EXHIBIT 1.1
1,095,890 SHARES
AMERICAN GENERAL HOSPITALITY CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
February 18, 1998
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
American General Hospitality Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell an aggregate of 1,095,890 shares (the
"Shares") of its common stock, $0.01 par value per share (the "Common Stock"),
to ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. (the "Underwriter"). The offering of the Shares
pursuant to this Agreement is referred to herein as the "Offering."
Upon consummation of the transactions contemplated hereby and application
of the net proceeds from the sale of the Shares, the Company, through its
wholly-owned subsidiaries, AGH GP, Inc. ("AGH GP") and AGH LP, Inc. ("AGH LP")
will own an approximately 1.0% general partnership interest and an approximately
85% limited partnership interest in American General Hospitality Operating
Partnership, L.P., a Delaware limited partnership (together with its subsidiary
partnerships and limited liability companies, the "Operating Partnership"). The
Operating Partnership currently owns 53 hotels listed on Schedule I hereto which
represent, as of the date hereof, all of the hotel real property in which the
Company, either through the Operating Partnership or the Subsidiaries (as
defined herein), owns an interest (the "Hotels"). Thirteen of the Hotels (the
"Initial Hotels") were acquired in connection with the Company's initial public
offering of Common Stock in July 1996 (the "IPO"), and the remaining 40 Hotels
(the "Acquired Hotels") were acquired subsequent to, and not in connection with,
the IPO. The Operating Partnership leases 44 of the Hotels to AGH Leasing,
L.P., one Subsidiary leases the Radisson Twin Towers Orlando hotel to Twin
Towers Leasing, L.P. (AGH Leasing, L.P. and Twin Towers Leasing, L.P., being
referred to herein collectively as the "Lessee"), and the remaining Hotels are
leased to affiliates of Prime Hospitality Corp. (the "Prime Lessee"), each
pursuant to separate participating leases (the "Leases"). The Lessee and the
Prime Lessee are collectively referred to herein as the "Lessees." Forty-four of
the Hotels are operated by American General Hospitality, Inc. ("▇▇▇▇"), pursuant
to separate management agreements between ▇▇▇▇ and the Lessee (the "Management
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Agreements"). The Wyndham Garden-Marietta hotel is operated by Wyndham Hotel
Corporation ("Wyndham") pursuant to a management agreement (the "Wyndham
Management Agreement") between the Lessee and Wyndham. The eight Hotels leased
to the Prime Lessee are leased and operated by the Prime Lessee pursuant to
separate participating lease agreements (the "Prime Lease Agreement") between
the Operating Partnership, Mt. Arlington New Jersey, LLC or Portland/▇▇▇▇▇▇▇ LLC
(as applicable) and the Prime Lessee. The Operating Partnership and/or the
Subsidiaries (as defined herein) has entered into agreements (the "Acquisition
Agreements") as described in the Company's Current Report on Form 8-K dated
January 8, 1998, to acquire 12 additional hotels (one of such hotels is in
connection with the FSA Portfolio Acquisition (as defined in the Prospectus
Supplement)).
The Company and the Operating Partnership wish to confirm as follows their
agreements with the Underwriter in connection with the purchase of the Shares by
the Underwriter.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act, Commission No. 333-
33007 (the "Initial Registration Statement"), including a prospectus relating to
the Shares, and such amendments to the Initial Registration Statement as may
have been required prior to the date hereof have been filed with the Commission,
and such amendments have been similarly prepared. The Initial Registration
Statement and any post-effective amendments thereto have become effective under
the Act. The Company also has filed, or proposes to file, with the Commission
pursuant to Rule 424(b) under the Act, a prospectus supplement relating to the
offering of the Shares pursuant to Rule 415 of the Act.
The term "Registration Statement" as used in this Agreement means the
Initial Registration Statement (including all financial schedules and exhibits),
as amended at the time it became effective and as may be supplemented or amended
prior to the execution of this Agreement together with any Incorporated Document
(as defined below). If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the Initial Registration Statement
will be filed and must be declared effective before the offering of the Shares
may commence, the term "Registration Statement" as used in this Agreement means
the Initial Registration Statement as amended by said post-effective amendment.
The term "Prospectus" as used in this Agreement means the prospectus
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in the form included in the Registration Statement at the time it was declared
effective (the "Base Prospectus") together with the prospectus supplement
relating to the offering of the Shares under Rule 415 of the Act dated the date
hereof in the form first filed with the Commission on or after the date hereof
(the "Prospectus Supplement"). The term "Prepricing Prospectus Supplement" as
used in this Agreement means the Base Prospectus together with any prospectus
supplement subject to completion included in the Initial Registration Statement
as filed with the Commission pursuant to Rule 424(b) under the Act; and as such
prospectus shall have been amended from time to time prior to the date of the
Prospectus. Any reference in this Agreement to the Initial Registration
Statement, the Registration Statement, the Base Prospectus, any Prepricing
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Initial Registration Statement, the
Registration Statement, such Prepricing Prospectus Supplement or the Prospectus,
as the case may be, and any reference to any amendment or supplement to the
Initial Registration Statement, the Registration Statement, any Prepricing
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the Initial Registration Statement, the
Registration Statement, any Prepricing Prospectus Supplement, the Prospectus, or
any amendment or supplement thereto. Capitalized terms used but not otherwise
defined herein have the meanings given to them in the Prospectus.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to the
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company, AGH GP, AGH LP and the Operating Partnership herein
contained and subject to all the terms and conditions set forth herein, the
Underwriter agrees to purchase from the Company, at a purchase price of $26.01
per Share (the "purchase price per share"), the Shares.
3. Terms of Public Offering. The Company has been advised by you that
you propose to make an offering of the Shares as soon after this Agreement has
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
The Company understands that the Underwriter intends to sell the Shares to
the sponsor of a newly-formed unit investment trust
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(the "Trust") registered under the Investment Company Act of 1940, as amended,
in exchange for units in the Trust. The Underwriter is acting as sponsor and
depositor of the Trust and is therefore considered an affiliate of the Trust.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriter of and payment for the Shares shall be made at the office of ▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m., St.
Louis time, on February 23, 1998 (the "Closing Date"). The place of closing for
the Shares and the Closing Date may be varied by agreement between you and the
Company.
Certificates for the 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.,
New York City time, on the second business day preceding the Closing Date. Such
certificates shall be made available to you in New York City for inspection and
packaging not later than 9:30 a.m., New York City time, on the business day next
preceding the Closing Date. The certificates evidencing the Shares to be
purchased hereunder shall be delivered to you on the Closing Date against
payment of the purchase price therefor by wire transfer of immediately available
funds to the Company.
5. Agreements of the Company and the Operating Partnership. The Company
and the Operating Partnership jointly and severally agree with the Underwriter
as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Initial Registration Statement, any
Prepricing Prospectus Supplement or the Prospectus or for additional
information; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Initial Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
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(iii) within the period of time referred to in paragraph (e) below, of any
change in the Company's condition (financial or other), business, prospects,
properties, net worth or results of operations, or of the happening of any
event, which makes any statement of a material fact made in the Registration
Statement or the Prospectus (as then amended or supplemented) untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectus (as then amended or supplemented) in order to state a material
fact required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, (i) as many
copies of the Initial Registration Statement and of each amendment thereto,
including financial statements and all exhibits thereto, as may be reasonably
requested by you, (ii) such number of conformed copies of the Initial
Registration Statement and of each amendment thereto, but without exhibits, as
you may reasonably request, (iii) such number of copies of the Incorporated
Documents, without exhibits, as you may reasonably request, and (iv) two copies
of the exhibits to the Incorporated Documents.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus or, prior to the
end of the period of time referred to in the first sentence in paragraph (e)
below, file any document which, upon filing, becomes an Incorporated Document,
of which you shall not previously have been advised or to which, within one
business day following your receipt of a copy of the document proposed to be
filed, you shall reasonably object after being so advised or (ii) so long as, in
the opinion of counsel for the Underwriter, a prospectus is required to be
delivered in connection with sales by the Underwriter or any dealer, file any
information, documents or reports pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without delivering a copy of such
information, documents or reports to you prior to or concurrently with such
filing.
(e) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriter
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a prospectus is required by the Act to be delivered in connection with sales by
the Underwriter or dealer, the Company will expeditiously deliver to the
Underwriter and each dealer, without charge, as many copies of the Prospectus
(and of any amendment or supplement thereto) as you may request. The Company
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Act and with the securities or
Blue Sky or real estate syndication laws of the jurisdictions in the United
States in which the Shares are offered by the Underwriter and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by the Underwriter or any
dealer. If during such period of time any event shall occur that in the judgment
of the Company or in the opinion of counsel for the Underwriter 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 (or to file under the Exchange Act any
document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto (or to such document), and will
expeditiously furnish to the Underwriter and any dealers a reasonable number of
copies thereof. In the event that the Company and you agree that the Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(f) The Company will cooperate with you and with counsel for the
Underwriter in connection with the registration or qualification of the Shares
for offering and sale by the Underwriter and by dealers under the securities or
Blue Sky or real estate syndication laws of such jurisdictions as you may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
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(g) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(h) During the period of five years hereafter, the Company will
furnish to you (i) concurrently with mailing or filing, a copy of each report of
the Company mailed to stockholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may reasonably
request, which information you will treat confidentially unless the Company has
publicly disclosed such information.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
you terminating this Agreement pursuant to Sections 10 or 11 hereof) or if this
Agreement shall be terminated by the Underwriter because of any failure or
refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse you for all
out-of-pocket expenses (including reasonable fees and expenses of your counsel)
incurred by you in connection herewith.
(j) The Company will apply the net proceeds from the sale of the
Shares in accordance with the description set forth under the caption "Use of
Proceeds" in the Prospectus.
(k) The Company will (i) prepare and timely file with the Commission a
Prospectus Supplement pursuant to Rule 424(b) under the Act containing
information previously omitted at the time of effectiveness of the Registration
Statement and will advise you of the time and manner of such filing, and (ii)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus Supplement and prior to the termination of the
offering of the Shares by the Underwriter.
(l) Except as stated in this Agreement and in the Prospectus, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
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(m) The Company will cause the Shares to be listed, subject to notice
of issuance, on the New York Stock Exchange (the "NYSE") on or before the
Closing Date.
(n) The Company qualifies, and will use its best efforts to meet the
requirements to continue to qualify, as a "real estate investment trust"
under the Internal Revenue Code of 1986, as amended (the "Code").
(o) The Company and the Operating Partnership in good faith will
enforce the terms of any agreements with the Lessees or any parties
affiliated with the Lessees relating to such agreements.
6. Representations and Warranties of the Company, AGH GP, AGH LP and the
Operating Partnership. The Company, AGH GP, AGH LP and the Operating
Partnership, jointly and severally, represent and warrant to the Underwriter
that (with such representations and warranties regarding ▇▇▇▇ herein being
expressly made subject to the knowledge of the Company and the Operating
Partnership):
(a) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 and Rule 415 under the Act. No
stop order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened by the
Commission or the securities authority of any state or other jurisdiction.
The Registration Statement in the form in which it became effective and
also in such form as it may be when any post-effective amendment thereto
shall become effective and the Prospectus and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the Act,
complied or will comply in all material respects with the provisions of the
Act and did not or will not at any such times contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to the
Underwriter furnished to the Company in writing by or on behalf of the
Underwriter through you expressly for use therein.
(b) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
any further
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Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment
was filed), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Underwriter against
payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights; and the capital stock of the Company conforms to the description
thereof in the Registration Statement and the Prospectus. Except as
disclosed in the Prospectus, and in a separate writing delivered by the
Company, there are no outstanding options, warrants or other rights calling
for the issuance of, or any commitment, plan or arrangement to issue, any
capital stock of the Company or any security convertible into or
exchangeable for capital stock of the Company, other than the issuance of
OP Units in connection with the acquisition of properties in the usual
course of business. As of the Closing Date, the Company will have reserved
a sufficient number of shares of Common Stock for issuance upon (i) the
exchange of OP Units held by certain continuing investors that acquired OP
Units in connection with the acquisition of real property by the Company,
and (ii) the exercise of options for shares of Common Stock to be issued
under the Company's stock option plans.
(d) Each of the Company, the Operating Partnership, the Subsidiaries
(as defined herein), the Lessee, and ▇▇▇▇ (each such entity, a "Relevant
Party") is a corporation, limited partnership, general partnership or
limited liability company duly organized or formed, as the case may be,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or formation. Each such entity has or will have full
corporate, partnership or limited liability company power and authority to
own, lease and operate its properties, to conduct its business and to enter
into this Agreement and each
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Operative Document (as defined herein) to which it is a party. Each such
entity is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification.
(e) (i) All of the outstanding OP Units of the Operating Partnership,
and shares of capital stock, partnership interests or membership interests
in each of the other Relevant Parties have been validly issued or created
under the agreements forming the Relevant Parties and are owned or held by
the persons in the percentage amounts set forth and in the manner described
in the Prospectus to the extent described therein, and (ii) the Amended and
Restated Agreement of Limited Partnership of the Operating Partnership, and
the organizational or formation documents of the other Relevant Parties are
in full force and effect. None of the Subsidiaries (other than the
Operating Partnership) has issued any ownership interests to any party
other than a Relevant Party. AGH GP is the sole general partner of the
Operating Partnership and owns a 1% general partnership interest in the
Operating Partnership. Upon completion of the Offering, AGH LP will own an
approximate 85% limited partnership interest in the Operating Partnership.
AGH GP, Inc. is the sole general partner of AGH Leasing, L.P. Except as
described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), there are no outstanding options,
warrants or other rights calling for the issuance of, or any commitment,
plan or arrangement to issue, any equity interests in the Operating
Partnership, or any membership or equity interests in any other Relevant
Party or any security convertible into, or exchangeable or exercisable for,
any such interests in the Operating Partnership or any other Relevant
Party.
(f) The Company has no subsidiaries other than the entities listed on
Schedule 6(f) hereto (collectively, the "Subsidiaries" and individually, a
"Subsidiary"). Other than its interests in the Subsidiaries, the Company
does not own, directly or indirectly, securities of any corporation,
partnership, joint venture, limited liability company, association or other
business association.
(g) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Relevant
Parties or any of their respective partners, directors or officers in their
capacity as such, or to which any of the Hotels is subject, that are
required to be described in the Registration Statement or the Prospectus
but are not described as required, and there are no agreements,
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contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement or any Incorporated Document that
are not described or filed as required by the Act.
(h) No Relevant Party is in violation of its certificate or articles
of incorporation or by-laws, partnership agreement, or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to such entities or of any decree of any court or
governmental agency or body having jurisdiction over such entities, or in
default in any material respect in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which any such entity is a party or by which any of
them or any of their respective properties may be bound.
(i) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement and the Operative Documents, nor
the consummation of the transactions contemplated hereby or thereby by the
Company, the Subsidiaries, the Lessee or ▇▇▇▇, as applicable, (i) requires
any consent, approval, authorization or other order of or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for
the registration of the Shares under the Act and compliance with the
securities or Blue Sky laws of various jurisdictions, all of which have
been or will be effected in accordance with this Agreement) or conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation or bylaws,
partnership agreement or other organizational documents, of any of such
entities or (ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which any of such entities is a
party or by which any of them or any of their respective properties may be
bound, or violates or will violate any statute, law, regulation or filing
or judgment, injunction, order or decree applicable to any of such entities
or any of their respective properties, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of any of such entities pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be
bound or to which any of the property or assets of any of them is subject.
(j) The offers and sales of OP Units prior to the date
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hereof were exempt from the registration requirements of the Act and
applicable state securities and Blue Sky laws. All offers and sales by the
Company of Common Stock prior to the date hereof were either duly
registered or exempt from the registration requirements of the Act and
applicable state securities and Blue Sky laws.
(k) The accountants, Coopers & ▇▇▇▇▇▇▇ L.L.P., who have audited the
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), are independent public accountants as required by the Act.
(l) The financial statements, together with related schedules and
notes included or incorporated by reference in the Registration Statement
or the Prospectus (and any amendment or supplement thereto), present
fairly, in all material respects, the financial position, results of
operations and changes in financial position of the entities to which they
relate at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; the
other financial and statistical information and data included or
incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the relevant entities; the pro forma financial statements of
the Company and the Lessee included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects
with the applicable requirements of Rule 11-02 of Regulation S-X of the
Commission, and the pro forma adjustments have been made based upon
management's reasonable good faith estimates of the pro forma adjustments
and have been properly applied to the audited historical amounts in the
compilation of such statements; no other financial statements, data or
schedules are required by Form S-3, Regulation S-K, Regulation S-X or
otherwise to be included or incorporated by reference in the Registration
Statement.
(m) The execution and delivery of, and the performance by the Company,
AGH GP, AGH LP and the Operating Partnership of their respective
obligations under, this Agreement have been duly and validly authorized by
each of the Company, AGH GP, AGH LP and the Operating Partnership, and this
Agreement has been duly executed and delivered by the Company, AGH GP, AGH
LP and the Operating Partnership, and, assuming due authorization,
execution and delivery by or on behalf of
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the Underwriter, constitutes the valid and legally binding agreement of
each of the Company, AGH GP, AGH LP and the Operating Partnership,
enforceable against the Company, AGH GP, AGH LP and the Operating
Partnership in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, moratorium and
other laws affecting the enforceability of creditors' rights and general
principles of equity.
(n) Each of the documents listed on Schedule 6(n) hereto
(collectively, the "Operative Documents") has been duly authorized and
executed by the Company, the Operating Partnership or any Subsidiary, as
the case may be, and each Operative Document, assuming the due
authorization, execution and delivery by the other party or parties
thereto, constitutes a valid and binding agreement of each such party
thereto enforceable in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium and other laws affecting the enforceability of creditors' rights
and general principles of equity.
(o) Except as disclosed in the Prospectus, subsequent to the
respective dates as of which such information is given or incorporated by
reference in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), neither the Company nor any of the
Subsidiaries, nor to the Company's knowledge, the Lessee or ▇▇▇▇, has
incurred any liability or obligation, direct or contingent, or entered into
any transaction, not in the ordinary course of business, that is material
to the Company and the Subsidiaries taken as a whole, and there has not
been any change in the capital stock, or material increase in the short-
term debt or long-term debt, of the Company or any of the Subsidiaries, or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse change,
in the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(p) The Company or the Operating Partnership (either directly or
through a Subsidiary) has good and marketable title in fee simple to each
of the items of real property and good and marketable title to each of the
items of personal property which are included in the Hotels, and valid and
enforceable leasehold interests in each of the items of real and personal
property which are included in the Hotels, in each case free and clear of
all liens, charges, encumbrances, claims, security interests, defects and
restrictions, other than those described or incorporated by reference in
the
-13-
Registration Statement and the Prospectus and those which do not and will
not have a material adverse effect on the properties, business, financial
condition or results of operations of the Company and the Subsidiaries. All
leases pursuant to which the Operating Partnership leases any items of real
or personal property included in the Hotels are valid, binding and
enforceable leases. To the extent described or incorporated by reference in
the Registration Statement, such leases conform in all material respects to
the description thereof set forth or incorporated by reference in the
Registration Statement and no notice has been given or material claim
asserted by anyone adverse to the rights of Company under any of such
leases or affecting the Operating Partnership's or the present owner's
rights to continued possession of any leased property.
(q) The Operating Partnership has title policies in effect naming the
Operating Partnership as named party with respect to each of the Hotels.
(r) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, any
Prepricing Prospectus Supplement, the Prospectus or other materials, if
any, permitted by the Act.
(s) (i) Each of the Company, the Operating Partnership, the other
Subsidiaries, the Lessee and ▇▇▇▇ have all permits, licenses, franchises
and authorizations of governmental and regulatory authorities ("permits")
as are necessary to own its properties and to conduct its business in the
manner described in the Prospectus, (ii) each of the Company, the Operating
Partnership, the other Subsidiaries, the Lessee and ▇▇▇▇ has fulfilled and
performed all its material obligations with respect to such permits, and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus, and (iii)
except as described in the Prospectus, none of such permits contains any
restriction that is materially burdensome to the Company, the Operating
Partnership, any of the other Subsidiaries, the Lessee or ▇▇▇▇.
(t) The Company, together with its Subsidiaries, maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are
-14-
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(u) None of the Company, any of its Subsidiaries or any employee or
agent of any of them, has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law, rule
or regulation or of a character required to be disclosed in the Prospectus.
(v) The Company, each of the Subsidiaries, the Lessee and ▇▇▇▇ have
filed all tax returns required to be filed, which returns are complete and
correct in all material respects, and neither the Company, any Subsidiary,
the Lessee or ▇▇▇▇ is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto,
other than any taxes being contested in good faith by the applicable
entity.
(w) Except as described in the Prospectus, no person or entity has any
right to require the registration of any shares of Common Stock or any
other securities of the Company because of the filing of the registration
statement or sale of the Shares contemplated by this Agreement. (x) The
Company and its Subsidiaries are organized, have operated and intend to
operate in the manner described in the Registration Statement so that the
Company has met or will meet the requirements for qualification as a real
estate investment trust under Sections 856 through 860 of the Code and the
rules and regulations thereunder as currently in effect, commencing with
the year ended December 31, 1996. The Operating Partnership and each
Subsidiary that is a partnership or a limited liability company will be
treated as a partnership, and not as an association taxable as a
corporation or a publicly traded partnership, for federal income tax
purposes.
(y) The Company, the Subsidiaries and the Lessee are not now and after
the sale of the Shares to be sold hereunder and application of the net
proceeds from such sale as described in the Prospectus Supplement under the
caption "Use of Proceeds," none of them will be, an "investment company,"
or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
-15-
(z) The Company, the Subsidiaries, the Lessee and ▇▇▇▇ are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which they
are engaged; and neither the Company, nor any Subsidiary has any reason to
believe that it will not be able to renew that coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially
and adversely affect the condition (financial or other), business, net
worth or results of operations of the Company and the Subsidiaries taken as
a whole, the Lessee or ▇▇▇▇ except as described in or contemplated by the
Prospectus.
(aa) Except with respect to economic terms, the Leases entered into
with the Lessee are all substantially similar to each other and the Leases
entered into with the Prime Lessee are substantially similar to each other.
Other than the Wyndham Management Agreement, the Management Agreements are
all substantially similar to each other.
(bb) To the knowledge of the Company, no lessee, licensee or
concessionaire of any portion of any of the Hotels is in default under any
of the leases or licenses governing such properties and there is no event
which, but for the passage of time or the giving of notice, or both, would
constitute a default under any of such leases or license, except such
defaults that would not singly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), business, properties, net
worth, results of operations or prospects of the Company or its
Subsidiaries taken as a whole.
(cc) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Shares.
(dd) The Shares are duly authorized for listing, subject to official
notice of issuance, on the NYSE.
(ee) Neither the Company, any of its Subsidiaries, nor the Lessee nor,
to the knowledge of the Company, ▇▇▇▇ is involved in any material labor
dispute nor, to the knowledge of the Company, is any such dispute
threatened. No general labor problem exists or, to the knowledge of the
Company, is imminent with the employees of any of the Hotels, the Company,
-16-
any of the Subsidiaries, the Lessee or, to the knowledge of the Company,
▇▇▇▇.
(ff) The Company, the Subsidiaries and the Lessee and, to the
knowledge of the Company, ▇▇▇▇ have sufficient trademarks, trade names,
patent rights, copyrights, licenses, trade secrets, approvals and
governmental authorizations (the "Intangible Rights") necessary to conduct
the business of the Hotels as now conducted; the expiration of any
Intangible Rights, other than the use of the franchise names pursuant to
the franchise agreements and licenses to which the Hotels are subject,
would not, singly or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), business, properties, net worth,
results of operations or prospects of such entity; and the Company does not
have any knowledge of any material infringement of any Intangible Right and
there is no claim being made against the Company, any of the Subsidiaries,
the Lessee or ▇▇▇▇ regarding any Intangible Right which could have a
material adverse effect on the condition (financial or otherwise),
business, prospects, properties, net worth, results of operations or
prospects of any of the Company, any of the Subsidiaries, the Lessee or any
Hotel or, to the knowledge of the Company, ▇▇▇▇.
(gg) Except as described in the Prospectus, the mortgages and deeds of
trust encumbering the Hotels will not be cross-defaulted or cross-
collateralized with any other property not owned directly or indirectly by
the Company or the Subsidiaries.
(hh) Each of the Hotels, the Company, the Subsidiaries and the Lessee
and, to the knowledge of the Company, ▇▇▇▇, (i) is in compliance in all
material respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective business and (iii) is in
material compliance with all terms and conditions of any such permit,
license or approval.
(ii) (i) Except as may be specifically disclosed in the "Phase I"
environmental assessment reports referred to in the Prospectus (the
"Environmental Reports"), the Company, the Subsidiaries and the Lessee and,
to the knowledge of the Company, ▇▇▇▇ and the entities from which the
Operating Partnership acquired the Hotels (the "Selling Entities"), have
not at any time, and, to the knowledge of the Company, no
-17-
other party has at any time, handled, buried, stored, retained, refined,
transported, processed, manufactured, generated, produced, spilled, allowed
to seep, leak, escape or ▇▇▇▇▇, or be pumped, poured, emitted, emptied,
discharged, injected, dumped, transferred or otherwise disposed of or dealt
with, Hazardous Materials (as hereinafter defined) on, to or from the
Hotels. The Company, the Subsidiaries, the Lessee and ▇▇▇▇ do not intend to
use the Hotels or any subsequently acquired properties for the purpose of
handling, burying, storing, retaining, refining, transporting, processing,
manufacturing, generating, producing, spilling, seeping, leaking, escaping,
leaching, pumping, pouring, emitting, emptying, discharging, injecting,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials, except for such Hazardous Materials as may be customarily
required in hotel operations, stored and used in the quantities customary
for such uses and in compliance with applicable Environmental Laws.
(ii) Except as disclosed in the Environmental Reports, to the
knowledge of the Company, there has been no seepage, leak, escape, ▇▇▇▇▇,
discharge, injection, release, emission, spill, pumping, pouring, emptying
or dumping of Hazardous Materials into waters on or adjacent to the Hotels
or onto lands from which such hazardous or toxic waste or substances might
seep, flow or drain into such waters.
(iii) Except as disclosed in the Environmental Reports, neither the
Company, any Subsidiary or the Lessee or, to the knowledge of the Company,
▇▇▇▇ has received notice of any occurrence or circumstance which, with
notice or passage of time or both, would give rise to, any claim under or
pursuant to any Environmental Law pertaining to hazardous or toxic waste or
substances on or originating from the Hotels or arising out of the conduct
of any such party, including, without limitation, pursuant to any
Environmental Law.
(iv) No environmental engineering firm which prepared the
Environmental Reports (or amendments thereto) or, the physical condition
(engineering) reports with respect to the Acquired Hotels was employed for
such purpose on a contingent basis or has any substantial interest in the
Company, the Subsidiaries, any of the Selling Entities, ▇▇▇▇ or the Lessee.
As used herein, "Hazardous Materials" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material as defined by any Federal, state or
local environmental law, ordinance, rule, or regulation including,
-18-
without limitation, Environmental Laws, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601, et seq.) ("CERCLA"), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 9601, et seq.)
and in the regulations adopted and publications promulgated pursuant to
each of the foregoing or by any Federal, state or local governmental
authority having or claiming jurisdiction over the Hotels as described in
the Prospectus.
(jj) To the knowledge of the Company, all physical condition
(engineering) reports obtained for the Acquired Hotels are materially true
and correct. The Operating Partnership will set aside annually, as a cash
reserve account for capital expenditures and replacement and refurbishment
of furniture, fixtures and equipment, an amount equal to 4.0% of total
hotel revenues for each of the Hotels. Other than as described in the
Prospectus, neither the Company, any of the Subsidiaries, the Lessee nor
▇▇▇▇ is aware of any material capital expenditures (other than expenditures
for maintenance in the ordinary course of business) which will be required
in connection with any of the Hotels prior to the fifth anniversary of this
Agreement.
(kk) The assets of the Company and the Subsidiaries do not constitute
"plan assets" as defined in Department of Labor Regulations Section 2510-3-
101 promulgated under the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(ll) The statements set forth in the Prospectus under the caption
"Federal Income Tax Considerations," insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate
and complete in all material respects.
Any certificate signed by any officer of the Company, AGH GP, AGH LP, the
Operating Partnership, any Subsidiary, the Lessee or ▇▇▇▇ on behalf of any of
such entities and delivered to you or to counsel for the Underwriter shall be
deemed a representation and warranty by such entity to the Underwriter as to the
matters covered thereby.
7. Indemnification and Contribution. (a) The Company, AGH GP, AGH LP and
the Operating Partnership, jointly and severally, agree to indemnify and hold
harmless each of you and the directors, officers, employees and agents of the
Underwriter and each person, if any, who controls the 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
-19-
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus Supplement or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to the Underwriter furnished in writing to the Company by you expressly
for use in connection therewith; provided, however, that the indemnification
contained in this paragraph (a) with respect to any Prepricing Prospectus
Supplement shall not inure to the benefit of the Underwriter (or to the benefit
of any person controlling the Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Shares by the
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such Prepricing
Prospectus Supplement was corrected in the Prospectus, provided that the Company
has delivered the Prospectus to the Underwriter in requisite quantity on a
timely basis to permit such delivery or sending within the time required by the
Act The foregoing indemnity agreement shall be in addition to any liability
which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Underwriter or any person controlling the Underwriter in respect of which
indemnity may be sought against the Company, AGH GP, AGH LP or the Operating
Partnership, the Underwriter or such controlling person shall promptly notify in
writing the Company, AGH GP, AGH LP or the Operating Partnership, and the
Company, AGH GP, AGH LP or the Operating Partnership shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. The Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Underwriter or such controlling person unless (i)
the Company, AGH GP, AGH LP and the Operating Partnership have agreed in writing
to pay such fees and expenses, (ii) the Company, AGH GP, AGH LP and the
Operating Partnership have failed to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both the Underwriter or such controlling person and
the
-20-
Company, AGH GP, AGH LP or the Operating Partnership and the Underwriter or such
controlling person shall have been advised in writing by its counsel that
representation of such indemnified party and the Company, AGH GP, AGH LP or the
Operating Partnership by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the Company, AGH GP, AGH LP and the
Operating Partnership shall not have the right to assume the defense of such
action, suit or proceeding on behalf of the Underwriter or such controlling
person). In any event, it is understood, however, that the Company, AGH GP, AGH
LP and the Operating Partnership shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for the Underwriter and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The Company, AGH GP, AGH LP or the
Operating Partnership shall not be liable for any settlement of any such action,
suit or proceeding effected without its written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the Company, AGH GP, AGH LP and the Operating
Partnership agree to indemnify and hold harmless the Underwriter, to the extent
provided in the preceding paragraph, and any such controlling person from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) The Underwriter agrees to indemnify and hold harmless the Company, the
Operating Partnership, AGH GP and AGH LP and their respective directors and
officers who sign the Registration Statement, and any person who controls the
Company, the Operating Partnership, AGH GP or AGH LP within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as
the foregoing indemnity from the Company, AGH GP, AGH LP and the Operating
Partnership to the Underwriter, but only with respect to losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact set forth in the
information relating to the Underwriter furnished in writing by or on behalf of
the Underwriter expressly for use in the Registration Statement, the Prospectus
or any Prepricing Prospectus Supplement, or any amendment or supplement thereto.
If any action, suit or proceeding shall be brought against the Company, AGH GP,
AGH LP or the Operating Partnership, or any of their respective directors, any
such officer, or any such controlling person based on the Registration
-21-
Statement, the Prospectus or any Prepricing Prospectus Supplement, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against the Underwriter pursuant to this paragraph (c), the Underwriter shall
have the rights and duties given to the Company, AGH GP, AGH LP and the
Operating Partnership by paragraph (b) above (except that if the Company, AGH
GP, AGH LP or the Operating Partnership shall have assumed the defense thereof
the 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 the Underwriter's expense), and the Company, AGH GP,
AGH LP and the Operating Partnership, their respective directors, any such
officer, and any such controlling person shall have the rights and duties given
to the Underwriter by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, AGH
GP, AGH LP and the Operating Partnership on the one hand and the Underwriter on
the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, AGH GP, AGH
LP and the Operating Partnership on the one hand and the Underwriter on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, AGH
GP, AGH LP and the Operating Partnership on the one hand and the Underwriter on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares (before deducting expenses) received by the
Company, AGH GP, AGH LP and the Operating Partnership bear to the total
underwriting discounts and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company, AGH GP, AGH LP and the Operating Partnership on the one
hand and the Underwriter on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, AGH GP, AGH LP and the Operating
Partnership on the one hand or by the Underwriter on the other hand and the
parties' relative intent, knowledge, access to
-22-
information and opportunity to correct or prevent such statement or omission.
(e) The Company, AGH GP, AGH LP, the Operating Partnership and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by a pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in paragraph (d) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
and expenses referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price of the
Shares underwritten by it and distributed to the public exceeds the amount of
any damages which the Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7(e),
each person, if any, who controls a party to this Agreement within the meaning
of the Act, shall have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement shall have the same
rights to contributions as the Company.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company, AGH GP, AGH LP and the Operating
Partnership set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter or the Company, AGH GP,
AGH LP and the Operating Partnership, their respective directors or officers, or
-23-
any person controlling the Company, AGH GP, AGH LP or the Operating Partnership,
(ii) acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to the Underwriter or any person
controlling the Underwriter, or to the Company, AGH GP, AGH LP and the Operating
Partnership, their respective directors or officers, or any person controlling
the Company, AGH GP, AGH LP and the Operating Partnership, shall be entitled to
the benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 7.
8. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Shares hereunder is subject to the following
conditions:
(a) 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 Shares may commence, the
Initial Registration Statement or such post-effective amendment shall have
become effective not later than 5:30 p.m., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing
by you, and all filings, if any, required by Rules 424 and 430A under the
Act shall have been timely made; no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the Company
or the Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
your satisfaction.
(b) Subsequent to the effectiveness of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company and the
Subsidiaries taken as a whole not contemplated by the Prospectus, which in
your reasonable opinion would materially adversely affect the market for
the Shares, or (ii) any event or development relating to or involving the
Company or any officer or director of the Company, which makes any
statement made in the Prospectus untrue or which, in the reasonable opinion
of the Company and its counsel or the Underwriter and its counsel, requires
the making of any addition to or change in the Prospectus in order to state
a material fact required by the Act or any other law to be stated therein
or necessary in order to make the statements therein not misleading, if
amending or supplementing the Prospectus to reflect such event
-24-
or development would, in your reasonable opinion, materially adversely
affect the market for the Shares.
(c) You shall have received on the Closing Date, opinions of Battle
▇▇▇▇▇▇, LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, LLP, counsel for the
Company, the Subsidiaries and the Lessee, dated the Closing Date and
addressed to you, in substantially the form set forth on Exhibit 8(c)
attached hereto.
In rendering their opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by them or
the Company as to laws of any jurisdiction other than the United States or the
State of New York or the State of Maryland and such opinion may be subject to
the limitations and assumptions with respect to matters concerning the laws of
such jurisdiction contained in such other counsel's opinion, provided that (1)
each such local counsel is acceptable to the Underwriter, (2) such reliance is
expressly authorized by each opinion so relied upon, and a copy of each such
opinion is delivered to the Underwriter and is, in form and substance,
reasonably satisfactory to you and your counsel, and (3) counsel shall state in
their opinion that they believe that they and the Underwriter are justified in
relying thereon. In addition, in rendering the foregoing opinion, such counsel
may rely, as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company, the Operating Partnership, the Lessee,
AGH GP and AGH LP and certificates or other written statements of officers or
departments of various jurisdictions having custody of documents respecting the
existence or good standing of the Company, the Operating Partnership, the
Lessee, AGH GP and AGH LP, provided that copies of all such opinions, statements
or certificates shall be delivered to counsel for the Underwriter.
(d) You shall have received on the Closing Date an opinion of Coopers &
▇▇▇▇▇▇▇ L.L.P., special tax advisor to the Company, dated the Closing Date and
addressed to you, satisfactory in form and substance to counsel for the
Underwriter, to the effect that the discussion contained in the Prospectus under
the caption "Federal Income Tax Considerations--Other Tax Considerations" fairly
summarizes the Texas state tax considerations that are material to a holder of
Shares.
(e) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, counsel for the Underwriter, dated the Closing Date and addressed to
you, with respect to the Registration Statement, the Prospectus and this
Agreement and such other related matters as you may request.
-25-
(f) You shall have received letters addressed to you, and dated the date
hereof and the Closing Date, from Coopers & ▇▇▇▇▇▇▇ L.L.P., independent
certified public accountants, substantially in the forms heretofore approved by
you.
(g) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company or the Underwriter, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business and the proposed new credit facility being entered
into by the Company and the Operating Partnership) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); and (v) all the representations and warranties of the
Company, the Operating Partnership, AGH LP and AGH GP contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company, AGH GP and AGH LP (or
such other officers as are acceptable to you), to the effect set forth in this
Section 8(g) and in Section 8(h).
(h) The Company shall not have failed at or prior to the Closing Date to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(i) The Shares shall have been listed or approved for listing, subject to
notice of issuance, on the NYSE.
(j) The Company, AGH GP, AGH LP, the Operating Partnership and the Lessee
shall have furnished to the Underwriter such certificates, in addition to those
specifically mentioned herein,
-26-
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 satisfactory in form and
substance to you and your counsel in your reasonable discretion.
9. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them as may be reasonably
requested for use in connection with the offering and sale of the Shares; (iii)
the preparation, printing, authentication, issuance and delivery of certificates
for the Shares, including any stamp taxes in connection with the original
issuance and sale of the Shares; (iv) the printing (or reproduction) and
delivery of this Agreement, the Blue Sky Memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the NYSE; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriter
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriter in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Shares; and (ix) the fees
and expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a post-
effective amendment to the Initial Registration Statement to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of such post-effective amendment has been released by the
Commission. Until such time as this Agreement shall have
-27-
become effective, it may be terminated by the Company, by notifying you, or by
you, by notifying the Company.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed within 24 hours by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date, (i) trading in the Common Stock shall have been suspended by the
Commission or the NYSE, (ii) trading in securities generally on the NYSE, the
American Stock Exchange or The Nasdaq Stock Market shall have been suspended or
materially limited, (iii) a general moratorium on commercial banking activities
in New York, Missouri or Texas shall have been declared by either federal or
state authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your reasonable
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares as contemplated by the Prospectus or (y) to enforce contracts for the
resale of the Shares. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriter. The Company and the
Operating Partnership acknowledge that the statements set forth in the second
sentence of the penultimate paragraph on the cover page of the Prospective
Supplement, the last paragraph on the cover page of the Prospectus Supplement,
the legend with respect to stabilization on the second page of the Prospectus
Supplement, the name of the Underwriter appearing on the cover page and the back
cover page of the Prospectus Supplement, and the statements in the second,
fourth, fifth and sixth paragraphs under the caption "Underwriting" in the
Prospectus Supplement, constitute the only information furnished by or on behalf
of the Underwriter through you as such information is referred to in Sections
6(a) or 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, AGH GP, AGH LP or the
Operating Partnership, at the office of the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman, Chief
Executive Officer and President; or (ii) if to you, care of ▇.▇. ▇▇▇▇▇▇▇ & Sons,
Inc., at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate.
This Agreement has been and is made solely for the benefit of the
Underwriter, the Company, the Operating Partnership, AGH GP and AGH LP and their
respective directors and officers, and the other controlling persons referred to
in Section 7 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or by
virtue of this Agreement. Neither the term "successor" nor the term "successors
and assigns" as used in this Agreement shall include a purchaser from the
Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
-29-
Please confirm that the foregoing correctly sets forth the agreement
between the Company, AGH GP, AGH LP and the Operating Partnership and the
Underwriter.
Very truly yours,
American General Hospitality
Corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
American General Hospitality
Operating Partnership, L.P.
By AGH GP, Inc., as general
partner
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
AGH GP, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
AGH LP, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
-30-
Confirmed as of the date first above mentioned on behalf of themselves.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Printed Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
-31-
SCHEDULE I
HOTELS
Holiday Inn Dallas ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ by Marriott Meadowlands
Hampton Inn Richmond Airport
Hotel Maison de Ville
Hilton Hotel-Toledo Holiday Inn
Select Dallas DFW Airport South
Holiday Inn Select New Orleans Hampton
Inn Ocean City International Airport
Crowne Plaza Madison
Holiday Inn Park Center Plaza
Wyndham Albuquerque Airport Hotel
Wyndham Airport Hotel San ▇▇▇▇
Holiday Inn Select Mission Valley
Wyndham Hotel Lake Buena Vista
Holiday Inn Resort Monterey
Hilton Hotel Durham
Radisson Hotel Arlington Heights
Wyndham Garden Hotel-Marietta
Doubletree Guest Suites Hotel
Westin Resorts Key Largo
Holiday Inn Corporate Center Phoenix
Hilton Airport Hotel Grand Rapids
Holiday Inn Select Bucks County
Marriott Houston West Loop
Radisson Twin Towers ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Hotel Cocoa Beach
Courtyard by Marriott Durham
Crowne Plaza Suites Las Vegas
St. Tropez Suites Las Vegas
Ramada Inn Mahwah
Sheraton Crossroads Hotel Mahwah
Ramada Plaza Meriden
Sheraton Four Points Hotel Mt. Arlington
Crowne Plaza Portland
Ramada Plaza ▇▇▇▇▇▇▇
Ramada Plaza Hotel Alexandria
Holiday Inn and Suites Alexandria
Holiday Inn Annapolis
Holiday Inn Express BWI
Holiday Inn ▇'▇▇▇▇ International Hotel
Doubletree Resort Surfside Clearwater
Courtyard by Marriott Lake Buena Vista
Holiday Inn Ft. Lauderdale Beach Galleria
Doubletree Hotel Tampa Airport Westshore
The Lodge at the Seapost, Mystic
Holiday Inn Forest Park
Holiday Inn Richmond
Ramada Inn Gulfview Clearwater Beach
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Resort Key Largo
Holiday Inn Madeira Beach
Courtyard by Marriott Marina del Rey
Courtyard by Marriott Century City
Radisson Inn Airport Rochester
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State or Other
Jurisdiction of Incorporation
Or Organization/Type of Entity
SCHEDULE 6(F)
SUBSIDIARIES
State or Other
Jurisdiction of Incorporation
Subsidiary
or Organization/Type of Entity
AGH GP, Inc. Nevada/Corporation
AGH LP, Inc. Nevada/Corporation
American General Hospitality Operating
Partnership, L.P. Delaware/Limited Partnership
AGH Upreit LLC Delaware/Limited Liability
Company
AGH Secaucus LLC Delaware/Limited Liability
Company
AGH DFW South LLC Delaware/Limited Liability
Company
AGH 75 Arlington Heights LLC Delaware/Limited Liability
Company
AGH 2780 Atlanta LLC Delaware/Limited Liability
Company
2929 ▇▇▇▇▇▇▇▇ Limited Liability Company Delaware/Limited Liability
Company
-34-
State or Other
Jurisdiction of Incorporation
Subsidiary
or Organization/Type of Entity
BCHI Acquisition, LLC Delaware/Limited Liability
Company
3100 Glendale Joint Venture Ohio/General Partnership
MDV Limited Partnership Texas/Limited Partnership
Madison Motel Associates Wisconsin/General Partnership
183 Hotel Associates, Ltd. Texas/Limited Partnership
Richmond Williamsburg Associates, Ltd. Texas/Limited Partnership
455 Meadowlands Associates, Ltd. Texas/Limited Partnership
DFW South I Limited Partnership Texas/Limited Partnership
Lake Buena Vista Partners, Ltd. Florida/Limited Partnership
Cocoa Beach Hilton, Ltd. Florida/Limited Partnership
75 Arlington Heights Limited Delaware/Limited Partnership
Partnership, L.P.
2780 Atlanta Limited Partnership, L.P. Delaware/Limited Partnership
Portland/▇▇▇▇▇▇▇ Corp. Delaware/Corporation
-35-
State or Other
Jurisdiction of Incorporation
Subsidiary
or Organization/Type of Entity
AGH Portland/▇▇▇▇▇▇▇ LLC Delaware/Limited Liability
Company
Portland/▇▇▇▇▇▇▇ LLC Delaware/Limited Liability
Company
Mt. Arlington New Jersey, LLC Delaware/Limited Liability
Company
AGH ▇'▇▇▇▇ International LLC Delaware/Limited Liability
Company
Durham I-85 Limited Partnership Delaware/Limited Partnership
AGH PSS I, Inc. Delaware/Corporation
-36-
SIGNIFICANT SUBSIDIARIES
American General Hospitality Operating Partnership, L.P.
AGH GP, Inc.
AGH LP, Inc.
AGH Upreit LLC
AGH Secaucus LLC
AGH DFW South LLC
AGH ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLC
Portland/▇▇▇▇▇▇▇ Corp.
-37-
SCHEDULE 6(N)
OPERATIVE DOCUMENTS
(1) Contract for Purchase and Sale of Hotels, dated November 26, 1997, by
and among Various Entities Identified on Schedule A as Sellers and American
General Hospitality Operating Partnership, L.P.
(2) Amendment No. 1 to Contract for Purchase and Sale of Hotels, dated
November 26, 1997, by and among Various Entities Identified on Schedule A
as Sellers and American General Hospitality Operating Partnership, L.P.
(3) Contract for Purchase and Sale of Hotel, dated November 26, 1997,
between Zeta Mystic Hotel, Inc. and American General Hospitality Operating
Partnership, L.P.
(4) Amendment No. 1 to Contract for Purchase and Sale of Hotel, dated
November 26, 1997, between Zeta Mystic Hotel, Inc. and American General
Hospitality Operating Partnership, L.P.
(5) Each Lease entered into between the Operating Partnership and AGH
Leasing, L.P. (44).
(6) The Lease entered into between the Operating Partnership and Twin
Towers Leasing, L.P.
(7) Each Lease entered into between the Operating Partnership and ▇▇▇▇▇▇▇
Holding Corp. (5).
(8) Each Management Agreement entered into between ▇▇▇▇ and the Lessee
(44).
(9) The Wyndham Management Agreement entered into between Wyndham and the
Lessee.
(10) The Lease entered into between Mt. Arlington New Jersey, LLC and
▇▇▇▇▇▇▇ Holding Corp.
(11) Each Lease entered into between Portland/▇▇▇▇▇▇▇ LLC and Fairfield
Holding Corp. (2).
(12) Purchase and Sale Agreement, dated November 20, 1997, between Prime
Hospitality Corp. and the Operating Partnership.
(13) The Contribution Agreement, dated September 22, 1997, among the
Operating Partnership and the Sellers of the Madison
-38-
Hotel in Madison, Wisconsin.
-39-
EXHIBIT 8(C)
FORM OF OPINION OF COUNSEL
1. The Company is a corporation duly incorporated and validly existing
under the laws of the State of Maryland and is in good standing with the State
Department of Assessments and Taxation of the State of Maryland, with full
corporate power to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business as described in the
Registration Statement and the Prospectus requires such registration or
qualification, except where the failure to so register or qualify would not have
a material adverse effect on the condition, financial or otherwise, business,
properties or results of operations of the Company.
2. There are [_____] shares of Common Stock issued and outstanding on the
date hereof (immediately prior to the issuance of the Shares) (the "Outstanding
Shares") and the Company does not have the authority, pursuant to the Charter,
to issue shares of any other class of stock. The Outstanding Shares have been
duly authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights under the Maryland General Corporation
Law ("MGCL"). The Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in accordance with the
terms of the Underwriting Agreement and the Resolutions (as defined in the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Opinion), will be validly issued, fully paid and nonassessable and
free of any preemptive or similar statutory rights under the MGCL. The terms of
the stock of the Company conform in all material respects to the description
thereof in the Registration Statement and the Prospectus. The form of
certificate representing the Shares conforms to the requirements of the MGCL.
3. To the best knowledge of such counsel, except as described in the
Prospectus or the Registration Statement (or any amendment or supplement
thereto) or any Incorporated Document, there are no outstanding options,
warrants or other written rights calling for the issuance of, or any written
commitment, plan or arrangement to issue, any capital stock of the Company or
any security convertible into, or exchangeable for, the capital stock of the
Company.
4. Each of the Operating Partnership, the Significant Subsidiaries and
the Lessee is a corporation, limited partnership
-40-
or limited liability company duly incorporated or formed, as the case may be,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or formation, with full corporate, partnership or limited
liability company power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business as
described in the Registration Statement and the Prospectus requires such
registration or qualification, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or otherwise,
business, properties or results of operations of the Company, the Operating
Partnership, the Lessee or any Significant Subsidiary, respectively.
5. All of the outstanding limited partnership interests of the Operating
Partnership and the Lessee were created under the agreements forming the
Operating Partnership and the Lessee, as the case may be, and have been duly
authorized and validly issued. All of the outstanding shares of capital stock
of the Significant Subsidiaries which are corporations and ▇▇▇▇ have been duly
authorized and validly issued. To the best knowledge of such counsel, based
solely on a review of the documents referred to in clauses (g) and (h) above,
after giving effect to the sale of Shares, AGH GP will be the record owner of a
1% interest, as sole general partner in the Operating Partnership, and AGH LP
will be the record owner of an approximate [_____]% interest, as a limited
partner in the Operating Partnership. To the best knowledge of such counsel,
except as described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) or any Incorporated Document, there are no
outstanding options, warrants or other written rights calling for the issuance
of, or any written commitment, plan or arrangement to issue, any equity interest
or any membership interest in the Operating Partnership, the Significant
Subsidiaries or the Lessee or any security convertible into, or exchangeable or
exercisable for, any such interests in the Operating Partnership, the
Significant Subsidiaries or the Lessee.
6. With respect to the Company, the Operating Partnership, the
Significant Subsidiaries, and the Lessee, neither the issuance and sale of the
Shares, the execution, delivery or performance of the Underwriting Agreement nor
the consummation of the transactions contemplated thereby by the Company, the
Operating Partnership, AGH GP or AGH LP, as applicable, (i) requires any
consent, approval, authorization or other order of, or registration or filing
with, any court, regulatory body, administrative agency or
-41-
other governmental body, agency or official (except such as has been obtained
for the registration of the Shares under the Act and the Exchange Act, and state
securities or Blue Sky laws of various jurisdictions and clearance by the NASD
in connection with the purchase and sale of the Shares by the Underwriter as
contemplated by the Underwriting Agreement (as to which such counsel need
express no opinion, and except that no opinion need be given with respect to
liquor laws, statutes, rules or regulations)), (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under the
Charter or the certificate or articles of incorporation, or bylaws, partnership
agreement or other organizational documents, of any of such entities or (iii)
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, any agreement, indenture, lease or other instrument known to
such counsel to which any of such entities is a party or by which any of them or
any of their respective properties may be bound, which in each case has been
filed or incorporated by reference as an exhibit to the Registration Statement
or any Incorporated Document, or violates or will violate any statute, law,
regulation, ruling or filing or judgment, injunction, order or decree applicable
to any of such entities, any of their respective properties, or will result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of any of such entities pursuant to the terms of any agreement or
instrument known to such counsel, which in each case has been filed as an
exhibit to the Registration Statement or any Incorporated Document, to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, (except that no opinion need be
given with respect to the indemnification and contribution provisions of the
Underwriting Agreement or the requirements of state securities or Blue Sky
laws).
7. The execution and delivery of, and the performance by the Company, the
Operating Partnership, AGH GP and AGH LP of their respective obligations under
the Underwriting Agreement are within the corporate or partnership power and
authority of each of such entities and have been duly and validly authorized by
the Company, the Operating Partnership, AGH GP and AGH LP, and the Underwriting
Agreement has been duly authorized, executed and delivered by the Company,
Operating Partnership, AGH GP and AGH LP.
8. To the best knowledge of such counsel, there are no legal or
governmental actions, suits or court proceedings pending or threatened against
the Company, or any of the Significant Subsidiaries, ▇▇▇▇ or the Lessee, or any
of their respective partners, directors or officers in their capacity as such,
or to which any of the Hotels (as defined in the Underwriting Agreement)
-42-
is subject, that are of a character which are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or in any Incorporated Document but are not described as required. To
the best knowledge of such counsel, there are no agreements, contracts,
indentures, leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any Incorporated Document or to be filed as an exhibit to the
Registration Statement or to any Incorporated Document that are not described or
filed as required by the Act, as the case may be.
9. At the Closing Date, the Registration Statement and the Prospectus and
any supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial, accounting and
statistical data included therein or excluded therefrom or the exhibits to the
Registration Statement, as to which such counsel need not express any opinion)
comply as to form in all material respects with the requirements of the Act,
except that such counsel need express no opinion as to the form of exhibits to
the Registration Statement, or to the accuracy, completeness or fairness of the
statements contained in the Registration Statement, except to the extent set
forth in this paragraph, paragraph 10 hereof and the penultimate paragraph of
this opinion; and each Incorporated Document (except for the financial
statements and the notes thereto and the schedules and other financial and
statistical data included therein, as to which counsel need not express an
opinion) complies as to form in all material respects with the Exchange Act and
the rules and regulations of the Commission thereunder.
10. The statements under the captions "Description of Common Stock,"
"Risk Factors--Tax Risks," "Risk Factors--Potential Anti-Takeover Effect of
Certain Provisions of Maryland Law and the Company's Charter and Bylaws,"
"Operating Partnership Agreement" and "Federal Income Tax Considerations" (other
than statements regarding Texas tax considerations under the subcaption "--Other
Tax Considerations") contained in the Prospectus, and "Certain Federal Income
Tax Considerations" contained in the Prospectus, to the extent they constitute
matters of law, descriptions of statues, rules or regulations, or legal
conclusions, each, respectively, fairly presents in all material respects the
information disclosed therein.
11. The offers and sales of units of limited partnership interests by
the Operating Partnership, and the offers and sales by the Company of shares of
Common Stock since formation and prior to the Closing Date as described in the
Registration Statement and the
-43-
Prospectus or any Incorporated Document were either duly registered or exempt
from the registration requirements of the Act and, to the extent applicable, New
York Blue Sky laws.
12. Except as described in the Registration Statement and the Prospectus
or any Incorporated Document and to the best knowledge of such counsel, there
are no contracts, agreements or understandings between the Company and any
person granting such person or entity the right to require the registration of
any shares of Common Stock or any other securities of the Company because of the
filing of the Registration Statement or sale of the Shares as contemplated by
the Underwriting Agreement.
13. After giving effect to the Offering and the use of proceeds from sale
of the Shares as described in the Prospectus Supplement, neither the Company,
the Operating Partnership nor any of the Significant Subsidiaries is required to
be registered under the Investment Company Act of 1940, as amended.
14. Each Operative Document, to be defined in the legal opinions, to which
the Company, the Operating Partnership, the Significant Subsidiaries and the
Lessee is a party has been duly authorized and executed by such entity. Assuming
due execution and authorization by the parties thereto, the Prime Lease
Agreements constitute a valid and binding obligation of the parties thereto,
enforceable against each in accordance with the terms thereof.
15. Based on certain customary assumptions and representations (acceptable
to such counsel and to counsel for the Underwriter in their reasonable
discretion) relating to applicable asset composition, source of income,
stockholder diversification distribution, record keeping tests and other
requirements of the Code necessary for the Company to qualify as a REIT, the
Company was organized and has operated in conformity with the requirements for
qualification and taxation as REIT under Sections 856 through 860 of the Code
for the each of the taxable years ended December 31, 1996 and December 31, 1997;
the Company's current organization and method of operations will enable the
Company to continue to qualify as a REIT under the Code.
16. Such counsel has been advised by the NYSE that the Shares are duly
authorized for listing, subject to official notice of issuance.
17. The Registration Statement and all post-effective amendments, if any,
have become effective under the Act as of August 28, 1997 and, to the best
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement
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has been issued and no proceedings for that purpose are pending before or
contemplated by the Commission, and any required filing of the Prospectus
pursuant to Rule 424(b) under the Act has been made in accordance with Rule
424(b) under the Act.
18. In addition, such counsel has participated in certain conferences with
officers and other representatives of the Company, the Operating Partnership,
the Significant Subsidiaries, the Lessee, representatives of the Company's
independent accountants and with you and your representatives and counsel in
connection with the preparation of the Registration Statement at which the
contents of the Registration Statement, and the Prospectus therein and related
matters were discussed and, although such counsel has not verified independently
and, therefore, does not assume any responsibility, explicitly or implicitly,
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, on the basis of the foregoing, nothing
has come to the attention of such counsel during the course of the above-
described process that has caused such counsel to believe that the Registration
Statement, at the time the Registration Statement became effective, or the
Prospectus, as of its date and the Prospectus Supplement as of its date and the
date hereof, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (except that such counsel need
express no opinion, view or belief with respect to the financial statements and
the notes thereto and the schedules and the other financial, accounting or
statistical data included in or excluded from the Registration Statement or the
Prospectus).
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