument known to us, which in each
case has been filed as an exhibit to the Registration Statement, to which any of
them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, except that no opinion is given
with respect to the indemnification and contribution provisions of the
Underwriting Agreement or the requirements of state securities or Blue Sky laws.
10
7. The offers and sales of units of limited partnership interests by
the Operating Partnership, and the offers and sales by the Company of shares of
Common Stock prior to the Effective Date as described in the Registration
Statement and the Prospectus, were either duly registered or exempt from the
registration requirements of the Act and, to the extent applicable, New York
Blue Sky laws.
8. The execution and delivery of, and the performance by the
Company, the Corporate Subsidiaries and the Operating Partnership of their
respective obligations under, the Underwriting Agreement are within the
corporate or partnership power and authority of each such entities and have been
duly and validly authorized by the Company, the Corporate Subsidiaries and the
Operating Partnership, and the Underwriting Agreement has been duly executed and
delivered by the Company, the Corporate Subsidiaries and the Operating
Partnership.
9. Except as described in the Registration Statement and the
Prospectus and to the best of our knowledge, there are no contracts, agreements
or understandings between the Company and any person granting such person or
entity the right to require the registration of any shares of Common Stock or
any other securities of the Company because of the filing of the Registration
Statement or sale of the Shares as contemplated by the Underwriting Agreement.
10. After giving effect to the Offering and the use of proceeds from
sale of the Shares as described in the Registration Statement and Prospectus,
neither the Company, the Operating Partnership nor any of the Subsidiaries is
required to be registered under the Investment Company Act of 1940, as amended.
11. Each Operative Document (other than the Proposed Operative
Documents) to which the Company, the Operating Partnership, the Subsidiaries,
and the Lessee is a party has been duly authorized and executed by such entity.
Each of the Operative Documents (other than the Proposed Operative Documents and
the Operative Document identified as Item (12) on Schedule II) constitutes a
valid and binding obligation of the parties thereto enforceable against each in
accordance with the terms thereof. Assuming the due authorization, execution and
delivery of each of the Proposed Operative Documents by the parties thereto,
will be valid and binding obligations of the parties thereto, enforceable
against each in accordance with the terms thereof.
12. To the best of our knowledge, there are no legal actions, suits
or court proceedings pending or threatened against the Company, or any of the
Subsidiaries or the Lessee, or any of their respective partners, directors or
officers in their capacity as such, or to which any of the Current Hotels (as
defined in the
11
Prospectus) is subject, that are of a character which are required to be
described in the Registration Statement or the Prospectus but are not described
as required. To the best of our knowledge, there are no agreements, contracts,
indentures, leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the Act.
13. At the Effective Date, the Registration Statement and the
Prospectus and any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other financial,
accounting and statistical data included therein or excluded therefrom or the
exhibits to the Registration Statement, as to which we do not express any
opinion) comply as to form in all material respects with the requirements of the
Act, except that we express no opinion as to the form of exhibits to the
Registration Statement, or to the accuracy, completeness or fairness of the
statements contained in the Registration Statement, except to the extent set
forth in paragraph 14 hereof and the third paragraph immediately following
paragraph 14.
14. The descriptions of agreements that are summarized under the
captions "The Hotels -- The Participating Leases," "The Hotels -- The Management
Agreements" and "Partnership Agreement," contained in the Registration Statement
and the Prospectus conform in all material respects to the provisions of such
agreements and each such description, respectively, fairly presents the
information contained therein. The statements under the captions "Description
of Capital Stock," "Certain Provisions of Maryland Law and the Company's Charter
and Bylaws," "Shares Available For Future Sale" and "Federal Income Tax
Considerations" (other than statements regarding Texas tax considerations under
the subcaption "-- Other Tax Considerations") to the extent they constitute
matters of law, descriptions of statutes, rules or regulations, or legal
conclusions, each, respectively, fairly presents in all material respects the
information disclosed therein.
We have been advised by the New York Stock Exchange, Inc. that the
Shares are duly authorized for listing, subject to official notice of issuance.
We have been advised by the staff of the Commission that the
Registration Statement and all post-effective amendments, if any, have become
effective under the Act as of _____ __, 1997 and, to the best of our knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending before or
contemplated by the Commission, and any required filing of the Prospectus.
12
In addition, we have participated in certain conferences with officers
and other representatives of the Company, the Operating Partnership, the
Subsidiaries, the Lessee, representatives of the Company's independent
accountants and with you and your representatives and counsel in connection with
the preparation of the Registration Statement at which the contents of the
Registration Statement, and the Prospectus therein and related matters were
discussed and, although we have not verified independently and, therefore, do
not assume any responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, on the basis of the foregoing, nothing has come to
our attention during the course of the above-described process that has caused
us to believe that the Registration Statement at the time the Registration
Statement became effective, or the Prospectus, as of its date and the date
hereof, contained or contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (other than information omitted therefrom in reliance
on Rule 430A under the Act), except that we express no opinion, view or belief
with respect to the financial statements and the notes thereto and the schedules
and the other financial, accounting or statistical data included in or excluded
from the Registration Statement or the Prospectus.
This opinion is being rendered to you for your sole use and may not be
made available to or relied upon by any other person, firm or entity without our
express prior written consent.
Very truly yours,
Schedule I
----------
STATUS OF FOREIGN
QUALIFICATION/
ENTITY OWNERSHIP STATE OF FORMATION REGISTRATION
--------------------------- -------------------------- ------------------ -----------------
The Company
-----------
American General Public Shareholders Maryland Texas
Hospitality Corporation
The Operating Partnership
-------------------------
American General [86.9]% AGH LP, Inc. Delaware California
Hospitality Operating 1% AGH GP, Inc. Maryland
Partnership, L.P. (general partner) New Mexico
North Carolina
Louisiana
Ohio
Wisconsin
Texas
LLC Subsidiaries
----------------
AGH UPREIT LLC 99% Operating Partnership Delaware Florida
1% The Company Louisiana
Ohio
Wisconsin
Virginia
Texas
AGH SECAUCUS LLC 99% Operating Partnership Delaware New Jersey
1% The Company
AGH DFW South LLC 99% Operating Partnership Delaware Texas
1% The Company
2929 Xxxxxxxx Limited 99% Operating Partnership Delaware Louisiana
Liability Company 1% AGH UPREIT LLC
Corporate Subsidiaries
----------------------
AGH GP, Inc. 100% The Company Nevada California
Maryland
New Mexico
Louisiana
Ohio
Wisconsin
Texas
AGH LP, INC. 100% The Company Nevada ____
STATUS OF FOREIGN
QUALIFICATION/
ENTITY OWNERSHIP STATE OF FORMATION REGISTRATION
--------------------------- -------------------------- ------------------ -----------------
Partnership Subsidiaries
------------------------
3100 Glendale Joint 99% Operating Partnership Ohio ____
Venture (Ohio General 1% AGH UPREIT LLC
Partnership)
MDV Limited 99% Operating Partnership Texas Louisiana
Partnership (Texas 1% AGH UPREIT LLC
limited partnership) (general partner)
Madison Motel 99% Operating Partnership Wisconsin ____
Associates (Wisconsin 1% AGH UPREIT LLC
general partnership)
183 Hotel Associates, Ltd. 99% Operating Partnership Texas ____
(Texas limited partnership) 1% AGH UPREIT LLC
(general partner)
Richmond Williamsburg 99% Operating Partnership Texas Virginia
Associates, Ltd. (Texas 1% AGH UPREIT LLC
limited partnership) (general partner)
455 Meadowlands 99% Operating Partnership Texas New Jersey
Associates, Ltd. (Texas 1% AGH SECAUCUS
limited partnership) LLC (general partner)
DFW South I Limited 99% Operating Partnership Texas ____
Partnership (Texas 1% AGH DFW South LLC
limited partnership) (general partner)
Lake Buena Vista Partners, 99% Operating Partnership Florida ----
Ltd. (Florida Limited 1% AGH UPREIT LLC
Partnership) (general partner)
The Lessee
----------
ENTITY OWNERSHIP STATE OF FORMATION STATUS OF FOREIGN
--------------------------- -------------------------- ------------------ QUALIFICATION/
REGISTRATION
-----------------
AGH Leasing, L.P. 99% Primary Contributors Delaware California
(Delaware limited 1% AGHL GP, Inc. Florida
partnership) (general partner) Maryland
New Mexico
Louisiana
North Carolina
Ohio
Wisconsin
Virginia
New Jersey
Texas
AGHL GP
-------
AGHL GP, Inc. 100% Primary Contributors Delaware California
Florida
Maryland
New Mexico
Louisiana
Ohio
Wisconsin
Virginia
New Jersey
Texas
-------------------------------------------------------------------------------------
Schedule II
-----------
OPERATIVE DOCUMENTS*
(1) Participating Lease, as amended, between the Operating Partnership and AGH Leasing, L.P.
(Hilton Hotel - Durham) (NC Law).
(2) Participating Lease, as amended, between Lake Buena Vista Partners, Ltd. and AGH Leasing,
L.P. (Days Inn Lake Buena Vista) (FL Law).
(3) Participating Lease, as amended, between the Operating Partnership and AGH Leasing L.P.
(Holiday Inn Resort Monterey) (CA Law).
(4) The three Management Agreements, as amended, between AGH Leasing, L.P. and American
General Hospitality, Inc. with respect to the Acquired Hotels (Days Inn Lake Buena Vista,
Holiday Inn Resort Monterey and Hilton Hotel - Durham) (TX Law).
(5) Form of Participating Lease, as amended, between the Operating Partnership and AGH Leasing,
L.P. (Radisson Hotel Arlington Heights) (IL Law).
(6) Form of Participating Lease, as amended, between the Operating Partnership and AGH Leasing,
L.P. (Four Points by Sheraton and French Quarter Suites) (GA Law).
(7) Hotel Purchase Agreement by and between SNA of Georgia, Inc. and American General
Hospitality Operating Partnership, L.P. (Four Points by Sheraton) (GA Law).
(8) Hotel Purchase Agreement by and between SKL of Florida, Inc. and American General
Hospitality Operating Partnership, L.P. (Sheraton Key Largo) (FL Law).
(9) Hotel Purchase Agreement by and between French Quarter Suites, Inc. and American General
Hospitality Operating Partnership, L.P. (French Quarter Suites Hotel) (GA Law).
(10) Hotel Purchase Agreement by and between American General Hospitality Operating Partnership,
L.P. or its Assigns and I-90 Hotel, Inc. and ACQ, Inc. (Radisson Hotel Arlington Heights)
(IL Law).
(11) Master Alliance Agreement by and among American General Hospitality Corporation, American
General Hospitality Operating Partnership, L.P. and WHC Franchise Corporation, WHC
Development Corporation (TX Law).
(12) Amended and Restated Agreement of Limited Partnership of the Operating Partnership (DE Law).
-----------------------------------------------------------------------------------------------------
Scheduled II-A
--------------
PROPOSED OPERATIVE DOCUMENTS*
(1) Form of Participating Lease, as amended, between the Operating Partnership and AGH Leasing,
L.P. (Radisson Hotel Arlington Heights) (IL Law).
(2) Form of Participating Lease, as amended, between the Operating Partnership and AGH Leasing,
L.P. (Four Points by Sheraton and French Quarter Suites) (GA Law).
--------------------
(1) Unless otherwise defined, defined terms used in Schedule II and Schedule
II-A shall have such meaning ascribed such term in the Prospectus.
