Exhibit 1.1
3,480,000 Shares*
LaSalle Hotel Properties
10 1/4 % Series A Cumulative Redeemable Preferred Shares
Of Beneficial Interest
UNDERWRITING AGREEMENT
St. Petersburg, Florida
February 28, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
Prudential Securities Incorporated
▇▇ ▇▇▇▇▇ Securities Corporation
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
LaSalle Hotel Properties, a Maryland real estate investment trust
(the "Company"), proposes, subject to the terms and conditions stated herein,
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of 3,480,000 shares of its 10 1/4 % Series A
Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $.01
per share (Liquidation Preference $25 Per Share) (the "Preferred Stock"). The
aggregate of 3,480,000 shares to be purchased from the Company are called the
"Firm Shares." In addition, the Company has agreed to sell to the
Underwriters, upon the terms and conditions stated herein, up to an additional
520,000 shares of 10 1/4 % Series A Cumulative Redeemable Preferred Shares of
Beneficial Interest (Liquidation Preference $25 Per Share) (the "Additional
Shares") to cover over-allotments by the Underwriters, if any. The Firm Shares
and the Additional Shares are collectively referred to in this Agreement as
the "Shares." ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
Incorporated, Prudential Securities Incorporated, and ▇▇ ▇▇▇▇▇ Securities
Corporation are acting as the representatives of the several Underwriters and
in such
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* Plus an additional 520,000 shares subject to Underwriters' over-allotment
option.
capacity are referred to in this Agreement as the "Representatives."
The Company and the LaSalle Hotel Operating Partnership, L.P., a
Delaware limited partnership (the "Operating Partnership") wish to confirm as
follows their agreement with you and the other several Underwriters, on whose
behalf you are acting, in connection with the several purchases of the Shares
from the Company.
1. Registration Statement and Prospectus. The Company has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 333-77371) and pre-effective amendment No.1 thereto
for the registration of the Shares under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), and the offering thereof in accordance with Rule
415 of the rules and regulations of the Commission under the Act. Such
registration statement has been declared effective by the Commission under the
Act. Such registration statement (as so amended, if applicable, and including
the exhibits thereto), is referred to herein as the "Registration Statement";
and the final prospectus and the final prospectus supplement relating to the
offering of the Shares, in the forms first furnished to the Underwriters by
the Company for use in connection with the offering of the Shares, are
collectively referred to herein as the "Prospectus"; provided, however, that
all references to the "Registration Statement" and the "Prospectus" shall also
be deemed to include all documents incorporated therein by reference or deemed
to be incorporated by reference therein, including, without limitation, all
documents incorporated or deemed to be incorporated by reference therein and
filed by the Company with the Commission pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), prior to the date hereof. A
"Preliminary Prospectus" shall be deemed to refer to any prospectus that
omitted information to be included upon pricing in a form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Act and was used after
such effectiveness and prior to the initial delivery of the Prospectus to the
Underwriters by the Company and shall also be deemed to include all documents
incorporated herein by reference or deemed to be incorporated by reference
therein, including, without limitation, all documents incorporated or deemed
to be incorporated by reference therein filed by the Company with the
Commission pursuant to the Exchange Act prior to the date hereof. For purposes
of this Agreement, all references to the Registration Statement, Prospectus or
Preliminary Prospectus or to any amendment or supplement to any of the
foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or Preliminary Prospectus shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement,
Prospectus or Preliminary Prospectus, as the case may be, prior to the date
hereof; and all references in this Agreement to amendments or supplements to
the Registration Statement, Prospectus or Preliminary Prospectus shall be
deemed to include any document filed under the Exchange Act which is
incorporated or
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deemed to be incorporated by reference in the Registration Statement,
Prospectus or Preliminary Prospectus, as the case may be, after the execution
of this Agreement.
2. Agreements to Sell and Purchase. The Company hereby agrees to
issue and sell the Firm Shares to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company at a purchase
price of $24.1875 per Share (the "purchase price per Share"), the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
The Company hereby also agrees to sell to the Underwriters, and, upon
the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right for 30 days from the date of the final
prospectus supplement constituting part of the Prospectus to purchase from the
Company up to 520,000 Additional Shares at the purchase price per Share for
the Firm Shares. The Additional Shares may be purchased solely for the purpose
of covering over-allotments, if any, made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each
Underwriter, severally and not jointly, agrees to purchase the number of
Additional Shares (subject to such adjustments as you may determine to avoid
fractional shares) that bears the same proportion to the total number of
Additional Shares to be purchased by the Underwriters as the number of Shares
set forth opposite the name of such Underwriter in Schedule I hereto bears to
the total number of Shares. The option to purchase Additional Shares may be
exercised at any time within 30 days after the date of the final prospectus
supplement constituting part of the Prospectus, but no more than once.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective
portions of the Shares as soon as this Agreement has become effective and as
in your judgment is advisable, and initially to offer the Shares upon the
terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the
date the Shares are released by the Underwriters for sale to the public, the
Company shall deliver or cause to be delivered copies of the Prospectus in
such quantities and at such places as the Representatives shall request.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ at 10:00 a.m., St. Petersburg, Florida time, on March 6,
2002, or such other place, time and date not later than 1:30 p.m., St.
Petersburg, Florida time, on March 20, 2002, as the Representatives shall
designate by notice to the Company (the time and date of such closing are
called the "Closing Date"). The place of closing for the Firm Shares and the
Closing Date may be varied by agreement between the Representatives and the
Company. The Company hereby acknowledges that circumstances under which the
Representatives may provide notice to postpone the Closing Date as originally
scheduled include
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any determination by the Company and the Representatives to recirculate to the
public copies of an amended or supplemented Preliminary Prospectus or
Prospectus, or a delay as contemplated by the provisions of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made by wire transfer in
immediately available funds at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m., St.
Petersburg, Florida time, on such date or dates (the "Additional Closing
Date") (which may be the same as the Closing Date, but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to) as shall
be specified in a written notice, from the Representatives on behalf of the
Underwriters to the Company, of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be
given at any time within 30 days after the date of the final prospectus
supplement constituting part of the Prospectus and must set forth (i) the
aggregate number of Additional Shares as to which the Underwriters are
exercising the option and (ii) the names and denominations in which the
certificates for which the Additional Shares are to be registered. The place
of closing for the Additional Shares and the Additional Closing Date may be
varied by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 1:00 p.m., St. Petersburg, Florida
time, not later than the second full business day preceding the Closing Date
or the Additional Closing Date, as the case may be. Such certificates shall be
made available to you in St. Petersburg, Florida for inspection and packaging
not later than 9:30 a.m., St. Petersburg, Florida time, on the business day
immediately preceding the Closing Date or the Additional Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Additional Closing Date, as the case may be, against payment of the
purchase price therefor by wire transfer of immediately available funds to an
account specified in writing, not later than the close of business on the
business day next preceding the Closing Date or the Additional Closing Date,
as the case may be, by the Company. Payment for the Shares sold by the Company
hereunder shall be delivered by the Representatives to the Company.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price per Share
for the Firm Shares and the Additional Shares, if any, that the Underwriters
have agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Associates, Inc., individually and
not as Representatives of the Underwriters, may, but shall not be obligated
to, make payment for any Shares to be purchased by any Underwriter whose funds
shall not have been received by the Representatives by the Closing Date or the
Additional Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any
of its obligations under this Agreement.
5. Covenants and Agreements of the Company and the Operating
Partnership.
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5.1 The Company and the Operating Partnership covenant and agree with
the several Underwriters, jointly and severally, as follows:
(a) The Company will advise you promptly and, if requested
by you, will confirm such advice in writing (i) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to the Prospectus and of the time and date that any
post-effective amendment to the Registration Statement becomes effective, and
(ii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes. If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time. The Company
will file the Prospectus with the Commission in accordance with Rule 424(b) of
the Act before the close of business on the second business day immediately
following the date hereof. The Company will provide the Underwriters with
copies of the Prospectus in such numbers as the Underwriters may reasonably
request.
(b) The Company will furnish to you, without charge, such
number of conformed copies of the Registration Statement as originally filed
with the Commission and of each amendment thereto, including financial
statements and all exhibits thereto as you may reasonably request.
(c) Prior to the Closing Date or any Additional Closing
Date, the Company will not file any amendment to the Registration Statement or
make any amendment or supplement to the Prospectus unless (i) you shall have
previously been advised thereof and been given a reasonable opportunity to
review such filing, amendment or supplement and (ii) you have not reasonably
objected to such filing, amendment or supplement after being so advised and
having been given a reasonable opportunity to review such filing, amendment or
supplement.
(d) Prior to the execution and delivery of this Agreement,
the Company has delivered or will deliver to you, without charge, in such
quantities as you have requested or may hereafter reasonably request, copies
of the Preliminary Prospectus. Consistent with the provisions of Section 5(e)
hereof, the Company consents to the use, in accordance with the provisions of
the Act and with the securities or Blue Sky laws of the jurisdictions in which
the Shares are offered by the several Underwriters and by dealers, prior to
the date of the Prospectus, of each Preliminary Prospectus so furnished by the
Company.
(e) As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time for so long as a
prospectus is required to be delivered under the Act or the Exchange Act, the
Company will deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
they may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the
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securities or Blue Sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares. If any event
shall occur that in the judgment of the Company or in the opinion of counsel
for the Underwriters is required to be set forth in the Prospectus (as then
amended or supplemented) or should be set forth therein in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with the Act or any other law, the Company will forthwith
prepare and, subject to Sections 5(a) and 5(c) hereof, file with the Commission
and use its best efforts to cause to become effective as promptly as possible
an appropriate supplement or amendment thereto, and will furnish to each
Underwriter who has previously requested Prospectuses, without charge, a
reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such
registration or qualification for so long as required to complete the
distribution of the Shares; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to general service of
process in suits, other than those arising out of the offering or sale of the
Shares, as contemplated by this Agreement and the Prospectus, in any
jurisdiction where it is not now so subject. In the event that the
qualification of the Shares in any jurisdiction is suspended, the Company
shall so advise you promptly in writing.
(g) The Company will make generally available to the
Company's security holders and to the Representatives as soon as practicable
an earnings statement covering a twelve month period beginning on the first
day of the first full fiscal quarter after the date of this Agreement, which
earnings statement shall satisfy the provisions of Section 11(a) of the Act
and the rules and regulations of the Commission thereunder. If such fiscal
quarter is the last fiscal quarter of the Company's fiscal year, such earnings
statement shall be made available not later than 90 days after the close of
the period covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(h) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof (except pursuant
to a termination under Section 12 hereof) or if this Agreement shall be
terminated by the Underwriters because of any inability, failure or refusal on
the part of the Company to perform in all material respects any agreement
herein or to comply in all material respects with any of the terms or
provisions hereof or to fulfill in all material respects any of the conditions
of this Agreement, the Company agrees to reimburse you and the other
Underwriters for all out-of-pocket expenses (including travel expenses and
reasonable fees and expenses of counsel for the Underwriters, but excluding
wages and salaries paid by you) reasonably incurred by you in connection
herewith.
(i) The net proceeds from the sale of the Shares to be sold
by the Company
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hereunder will be applied in accordance in all material respects with the
statements under the caption "Use of Proceeds" in the Prospectus. The Company
shall contribute the net proceeds from the sale of the Shares to the Operating
Partnership. In exchange for the contribution of such net proceeds, on the
Closing Date, the Operating Partnership will issue the Units (as hereinafter
defined) with an aggregate liquidation preference equal to the aggregate
liquidation preference of the shares (as defined below) to the Company, and
the terms of such Units will be substantially equivalent to the economic
terms of the Shares.
(j) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(k) The Company will use its best efforts to effect the
listing of the Shares on the New York Stock Exchange ("NYSE") no later than
March 28, 2001. If at any time when the Company distributes an annual report
to shareholders or investors pursuant to Section 13(a) of the Exchange Act the
Shares are not listed on a national securities exchange or the NASDAQ Stock
Market ("NASDAQ"), the Company will disclose in such annual report a per share
estimated value of the Shares, the method by which it was developed, and the
date of the data used to develop the estimated value.
(l) The Company shall engage and maintain, at its expense, a
transfer agent and, if necessary under the jurisdiction of its organization or
the rules of any national securities exchange on which the Preferred Stock
will be listed, a registrar (which, if permitted by applicable laws and rules
may be the same entity as the transfer agent) for the Preferred Stock.
(m) The Company will not issue any shares of Preferred Stock
other than in the offering pursuant to this Agreement. If after the completion
of such offering, there are unissued shares of Preferred Stock, the Company
will reclassify those shares in a manner acceptable to the Underwriters.
6. Representations and Warranties of the Company.
6.1 The Company and the Operating Partnership, jointly and severally,
represent and warrant to each Underwriter on the date hereof, and shall be
deemed to represent and warrant to each Underwriter on the Closing Date and
the Additional Closing Date, as the case may be, that:
(a) The Company is eligible to use Form S-3 under the Act
for the offering of Shares contemplated hereby. The Preliminary Prospectus,
filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act and the applicable rules and
regulations of the Commission thereunder, except that this representation and
warranty does not apply to statements in or omissions from the Preliminary
Prospectus made in reliance upon and in conformity with information relating
to any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(b) The Registration Statement has become effective under
the Act; no stop
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order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the knowledge of
the Company, threatened by the Commission.
(c) (i) Each document filed or to be filed pursuant to the
Exchange Act and incorporated or deemed to be incorporated by reference in the
Registration Statement or the Prospectus pursuant to Item 12 of Form S-3 under
the Act complied or will comply, as the case may be, when so filed in all
material respects with the requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain 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 not misleading, (iii) the
Registration Statement, the Prospectus comply and, as amended or supplemented,
if applicable, will comply in all material respects with the Act and the
applicable rules and regulations of the Commission thereunder and (iv) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.
(d) The Preliminary Prospectus and the Prospectus, if filed
by electronic transmission pursuant to ▇▇▇▇▇, was identical to the copy
thereof delivered to the Underwriters for use in connection with the offer and
sale of the Shares, except to the extent permitted by Regulation S-T.
(e) The authorized, issued and outstanding shares of
capital stock of the Company are as set forth in the section captioned
"Capitalization" in the column entitled "Actual" in the Prospectus (except for
subsequent issuances thereof pursuant to reservations, agreements or employee
benefit plans or pursuant to the exercise of convertible securities or
options). Such shares of capital stock have been duly authorized and validly
issued by the Company and are fully paid and nonassessable, and none of such
shares of capital stock was issued in violation of preemptive or other similar
rights of any securityholder of the Company. The Shares to be issued and sold
to the Underwriters by the Company hereunder have been duly authorized by the
Company and, when issued and delivered to the Underwriters against full
payment therefor in accordance with the terms hereof will be validly issued,
fully paid and nonassessable and free of any preemptive or similar rights; the
capital stock of the Company conforms to the description thereof in the
Prospectus (or any amendment or supplement thereto). The form of certificate
used to evidence the Shares is in due and proper form and complies with the
applicable statutory requirements, with any applicable requirements of the
declaration of trust or bylaws of the Company and with the requirements of the
NYSE. The preferred units (the "Units") have been duly authorized and, when
issued and delivered by the Operating Partnership to the Company in exchange
for the Company's contribution to the Operating Partnership of the net
proceeds from the sale of the Shares, will be validly issued, fully paid and
non-assessable limited partnership
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interests in the Operating Partnership, and the issuance of the Units will not
be subject to any preemptive or similar rights.
(f) The Company and each of the entities set forth on
Schedule II attached hereto (the "Subsidiaries" or individually each a
"Subsidiary") is duly organized and validly existing and in good standing
under the laws of the state of its organization and has the power and
authority to own and lease its properties and to conduct its business as
described in the Prospectus and is duly qualified to conduct its business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the condition (financial or other), business,
properties, net worth, results of operations or prospects of the Company and
the Subsidiaries considered as one enterprise (a "Material Adverse Effect").
(g) Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding capital stock,
partnership interests or other ownership interest in each of the Company's
Subsidiaries have been duly authorized and are validly issued, fully paid and
nonassessable and are owned by the Company, directly or through subsidiaries,
free and clear of any security interests, liens, encumbrances, equities or
claims.
(h) There are no legal or governmental proceedings pending
or, to the knowledge of the Company and the Operating Partnership, threatened
to which the Company or the Subsidiaries is a party or to which any of the
properties described in the Registration Statement or the Prospectus (the
"Properties" or individually each a "Property") of the Company or the
Subsidiaries is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described. Except as described in
the Prospectus, there is no action, suit, inquiry, proceeding or investigation
by or before any court or governmental or other regulatory or administrative
agency or commission pending or, to the knowledge of the Company and the
Operating Partnership, threatened, against or involving the Company or the
Subsidiaries or the Properties, which might reasonably be expected to
individually or in the aggregate adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse Effect. There
are no statutes, contracts or documents which are required to be described in
the Registration Statement, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(i) Neither the Company nor any of the Subsidiaries is (i)
in violation of (A) its declaration of trust, certificate or articles of
incorporation, bylaws, or other organizational documents, (B) any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or the Properties, the violation of which
would have a Material Adverse Effect or (C) any decree of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or the Properties; or (ii) in default in any material respect in
the performance of any obligation, agreement or condition contained in (A) any
bond, debenture, note or any other evidence of indebtedness or (B) any
agreement, indenture, lease or other instrument (each of (A) and (B), an
"Existing Instrument") to which the Company or any of the Subsidiaries is a
party or by which any of their properties may be bound, which
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default would have a Material Adverse Effect; and there does not exist any
state of facts that constitutes an event of default on the part of the Company
or any of the Subsidiaries, as defined in such documents or that, with notice
or lapse of time or both, would constitute such an event of default.
(j) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership. The Company has the
power and authority to enter into this Agreement and to issue and deliver the
Shares as provided in this Agreement. The Operating Partnership has the power
and authority to enter into this Agreement and to issue and deliver the Units
to the Company as provided in this Agreement.
(k) None of the issuance and sale of the Shares by the
Company, the issuance of the Units by the Operating Partnership, the
execution, delivery or performance of this Agreement by the Company and the
Operating Partnership, nor the consummation by the Company and the Operating
Partnership of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required for the listing of the
Shares for trading on the NYSE, the registration of the Preferred Stock under
the Exchange Act and compliance with the securities or Blue Sky laws of
various jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement), (ii) conflicts with or will conflict with or
constitutes or will constitute a breach of, or a default under, the Company's
declaration of trust or the Company's bylaws or any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of their properties may be bound, (iii) violates any
statute, law, regulation, ruling, filing, judgment, injunction, order or
decree applicable to the Company or any of the Subsidiaries or any of their
properties, or (iv) results in a breach of, or default under, or results in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to, or
requires the consent of any other party to, any Existing Instrument, except
for such conflicts, breaches, defaults, liens, charges or encumbrances that
will not, individually or in the aggregate, result in a Material Adverse
Effect.
(l) Except as described in the Prospectus, and except for
options to purchase capital stock issued pursuant to the Company's 1998 Share
Option Incentive Plan, as amended and dividend reinvestment plans, neither the
Company nor any of the Subsidiaries has outstanding and at the Closing Date
and the Additional Closing Date, as the case may be, will have outstanding any
options to purchase, or any warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, any shares of capital stock or any such warrants or convertible
securities or obligations. No holder of securities of the Company has rights
to the registration of any securities of the Company as a result of or in
connection with the filing of the Registration Statement or the consummation
of the transactions contemplated hereby that have not been satisfied or
heretofore waived in writing.
(m) KPMG LLP, the certified public accountants who have
certified the financial statements (including the related notes thereto and
supporting schedules) filed as part of the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are
-10-
independent public accountants as required by the Act and the Exchange Act.
(n) The financial statements, together with related
schedules and notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the financial
condition, results of operations, cash flows and changes in financial position
of the Company on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein. The Summary Financial Table
included in the Prospectus presents fairly the information shown therein and
has been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus; and the
other financial and statistical information and data set forth in the
Registration Statement and Prospectus (and any amendment or supplement
thereto) is accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company. No other
financial statements or schedules are required to be included in the
Registration Statement. The Company's ratios of earnings to fixed charges set
forth in the Prospectus has been calculated in compliance with Item 503(d) of
Regulation S-K under the Act. The audited financial statements for the Company
and the Operating Partnership for the year ended December 31, 2001 are not
available. The Company meets the conditions prescribed under paragraph (c) of
Regulation 210.3-01 of Regulation S-X of the Commission.
(o) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no Material Adverse Change with respect to
the Company and its Subsidiaries considered as one enterprise, (B) there have
been no transactions entered into other than those arising in the ordinary
course of business, or direct or contingent liabilities or obligations
incurred, by the Company or any of the Subsidiaries, which are material with
respect to the Company and the Subsidiaries considered as one enterprise and
(C) except for regular dividends on the Company's common stock, in amounts per
share that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(p) The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the Shares
other than the Preliminary Prospectus, the Prospectus or other offering
material, if any, as permitted by the Act.
(q) The Company and each of the Subsidiaries have filed all
tax returns required to be filed (other than certain state or local tax
returns, as to which the failure to file, individually or in the aggregate,
would not have a Material Adverse Effect), which returns are complete and
correct, and neither the Company nor any Subsidiary is in default in the
payment of any taxes that were payable pursuant to said returns or any
assessments with respect thereto. Except as disclosed in the Prospectus, all
deficiencies asserted as a result of any federal, state, local or foreign tax
audits have been paid or finally settled and no issue has been raised in any
such audit that, by application of the same or similar principles, reasonably
could be expected to
-11-
result in a proposed deficiency for any other period not so audited. There are
no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return for
any period. On the Closing Date and the Additional Closing Date, as the case
may be, all stock transfer and other taxes that are required to be paid in
connection with the sale of the Shares to be sold by the Company to the
Underwriters will have been fully paid by the Company and all laws imposing
such taxes will have been complied with.
(r) Neither the Company nor the Operating Partnership is
and, after giving effect to the offering and sale of the Shares, the issuance
and sale of the Units, and the application of the proceeds thereof as
described in the Prospectus, will be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(s) Each of the Company and the Subsidiaries has good and
marketable title to all property described in the Prospectus as being owned by
it, free and clear of all liens, claims, security interests or other
encumbrances except (i) such as are described in the Registration Statement
and the Prospectus or (ii) those which do not, singly or in the aggregate,
materially affect the value of such property and do not have or will not
result in a Material Adverse Effect on the use made and proposed to be made of
such property by the Company or its Subsidiaries. All property (real and
personal) held under lease by the Company and the Subsidiaries is held by it
under valid, subsisting and enforceable leases with only such exceptions as in
the aggregate are not materially burdensome and do not have or result in a
Material Adverse Effect. To the best knowledge of the Company, none of the
tenants of the Properties, which are not Subsidiaries, is in default under any
of the ground leases or other occupancy or license agreements relating to any
of the Properties, which default would have a Material Adverse Effect and
there does not exist any state of facts that constitutes an event of default
on the part of any such tenant or that, with notice or lapse of time or both
would constitute such an event of default. Each of the properties of the
Company and the Subsidiaries comply in all material respects with all laws and
regulations. Without limiting the generality of the foregoing, the use and
occupancy of each of the properties of the Company and the Subsidiaries
complies in all material respects with all laws and regulations, including,
without limitation, applicable codes and zoning laws and regulations. The
Company and the Subsidiaries have no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect the
size of, use of, improvement of, construction on, or access to any of the
properties of the Company and the Subsidiaries. The Company and the
Subsidiaries have no knowledge of any pending or threatened proceeding or
action that will in any manner materially affect the size of, use of,
improvements or construction on, or access to any of the properties of the
Company or the Subsidiaries.
(t) Each of the Company and the Subsidiaries possesses such
permits, licenses, franchises, approvals, consents and authorizations of
governmental or regulatory authorities (hereinafter "permit" or "permits") as
are necessary to own its properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus, except where the failure to have obtained any such
permit has not had and will not have a Material Adverse Effect; each of the
Company and the Subsidiaries has operated and is operating its business in
material compliance with all of its obligations with respect to each such
permit and no event has occurred that allows, or after notice or lapse of time
-12-
would allow, revocation or termination of any such permit or result in any
other material impairment of the rights of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus, except where
such revocation or termination would not have a Material Adverse Effect; and,
except as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to the Company or any of the Subsidiaries or
the Properties.
(u) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances 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 and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management's general or
specific authorizations and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(v) Each of the Company and the Subsidiaries owns and has
full right, title and interest in and to, or has valid licenses to use, each
material trade name, trademark, service ▇▇▇▇, patent, copyright, and other
similar rights, including without limitation, hotel brand and franchise
licenses, currently employed by the Company and the Subsidiaries in connection
with their business as described in the Prospectus, and none of the Company or
its Subsidiaries has received any notice or has become aware of any
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as described in or contemplated by the Prospectus.
(w) The Company and each of the Subsidiaries and Properties
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged; and neither the Company nor any of the
Subsidiaries has reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a comparable cost.
(x) Except as otherwise stated in the Registration
Statement and the Prospectus and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of the Subsidiaries or their properties is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative interpretation
thereof including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) neither
-13-
the Company nor any of the Subsidiaries or their properties fails to possess
any permit, authorization or approval required under any applicable
Environmental Laws or to be in compliance with their requirements, (C) there
are no pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating to any Environmental Law
against the Company or any of the Subsidiaries or their properties, (D) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of the Subsidiaries or their properties relating to Hazardous
Materials or any Environmental Laws, and (E) the Company and the Subsidiaries
and their properties are not subject to any costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties or in connection with off-site disposal of hazardous waste).
(y) The assets of the Company and the Subsidiaries do not
constitute "plan assets" under the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published interpretations
thereof.
(z) Title insurance in favor of the Company and the
Subsidiaries is maintained with respect to each of the Properties in an amount
at least equal to the cost of acquisition of such Property.
(aa) The Company has operated since its initial public
offering and intends to continue to operate in such a manner as to qualify to
be taxed as a "real estate investment trust" under the Internal Revenue Code
of 1986, as amended (the "Code"). The Company has no intention of changing its
operations or engaging in activities which would cause it to fail to qualify,
or make economically undesirable its continued qualification, as a real estate
investment trust.
(bb) During the period of at least the last 12 calendar
months prior to the date of this Agreement, the Company has timely filed with
the Commission all documents and other material required to be filed pursuant
to Sections 13, 14 and 15(d) under the Exchange Act. During the period of at
least the last 36 calendar months preceding the date hereof, the Company has
filed all reports required to be filed pursuant to Sections 13, 14 and 15(d)
under the Exchange Act. As of the date hereof, the aggregate market value of
the Company's voting shares of beneficial interest held by non-affiliates of
the Company was equal to or greater than $150 million.
(cc) The Shares will be treated as equity securities for U.S.
federal income tax purposes.
(dd) All leases of the Properties which the Operating
Partnership owns, or in which the Operating Partnership has an interest, as a
lessor are treated as true leases for federal income tax purposes.
-14-
(ee) The Company is the sole general partner of the
Operating Partnership and owns, directly, all of the outstanding general
partnership interests in the Operating Partnership; 97.6% of the total
outstanding partnership interests in the Operating Partnership are owned
directly by the Company.
(ff) There is no strike or work stoppage existing or, to
the knowledge of the Company and the Operating Partnership, threatened against
the Company, the Subsidiaries or any of their properties. The Company does not
have any knowledge as to any intentions of any key employees or any group of
employees to leave the employ of the Company or the Subsidiaries where such
departure would have a Material Adverse Effect.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
agrees to pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
preparation, printing and filing of the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof and of
any Preliminary Prospectus to the Underwriters and dealers; (ii) the printing
and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, the Prospectus,
each Preliminary Prospectus, the Blue Sky memoranda, this Agreement and all
amendments or supplements to any of them as may be reasonably requested for
use in connection with the offering and sale of the Shares; (iii) consistent
with the provisions of Section 5.1(f), all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws
or Blue Sky laws, including reasonable attorneys' fees and out-of-pocket
expenses of the counsel for the Underwriters in connection therewith; (iv) the
fees and expenses associated with listing the Shares on the NYSE; (v) the cost
of preparing stock certificates; (vi) the costs and charges of any transfer
agent or registrar; (vii) the cost of the tax stamps, if any, in connection
with the issuance and delivery of the Shares to the respective Underwriters;
(viii) all other fees, costs and expenses referred to in Item 14 of the
Registration Statement; and (ix) the transportation, lodging, graphics and
other expenses incidental to the Company's preparation for and participation
in the "roadshow" for the offering contemplated hereby. Except as provided in
this Section 7 and in Section 8 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel. In addition,
in the event that the proposed offering is terminated for the reasons set
forth in Section 5.1(h) hereof, the Company agrees to reimburse the
Underwriters as provided in Section 5.1(h).
8. Indemnification and Contribution. Subject to the limitations in
this paragraph below, the Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses,
including reasonable costs of investigation and attorneys' fees and expenses
(collectively, "Damages") arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required
-15-
to be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were made)
not misleading, except to the extent that any such Damages arise out of or are
based upon an untrue statement or omission or alleged untrue statement or
omission that has been made therein or omitted therefrom in reliance upon and
in conformity with the information furnished in writing to the Company by or
on behalf of any Underwriter through you, expressly for use in connection
therewith. This indemnification shall be in addition to any liability that the
Company may otherwise have.
If any action or claim shall be brought against any Underwriter or
any person controlling any Underwriter in respect of which indemnity may be
sought against the Company, such Underwriter or such controlling person shall
promptly notify in writing the party(s) against whom indemnification is being
sought (the "indemnifying party" or "indemnifying parties"), and such
indemnifying party(s), upon request of such Underwriter or such controlling
person, shall retain counsel reasonably acceptable to such Underwriter or such
controlling person and shall pay all reasonable fees of and expenses incurred
by such counsel. Such Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person, unless (i) the
indemnifying party(s) has (have) agreed in writing to pay such fees and
expenses, (ii) the indemnifying party(s) has (have) failed to retain counsel
reasonably acceptable to the Underwriter or such controlling person or (iii)
the named parties to any such action (including any impleaded parties) include
both such Underwriter or such controlling person and the indemnifying
party(s), and such Underwriter or such controlling person shall have been
advised by its counsel that one or more legal defenses may be available to the
Underwriter that may not be available to the Company, or that representation
of such indemnified party and any indemnifying party(s) by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests between them (in which case the
indemnifying party(s) shall not be liable for the fees and expenses of more
than one counsel for the Underwriters and such controlling persons). The
indemnifying party(s) shall not be liable for any settlement of any such
action effected without its (their several) written consent, but if settled
with such written consent, or if there be a final judgment for the plaintiff
in any such action, the indemnifying party(s) agree(s) to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment, but in the case of a judgment only to the extent stated in the first
paragraph of this Section 8.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its trustees, officers who sign the Registration
Statement and any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, up to the amount of
the underwriting commissions received by such Underwriter in connection with
the Shares underwritten by it and distributed to the public, but only with
respect to information furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto. If any action or claim shall be brought or asserted against the
Company, any
-16-
of its trustees, any of its officers or any such controlling person based on
the Registration Statement, the Prospectus or any Preliminary Prospectus, or
any amendment or supplement thereto, and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph, such Underwriter
shall have the rights and duties given to the Company by the immediately
preceding paragraph (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company, its trustees, any such officers and any such controlling persons,
shall have the rights and duties given to the Underwriters by the immediately
preceding paragraph.
In any event, any indemnifying party hereunder will not, without the
prior written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any proceeding or threatened claim,
action, suit or proceeding in respect of which the indemnification may be
sought hereunder (whether or not the indemnified party or any person who
controls the indemnified party within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of all indemnified parties and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
If the indemnification provided for in this Section 8 is unavailable
or insufficient for any reason whatsoever to an indemnified party in respect
of any Damages referred to herein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Damages (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand, and the Underwriters on the other hand, from the
offering and sale of the Shares or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative and several fault of the Company on the one
hand, and the Underwriters on the other hand, in connection with the
statements or omissions that resulted in such Damages as well as any other
relevant equitable considerations. The relative and several benefits received
by 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 net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriters shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by the
Company or the Underwriters from the offering of the Shares shall include the
net proceeds (before deducting expenses) received by the Company and the
underwriting discounts and commissions received by the Underwriters, from the
sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth on the cover page of the Prospectus. The relative
fault of the Company on the one hand, and the Underwriters on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand,
-17-
or by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 was determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the Damages referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute
any amount in excess of the amount of the underwriting commissions received by
such Underwriter in connection with the Shares underwritten by it and
distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 8 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 10 hereof) and not joint.
Any Damages for which an indemnified party is entitled to
indemnification or contribution under this Section 8 shall be paid by the
indemnifying party to the indemnified party as Damages are incurred after
receipt of reasonably itemized invoices therefor. The indemnity, contribution
and reimbursement agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company its trustees or officers or any
person controlling the Company (ii) acceptance of any Shares and payment
therefor hereunder and (iii) any termination of this Agreement. A successor to
any Underwriter or any person controlling any Underwriter, or to the Company,
its trustees or officers or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the Commission, and all filings
required by Rule 424(b) under the Act shall have been timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been
-18-
any change in the capital stock of the Company or the Subsidiaries or any
material change in the indebtedness (other than in the ordinary course of
business) of the Company or any of the Subsidiaries, (ii) except as set forth
or contemplated by the Registration Statement or the Prospectus, no material
oral or written agreement or other transaction shall have been entered into by
the Company or any of the Subsidiaries that is not in the ordinary course of
business or that could reasonably be expected to result in a material
reduction in the future earnings of the Company or any of the Subsidiaries,
(iii) no loss or damage (whether or not insured) to the property of the
Company or any of the Subsidiaries shall have been sustained that had or could
reasonably be expected to have a Material Adverse Effect, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any of the
Subsidiaries or the Properties that is material to the Company or that affects
or could reasonably be expected to affect the transactions contemplated by
this Agreement shall have been instituted or threatened and (v) there shall
not have been any material change in the condition (financial or otherwise),
business, management, results of operations or prospects of the Company or the
Subsidiaries or the Properties that makes it impractical or inadvisable in
your judgment to proceed with the public offering or purchase of the Shares as
contemplated hereby.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, LLP
counsel to the Company, substantially to the effect that:
(i) The Company is a real estate investment trust duly
formed and validly existing in good standing under the laws of the State of
Maryland, with full trust power and authority to own and lease its properties
and to conduct its business as described in the Prospectus, and is duly
qualified to conduct its business and is in good standing in each jurisdiction
where the nature of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not result in a
Material Adverse Effect.
(ii) Each of the Designated Subsidiaries, as set forth on
Schedule II, is duly formed, validly existing, and in good standing under the
laws of the jurisdiction of its formation, with full power and authority to own
and lease its properties and to conduct its business as described in the
Prospectus, and is duly qualified as a foreign entity to conduct its business
and is in good standing in each jurisdiction where the nature of its
properties or the conduct of its business requires such qualification, except
where the failure to so register or qualify does not have a Material Adverse
Effect; and except as otherwise described in the Prospectus, all of the issued
and outstanding shares of capital stock, partnership interests and other
ownership interests of each of the Designated Subsidiaries have been duly
authorized and validly issued, and are fully paid and, except for general
partnership interests, nonassessable, and to the best of such counsel's
knowledge are owned by the Company, directly or indirectly, free and clear of
any security interest, lien, adverse claim, equity or other encumbrance.
(iii) The authorized, issued and outstanding shares of capital
stock of the Company is as set forth in the column entitled "Actual" under the
caption "Capitalization" in the final prospectus supplement constituting part
of the Prospectus, and the Shares conform in all
-19-
material respects to the description of the Preferred Stock in the Prospectus.
Except as included or incorporated by reference in the Prospectus, the Company
is not a party to or bound by any outstanding options, warrants or similar
rights to subscribe for, or contractual obligations to issue, sell, transfer or
acquire, any of its capital stock or any securities convertible into or
exchangeable for any of such capital stock.
(iv) All shares of capital stock of the Company outstanding
prior to the issuance of the Shares to be issued and sold by the Company
hereunder, have been duly authorized and validly issued, are fully paid and
nonassessable, and are free of any preemptive or similar rights arising under
Maryland law, the Company's declaration of trust or bylaws, or, to the best of
such counsel's knowledge, otherwise, that entitle or will entitle any person to
acquire any Shares upon the issuance thereof by the Company.
(v) To the best of the knowledge of such counsel, neither the
Company nor any of the Subsidiaries is in violation of its declaration of trust,
certificate or articles of incorporation, bylaws, or other organizational
documents.
(vi) None of the offer, sale or delivery of the Shares by the
Company, the issuance of the Units to the Company by the Operating Partnership,
the execution, delivery or performance by the Company and the Operating
Partnership of this Agreement, compliance by the Company and the Operating
Partnership with all provisions hereof nor consummation by the Company and the
Operating Partnership of the transactions contemplated hereby (A) conflicts or
will conflict with or constitutes or will constitute a breach of, or a default
under, the declaration of trust, certificate or articles of incorporation,
bylaws, or other organizational documents of the Company, the Designated
Subsidiaries (as set forth in Schedule II), or, to the best of such counsel's
knowledge, any other Subsidiary other than the Designated Subsidiaries, or any
material agreement, indenture, lease or other instrument to which the Company,
the Designated Subsidiaries, or, to the best of such counsel's knowledge, any
other Subsidiary other than the Designated Subsidiaries, is a party or by
which any of their properties is bound or (B) creates or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Designated Subsidiaries, or, to the best of such
counsel's knowledge, any other Subsidiary other than the Designated
Subsidiaries, except for such liens, charges or encumbrances that will not,
individually or in the aggregate, result in a Material Adverse Effect, or (C)
violates or will result in any violation of any existing law, statute,
regulation, ruling (assuming compliance with all applicable state securities
and Blue Sky laws), judgment, injunction, order or decree that is known to
such counsel and is applicable to the Company, the Designated Subsidiaries,
or, to the best of such counsel's knowledge, any other Subsidiary other than
the Designated Subsidiaries, or their respective properties.
(vii) Except as described in the Registration Statement or
Prospectus, there is no action, suit, inquiry, proceeding, or investigation by
or before any court or governmental or other regulatory or administrative
agency or commission pending or, to the knowledge of such counsel, threatened,
against or involving the Company or the Subsidiaries, or the properties of
either the Company or any of the Subsidiaries: (A) which might reasonably be
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expected to, individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a Material Adverse
Effect; or (B) that are required to be described in the Registration Statement
or the Prospectus that are not described as required therein.
(viii) Such counsel does not know of any agreements, contracts,
indentures, leases or other documents or instruments required to be so
summarized or disclosed or filed that have not been so summarized or disclosed
or filed.
(ix) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official is required on the part of the
Company (except such as have been obtained under the Act or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of the Shares to
the Underwriters under this Agreement.
(x) The Company satisfies all of the requirements of the Act for
use of Form S-3 for the offering of Shares contemplated by this Agreement.
(xi) The form of certificate used to evidence the Shares is in
due and proper form and complies with any applicable requirements of the
declaration of trust and bylaws of the Company and with the applicable
statutory requirements.
(xii) The Company has the trust power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to be sold by it
to the Underwriters as provided herein. The Agreement has been duly
authorized, executed and delivered by the Company.
(xiii) The Operating Partnership has the partnership power and
authority to enter into this Agreement and to issue and deliver the Units to
be delivered to the Company as provided herein. This Agreement has been duly
authorized, executed and delivered by the Operating Partnership. The Company
is the sole general partner of the Operating Partnership and owns, directly,
all of the outstanding general partnership interests in the Operating
Partnership.
(xiv) The Shares to be issued and sold to the Underwriters by
the Company hereunder have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms
hereof, such Shares will be validly issued, fully paid and nonassessable, and
free of any preemptive or similar rights arising under Maryland law, the
Company's declaration of trust or bylaws, or, to the best of such counsel's
knowledge, otherwise, that entitle or will entitle any person to acquire any
Shares upon the issuance thereof by the Company.
(xv) The Units to be issued to the Company by the Operating
Partnership upon the contribution of the net proceeds from the sale of the
Shares to the Operating
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Partnership by the Company have been duly authorized and, when issued and
delivered to the Company, such Units will be validly issued, fully paid and
nonassessable and the issuance of the Units will not be subject to any
preemptive or similar rights that would entitle any person to acquire any
Units upon the issuance thereof by the Operating Partnership.
(xvi) The Registration Statement has been declared effective by
the Commission under the Act. To the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued under the Act and no proceedings for such purpose have been instituted
or are pending or are threatened by the Commission. Any required filing of the
Prospectus pursuant to Rule 424(b) under the Act has been made in the manner
and within the time period required by such Rule 424(b).
(xvii) The Registration Statement, the Prospectus, including any
document incorporated or deemed incorporated by reference therein pursuant to
Item 12 of Form S-3, and each amendment or supplement to the Registration
Statement and the Prospectus including any document incorporated or deemed
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules and other
financial and statistical data included or incorporated by reference therein
or in exhibits to or excluded from the Registration Statement, as to which no
opinion need be given) comply as to form in all material respects with the
requirements of the Act.
(xviii) Neither the Company nor the Operating Partnership is an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(xix) The statements (i) in the final prospectus supplement
constituting part of the Prospectus under the captions "Description of the
Series A Preferred Shares" and "Federal Income Tax Consequences", and (ii) in
the final prospectus constituting part of the Prospectus under the captions
"Risk Factors - The Ability of our Shareholders to Effect a Change of Control
is Limited," "Description of Common Shares," "Description of Preferred
Shares," and "Restrictions on Ownership of Capital Shares", insofar as such
statements constitute matters of law, summaries of legal matters, the
Company's declaration of trust or bylaw provisions, documents or legal
proceedings, or legal conclusions, have been reviewed by such counsel and
fairly present and summarize, in all material respects, the matters referred
to therein.
(xx) Commencing with the Company's taxable year ending December
31, 1998, the Company has been organized in conformity with the requirements
for qualification and taxation as a real estate investment trust ("REIT")
under the Code, and its organization and proposed method of operation will
enable it to continue to meet the requirements for qualification and taxation
as a REIT under the Code.
(xxi) The Operating Partnership will be treated as a partnership
for federal income tax purposes and not as a corporation.
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(xxii) The discussion in the Prospectus under the caption
"Federal Income Tax Considerations" in the prospectus supplement fairly
summarizes the federal income tax considerations that are likely to be
material to a holder of Preferred Stock.
(xxiii) The Company's articles supplementary for the Preferred
Stock have been filed and are effective in accordance with Maryland law.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of
the Company and of government officials, provided that counsel shall state
their belief that they and you are justified in relying thereon. Copies of all
such certificates shall be furnished to you and your counsel on the Closing
Date and the Additional Closing Date, as the case may be.
In addition to the opinion set forth above, counsel will also state
the such counsel has participated in conferences with officers and other
representatives of the company, representatives of the independent public
accountants for the Company, and representatives of the Underwriters, at which
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel may state that such counsel
is not passing upon, and does not assume any responsibility for the accuracy,
completeness or fairness of, the statements contained or incorporated by
reference in the Registration Statement and the Prospectus and such counsel
has not made any independent check or verification thereof (except as set
forth in Section 9(c)(viii), Section 9(c)(xix) and Section 9(c)(xxii)), during
the course of such participation, no facts came to such counsel's attention
that have caused such counsel to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus, as of
its date or as of the date of such opinion, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that such
counsel may state that they express no belief with respect to the financial
statements, schedules and other financial and statistical data included or
incorporated by reference in or omitted from the Registration Statement or the
Prospectus.
(d) You shall have received on the Closing Date or
Additional Closing Date, as the case may be, an opinion of McGuireWoods LLP,
as counsel for the Underwriters, dated the Closing Date or Additional Closing
Date, as the case may be, with respect to such matters as you may reasonably
request, and the Company and its counsel shall have furnished to your counsel
such documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(e) You shall have received letters addressed to you and
dated the date hereof and the Closing Date or the Additional Closing Date, as
the case may be, from the firm of KPMG LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
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(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall be pending or, to the knowledge of the
Company, shall be threatened or contemplated by the Commission at or prior to
the Closing Date or Additional Closing Date, as the case may be; (ii) no order
suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending or, to the knowledge of the Company, threatened or
contemplated by the authorities of any jurisdiction; (iii) any request for
additional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities; (iv) after the date hereof, no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to you and you did not object
thereto in good faith; and (v) all of the representations and warranties of
the Company contained in this Agreement shall be true and correct in all
material respects (except for such representations and warranties qualified by
materiality, which representations and warranties shall be true and correct in
all respects) on and as of the date hereof and on and as of the Closing Date
or Additional Closing Date, as the case may be, as if made on and as of the
Closing Date or Additional Closing Date, as the case may be, and you shall
have received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company and the
Operating Partnership (or such other officers as are acceptable to you) to the
effect set forth in this Section 9(f) and in Sections 9(b) and 9(h) hereof.
(g) The Company shall not have failed in any material
respect at or prior to the Closing Date or the Additional Closing Date, as the
case may be, to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date or Additional Closing Date, as the case may be.
(h) The Company and the Operating Partnership shall have
furnished or caused to have been furnished to you such further certificates
and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if
the Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been
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satisfied when and as required by this Agreement, this Agreement may be
terminated by you by notifying the Company of such termination in writing or
by telegram at or prior to such Closing Date, but you shall be entitled to
waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto;
provided, however, that the provisions of Sections 7 and 8 shall at all times
be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Shares that it or they have agreed to
purchase hereunder, and the aggregate number of Firm Shares that such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of the Firm
Shares, each non-defaulting Underwriter shall be obligated, severally, in the
proportion in which the number of Firm Shares set forth opposite its name in
Schedule I hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in the Agreement Among Underwriters, to purchase
the Firm Shares that such defaulting Underwriter or Underwriters agreed, but
failed or refused to purchase. If any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares and arrangements satisfactory to you and the Company for
the purchase of such Firm Shares are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case that does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
(7) days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and
then only as to the Additional Shares), as the case may be, in your sole
judgment, (i) trading in the Company's common stock or preferred stock shall
have been suspended by the Commission or the NYSE, (ii) trading in securities
generally on the NYSE or NASDAQ shall have been suspended or materially
limited, or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force
on the date of this Agreement, shall have been imposed upon trading in
securities generally by any such exchange or by order of the Commission or any
court or other governmental authority, (iii) a material disruption in
commercial banking activities shall have occurred in the United States, or
(iv) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions or other material event the effect of which
is such as to make it, in your judgment, impracticable or inadvisable to
market the Shares or to enforce contracts for the sale of
-25-
the Shares. Notice of such cancellation shall be promptly given to the Company
and its counsel by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter.
13. Information Furnished by the Underwriters. The Company
acknowledges that the following information under the caption "Underwriting"
in the prospectus supplement constituting part of the Prospectus constitutes
the only information furnished by or on behalf of the Underwriters through you
expressly for use in the Registration Statement, the Preliminary Prospectus,
or the Prospectus, as such information is referred to in Sections 6.1(a),
6.1(c) and 8 hereof: (i) the first sentence of the seventh paragraph; (ii) the
information in the sixth paragraph, in so far as it relates to market making
transactions; (iii) the information in the eighth paragraph, in so far as it
relates to stabilization and related matters; and (iv) the information in the
ninth paragraph, in so far as it relates to penalty bids.
14. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered
(i) to the Company or the Operating Partnership
LaSalle Hotel Properties
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
with a copy to
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(ii) to the Underwriters
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to
McGuireWoods LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
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Washington, D.C. 20036
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and its trustees and officers.
15. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect to any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
-27-
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Operating Partnership and the several Underwriters.
Very truly yours,
LaSalle Hotel Properties
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President, Chief Financial
Officer and Treasurer
LaSalle Hotel Operating Partnership L.P.
By: LaSalle Hotel Properties, its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President, Chief Financial
Officer and Treasurer
CONFIRMED as of the date first above
mentioned, on behalf of the
Representatives and the other several
Underwriters named in Schedule I hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, III
----------------------------------------
Authorized Representatives
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SCHEDULE I
Number
Name Firm Shares
--------------------------------------- -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ and Associates, Inc. 1,044,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated 1,044,000
Prudential Securities Incorporated 1,044,000
▇▇ ▇▇▇▇▇ Securities Corporation 348,000
Total: 3,480,000
===========
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Schedule II
1. LaSalle Hotel Operating Partnership L.P. *
2. LaSalle Hotel Lessee, Inc. *
3. LHO Financing Partnership I, LP *
4. LHO Financing, Inc. *
5. LHO Carlyle 540, L.L.C. *
6. Chicago 540 Hotel, L.L.C. *
7. Chicago 540 Lessee, Inc.
8. LHO Harborside Hotel, L.L.C. *
9. LHO Mission Bay Hotel, L.P. *
10. LHO Viking Hotel, L.L.C.
11. LHO Hollywood LM, L.P. *
12. LHO Hollywood Financing, Inc. *
13. LHO Key West HI, L.P. *
14. LHO Key West Financing, Inc. *
15. LHO New Orleans LM, L.P. *
16. LHO New Orleans Financing, Inc. *
17. LHO Washington Hotel One, L.L.C. *
18. LHO Washington Hotel Two, L.L.C. *
19. LHO Washington Hotel Three, L.L.C. *
20. LHO Washington Hotel Four, L.L.C. *
21. I&G Capitol, L.L.C. *
22. LaSalle Washington One Lessee, Inc. *
23. LaSalle Washington Two Lessee, Inc. *
24. LaSalle Washington Three Lessee, Inc. *
25. LaSalle Washington Four Lessee, Inc. *
26. LHO Washington Five Lessee, LLC
27. 540 Leaseco, L.L.C.
28. LHO Bloomington One Lessee LLC *
29. LHO Key West One Lessee, LLC *
30. LHO Dallas One Lessee, LLC
31. LHO Dallas Beverages, Inc.
32. LHO New Orleans One Lessee, LLC
* A Designated Subsidiary
(All entities listed are Subsidiaries, as that term is used in the Agreement.
All entities marked with an * are Designated Subsidiaries.)
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