EXHIBIT 1.1
1,600,000 TRUST PREFERRED SECURITIES(1)
WESTCOAST HOSPITALITY CAPITAL TRUST
(LIQUIDATION AMOUNT OF $25 PER TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
WESTCOAST HOSPITALITY CORPORATION
UNDERWRITING AGREEMENT
February __, 2004
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
XXXXX FARGO SECURITIES, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
WestCoast Hospitality Capital Trust, a statutory trust formed under the
laws of the State of Delaware (the "Trust"), and WestCoast Hospitality
Corporation, a Washington corporation (the "Company"), each confirms its
agreement with each of you (each an "Underwriter"; collectively, the
"Underwriters"), for whom Friedman, Billings, Xxxxxx & Co., Inc. is acting as
representative with respect to (i) the sale by the Trust of 1,600,000 (the
"Initial Securities") of its ____% Trust Preferred Securities (Liquidation
Amount of $25 per Trust Preferred Security) (the "Trust Preferred Securities"),
representing undivided preferred beneficial interests in the assets of the
Trust, guaranteed on a subordinated basis by the Company as to the payment of
distributions, and as to payments on liquidation and redemption, to the extent
set forth in the Trust Preferred Securities Guarantee Agreement (the "Preferred
Guarantee") between the Company and Wilmington Trust Company, as guarantee
trustee (the "Guarantee Trustee"), and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of Trust Preferred
Securities set forth opposite their names in Schedule I hereto, and (ii) the
grant by the Trust to the Underwriters, acting severally and not jointly, of the
option described in Section 1(b) hereof to purchase all or any part of an
additional 240,000 Trust Preferred Securities to cover over-allotments (the
"Option Securities"), if any, in the respective number of Trust Preferred
Securities set forth opposite their names in Schedule I hereto. The Initial
Securities and such portion of the Option Securities as are purchased pursuant
to Section l(b) hereof are hereinafter called, collectively, the "Preferred
Securities." The Trust will purchase, with the proceeds of the sale of the
Preferred Securities and 49,485 (or 56,908 assuming full exercise by the
Underwriters of the over-allotment option described herein) of its % Trust
Common Securities (Liquidation Amount of $25 per Trust Common Security) (the
"Common Securities"), $41,237,125 aggregate principal amount (or $47,422,700
aggregate principal amount assuming full exercise by the Underwriters of the
over-allotment option described herein) of % Junior Subordinated
Debentures due _____ __, 2044 (the "Debentures") of the Company,
----------------------
(1) Plus an option from the Trust to purchase up to an additional 240,000
Trust Preferred Securities.
to be issued pursuant to an Indenture to be dated as of the Closing Time (as
hereinafter defined) (the "Indenture") between the Company and Wilmington Trust
Company, as trustee (the "Indenture Trustee").
Immediately after the Closing Time, the Company will be the holder of
all of the Common Securities. The Common Securities will represent subordinated
undivided common beneficial interests in the assets of the Trust, guaranteed on
a subordinated basis by the Company as to the payment of distributions, and as
to payments on liquidation and redemption, to the extent set forth in the Trust
Common Securities Guarantee Agreement (the "Common Guarantee") between the
Company and Wilmington Trust Company. The Trust will be subject to the
provisions of an Amended and Restated Declaration of Trust (the "Declaration")
to be dated as of the Closing Time among the Company, as sponsor of the Trust,
Wilmington Trust Company, as property trustee (the "Property Trustee"),
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee"), two
individual trustees who are officers of the Company (the "Administrative
Trustees") and the holders, from time to time, of undivided beneficial interests
of the Trust. The Property Trustee, the Delaware Trustee and the Administrative
Trustees are collectively referred to herein as the "Trustees."
The Trust and the Company understand that the Underwriters propose to
make a public offering of the Preferred Securities as soon as the Underwriters
deem advisable after this Underwriting Agreement (the "Agreement") has been
executed and delivered and the Declaration, the Indenture and the Preferred
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act").
The Trust and the Company have filed with the Securities and Exchange
Commission (the "Commission") a joint registration statement on Form S-1 (Nos.
333-110214 and 333-110214-01) and a related preliminary prospectus for the
registration of the Preferred Securities, the Debentures and the Preferred
Guarantee under the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations thereunder (the "Securities Act Regulations"). The
Trust and the Company have prepared and filed such amendments thereto, if any,
and such amended preliminary prospectuses, if any, as may have been required to
the date hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required. The registration statement
has been declared effective under the Securities Act by the Commission. The
registration statement, as amended at the time it became effective (including
all information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 430A of the Securities Act Regulations), is
hereinafter called the "Registration Statement," except that, if the Trust and
the Company file a post-effective amendment to such registration statement which
becomes effective prior to the Closing Time, "Registration Statement" shall
refer to such registration statement as so amended. Any registration statement
filed pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter
called the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the 462(b) Registration Statement. Each
prospectus included in the Registration Statement, or amendments thereof or
supplements thereto, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Trust and the Company with the
consent of the Underwriters pursuant to Rule 424(a) of the Securities Act
Regulations is hereinafter called the "Preliminary Prospectus." The term
"Prospectus" means the final prospectus, as first filed with the Commission
pursuant to Rule 424(b) of the Securities Act Regulations, and any amendments
thereof or supplements thereto. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
The Trust, the Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Securities. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per Trust Preferred Security of $25.00, the Trust agrees
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to sell to the Underwriters the number of Initial Securities set forth in
Schedule I opposite each Underwriter's name, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust the number of Initial
Securities set forth in Schedule I opposite such Underwriter's name, plus any
additional number of Initial Securities that such Underwriter may become
obligated to purchase pursuant to the provisions of Section 8 hereof, subject in
each case, to such adjustments among the Underwriters as the Underwriters in
their sole discretion shall make to eliminate any sales or purchases of
fractional Trust Preferred Securities.
(b) Option Securities. In addition, upon the basis of the warranties
and representations and other terms and conditions herein set forth, at the
purchase price per Trust Preferred Security set forth in subsection (a) above,
the Trust hereby grants an option to the Underwriters, acting severally and not
jointly, to purchase from the Trust all or any part of the Option Securities,
plus any additional number of Option Securities that such Underwriter may become
obligated to purchase pursuant to the provisions of Section 8 hereof. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Underwriters to the
Trust setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Underwriters, but shall not be later
than three full business days (or earlier, without the consent of the Company,
than two full business days) after the exercise of such option, nor in any event
prior to the Closing Time. If the option is exercised as to all or any portion
of the Option Securities, the Trust will sell and each Underwriter, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased, which the number of Initial Securities
set forth in Schedule I opposite the name of such Underwriter bears to the total
number of Initial Securities, plus any additional number of Option Securities
that such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof, subject in each case to such adjustments among
the Underwriters as the Underwriters in their sole discretion shall make to
eliminate any sales or purchases of fractional Trust Preferred Securities.
(c) Underwriting Compensation. As compensation to the Underwriters for
their commitments hereunder, and in view of the fact that the proceeds of the
sale of the Preferred Securities and Common Securities will be used by the Trust
to purchase the Debentures, the Company at the Closing Time or any Date of
Delivery (as hereinafter defined) shall pay to Friedman, Billings, Xxxxxx & Co.,
Inc., for the respective accounts of the several Underwriters, an amount equal
to $_______ per Trust Preferred Security for the Preferred Securities delivered
by the Trust pursuant hereto at the Closing Time or any Date of Delivery. In
addition, the Company shall, for a period of six months from the Closing Time,
appoint Friedman, Billings, Xxxxxx & Co., Inc. to act as lead underwriter or
placement agent in connection with any public or private offering of equity or
corporate debt securities (other than Excluded Securities) of the Company or any
Subsidiary (as hereinafter defined) or other capital market financing, to act as
dealer manager with respect to any self-tender offer by the Company and to act
as financial advisor in connection with any sale of all or substantially all of
the assets of the Company or a sale of equity of the Company which constitutes a
controlling equity interest in the Company. The term "Excluded Securities" means
any securities offered, sold or issued pursuant to or in connection with (i)
employee benefit plans of the Company, (ii) the acquisition by the Company or
any Subsidiary (as hereinafter defined) of any asset or entity, (iii) the
refinancing by the Company or any Subsidiary from time to time of any owned or
leased hotel or hotels, (iv) the consummation by the Company or any Subsidiary
with a third party of any credit facility or revolving credit line or (v)
registration by the Company of any existing unregistered securities of the
Company.
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2. Payment and Delivery:
(a) Initial Securities. The Initial Securities to be purchased by each
Underwriter hereunder, in definitive form, shall be delivered by or on behalf of
the Trust to the Underwriter, in the form of one or more global securities (or
an interest therein) through the facilities of The Depository Trust Company
("DTC") for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Underwriters by the Trust upon
at least 48 hours' prior notice. The Trust will cause the certificate or
certificates representing the Initial Securities to be made available for
checking at least 24 hours prior to the Closing Time at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on the third
(fourth if pricing occurs after 4:30 p.m., New York City time) business day
after the date hereof (unless another time and date shall be agreed to by the
Underwriters and the Trust). The time at which such payment and delivery are
actually made is hereinafter sometimes called the "Closing Time" and the date of
delivery of both Initial Securities and Option Securities is hereinafter
sometimes called the "Date of Delivery." Interests in the Preferred Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus.
(b) Option Securities. Any Option Securities to be purchased by each
Underwriter hereunder, in definitive form, shall be delivered by or on behalf of
the Trust to the Underwriter, in the form of one or more global securities (or
an interest therein) through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified in writing to the Underwriters by the Trust upon at least 48 hours'
prior notice. The Trust will cause the certificate or certificates representing
the Option Securities to be made available for checking at least 24 hours prior
to the Date of Delivery with respect thereto at the Designated Office. The time
and date of such delivery and payment shall be 9:30 a.m., New York City time, on
the date specified by the Underwriters in the notice given by the Underwriters
to the Trust of the Underwriters' election to purchase such Option Securities
(unless another time and date shall be agreed to by the Underwriters and the
Trust).
(c) Documents. The documents to be delivered at Closing Time or any
Date of Delivery on behalf of the parties hereto pursuant to Section 6 hereof,
shall be delivered at the offices of Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000, and the Preferred Securities will be delivered at the
Designated Office, all at Closing Time or such Date of Delivery, as the case may
be.
3. Representations and Warranties of the Trust and the Company:
The Trust and the Company, jointly and severally, represent and warrant
to each Underwriter that:
(a) the Company has an authorized capitalization as of September 30,
2003 as set forth in the Prospectus (and there have not been any subsequent
issuances of capital stock of the Company except for issuances pursuant to stock
options held by employees and directors of the Company and the Subsidiaries);
the outstanding shares of capital stock, the partnership interests, membership
interests or other equity interests, as the case may be, of the Company and each
direct or indirect subsidiary of the Company other than the Trust that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
promulgated by the Commission, all of which subsidiaries are named in Exhibit 21
to the Registration Statement (each, a "Subsidiary"; collectively,
"Subsidiaries") have been duly and validly authorized and issued and are fully
paid and nonassessable; except as disclosed in the Prospectus, all of the
outstanding shares of capital stock of, or the partnership interests, membership
interests or other equity interests in, as the case may be, any Subsidiary are
directly or indirectly owned of record and beneficially by the Company; except
as disclosed in the Prospectus and except for outstanding stock
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options held by employees and directors of the Company and the Subsidiaries,
there are no outstanding (i) securities or obligations of the Company or of any
Subsidiary convertible into or exchangeable for any capital stock of or
partnership interests, membership interests or other equity interests, as the
case may be, in the Company or any such Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary any
such capital stock, partnership interests, membership interests or other equity
interests, as the case may be, or any such convertible or exchangeable
securities or obligations or (iii) obligations of the Company or any such
Subsidiary to issue any securities or obligations, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or options;
(b) each of the Company and the Subsidiaries has been duly incorporated
or formed and is validly existing as a corporation, general or limited
partnership, limited liability company or trust, as the case may be, in good
standing under the laws of its respective jurisdiction of incorporation or
formation with full corporate, partnership, limited liability company or trust
power and authority to own, lease and operate its respective properties and to
conduct its respective businesses as described in the Registration Statement and
the Prospectus and to execute and deliver this Agreement, the Guarantor
Agreements (as hereinafter defined) and the Debentures (to the extent a party
thereto) and to consummate the transactions contemplated hereby and thereby;
(c) each of the Company and the Subsidiaries is duly qualified or
licensed and is in good standing in each jurisdiction in which it conducts its
business or in which it owns or leases real property or otherwise maintains an
office and in which the failure, individually or in the aggregate, to be so
qualified or licensed could have a material adverse effect on the assets,
business, operations, earnings, prospects, properties or condition (financial or
otherwise), present or prospective, of the Company and the Covered Entities (as
defined below), taken as a whole (any such effect or change, where the context
so requires, is hereinafter called a "Material Adverse Effect" or "Material
Adverse Change"); except as disclosed in the Prospectus, no Subsidiary is
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such Subsidiary's
capital stock, partnership interests, membership interests or other equity
interests, as the case may be, or from repaying to the Company or any other
Subsidiary any amounts which may from time to time become due under any loans or
advances to such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or to any
other Subsidiary; except as disclosed in the Registration Statement, the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, limited liability company, trust, joint venture or other entity;
(d) the Trust has been duly established and is validly existing as a
statutory trust in good standing under the Delaware Statutory Trust Act with the
trust power and authority to own property and conduct its business as described
in the Registration Statement and the Prospectus and to enter into and perform
its obligations under this Agreement and the Declaration and to consummate the
transactions herein contemplated; the Trust has conducted and will conduct no
business other than as contemplated by this Agreement and described in the
Prospectus; the Trust is duly qualified to transact business as a foreign
company and is in good standing in each jurisdiction in which the conduct of its
business or the ownership of its property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would not
materially and adversely effect the Trust; the Trust is not a party to or
otherwise bound by any agreement or instrument other than those described in the
Registration Statement and the Prospectus; based on expected operations and
current law, the Trust will be classified for U.S. federal income tax purposes
as a grantor trust and will not be taxable as a corporation; the Trust is, and
at the Closing Time or any Date of Delivery will be, treated as a deconsolidated
subsidiary of the Company pursuant to generally accepted accounting principles
as applied in the United States; the Trust is not a party to or subject to any
action, suit or proceeding of any nature; the Trust has no liabilities or
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obligations other than those arising out of the transactions contemplated by
this Agreement and the Declaration and described in the Registration Statement
and the Prospectus;
(e) the Trust, the Company and the Subsidiaries are in compliance in
all material respects with all applicable laws, rules, regulations, orders,
decrees and judgments, including those relating to transactions with affiliates,
except for any failure to comply which could not have a Material Adverse Effect;
(f) none of the Trust, the Company or any of the Subsidiaries is in
breach of or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its
respective organizational documents, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument to which the Trust, the Company or any Subsidiary is a party or by
which any of them or their respective properties is bound, except, in the case
of the Company and the Subsidiaries, for such breaches or defaults which could
not have a Material Adverse Effect;
(g) the execution, delivery and performance of this Agreement by the
Trust, the compliance by the Trust with all the provisions of this Agreement and
the Declaration and the consummation by the Trust of the transactions
contemplated hereby and thereby, including the issuance and sale of the
Preferred Securities and the Common Securities by the Trust, the purchase of the
Debentures by the Trust and the distribution of the Debentures by the Trust in
the circumstances contemplated by the Declaration and described in the
Registration Statement and the Prospectus, and the execution, delivery and
performance of this Agreement, the Debentures and each of the Guarantor
Agreements by the Company, the compliance by the Company with all the provisions
hereof and thereof and the consummation of the transactions contemplated hereby
and thereby including the sale of the Debentures by the Company to the Trust and
the issuance by the Company of the Preferred Guarantee and the Common Guarantee,
have been duly authorized by all necessary action on the part of the Trust and
do not and will not (i) result in any violation of the Declaration or the
Certificate of Trust of the Trust, (ii) conflict with, or result in any breach
of, or constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of, or default under) (A) any
provision of the Declaration or the Certificate of Trust of the Trust or (B) any
provision of any contract, license, indenture, mortgage, note, lease, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Trust is a party or by which it or its properties may be bound or affected, or
under any U.S. federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Trust, (iii) conflict with, or
result in any breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both would constitute a breach of, or
default under) (A) any provision of the organizational documents of the Company
or any Subsidiary or (B) any provision of any contract, license, indenture,
mortgage, note, lease, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them or their respective properties may be bound or affected, or
under any U.S. federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any Subsidiary, (iv)
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Trust, or (v) result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or asset
of the Company or the Subsidiaries, except such violations, conflicts, breaches,
defaults or creations or impositions that could not, individually or in the
aggregate, have a Material Adverse Effect and could not, individually or in the
aggregate, be materially adverse to the Trust;
(h) this Agreement has been duly authorized, executed and delivered by
the Trust and the Company and is a legal, valid and binding agreement of the
Trust and the Company enforceable in accordance with its terms, except as may be
limited by (A) bankruptcy, insolvency, moratorium,
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receivership, liquidation, fraudulent conveyance, reorganization, and other
similar laws relating to or affecting the remedies and rights of creditors, (B)
principles of equity, including applicable law relating to fiduciary duties
(regardless of whether considered or applied in a proceeding in equity or at
law) and (C) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(i) each of the Preferred Guarantee, the Common Guarantee, the
Declaration and the Indenture (collectively, the "Guarantor Agreements") has
been duly authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as may be limited by (A)
bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity (regardless of
whether considered or applied in a proceeding in equity or at law); each of the
Guarantor Agreements will conform in all material respects to all statements
relating thereto contained in the Prospectus; each of the Preferred Guarantee,
the Declaration and the Indenture has been duly qualified under the 1939 Act and
is in substantially the form filed as an exhibit to the Registration Statement;
(j) the Debentures have been duly authorized and at Closing Time and on
each Date of Delivery, if any, will have been validly executed and delivered by
the Company; when the Debentures have been executed and authenticated in
accordance with the provisions of the Indenture and delivered to the Trust
against payment therefor as described in the Prospectus, the Debentures will be
in the form contemplated by, and entitled to the benefits of, the Indenture,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as may be limited by
(A) bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity (regardless of
whether considered or applied in a proceeding in equity or at law); will conform
in all material respects to all statements relating thereto contained in the
Prospectus and will be owned by the Trust free and clear of any security
interest, mortgage, pledge, lien, encumbrance, restriction upon transfer,
preemptive rights, claim or equity; the Debentures are in substantially the form
filed as an exhibit to the Registration Statement;
(k) no approval, authorization, consent, license, order, registration,
qualification or decree of or filing with any U.S. federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency
(each, a "Governmental Authority") is required in connection with the execution,
delivery and performance of this Agreement or any of the Guarantor Agreements by
the Company or the Trust (to the extent a party thereto) and the consummation of
the transactions contemplated herein or therein, other than (i) such as have
been obtained, or will have been obtained at or prior to the Closing Time or the
relevant Date of Delivery, as the case may be, under the Securities Act, the
Securities Exchange Act of 1934 (the "Exchange Act") and the 1939 Act, and (ii)
such approvals as have been obtained in connection with the approval of the
listing of the Preferred Securities on the New York Stock Exchange, Inc. (the
"NYSE");
(l) each of the Company and the Subsidiaries has all necessary permits,
licenses, authorizations, consents and approvals and has made all necessary
filings required under any U.S. federal, state, local or foreign law, regulation
or rule, and has obtained all necessary permits, licenses, authorizations,
consents and approvals from other persons, required to conduct its business as
described in the Prospectus, except to the extent that the failure to have any
such permits, licenses, authorizations, consents or approvals, to make any such
filings or to obtain any such permits, licenses, authorizations, consents or
approvals could not, individually or in the aggregate, have a Material Adverse
Effect; neither the Company nor any Subsidiary is required by any applicable law
to obtain accreditation or certification from any Governmental Authority in
order to provide the products and services which it currently provides or
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which it proposes to provide as set forth in the Prospectus; neither the Company
nor any Subsidiary is in violation of, in default under, or has received any
notice regarding a possible violation, default or revocation of any such permit,
license, authorization, consent or approval or any U.S. federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any Subsidiary, the effect of which could result in a Material
Adverse Change; and no such permit, license, authorization, consent or approval
contains a materially burdensome restriction that is not adequately disclosed in
the Registration Statement and the Prospectus;
(m) the Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Trust and the Company, are threatened by the Commission, and
the Trust and the Company have complied with any request on the part of the
Commission for additional information;
(n) the Preliminary Prospectus and the Registration Statement comply,
and the Prospectus and any further amendments or supplements thereto will, when
they have become effective or are filed with the Commission, as the case may be,
comply, in all material respects with the requirements of the Securities Act and
the Securities Act Regulations; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein (with
respect to the Prospectus only, in the light of the circumstances under which
they were made) not misleading; and the Preliminary Prospectus does not, and the
Prospectus or any amendment or supplement thereto will not, as of the applicable
filing date and at the Closing Time and on each later Date of Delivery (if any),
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company and the Trust make no warranty or
representation with respect to any statement contained in the Registration
Statement, the Prospectus or the Preliminary Prospectus in reliance upon and in
conformity with the information concerning the Underwriters and furnished in
writing by or on behalf of the Underwriters to the Company and the Trust
expressly for use in the Registration Statement, the Prospectus or the
Preliminary Prospectus (that information being limited to that described in the
penultimate sentence of Section 9(c) hereof);
(o) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
respective version of the Preliminary Prospectus or the Prospectus created to be
transmitted to the Commission for filing via the Electronic Data Gathering
Analysis and Retrieval System ("XXXXX"), except to the extent permitted by
Regulation S-T;
(p) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company, threatened against
the Company or any Subsidiary or any of their respective officers, directors,
partners, members or trustees, as applicable, or to which the properties, assets
or rights of any such entity are subject, at law or in equity, before or by any
Governmental Authority or arbitral panel which are required to be disclosed in
the Registration Statement and the Prospectus or which could result in a
judgment, decree, award or order having a Material Adverse Effect;
(q) the financial statements, including the notes thereto, included in
the Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and the other entities to which such financial
statements relate (such other entities, the "Covered Entities") as of the dates
indicated and the consolidated results of operations and changes in financial
position and cash flows of the Company and the Covered Entities for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States and
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on a consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the amounts in the Prospectus
under the captions "Summary - Summary Consolidated Financial and Other Data,"
"Ratios of Consolidated Earnings and EBITDA to Combined Fixed Charges and
Preferred Stock Dividends" and "Selected Consolidated Financial Data" fairly
present the information shown therein and have been compiled on a basis
consistent with the financial statements included in the Registration Statement
and the Prospectus;
(r) BDO Xxxxxxx, LLP and PricewaterhouseCoopers LLP, whose reports on
the consolidated financial statements of the Company and the Covered Entities
are filed with the Commission as part of the Registration Statement and the
Prospectus, and any other accounting firm that has certified Company financial
statements and delivered its reports with respect thereto, are, and were during
the periods covered by their reports, independent public accountants as required
by the Securities Act and the Securities Act Regulations;
(s) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or the Prospectus, there has not been (i)
any Material Adverse Change or any development that could result in a Material
Adverse Change, whether or not arising in the ordinary course of business, (ii)
any transaction that is material to the Company and the Covered Entities, taken
as a whole, contemplated or entered into by the Company or any of the
Subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any Subsidiary that is material to the
Company and the Covered Entities, taken as a whole or (iv) except for the
regular quarterly dividends on the Series A Preferred Stock and Series B
Preferred Stock of the Company in amounts per share that are consistent with
past practice, any dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock or any Subsidiary on any of its
equity interests;
(t) except for registration rights held by Doubletree Corporation with
respect to Series A Preferred Stock and Series B Preferred Stock of the Company
held by it, there are no persons with registration or other similar rights to
have any equity or debt securities, including securities that are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act;
(u) the Preferred Securities have been duly and validly authorized by
the Trust and, when issued and delivered to the Underwriters against payment
therefor as provided herein, will be duly and validly issued and fully paid and
nonassessable undivided preferred beneficial interests in the assets of the
Trust, and will conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Preferred Securities by the
Trust is not subject to preemptive or other similar rights arising by operation
of law, under the organizational documents of the Trust, the Company or any
Subsidiary or under any agreement to which the Trust, the Company or any
Subsidiary is a party or otherwise; the Preferred Securities will have the
rights set forth in the Declaration, and the terms of the Preferred Securities
are valid and binding on the Trust;
(v) the Common Securities have been duly and validly authorized by the
Trust and, when issued and delivered by the Trust to the Company against payment
therefor as described in the Registration Statement and the Prospectus, will be
duly and validly issued, fully paid and nonassessable undivided subordinated
beneficial interests in the assets of the Trust and will conform in all material
respects to the description thereof contained in the Prospectus; the issuance of
the Common Securities by the Trust is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Trust, the Company or any Subsidiary or under any agreement to which the Trust,
the Company or any Subsidiary is a party or otherwise; and at the Closing Time
and each Date of Delivery, if any, all of the issued and outstanding Common
Securities of the Trust will be directly owned by the
9
Company; the Common Securities and the Preferred Securities are the only
interests authorized to be issued by the Trust;
(w) the Preferred Securities have been approved for listing on the
NYSE, subject to official notice of issuance, and the form of certificate used
to evidence the Preferred Securities complies in all material respects with all
applicable statutory requirements, with any applicable requirements of the
organizational documents of the Trust and the requirements of the NYSE;
(x) none of the Trust, the Company, nor the Subsidiaries and their
respective directors, officers, affiliates, and controlling persons has taken,
or will take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Trust or the
Company to facilitate the sale or resale of the Preferred Securities;
(y) none of the Trust, the Company or any of their affiliates (i) is
required to register as a "broker" or "dealer" in accordance with the provisions
of the Exchange Act, or the rules and regulations thereunder (the "Exchange Act
Regulations"), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")) any member firm of the NASD;
(z) neither the Trust nor the Company has relied upon the Underwriters
or legal counsel for the Underwriters for any legal, tax or accounting advice in
connection with the offering and sale of the Preferred Securities;
(aa) the Company and the Subsidiaries have good and marketable
title in fee simple to, or a valid leasehold interest in, all real property
described in the Prospectus as owned or leased by them, and good title to all
personal property owned by them, in each case free and clear of all liens,
security interests, pledges, claims, charges, restrictions, encumbrances,
mortgages and defects of any kind, except such as secure obligations of the
Company and the Covered Entities disclosed in the Prospectus or such as do not
materially and adversely affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the Company and the
Subsidiaries; and any real property improvements, equipment and personal
property held under lease by the Company or any Subsidiary are held under valid,
existing and enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the use made or
proposed to be made of such property improvements, equipment and personal
property by the Company or such Subsidiary; the Company or a Subsidiary has
obtained an owner's or leasehold title insurance policy, from a title insurance
company licensed to issue such policy, on any real property owned in fee or
leased, as the case may be, by the Company or any Subsidiary, that insures the
Company's or the Subsidiary's fee or leasehold interest, as the case may be, in
such real property, which policies include only commercially reasonable
exceptions, and with coverages in amounts at least equal to amounts that are
generally deemed in the Company's industry to be commercially reasonable in the
markets where the Company's properties are located, or a lender's title
insurance policy insuring the lien of its mortgage securing the real property
with coverage equal to the maximum aggregate principal amount of indebtedness
held by the Company or a Subsidiary and secured by the real property, except
where the failure to obtain any such policy could not have a Material Adverse
Effect; all of the leases and subleases material to the business of the Company
and the Subsidiaries are in full force and effect, and neither the Company nor
any of the Subsidiaries has received any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company or
any of the Subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary of the
continued possession of the leased or subleased premises;
10
(bb) all real property owned or leased by the Company or a
Subsidiary is free of material structural defects and all building systems
contained therein are in good working order in all material respects, subject to
ordinary wear and tear or, or, in each instance, the Company or a Subsidiary, as
the case may be, has created an adequate reserve to effect reasonably required
repairs, maintenance and capital expenditures; to the knowledge of the Company
and such Subsidiary, water, storm water, sanitary sewer, electricity and
telephone service are all available at the property lines of such property over
duly dedicated streets or perpetual easements of record benefiting such
property; except as described in the Prospectus, to the knowledge of the Company
and such Subsidiary, there is no pending or threatened special assessment, tax
reduction proceeding or other action that, individually or in the aggregate,
could reasonably be expected to increase or decrease the real property taxes or
assessments of any of such property, that, individually or in the aggregate,
could have a Material Adverse Effect;
(cc) the mortgages and deeds of trust encumbering any real property
owned in fee or leased by the Company or a Subsidiary (i) are not convertible
(in the absence of foreclosure) into an equity interest in the Real Property (as
hereinafter defined) or in the Company or any Subsidiary, and none of the
Company or the Subsidiaries hold a participating interest therein, (ii) except
as set forth in the Prospectus, are not cross-defaulted to any indebtedness
other than indebtedness of the Company or any of the Covered Entities and (iii)
are not cross-collateralized to any real property not owned by the Company or
any of the Covered Entities;
(dd) the descriptions in the Registration Statement and the
Prospectus of the legal or governmental proceedings, contracts, leases and other
legal documents therein described present fairly the information required to be
shown, and there are no legal or governmental proceedings, contracts, leases, or
other documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required; all agreements between
the Company or any of the Subsidiaries and third parties expressly referenced in
the Prospectus are legal, valid and binding obligations of the Company or one or
more of the Subsidiaries, and to the knowledge of the Company and such
Subsidiaries, with respect to third parties, enforceable in accordance with
their respective terms, except to the extent enforceability may be limited by
(A) bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity (regardless of
whether considered or applied in a proceeding in equity or at law);
(ee) the Company and each of the Subsidiaries owns or possesses
adequate licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and know-how
(collectively "Intangibles") necessary to entitle the Company and each
Subsidiary to conduct its business as described in the Prospectus, and neither
the Company nor any Subsidiary has received notice of infringement of or
conflict with (and the Company or such Subsidiary knows of no such infringement
of or conflict with) asserted rights of others with respect to any Intangibles
which could have a Material Adverse Effect;
(ff) each of the Company and the Subsidiaries makes and keeps
books, records, and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of its assets; and each of the Company
and the Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
11
(gg) as required by Rule 13a-15 under the Exchange Act, the
Company's principal executive officer, principal financial officer, and other
members of senior management have evaluated the design and operations of the
disclosure controls and procedures of the Company. Based on this evaluation, the
Company's Chief Executive Officer and Chief Financial Officer have concluded
that the disclosure controls and procedures effectively ensure that information
required to be disclosed in the Company's filings and submissions with the
Commission under the Exchange Act, is collected and communicated to the
Company's management (including, without limitation, the principal executive
officer and principal financial officer of the Company) and is recorded,
processed, summarized and reported within the time periods specified by the
Commission. In addition, there have not been any changes in the Company's
internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting;
(hh) the Company has not, directly or indirectly, including through
any Subsidiary, extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any director or
executive officer of the Company, or to or for any family member or affiliate of
any director or executive officer of the Company;
(ii) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and the Company has
obtained the written consent to the use of such data from such sources to the
extent required;
(jj) neither the Company nor any Subsidiary nor, to the Company's
knowledge after due inquiry, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Registration Statement or the Prospectus;
(kk) to the Company's knowledge after due inquiry, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement and the Prospectus;
(ll) to the Company's knowledge after due inquiry, the Company and
its directors and officers, in their capacity as such, are in compliance with
all presently applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated thereunder;
(mm) each of the Company and the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types and in
the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect;
(nn) neither the Company nor any of the Subsidiaries is in
violation, or has received notice of any violation with respect to, any
applicable environmental, safety or similar law applicable to the business of
the Company or any of the Subsidiaries; the Company and the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable U.S. federal, state, local and foreign occupational safety and health
and environmental laws and regulations to conduct their respective businesses,
and the Company and the Subsidiaries are in compliance with all terms and
conditions of any such permit, license or approval, except any such violation of
law or regulation, failure to receive required
12
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which could not, individually
or in the aggregate, result in a Material Adverse Change;
(oo) each of the Company and the Subsidiaries has filed on a timely
basis all necessary U.S. federal, state, local and foreign income and franchise
tax returns required to be filed through the date hereof and have paid all taxes
shown as due thereon; and no tax deficiency has been asserted against any such
entity, nor does any such entity know of any tax deficiency which is likely to
be asserted against any such entity which, if determined adversely to any such
entity, could materially and adversely affect the business, prospects,
properties, assets, results of operations or condition (financial or otherwise)
of any such entity, respectively; all tax liabilities are adequately provided
for on the respective books of such entities;
(pp) neither the Company nor any Subsidiary is in violation of or
has received notice of any violation with respect to any U.S. federal, state,
local or foreign law relating to discrimination in the hiring, promotion or pay
of employees, or any applicable U.S. federal, state, local or foreign wages and
hours law, which violation could have a Material Adverse Effect;
(qq) each of the Company and the Subsidiaries is in compliance in
all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any
liability; each of the Company and the Subsidiaries has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412 or
4971 of the Internal Revenue Code of 1986, as amended (the "Code"); and each
"pension plan" for which each of the Company and the Subsidiaries would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification;
(rr) neither the Company nor any of the Subsidiaries nor any
officer, director, partner, member or trustee, as applicable, purporting to act
on behalf of the Company or any of the Subsidiaries has at any time (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law, (ii) made any payment to any U.S.
federal, state, local or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law, or (iii) engaged in any transactions,
maintained any bank account or used any corporate funds except for transactions,
bank accounts and funds which have been and are reflected in the normally
maintained books and records of the Company and the Subsidiaries;
(ss) there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or any of the Subsidiaries to
or for the benefit of any of the officers, directors, partners, members or
trustees, as applicable, of the Company or any of the Subsidiaries or any of the
members of the families of any of them;
(tt) all securities issued by the Company, any of the Subsidiaries
or any trusts established by the Company or any Subsidiary, have been issued and
sold in compliance with (i) all applicable U.S. federal and state securities
laws, (ii) the laws of the applicable jurisdiction of organization of the
issuing entity and (iii) to the extent applicable to the issuing entity, the
requirements of the NYSE;
13
(uu) neither the Company nor any Subsidiary knows of any violation
of any U.S. federal, state, local or foreign law, rule or regulation (including
those pertaining to environmental matters) concerning the Real Property or any
part thereof that, individually or in the aggregate, could have a Material
Adverse Effect; each Real Property complies with all applicable zoning laws,
ordinances, regulations and deed restrictions or other covenants in all material
respects and, if and to the extent there is a failure to comply, such failure
does not materially impair the value of any of the Real Properties and will not
result in a forfeiture or reversion of title; neither the Company nor any of the
Subsidiaries has received from any Governmental Authority having or claiming
jurisdiction over the properties and assets described in the Prospectus any
written notice of any condemnation of or zoning change affecting the Real
Property or any part thereof, and neither the Company nor any of the
Subsidiaries knows of any such condemnation or zoning change which is threatened
and which if consummated could have a Material Adverse Effect; all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Real Property) of the Company or any of the other
Subsidiaries that are required to be described in the Prospectus (or, the most
recent Preliminary Prospectus) are disclosed therein; no lessee of any portion
of any of the Real Property is in default under any of the leases governing such
Real Property and there is no event which, but for the passage of time or the
giving of notice or both would constitute a default under any of such leases,
except such defaults that could not have a Material Adverse Effect; and no
tenant under any lease pursuant to which any of the Subsidiaries leases the Real
Property (as hereinafter defined) has an option or right of first refusal to
purchase the premises leased thereunder or the building of which such premises
are a part, except as such options or rights of first refusal which, if
exercised, could not have a Material Adverse Effect, and except as provided by
law;
(vv) (i) except as would not have a Material Adverse Effect,
neither the Company nor any Subsidiary nor, to the best knowledge of the Company
and such Subsidiary, any other owners of the property at any time or any other
party has at any time, handled, stored, treated, transported, manufactured,
spilled, leaked, or discharged, dumped, transferred or otherwise disposed of or
dealt with, Hazardous Materials (as hereinafter defined) on, to or from any real
property leased, owned or controlled, including any real property underlying any
loan held or to be held by the Company or any of the Subsidiaries (collectively,
the "Real Property"), other than by any such action taken in compliance with all
applicable Environmental Statutes (as hereinafter defined) or by the Company,
any of the Subsidiaries or any other party in connection with the ordinary use
of residential, retail or commercial properties leased, owned or controlled by
the Company or any Subsidiary; (ii) the Company and the Subsidiaries do not
intend to use the Real Property or any subsequently acquired properties for the
purpose of handling, storing, treating, transporting, manufacturing, spilling,
leaking, discharging, dumping, transferring or otherwise disposing of or dealing
with Hazardous Materials other than by any such action taken in compliance with
all applicable Environmental Statues or by the Company, any of the Subsidiaries
or any other party in connection with the ordinary use of residential, retail or
commercial properties leased, owned or controlled by the Company or any
Subsidiary; (iii) neither the Company nor any Subsidiary knows of any seepage,
leak, discharge, release, emission, spill, or dumping of Hazardous Materials
into waters on or adjacent to the Real Property or any other real property owned
or occupied by any such party, or onto lands from which Hazardous Materials
might seep, flow or drain into such waters; (iv) neither the Company, nor any
Subsidiary has received any notice of, or has any knowledge of any occurrence or
circumstance which, with notice or passage of time or both, would give rise to a
claim under or pursuant to any U.S. federal, state, local or foreign
environmental statute or regulation or under common law, pertaining to Hazardous
Materials on or originating from any of the Real Property or any assets
described in the Prospectus (or, the most recent Preliminary Prospectus) or any
other real property owned or occupied by any such party or arising out of the
conduct of any such party, including without limitation a claim under or
pursuant to any Environmental Statute; (v) neither the Real Property nor any
other land owned by any Subsidiary is included or, to the best of such
Subsidiary's knowledge, proposed for inclusion on the National Priorities List
issued pursuant to CERCLA (as hereinafter defined) by the United States
Environmental Protection Agency or, to the best of such Subsidiary's and the
Company's
14
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Statute or issued by any other Governmental
Authority; and (vi) in the operation of the Company's and any of the
Subsidiaries' businesses, the Company or any of the Subsidiaries acquires,
before acquisition of any real property, an environmental assessment of the real
property (the "Phase I Environmental Assessment") and to the extent they become
aware of any condition that could reasonably be expected to result in liability
associated with the presence or release of a Hazardous Material, or any
violation or potential violation of any Environmental Statute, the Company and
the Subsidiary, as the case may be, take all commercially reasonable action
necessary or advisable (including any capital improvements) for clean-up,
closure or other compliance with such Environmental Statute;
As used herein, "Hazardous Material" shall include, without limitation
any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, toxic substances, or related materials, asbestos or any hazardous
material as defined by any U.S. federal, state, local or foreign environmental
law, ordinance, rule or regulation including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601-9675 ("CERCLA"), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Sections 1801-1819, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901-6992K, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections
11001-11050, the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2671, the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136-136y,
the Clean Air Act, 42 U.S.C. Sections 7401-7642, the Clean Water Act (Federal
Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe Drinking
Water Act, 42 U.S.C. Sections 300f-300j-26, and the Occupational Safety and
Health Act, 29 U.S.C. Sections 651-678, as any of the above statutes may be
amended from time to time, and in the regulations promulgated pursuant to each
of the foregoing (individually, an "Environmental Statute") or by any
Governmental Authority;
(ww) there are no costs or liabilities associated with the Real
Property pursuant to any Environmental Statute (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with any Environmental Statute or any permit, license
or approval, any related constraints on operating activities and any potential
liabilities to third parties) that, individually or in the aggregate, could have
a Material Adverse Effect;
(xx) none of the entities that prepared Phase I Environmental
Assessments or other environmental assessments with respect to the Real Property
was employed for such purpose on a contingent basis or had at the time of such
preparation any substantial interest in the Company or any of the Subsidiaries,
and none of the directors, officers or employees of any such entity was at the
time of such preparation connected with the Company or any of the Subsidiaries
as a promoter, selling agent, trustee, officer, director, partner, member or
employee;
(yy) the Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated;
(zz) no relationship, direct or indirect, exists between or among
the Company or any of the Subsidiaries on the one hand, and the directors,
officers, partners, members, trustees, shareholders, customers or suppliers of
the Company or any of the Subsidiaries on the other hand, which is required by
the Securities Act and the Securities Act Regulations to be described in the
Registration Statement and the Prospectus and which is not so described;
(aaa) each of the Administrative Trustees is an officer of the
Company and has been duly authorized by the Company to act in such trustee
capacity and to execute and deliver the Declaration; the Declaration has been
duly executed and delivered by such Administrative Trustees and is a valid and
15
binding obligation of each such Administrative Trustee, enforceable against such
Administrative Trustee in accordance with its terms, except as may be limited by
(A) bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered or
applied in a proceeding in equity or at law) ;
(bbb) none of the Trust, the Company or any of the Subsidiaries is
or, after giving effect to the offering and sale of the Preferred Securities,
will be an "investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and
(ccc) there are no existing or, to the knowledge of the Company or
any of the Subsidiaries, threatened labor disputes with the employees of the
Company or any of the Subsidiaries which are required to be disclosed in the
Prospectus or which are likely to have individually or in the aggregate a
Material Adverse Effect.
4. Certain Covenants:
The Trust and the Company hereby, jointly and severally, agree with
each Underwriter:
(a) to furnish such information as may be required and otherwise
to cooperate in any filings required with respect to the Preferred Securities,
the Preferred Guarantee and the Debentures under the securities or "blue sky"
laws of such jurisdictions (both domestic and foreign) as the Underwriters may
designate;
(b) if, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Preferred Securities may commence,
the Trust and the Company will endeavor to cause such post-effective amendment
to become effective as soon as possible and will advise the Underwriters
promptly and, if requested by the Underwriters, will confirm such advice in
writing, when such post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the
Underwriters and file such Prospectus with the Commission pursuant to Rule
424(b) under the Securities Act and to furnish promptly to the Underwriters
copies of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) in such quantities and at such
locations as the Underwriters may reasonably request for the purposes
contemplated by the Securities Act Regulations, which Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the version created to be transmitted to the Commission for filing
via XXXXX, except to the extent permitted by Regulation S-T;
(d) to comply with the requirements of Rule 430A of the Securities
Act Regulations, if and as applicable, and to advise the Underwriters promptly
and (if requested by the Underwriters) to confirm such advice in writing, when
the Registration Statement has become effective and when any post-effective
amendment thereto becomes effective under the Securities Act Regulations;
(e) to advise the Underwriters immediately of (i) the receipt of
any comments from, or any request by, the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information with respect thereto or (ii) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, or of the suspension of the
16
qualification of the Preferred Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes and, if the Commission or any Governmental Authority should issue
any such order, to use commercially reasonable efforts to obtain the lifting or
removal of such order as soon as possible and to advise the Underwriters
promptly of the lifting or removal of such order; to advise the Underwriters
promptly of any proposal to amend or supplement the Registration Statement or
the Prospectus and to file no such amendment or supplement to which the
Underwriters shall reasonably object in writing;
(f) to furnish to the Underwriters for a period of five years from
the date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of the
Preferred Securities, (ii) as soon as practicable after the filing thereof,
copies of all reports filed by the Trust or the Company with the Commission
(other than reports filed via XXXXX), the NASD or any securities exchange and
(iii) such other information as the Underwriters may reasonably request
regarding the Trust, the Company and the Subsidiaries;
(g) to advise the Underwriters promptly of the happening of any
event known to the Trust, the Company or any of the Subsidiaries within the time
during which a Prospectus relating to the Preferred Securities is required to be
delivered under the Securities Act Regulations which, in the judgment of the
Company or in the reasonable opinion of the Underwriters or counsel for the
Underwriters, would require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with any law and, during such time,
to promptly prepare and furnish to the Underwriters copies of the proposed
amendment or supplement before filing any such amendment or supplement with the
Commission and thereafter promptly furnish at the Company's own expense to the
Underwriters and to dealers, copies in such quantities and at such locations as
the Underwriters may from time to time reasonably request of an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the Securities Act and the Securities Act Regulations;
(h) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Trust, the Company or the
Underwriters, be required by the Securities Act or requested by the Commission;
(i) to furnish promptly to the Underwriters a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Underwriters may reasonably request;
(j) to apply the net proceeds of the sale of the Preferred
Securities, the Common Securities and the Debentures in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus;
(k) in the case of the Company, to make generally available to its
security holders and to deliver to the Underwriters as soon as practicable, but
in any event not later than forty-five (45) days after the end of the fiscal
quarter first occurring after the first anniversary of the effective date of the
Registration Statement an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in such form, at the option of the Company,
as complies with Rule 158 of the Securities Act Regulations), covering a period
of 12 months beginning after the effective date of the Registration Statement;
17
(l) for so long as the Preferred Securities or the Debentures
shall remain outstanding, to fulfill all registration, reporting and filing
requirements under the Exchange Act as applicable to companies having a class of
securities registered under Section 12(b) or 12(g) thereof;
(m) for so long as the Preferred Securities are outstanding, to
use its commercially reasonable efforts to maintain the listing of the Preferred
Securities on the NYSE and to file with the NYSE all documents and notices
required by the NYSE of companies that have securities that are traded on the
NYSE; if the Preferred Securities are exchanged for Debentures, the Company will
use its commercially reasonable efforts to promptly effect the listing of the
Debentures on the NYSE or other national securities exchange or automated
quotation system on which the Preferred Securities are then listed, to have the
Debentures promptly registered under the Exchange Act and to maintain such
listing for as long as the Debentures remain outstanding;
(n) to engage and maintain, at its expense, a registrar and
transfer agent for the Preferred Securities;
(o) to prepare and file any instruments required to be filed by
the Trust or the Company in order to permit the Preferred Securities to be
eligible for clearance and settlement through the facilities of DTC;
(p) to refrain during a period of 180 days from the date of the
Prospectus, without the prior written consent of the Underwriters, from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, (or entering into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any time in
the future of), any Preferred Securities or Debentures (or any equity or debt
securities substantially similar to the Preferred Securities or Debentures,
respectively), including any guarantee of such beneficial interests or
substantially similar securities, or any securities convertible into or
exercisable or exchangeable for Preferred Securities or Debentures (or any
equity or debt securities substantially similar to the Preferred Securities or
Debentures, respectively) or filing any registration statement under the
Securities Act with respect to any of the foregoing or (ii) entering into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of Preferred
Securities or Debentures (or any equity or debt securities substantially similar
to the Preferred Securities or Debentures, respectively), whether any such swap
or transaction described in clause (i) or (ii) above is to be settled by
delivery of Preferred Securities or Debentures (or any equity or debt securities
substantially similar to the Preferred Securities or Debentures, respectively)
or such other securities, in cash or otherwise. The foregoing sentence shall not
apply to the Preferred Securities or Debentures to be sold hereunder;
(q) in the case of the Company, to issue the Preferred Guarantee
and the Debentures concurrently with the issuance and sale of the Preferred
Securities as contemplated herein;
(r) prior to the Closing Time (and, if applicable, any Date of
Delivery), not to, and to use its best efforts to cause their respective
trustees, officers, directors, partners, members and affiliates, as applicable,
not to, directly or indirectly, issue any press release or other communication
or hold any press conference with respect to the financial results of the
Company or the Subsidiaries or the offering of the Preferred Securities which
the Underwriters shall not previously have been provided a copy a reasonable
time prior to the release thereof or provided reasonable notice thereof and the
Underwriters shall not have reasonably objected thereto;
(s) not to, and to use its best efforts to cause their respective
trustees, officers, directors, partners, members and affiliates, as applicable,
not to, (i) take, directly or indirectly prior to termination of the
18
underwriting syndicate contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the Trust or the Company,
or which may cause or result in, or which might in the future reasonably be
expected to cause or result in, the stabilization or manipulation of the price
of any security of the Company, to facilitate the sale or resale of any of the
Preferred Securities, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Preferred Securities or (iii) pay
or agree to pay to any person any compensation for soliciting any order to
purchase any other securities of the Trust or the Company;
(t) that the Trust and the Company will comply with all of the
provisions of any undertakings in the Registration Statement;
(u) that the Trust and the Company will not invest or otherwise use the
proceeds received by the Trust or the Company from its sale of the Preferred
Securities or the Debentures, as the case may be, in such a manner as would
require the Trust, the Company or any Subsidiary to register as an investment
company under the Investment Company Act; and
(v) not to voluntarily claim and to actively resist any attempts to
claim the benefit of any usury laws against the holders of the Preferred
Securities or the Debentures.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance by it and by the Trust of its and the Trust's respective and joint
obligations under this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including expenses,
fees and taxes in connection with (i) the preparation and filing of the
Registration Statement (including financial statements and exhibits thereto),
each Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing (or reproduction) and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the preparation, issuance and delivery of the certificates for
the Preferred Securities to the Underwriters, including any stock or other
transfer taxes or duties payable upon the sale, issuance or delivery of the
Preferred Securities to the Underwriters, (iii) the preparation, printing (or
reproduction), execution and delivery of this Agreement, the Debentures, each of
the Guarantor Agreements and the Certificate of Trust of the Trust and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Preferred Securities for offering and sale under state laws that the Company and
the Underwriters have mutually agreed are appropriate and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters and the printing and furnishing of copies of any "blue sky" surveys
or legal investment surveys to the Underwriters and to dealers), (v) filing for
review of the public offering of the Preferred Securities by the NASD (including
the legal fees and filing fees and other disbursements of counsel for the
Underwriters relating thereto), (vi) the fees and expenses of any transfer
agent, registrar or depository (including DTC) for the Preferred Securities and
the fees and expenses of counsel for any such person and miscellaneous expenses
referred to in the Registration Statement, (vii) the printing of the Debentures
in certificated form, if required, (viii) the fees and expenses associated with
obtaining ratings for the Preferred Securities and the Debentures from any
"nationally recognized statistical rating organization" (as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities Act) to
the extent any such ratings are sought; (ix) the fees and expenses incurred in
connection with the listing of the Preferred Securities and, to the extent
required or advisable, the Preferred Guarantee and the Debentures on the NYSE,
(x) the fees and expenses of the Trust, the Trustees, the Guarantee Trustee, the
Indenture Trustee and the Company and their respective counsel, accountants and
other advisors in connection with any of the Guarantor Agreements, the
Debentures, the Certificate of Trust of the Trust or the offering, issuance and
delivery of
19
the Preferred Securities, the Common Securities, the Preferred Guarantee, the
Common Guarantee and/or the Debentures, (xi) the fees and expenses incurred by
the Company and the Underwriters in making road show presentations with respect
to the offering of the Preferred Securities, (xii) preparing and distributing
bound volumes of transaction documents for the Underwriters and its legal
counsel and (xiii) the performance of the Trust's and the Company's other
obligations under this Agreement and the Guarantor Agreements that are not
otherwise specifically provided for in this Section 5(a). Upon the request of
the Underwriters, the Company will provide funds in advance for filing fees.
(b) Whether or not the transactions contemplated by this Agreement are
consummated, the Company agrees to reimburse the Underwriters for their
reasonable out-of-pocket expenses (not to exceed $250,000) paid to unaffiliated
third parties in connection with the transactions contemplated by this
Agreement, including the reasonable fees and expenses of the Underwriters' legal
counsel (other than the fees and expenses of counsel with respect to state
securities or "blue sky" laws and obtaining the filing for review of the public
offering of the Preferred Securities by the NASD, and any of the fees and
expenses incurred by the Underwriters in making road show presentations with
respect to the offering of the Preferred Securities, all of which shall be
reimbursed by the Company pursuant to the provisions of subsection (a) above).
6. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Preferred
Securities at the Closing Time or on each Date of Delivery, as applicable, are
subject to the accuracy of the representations and warranties on the part of the
Trust and the Company hereunder on the date hereof and at the Closing Time and
on each Date of Delivery, as applicable, the performance by the Trust and the
Company of their respective obligations hereunder and to the satisfaction of the
following further conditions at the Closing Time or on each Date of Delivery, as
applicable:
(b) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of Xxxxxxx Xxxxxxxx X.X., counsel for
the Trust and the Company, addressed to the Underwriters and dated the Closing
Time and each Date of Delivery and in form and substance satisfactory to
Xxxxxxxx Chance US LLP, counsel for the Underwriters, stating that:
(i) the Company has an authorized capitalization as of
September 30, 2003 as set forth in the Prospectus (and to the best
knowledge of such counsel, there have not been any subsequent issuances
of capital stock of the Company except for issuances pursuant to stock
options held by employees and directors of the Company and the
Subsidiaries); the outstanding shares of capital stock, the partnership
interests, membership interests or other equity interests, as the case
may be, of the Company and, to the best knowledge of such counsel, each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable; except as disclosed in the Prospectus,
all of the outstanding shares of capital stock of, or the partnership
interests, membership interests or other equity interests, as the case
may be, in any Subsidiary are, to the best knowledge of such counsel,
directly or indirectly owned of record by the Company; except as
disclosed in the Prospectus, and except for outstanding stock options
held by employees and directors of the Company and the Subsidiaries,
and to the best knowledge of such counsel, there are no outstanding (i)
securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any capital stock of or
partnership interests, membership interests or other equity interests,
as the case may be, in the Company or any such Subsidiary, (ii)
warrants, rights or options to subscribe for or purchase from the
Company or any such Subsidiary any such capital stock, partnership
interests, membership interests or other equity interests, as the case
may be, or any such convertible or exchangeable securities or
obligations or (iii) obligations
20
of the Company or any such Subsidiary to issue any securities or
obligations, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options;
(ii) each of the Company and the Subsidiaries (all of
which Subsidiaries are named in Exhibit 21 to the Registration
Statement) has been duly incorporated or formed and is validly existing
as a corporation, general or limited partnership, limited liability
company or trust, as the case may be, in good standing under the laws
of its respective jurisdiction of incorporation or formation with full
corporate, partnership, limited liability company or trust power and
authority to own, lease and operate its respective properties and to
conduct its respective businesses as described in the Registration
Statement and the Prospectus and to execute and deliver this Agreement,
the Guarantor Agreements and the Debentures (to the extent a party
thereto) and to consummate the transactions contemplated hereby and
thereby;
(iii) each of the Company and the Subsidiaries is duly
qualified or licensed and is in good standing in each jurisdiction in
which it conducts its business or in which it owns or leases real
property or otherwise maintains an office and in which the failure,
individually or in the aggregate, to be so qualified or licensed could
have a Material Adverse Effect; except as disclosed in the Prospectus,
to the best knowledge of such counsel, no Subsidiary is prohibited or
restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such
Subsidiary's capital stock, partnership interests, membership interests
or other equity interests, as the case may be, or from repaying to the
Company or any other Subsidiary any amounts which may from time to time
become due under any loans or advances to such Subsidiary from the
Company or such other Subsidiary, or from transferring any such
Subsidiary's property or assets to the Company or to any other
Subsidiary; except as disclosed in the Registration Statement, to the
best knowledge of such counsel, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, limited
liability company, trust, joint venture or other entity;
(iv) to the best knowledge of such counsel, the Trust, the
Company and the Subsidiaries are in compliance in all material respects
with all applicable laws, rules, regulations, orders, decrees and
judgements, including those relating to transactions with affiliates,
except for any failure to comply that could not have a Material Adverse
Effect;
(v) to the best knowledge of such counsel, none of the
Trust, the Company or any of the Subsidiaries is in breach of or in
default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its
respective organizational documents, or in the performance or
observance of any obligation, agreement, covenant or condition
contained in any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Trust,
the Company or any Subsidiary is a party or by which any of them or
their respective properties is bound, except, in the case of the
Company and the Subsidiaries, for such breaches or defaults which could
not have a Material Adverse Effect;
(vi) the execution, delivery and performance of this
Agreement by the Trust, the compliance by the Trust with all the
provisions of this Agreement and the Declaration and the consummation
by the Trust of the transactions contemplated hereby and thereby,
including the issuance and sale of the Preferred Securities and the
Common Securities by the Trust, the purchase of the Debentures by the
Trust and the distribution of the Debentures by the Trust in the
circumstances contemplated by the Declaration and described in the
Registration Statement and the Prospectus, and the execution, delivery
and performance of this Agreement, the Debentures and each of the
Guarantor Agreements by the Company, the compliance by the Company with
all
21
the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby including the sale of the
Debentures by the Company to the Trust and the issuance by the Company
of the Preferred Guarantee and the Common Guarantee, have been duly
authorized by all necessary action on the part of the Trust and do not
and will not (i) result in any violation of the Declaration or the
Certificate of Trust of the Trust, (ii) conflict with, or result in any
breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both would constitute a breach of,
or default under) (A) any provision of the Declaration or the
Certificate of Trust of the Trust or (B) to the best knowledge of such
counsel, any provision of any contract, license, indenture, mortgage,
note, lease, deed of trust, loan or credit agreement or other agreement
or instrument to which the Trust is a party or by which it or its
properties may be bound or affected, or under any U.S. federal, state,
local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Trust, (iii) conflict with, or result in any
breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both would constitute a breach of,
or default under) (A) any provision of the organizational documents of
the Company or any Subsidiary or (B) to the best knowledge of such
counsel, any provision of any contract, license, indenture, mortgage,
note, lease, deed of trust, loan or credit agreement or other agreement
or instrument to which the Company or any Subsidiary is a party or by
which any of them or their respective properties may be bound or
affected, or under any U.S. federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or any Subsidiary, (iv) to the best knowledge of such counsel,
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Trust, or (v) to the best
knowledge of such counsel, result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the
Company or the Subsidiaries, except such violations, conflicts,
breaches, defaults or creations or impositions that could not,
individually or in the aggregate, have a Material Adverse Effect, and
could not, individually or in the aggregate, be materially adverse to
the Trust;
(vii) this Agreement has been duly authorized, executed and
delivered by the Trust and the Company and is a legal, valid and
binding agreement of the Trust and the Company enforceable in
accordance with its terms, except as may be limited by (A) bankruptcy,
insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization, and other similar laws relating to or
affecting the remedies and rights of creditors, (B) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered or applied in a proceeding in equity
or at law) and (C) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution;
(viii) each of the Guarantor Agreements has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as may be
limited by (A) bankruptcy, insolvency, moratorium, receivership,
liquidation, fraudulent conveyance, reorganization, and other similar
laws relating to or affecting the remedies and rights of creditors, and
(B) principles of equity (regardless of whether considered or applied
in a proceeding in equity or at law); each of the Guarantor Agreements
conforms in all material respects to all statements relating thereto
contained in the Prospectus; each of the Preferred Guarantee, the
Declaration and the Indenture has been duly qualified under the 1939
Act and is in substantially the form filed as an exhibit to the
Registration Statement;
(ix) the Debentures have been duly authorized, executed
and delivered by the Company; when the Debentures have been executed
and authenticated in accordance with the provisions of the Indenture
and delivered to the Trust against payment therefor as described in the
Prospectus, the Debentures will be in the form contemplated by, and
entitled to the benefits of,
22
the Indenture, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as may be limited by (A) bankruptcy, insolvency,
moratorium, receivership, liquidation, fraudulent conveyance,
reorganization, and other similar laws relating to or affecting the
remedies and rights of creditors, and (B) principles of equity
(regardless of whether considered or applied in a proceeding in equity
or at law), and conform in all material respects to all statements
relating thereto contained in the Prospectus; the Debentures are in
substantially the form filed as an exhibit to the Registration
Statement;
(x) no approval, authorization, consent, license, order,
registration, qualification or decree of or filing with any
Governmental Authority is required in connection with the execution,
delivery and performance of this Agreement or any of the Guarantor
Agreements by the Company or the Trust (to the extent a party thereto)
and the consummation of the transactions contemplated herein or
therein, other than (A) such as have been obtained under the Securities
Act, the Exchange Act and the 1939 Act, and (B) such approvals as have
been obtained in connection with the listing of the Preferred
Securities on the NYSE;
(xi) to the best knowledge of such counsel, each of the
Company and the Subsidiaries has all necessary permits, licenses,
authorizations, consents and approvals and has made all necessary
filings required under any U.S. federal, state, local or foreign law,
regulation or rule, and has obtained all necessary permits, licenses,
authorizations, consents and approvals from other persons, required to
conduct its business as described in the Prospectus, except to the
extent that the failure to have any such permits, licenses,
authorizations, consents or approvals, to make any such filings or to
obtain any such permits, licenses, authorizations, consents or
approvals could not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor any Subsidiary is required by
any applicable law to obtain accreditation or certification from any
Governmental Authority in order to provide the products and services
which it currently provides or which it proposes to provide as set
forth in the Prospectus; to the best knowledge of such counsel, neither
the Company nor any Subsidiary is in violation of, in default under, or
has received any notice regarding a possible violation, default or
revocation of any such permit, license, authorization, consent or
approval or any U.S. federal, state, local or foreign law, regulation
or rule or any decree, order or judgment applicable to the Company or
any Subsidiary, the effect of which could result in a Material Adverse
Change; and to the best knowledge of such counsel, no such permit,
license, authorization, consent or approval contains a materially
burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(xii) neither the Trust nor the Company is or, after giving
effect to the offering and sale of the Preferred Securities, will be an
"investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act;
(xiii) the Preferred Securities have been duly and validly
authorized by the Trust, are duly and validly issued and fully paid and
nonassessable undivided preferred beneficial interests in the assets of
the Trust, and conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Preferred
Securities by the Trust is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents
of the Trust, the Company or any Subsidiary or under any agreement
known to such counsel to which the Trust, the Company or any Subsidiary
is a party or otherwise;
(xiv) to the best knowledge of such counsel, except for
registration rights held by Doubletree Corporation with respect to
Series A Preferred Stock and Series B Preferred Stock of the Company
held by it, there are no persons with registration or other similar
rights to have any
23
equity or debt securities, including securities that are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act;
(xv) the form of certificate used to evidence the
Preferred Securities complies in all material respects with all
applicable statutory requirements, with any applicable requirements of
the organizational documents of the Trust and with the requirements of
the NYSE;
(xvi) the Registration Statement has become effective under
the Securities Act; all filings with the Commission required by Rule
424 under the Securities Act to have been filed by the Closing Time
have been made within the applicable time period prescribed for such
filing by such Rule; no stop order suspending the effectiveness of the
Registration Statement has been issued; and, to the best knowledge of
such counsel, no proceedings for that purpose are pending or
threatened;
(xvii) as of the effective date of the Registration
Statement, the Registration Statement and the Prospectus (except as to
the financial statements and other financial and statistical data
contained therein or omitted therefrom and the three Trustees'
Statements of Eligibility on Form T-1, included as exhibits to the
Registration Statement, as to which such counsel need express no
opinion) complied as to form in all material respects with the
requirements of the Securities Act, the Exchange Act, the Securities
Act Regulations and the Exchange Act Regulations;
(xviii) the statements in the Prospectus under the captions
"Description of Securities," "Material U.S. Federal Income Tax
Consequences" and "Employee Benefit Plan Considerations," insofar as
such statements constitute a summary of the legal matters or documents
referred to therein, constitute accurate summaries thereof in all
material respects;
(xix) the Registration Statement on Form 8-A complied as to
form in all material respects with the requirements of the Exchange
Act; the Registration Statement on Form 8-A has become effective under
the Exchange Act; and the Preferred Securities have been validly
registered under the Securities Act, the Exchange Act and the
Securities Act Regulations and the Exchange Act Regulations;
(xx) to the best knowledge of such counsel, there are no
actions, suits, proceedings, inquiries or investigations pending or
threatened against the Company or any of the Subsidiaries or any of
their respective officers, directors, partners, members or trustees, as
applicable, or to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by any Governmental
Authority or arbitral panel which are required to be described in the
Prospectus but are not so described;
(xxi) to the best knowledge of such counsel, there are no
contracts or documents of a character which are required to be filed as
exhibits to the Registration Statement or required to be described or
summarized in the Prospectus which have not been so filed, summarized
or described, and all such summaries and descriptions, in all material
respects, fairly and accurately set forth the material provisions of
such contracts and documents;
(xxii) to the best knowledge of such counsel, the Company
and each of the Subsidiaries owns or possesses adequate licenses or
other rights to use all Intangibles necessary to entitle the Company
and each Subsidiary to conduct its business as described in the
Prospectus, and to the best knowledge of such counsel, neither the
Company nor any Subsidiary has received notice of infringement of or
conflict with (and to the best knowledge of such counsel there is no
such
24
infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could have a Material Adverse Effect;
(xxiii) to the best knowledge of such counsel, each of the
Company and the Subsidiaries has filed on a timely basis all necessary
U.S. federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and has paid all taxes
shown as due thereon; to the best knowledge of such counsel, no tax
deficiency has been asserted against any such entity, and to the best
knowledge of such counsel there is no tax deficiency which is likely to
be asserted against any such entity which, if determined adversely to
any such entity, could materially and adversely affect the business,
prospects, properties, assets, results of operations or condition
(financial or otherwise) of any such entity, respectively; and
(xxiv) such counsel has participated in conferences with
officers and other representatives of the Trust and the Company,
independent public accountants of the Company, representatives of the
Underwriters, at which the contents of the Registration Statement and
the Prospectus were discussed and, although such counsel is not passing
upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus, and such counsel has no reason to believe that the
Registration Statement, the Preliminary Prospectus or the Prospectus,
as of their respective effective or issue dates, and as of the date of
such counsel's opinion, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(it being understood that, in each case, such counsel need express no
view with respect to the financial statements and other financial and
statistical data included in the Registration Statement, Preliminary
Prospectus or the Prospectus, or the three Trustees' Statements of
Eligibility on Form T-1 included as exhibits to the Registration
Statement).
(c) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of Xxxxxxxx, Xxxxxx & Finger, P.A.,
special Delaware counsel for the Trust and the Company, addressed to the
Underwriters and dated the Closing Time and each Date of Delivery and in form
and substance satisfactory to Xxxxxxxx Chance US LLP, counsel for the
Underwriters, stating that:
(i) The Trust has been duly created and is validly
existing in good standing as a statutory trust under the Delaware
Statutory Trust Act, and all filings required under the laws of the
State of Delaware with respect to the creation and valid existence of
the Trust as a statutory trust have been made;
(ii) Under the Delaware Statutory Trust Act and the
Declaration, the Trust has the trust power and authority (A) to own
property and conduct its business as described in the Prospectus, (B)
to execute and deliver, to perform its obligations under and to
consummate the transactions contemplated by, this Agreement and (C) to
issue and sell, and to perform its obligations under, the Preferred
Securities and the Common Securities;
(iii) The execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust action on
the part of the Trust;
(iv) The Declaration constitutes a valid and binding
obligation of the Company and the Trustees, enforceable against the
Company and the Trustees in accordance with its terms, subject, as to
enforcement, to the effect upon the Declaration of (A) bankruptcy,
insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization and other similar
25
laws relating to or affecting the remedies and rights of creditors, (B)
principles of equity, including applicable law relating to fiduciary
duties (regardless of whether considered or applied in a proceeding in
equity or at law) and (C) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution;
(v) The Preferred Securities have been duly authorized by
the Declaration and, when delivered to and paid for by the Underwriters
pursuant to this Agreement, will be duly and validly issued, fully paid
and, subject to the qualifications set forth herein, nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners of the Trust (the
"Securityholders"), are entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware,
except that such counsel may note that the Securityholders may be
obligated, pursuant to the Declaration, to (A) provide indemnity and/or
security in connection with and pay a sum sufficient to cover any taxes
or governmental charges arising from transfers or exchanges of
Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates and (B) provide security and/or
indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Declaration; under
the Delaware Statutory Trust Act and the Declaration, the issuance of
the Preferred Securities is not subject to preemptive or other similar
rights; and the form of certificates to evidence the Preferred
Securities has been approved by the Trust and is in due and proper form
and complies with the Declaration and all applicable requirements, if
any, of the Delaware Statutory Trust Act;
(vi) The Common Securities have been duly authorized by
the Declaration and are duly and validly issued and fully paid
undivided beneficial interests in the assets of the Trust; and under
the Delaware Statutory Trust Act and the Declaration, the issuance of
the Common Securities is not subject to preemptive or other similar
rights;
(vii) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, the consummation by the
Trust of the transactions contemplated herein and the compliance by the
Trust with its obligations hereunder do not violate (A) any of the
provisions of the Certificate of Trust of the Trust or the Declaration
or (B) any applicable law, rule or regulation of the State of Delaware;
(viii) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Statutory Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State
of Delaware, no authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely as a result of the issuance
and sale of the Preferred Securities, the consummation by the Trust of
the transactions contemplated herein or the compliance by the Trust of
its obligations hereunder;
(ix) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Statutory Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State
of Delaware, and assuming that the Trust is treated as a grantor trust
for U.S. federal income tax purposes, the Securityholders (other than
those holders of the Preferred Securities who reside or are domiciled
in the State of Delaware) will have no liability for income taxes
imposed by the State of Delaware solely as a
26
result of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware (in
rendering the opinion expressed in this subsection (ix), such counsel
need express no opinion concerning the securities laws of the State of
Delaware); and
(x) Such counsel has reviewed the statements in the
Prospectus under the captions "WestCoast Hospitality Capital Trust" and
"Description of Securities" and, insofar as they contain statements of
Delaware law, such statements are fairly presented.
(d) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of Xxxxxxx Xxxxxxxx X.X., special
tax counsel for the Trust and the Company, addressed to the Underwriters and
dated the Closing Time and each Date of Delivery and in form and substance
satisfactory to Xxxxxxxx Chance US LLP, counsel for the Underwriters, stating
that:
(i) the Trust is and will be classified for U.S. federal
income tax purposes as a grantor trust and not as an association
taxable as a corporation;
(ii) the Debentures will be treated as debt of the Company
for U.S. federal income tax purpose; and
(iii) the statements set forth in the Prospectus under the
caption "Material U.S. Federal Income Tax Consequences" constitute a
fair and accurate summary of the anticipated U.S. federal income tax
consequences of the ownership and disposition of the Preferred
Securities under current law.
(e) The Underwriters shall have received from each of BDO Xxxxxxx, LLP
and PricewaterhouseCoopers LLP, letters dated, respectively, as of the date of
this Agreement, the Closing Time and each Date of Delivery, as the case may be,
addressed to the Underwriters, in form and substance satisfactory to the
Underwriters, relating to the financial statements, including any pro forma
financial statements, of the Company and the Covered Entities, and such other
matters customarily covered by comfort letters issued in connection with
registered public offerings.
In the event that the letters referred to above set forth any changes
in indebtedness, decreases in total assets or retained earnings or increases in
borrowings, it shall be a further condition to the obligations of the
Underwriters that (i) such letters shall be accompanied by a written explanation
of the Company as to the significance thereof, unless the Underwriters deems
such explanation unnecessary and (ii) such changes, decreases or increases do
not, in the sole judgment of the Underwriters, make it impractical or
inadvisable to proceed with the purchase and delivery of the Preferred
Securities as contemplated by the Registration Statement.
(f) The Underwriters shall have received at the Closing Time and on
each Date of Delivery the favorable opinion of Xxxxxxxx Chance US LLP, dated the
Closing Time or such Date of Delivery, addressed to the Underwriters and in form
and substance satisfactory to the Underwriters.
(g) No amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(h) Prior to the Closing Time and each Date of Delivery (i) no stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
has been issued, and no proceedings for such purpose shall have been initiated
or threatened, by the Commission, and no suspension of the qualification of the
Preferred Securities for offering or sale in any jurisdiction, or the initiation
or threatening of any proceedings for
27
any of such purposes, has occurred; (ii) all requests for additional information
on the part of the Commission shall have been complied with to the reasonable
satisfaction of the Underwriters; and (iii) the Registration Statement and the
Prospectus shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(i) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.
(j) Between the time of execution of this Agreement and the Closing
Time or the relevant Date of Delivery there shall not have been any Material
Adverse Change, and no transaction which is material and unfavorable to the
Trust, the Company or any Subsidiary shall have been entered into by the Trust,
the Company or any of the Subsidiaries, in each case, which in the Underwriters'
sole judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Preferred Securities as contemplated by the Registration
Statement.
(k) At the Closing Time, each of the Guarantor Agreements shall have
been entered into by the Company and the other parties thereto and shall be in a
form reasonably satisfactory to the Underwriters.
(l) The Preferred Securities shall have been approved for listing on
the NYSE, subject to official notice of issuance.
(m) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(n) The Trust and the Company will, at the Closing Time and on each
Date of Delivery, deliver to the Underwriters, in the case of the Trust, a
certificate of an Administrative Trustee, and in the case of the Company, a
certificate of its Chief Executive Officer and Chief Financial Officer, in each
case to the effect that:
(i) the representations and warranties of the Trust or
the Company, as the case may be, in this Agreement are true and
correct, as if made on and as of the date hereof, and the Trust or the
Company, as the case may be, has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Time;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Securities Act;
(iii) when the Registration Statement became effective and
at all times subsequent thereto up to the date hereof, the Registration
Statement and the Prospectus, and any amendments or supplements thereto
contained all material information required to be included therein by
the Securities Act or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may be, and in
all material respects conformed to the requirements of the Securities
Act or the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be; the Registration Statement
and the Prospectus, and any amendments or supplements thereto, did not
and do not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
28
and, since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amendment or
supplement to the Prospectus which has not been so set forth; and
(iv) in the case of the certificate delivered by the
Company, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
have occurred in connection with dividends paid on, or the redemption
or proposed redemption of the Company's Series A Preferred Stock and
Series B Preferred Stock, there has not been (A) any Material Adverse
Change, (B) any transaction that is material to the Company and the
Covered Entities considered as one enterprise, except transactions
entered into in the ordinary course of business, (C) any obligation,
direct or contingent, that is material to the Company and the Covered
Entities considered as one enterprise, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of
business, (D) any change in the capital stock or outstanding
indebtedness of the Company or any Subsidiary that is material to the
Company and the Covered Entities considered as one enterprise, (E) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any Subsidiary or (F) any loss or
damage (whether or not insured) to the property of the Company or any
Subsidiary which has been sustained or will have been sustained which
has a Material Adverse Effect.
(o) The Trust and the Company shall have furnished to the Underwriters
such other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Trust and the Company contained herein and in
the Guarantor Agreements, the performance by the Trust and the Company of their
respective covenants contained herein and therein and the fulfillment of any
conditions contained herein and therein, as of the Closing Time or any Date of
Delivery, as the Underwriters may reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of the Underwriters, at any time prior
to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 hereof shall not have been fulfilled when and as required
by this Agreement to be fulfilled, (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
Material Adverse Change, or any development involving a prospective Material
Adverse Change, or material change in management of the Company, whether or not
arising in the ordinary course of business, (iii) if there has occurred any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic, political or other conditions the
effect of which on the financial markets of the United States is such as to make
it, in the judgment of the Underwriters, impracticable to market the Preferred
Securities or enforce contracts for the sale of the Preferred Securities, (iv)
if trading in any securities of the Trust or the Company has been suspended by
the Commission or by the NYSE, or if trading generally on the NYSE or in the
Nasdaq over-the-counter market has been suspended (including an automatic halt
in trading pursuant to market-decline triggers, other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or the NASD or the Nasdaq over-the-counter market or by order of the Commission
or any other Governmental Authority, (v) if there has been any downgrade in the
rating of the Preferred Securities or any of the Company's debt securities or
preferred stock by any "nationally recognized statistical rating organization"
(as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act), (vi) any U.S. federal, state, local or foreign statute,
regulation, rule or order of any court or Governmental Authority has been
enacted, published, decreed or otherwise promulgated which, in the reasonable
opinion of the Underwriters, materially adversely affects or will materially
adversely affect the business or operations of the Company, (vii) any action has
been taken by any Governmental Authority or agency in respect of its
29
monetary or fiscal affairs which, in the reasonable opinion of the Underwriters,
has a material adverse effect on the securities markets in the United States, or
(viii) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iii) or (vii) in the Underwriters' judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Preferred Securities on the terms and in the manner contemplated in the
Registration Statement and the Prospectus.
If the Underwriters elect to terminate this Agreement as provided in
this Section 7, the Trust, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Preferred Securities, as
contemplated by this Agreement, is not carried out by the Underwriters for any
reason permitted under this Agreement or if such sale is not carried out because
the Trust or the Company shall be unable to comply in all material respects with
any of the terms of this Agreement, the Company shall not be under any
obligation or liability under this Agreement (except to the extent provided in
Sections 5 and 9 hereof) and the Underwriters shall be under no obligation or
liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Preferred Securities to be
purchased by it under this Agreement on such date, the Underwriters shall have
the right, within 36 hours after such default, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Preferred Securities which such Underwriter
shall have agreed but failed to take up and pay for (the "Defaulted
Securities"). Absent the completion of such arrangements within such 36-hour
period, (i) if the total number of Defaulted Securities does not exceed 10% of
the total number of Preferred Securities to be purchased on such date, each
non-defaulting Underwriter shall take up and pay for (in addition to the number
of Preferred Securities which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Preferred
Securities agreed to be purchased by the defaulting Underwriter on such date in
the proportion that its underwriting obligation hereunder bears to the
underwriting obligations of all non-defaulting Underwriters and (ii) if the
total number of Defaulted Securities exceeds 10% of such total, the Underwriters
may terminate this Agreement by notice to the Company, without liability of any
party to any other party except that the provisions of Sections 5 and 9 hereof
shall at all times be effective and shall survive such termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Trust and the Company agree with the non-defaulting Underwriters
that the Trust will not sell any Preferred Securities hereunder on such date
unless all of the Preferred Securities to be purchased on such date are
purchased on such date by the Underwriters (or by substituted Underwriters
selected by themselves with the approval of the Company or selected by the
Company with the approval of the Underwriters).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the same effect as
if such substituted Underwriter had originally been named in this Agreement.
30
9. Indemnity and Contribution by the Trust, the Company and the
Underwriters:
(a) The Trust and the Company, jointly and severally, agree to
indemnify, defend and hold harmless each Underwriter and any person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, any such Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, expense,
liability, damage or claim arises out of or is based upon (i) any breach of any
representation, warranty or covenant of the Trust or the Company contained
herein, (ii) any failure on the part of the Trust or the Company to comply with
any applicable law, rule or regulation relating to the offering of securities
being made pursuant to the Prospectus or the offering of the Common Securities,
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Trust and the Company),
the Prospectus (the term Prospectus for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Trust and the Company), (iv) any application
or other document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction (domestic or foreign) in order to qualify the
Preferred Securities under the securities or "blue sky" laws thereof or filed
with the Commission or any securities association or securities exchange (each
an "Application"), (v) any omission or alleged omission to state a material fact
required to be stated in any such Registration Statement, Prospectus or any
Application or necessary to make the statements made therein (with respect to
the Prospectus only, in the light of the circumstances under which they were
made) not misleading or (vi) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in connection
with the marketing of the Preferred Securities, including, without limitation,
slides, videos, films and tape recordings; except insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and in conformity with information furnished in
writing by the Underwriters to the Trust and the Company expressly for use in
such Registration Statement, Prospectus or Application. The Company agrees to
indemnify the Trust against all loss, expense, liability, damage and claim
whatsoever as due from the Trust under this Section 9(a). The indemnity
agreement set forth in this Section 9(a) shall be in addition to any liability
which the Trust or the Company may otherwise have.
(b) If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Trust or the
Company pursuant to subsection (a) above, such Underwriter shall promptly notify
the Company in writing of the institution of such action, and the Company shall
assume the defense of such action, including the employment of counsel and
payment of expenses; provided, however, that any failure or delay to so notify
the Company will not relieve the Trust or the Company of any obligation
hereunder, except to the extent that its ability to defend is actually impaired
by such failure or delay. Such Underwriter or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action, or the Company shall not have employed counsel reasonably satisfactory
to the Underwriter or controlling person, as the case may be, to have charge of
the defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate firm of attorneys for the Underwriters or controlling persons in any
31
one action or series of related actions in the same jurisdiction (other than
local counsel in any such jurisdiction) representing the indemnified parties who
are parties to such action). Anything in this subsection to the contrary
notwithstanding, neither the Trust nor the Company shall be liable for any
settlement of any such claim or action effected without the written consent of
the Company.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Trust, the Trustees, the Company, the Company's
directors, the Company's officers that signed the Registration Statement, and
any person who controls the Trust, the Trustees or the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, the Trust, the
Company or any such person may incur under the Securities Act, the Exchange Act
or otherwise, but only insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriters to the Company expressly for use in
the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Trust and the Company), the Prospectus
or any Application or (ii) any omission or alleged omission to state a material
fact in connection with such information either required to be stated in such
Registration Statement, Prospectus or any Application or necessary to make such
information, in the light of the circumstances under which made, not misleading.
The statements set forth in the fourth and fifteenth paragraphs under the
caption "Underwriting" in the Preliminary Prospectus and the Prospectus (to the
extent such statements relate to the Underwriters) constitute the only
information furnished by or on behalf of any Underwriter to the Company for
purposes of Section 3(n) and this Section 9. The indemnity agreement set forth
in this Section 9(c) shall be in addition to any liabilities that such
Underwriter may otherwise have.
(d) If any action is brought against the Trust, the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing subsection, the Trust, the Company or such person
shall promptly notify the Underwriters in writing of the institution of such
action, and the Underwriters shall assume the defense of such action, including
the employment of counsel and payment of expenses. The Trust, the Company or
such person shall have the right to employ its own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Trust, the
Company or such person unless the employment of such counsel shall have been
authorized in writing by the Underwriters in connection with the defense of such
action or the Underwriters shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Underwriters shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this subsection to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without its written consent.
(e) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) and (c) of this Section 9 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Company, on the one hand,
32
and the Underwriters, on the other hand, from the offering of the Preferred
Securities or (ii) if (but only if) the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Trust and the Company, on the one hand, and of the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, expenses, liabilities, damages or claims, as well
as any other relevant equitable considerations. The relative benefits received
by the Trust and the Company, on the one hand, and the Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Trust and the Company bear to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Trust and the Company, on the one hand, and of the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Trust and the Company, or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.
(f) The Trust, the Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in subsection (e)(i) and, if
applicable, (ii), above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions, applicable to the Preferred Securities
purchased by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Survival:
The indemnity and contribution agreements contained in Section 9 and
the covenants, warranties and representations of the Trust and the Company
contained in Sections 3, 4 and 5 of this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, or any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Trust, the Trustees, the Company, the Company's directors and
officers or any person who controls the Trust, the Trustees or the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the sale
and delivery of the Preferred Securities. The Trust, the Company and each
Underwriter agree promptly to notify the others of the commencement of any
litigation or proceeding against it and, in the case of the Trust and the
Company, against any of the Trustees or the Company's officers or directors, in
connection with the sale and delivery of the Preferred Securities or the Common
Securities or in connection with the Registration Statement or the Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram and, if to the Underwriters,
shall be sufficient in all respects if delivered to Friedman, Billings, Xxxxxx &
Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
Syndicate Department, with a copy to Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Xxx X. Xxxxxxxxx, Esq. and Xxxxxx Xxxxxxx, Esq.;
if to the Company or the Trust, shall
33
be sufficient in all respects if delivered to the Company or the Trust at the
offices of the Company at 000 X. Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000, with a copy to Xxxxxxx Xxxxxxxx, X.X., 0000 Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxx, Esq.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Parties at Interest:
The Agreement herein set forth has been and is made solely for the
benefit of the Underwriters, the Trust, the Company and the trustees,
controlling persons, directors and officers referred to in Sections 9 and 10
hereof, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser,
as such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which
together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all purposes.
[Signature page follows.]
34
If the foregoing correctly sets forth the understanding among the
Trust, the Company and the Underwriters, please so indicate in the space
provided below for the purpose, whereupon this Agreement shall constitute a
binding agreement among the Trust, the Company and the Underwriters.
Very truly yours,
WESTCOAST HOSPITALITY CAPITAL TRUST
By: ___________________________________
Name: ______________________________
Title: Administrative Trustee
By: ___________________________________
Name: ______________________________
Title: Administrative Trustee
WESTCOAST HOSPITALITY CORPORATION
By: ____________________________________
Name: ______________________________
Title: ______________________________
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: ____________________________________
Name: ______________________________
Title: _______________________________
XXXXX FARGO SECURITIES, LLC
By: ________________________________
Name:___________________________
Title: ____________________________
35
SCHEDULE I
NUMBER OF INITIAL
SECURITIES TO BE
UNDERWRITERS PURCHASED
Friedman, Billings, Xxxxxx & Co., Inc. [ ]
Xxxxx Fargo Securities, LLC [ ]
Total................................... [ ]
