4,850,000 Shares
LA QUINTA INNS, INC.
Common Stock
U.S. UNDERWRITING AGREEMENT
, 1995
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Representatives of the Several U.S. Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
AEW Partners, L.P., a Delaware limited partnership (the "Selling
Shareholder"), proposes to sell an aggregate of 3,880,000 shares (the "Firm
Shares") of common stock, par value $0.10 per share (the "Common Stock"), of La
Quinta Inns, Inc., a Texas corporation (the "Company"), to the several
Underwriters named in Schedule I hereto (the "U.S. Underwriters") for whom Smith
Barney Inc., Alex. Brown & Sons Incorporated and Montgomery Securities are
acting as representatives (the "Representatives"). In addition, solely for the
purpose of covering over-allotments, the Selling Shareholder proposes to sell to
the U.S. Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 470,071 shares (the "Additional Shares") of Common
Stock. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares".
It is understood that the Company and the Selling Shareholder are
concurrently entering into an International Underwriting Agreement, dated the
date hereof (the "International Underwriting Agreement"), providing for the sale
by the Selling Shareholder of 970,000 shares of Common Stock (the "International
Shares") through arrangements with certain underwriters outside the United
States and Canada (the "Managers"), for whom Smith Barney Inc., Alex. Brown &
Sons Incorporated and Montgomery Securities are acting as lead Managers (the
"Lead Managers").
The International Shares and the Shares, collectively, are herein called the
"Underwritten Shares".
The Company and the Selling Shareholder also understand that the
Representatives and the Lead Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from the Managers a portion of the
International Shares or sell to the Managers a portion of the Shares. The
Company and the Selling Shareholder understand that any such purchases and sales
between the U.S. Underwriters and the Managers shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement or the International Underwriting Agreement.
The Company and the Selling Shareholder wish to confirm as follows
their respective agreements with you and the other several U.S. Underwriters on
whose behalf you are acting, in connection with the several purchases of the
Shares by the U.S. Underwriters.
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
(the "registration statement"), including two forms of prospectus subject to
completion relating to the Shares. The term "Registration Statement" as used in
this Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Underwritten Shares may commence,
the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. The term
"Registration Statement" shall also include any registration statement relating
to the Shares that is filed and declared effective pursuant to Rule 462(b) under
the Act. The term "Prospectuses" as used in this Agreement means the
prospectuses in the form included in the Registration Statement or, if the
prospectuses included in the Registration Statement omit information in reliance
on Rule 430A under the Act and such information is included in prospectuses
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
included in the Registration Statement
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as supplemented by the addition of the Rule 430A information contained in the
prospectuses filed with the Commission pursuant to Rule 424(b), PROVIDED that
if prospectuses that meet the requirements of Section 10(a) of the Act are
delivered pursuant to Rule 434(c) under the Act, then (i) the term
"Prospectuses" as used in this Agreement means the prospectuses subject to
completion (as defined in Rule 434(g) under the Act) as supplemented by (a) the
addition of Rule 430A or other information contained in the forms of prospectus
filed pursuant to Rule 434(c)(2) under the Act and (b) the information contained
in the abbreviated term sheets described in Rule 434(c)(3) under the Act, and
(ii) the date of such Prospectuses shall be deemed to be the date of such
abbreviated term sheets. The term "Prepricing Prospectuses" as used in this
Agreement means the prospectuses subject to completion in the form included in
the registration statement at the time of the initial filing of the registration
statement with the Commission, and as such prospectuses shall have been amended
from time to time prior to the date of the Prospectuses. Any reference in
this Agreement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectuses 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 registration statement, the
Registration Statement, such Prepricing Prospectus or the Prospectuses, as the
case may be, and any reference to any amendment or supplement to the
registration statement, the Registration Statement, any Prepricing Prospectus or
the Prospectuses shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Exchange
Act"), that, 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, at any time, the documents that at such time are incorporated
by reference in the registration statement, the Registration Statement, any
Prepricing Prospectus, the Prospectuses, or any amendment or supplement thereto.
It is understood that two forms of Prepricing Prospectus and two
forms of Prospectus are to be used in connection with the offering and sale of
the Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to
the Shares that are to be offered and sold in the United States (as defined
herein) or Canada (as defined herein) to U.S. or Canadian Persons (the "U.S.
Prepricing Prospectus" and the "U.S. Prospectus", respectively), and a
Prepricing Prospectus and a Prospectus relating to the International Shares that
are to be offered and sold outside the United States or Canada to persons other
than U.S. or Canadian Persons (the "International Prepricing Prospectus" and the
"International Prospectus", respectively). The U.S. Prospectus and the
International Prospectus are herein collectively called the "Prospectuses", and
the U.S. Prepricing
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Prospectus and the International Prepricing Prospectus are herein called the
"Prepricing Prospectuses". For purposes of this Agreement: "U.S. or Canadian
Person" means any resident or national of the United States or Canada, any
corporation, partnership or other entity created or organized in or under the
laws of the United States or Canada or any estate or trust the income of which
is subject to United States or Canadian income taxation regardless of the source
of its income (other than the foreign branch of any U.S. or Canadian Person),
and includes any United States or Canadian branch of a person other than a U.S.
or Canadian Person; "United States" means the United States of America
(including the states thereof and the District of Columbia) and its territories,
its possessions and other areas subject to its jurisdiction; and "Canada" means
Canada and its territories, its possessions and other areas subject to its
jurisdiction.
2. AGREEMENTS TO SELL AND PURCHASE. The Selling Shareholder
hereby agrees, subject to all the terms and conditions set forth herein, to sell
to each U.S. Underwriter and, upon the basis of the representations, warranties
and agreements of the Company and the Selling Shareholder herein contained and
subject to all the terms and conditions set forth herein, each U.S. Underwriter
agrees, severally and not jointly, to purchase from the Selling Shareholder, at
a purchase price of $____ per Share (the "purchase price per share"), the number
of Firm Shares set forth opposite the name of such U.S. Underwriter in Schedule
I hereto (or such number of Firm Shares increased as set forth in Section 13
hereof).
The Selling Shareholder also agrees, subject to all the terms and
conditions set forth herein, to sell to the U.S. Underwriters, and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Shareholder herein contained and subject to all the terms and conditions
set forth herein, the U.S. Underwriters shall have the right to purchase from
the Selling Shareholder, at the purchase price per share, pursuant to an option
(the "over-allotment option") that may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the U.S. Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 470,071 Additional Shares from the
Selling Shareholder. Additional Shares may be purchased only for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. Upon any exercise of the over-allotment option, each U.S. Underwriter,
severally and not jointly, agrees to purchase from the Selling Shareholder the
number of Additional Shares (subject to such adjustments as you may determine in
order to avoid fractional shares) that bears the same proportion to the number
of Additional Shares to be purchased by the U.S. Underwriters as the number of
Firm Shares
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set forth opposite the name of such U.S. Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 13 hereof) bears to
the aggregate number of Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Company and the Selling
Shareholder have been advised by you that the U.S. Underwriters propose to make
a public offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Shares upon the terms set forth
in the U.S. Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to
the U.S. Underwriters of and payment for the Firm Shares shall be made at the
office of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00
A.M., New York City time, on , 1995 (the "Closing Date"). The place
of closing for the Firm Shares and the Closing Date may be varied by agreement
among you, the Company and the Selling Shareholder.
Delivery to the U.S. Underwriters of and payment for any Additional
Shares to be purchased by the U.S. Underwriters shall be made at the
aforementioned office of Smith Barney Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the U.S.
Underwriters to the Company and the Selling Shareholder of the U.S.
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement among you, the
Company and the Selling Shareholder.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 P.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by certified or official bank check or checks payable in New York
Clearing House (next day) funds to the order of the Selling Shareholder.
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5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several U.S. Underwriters and the Selling Shareholder as follows:
(a) The Company shall, 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, use its best efforts to cause the
Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company shall comply fully
and in a timely manner with the applicable provisions of Rule 424, Rule
430A and Rule 434 under the Act.
(b) The Company shall advise you and the Selling Shareholder
promptly and, if requested by any of you, confirm such advice in writing,
(i) when the Registration Statement has become effective, if and when a
Prospectus or form of prospectus is sent for filing pursuant to Rule 424
under the Act and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the receipt of any comments from the
Commission that relate to the Registration Statement or any request by the
Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by the Commission or any
state securities commission or other regulatory authority, and (iv) during
the period referred to in subsection (f) below, (A) 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,
including the filing of any information, document or report pursuant to
the Exchange Act, that makes any statement of a material fact made in the
Registration Statement untrue or that requires the making of any additions
to or changes in the Registration Statement in order to state a material
fact required by the Act to be stated therein or to make the statements
therein not misleading or that makes any statement of a material fact made
in the U.S. Prospectus (as then amended or supplemented) untrue or that
requires the making of any additions to or changes in the U.S. Prospectus
(as then amended or supplemented) in order to state a material fact
required by the Act to be stated therein or in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and (B) of the necessity to amend or supplement
the U.S. Prospectus (as then amended or supplemented) to comply with the
Act or any
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other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of the Shares under any state
securities or Blue Sky laws or real estate syndication laws, the Company
shall use every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time.
(c) The Company shall furnish to each of you and the Selling
Shareholder without charge (i) two (2) conformed copies (plus one (1)
additional similarly conformed copy to your legal counsel) of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits filed therewith, (ii) such number
of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request, (iii)
such number of copies of the Incorporated Documents, without exhibits, as
you may request, and (iv) two (2) copies of each of the exhibits to the
Incorporated Documents.
(d) The Company shall not file any amendment or supplement to the
Registration Statement, whether before or after the time when it becomes
effective, or make any amendment or supplement to the U.S. Prospectus, or,
prior to the end of the period of time referred to in subsection (f)
below, file any document pursuant to the Exchange Act that will, upon
filing, become an Incorporated Document, of which you and the Selling
Shareholder shall not previously have been advised and provided a copy
within two business days (or such reasonable amount of time as is
necessitated by the exigency of such amendment, supplement or document)
prior to the filing thereof and to which you or the Selling Shareholder
shall reasonably object in writing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you and the Selling Shareholder, without charge,
in such quantities as you have requested, copies of each form of the U.S.
Prepricing Prospectus. The Company consents to the use, in accordance
with the provisions of the Act and with the state securities or Blue Sky
laws or real estate syndication laws of the jurisdictions in which the
Shares are offered by the several U.S. Underwriters and by dealers, prior
to the date of the U.S. Prospectus, of each U.S. Prepricing Prospectus so
furnished by the Company.
(f) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the reasonable
opinion of counsel for the U.S. Underwriters a prospectus is required by
the Act to be
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delivered in connection with sales by any U.S. Underwriter or dealer, the
Company shall expeditiously furnish to each U.S. Underwriter and each
dealer, without charge, as many copies of the U.S. Prospectus (and of any
amendment or supplement to the U.S. Prospectus) as you may reasonably
request for the purposes contemplated by the Act. The Company consents to
the use of the U.S. Prospectus and any amendment or supplement thereto by
you or any dealer in accordance with the provisions of the Act and with
the state securities or Blue Sky laws or real estate syndication laws of
the jurisdictions in which the Shares are offered by the several U.S.
Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering or sale of the Shares and for such period of
time thereafter as a prospectus is required by the Act to be delivered in
connection therewith.
(g) If during the period specified in subsection (f) above any
event shall occur as a result of which it becomes necessary, in the
judgment of the Company or in the reasonable opinion of counsel for the
U.S. Underwriters, to amend or supplement the U.S. Prospectus (as them
amended or supplemented) 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 amend or supplement the U.S. Prospectus to comply
with the Act or any other law, the Company shall, as promptly as
practicable, prepare and, subject to the provisions of subsection (d)
above, file with the Commission an appropriate amendment or supplement to
the U.S. Prospectus so that the statements in the U.S. Prospectus, as so
amended or supplemented, will not, in the light of the circumstances under
which they were made, be misleading, and the U.S. Prospectus, as so
amended or supplemented, will comply with the Act or such other law, and
shall expeditiously furnish to you without charge such number of copies
thereof as you may reasonably request.
(h) Prior to any public offering of the Shares, the Company shall
cooperate with you and with counsel for the U.S. Underwriters in
connection with the registration or qualification of the Shares for
offering and sale by the U.S. Underwriters and by dealers under the state
securities or Blue Sky laws or real estate syndication laws of such
jurisdictions as you may request (provided, that the Company shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to take any action that would subject it to
consent to service of process in suits, other than those arising out of
the offering or sale of the Shares, in any jurisdiction in which it is not
now so subject). The Company shall continue such qualification in effect
so long as required by law for distribution of the Shares and shall file
such consents to service of process or other documents as may be necessary
or
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appropriate in order to effect such registration or qualification
(provided, that the Company shall not be obligated to take any action that
would subject it to consent to service of process in suits, other than
those arising out of the offering or sale of the Shares, in any
jurisdiction in which it is not now so subject).
(i) The Company shall make generally available to its security
holders as soon as reasonably practicable a consolidated earnings
statement covering a period of at least 12 months beginning after the
"effective date" (as defined in Rule 158 under the Act) of the
Registration Statement (but in no event later than 90 days after such
date) that shall satisfy the provisions of Section 11(a) of the Act.
(j) (i) During the period of five years hereafter, the Company
shall mail to each of you without charge as soon as available, a copy of
each report of the Company mailed to stockholders or filed with the
Commission, and (ii) during the period specified in subsection (f) above,
from time to time such other information concerning the Company as you may
reasonably request.
(k) Except as provided in this Agreement and the International
Underwriting Agreement, the Company shall not sell, contract to sell or
otherwise dispose of any Common Stock (other than upon cashless exercise
of options or warrants outstanding as of the date of this Agreement that
will expire by their terms prior to 90 days after the date of the U.S.
Prospectus) or any securities convertible into or exercisable or
exchangeable for Common Stock, or grant any options (other than the grant
of options to employees or directors in the ordinary course of business)
or warrants to purchase Common Stock, for a period of 90 days after the
date of the U.S. Prospectus, without the prior written consent of Smith
Barney Inc., which shall not be unreasonably withheld.
(l) The Company has furnished or shall furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current executive officers and directors.
(m) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Company shall not 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 Underwritten Shares.
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(n) The Company shall use its best efforts to have the Shares
listed, subject to notice of issuance, on the New York Stock Exchange on
or before the Closing Date.
6. AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling
Shareholder agrees with the several U.S. Underwriters and the Company as
follows:
(a) The Selling Shareholder shall cooperate to the extent
necessary to cause the registration statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(b) The Selling Shareholder shall pay all Federal and other taxes,
if any, on the transfer or sale of the Shares to the U.S. Underwriters.
(c) The Selling Shareholder shall do or perform all things
required to be done or performed under this Agreement and the
International Underwriting Agreement by the Selling Shareholder prior to
the Closing Date or any Option Closing Date, as the case may be, to
satisfy all conditions precedent to the delivery of the Shares pursuant to
this Agreement.
(d) Except as provided in this Agreement and the International
Underwriting Agreement, the Selling Shareholder shall not sell, contract
to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock for a
period of 90 days after the date of the U.S. Prospectus, without the prior
written consent of Smith Barney Inc., which shall not be unreasonably
withheld.
(e) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Selling Shareholder shall not 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 Underwritten Shares.
(f) The Selling Shareholder shall advise you and the Company
promptly and, if requested by you, shall confirm such advice in writing,
within the period of time referred to in Section 5(f) hereof, of any
change in information furnished by or on behalf of the Selling Shareholder
expressly for use in the Registration Statement and the U.S. Prospectus
that comes to the attention of the Selling Shareholder and that suggests
that any statement of a material fact made in the Registration Statement
is or may be untrue or that requires or may require the making of any
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additions to or changes in the Registration Statement in order to state a
material fact required by the Act to be stated therein or to make the
statements therein not misleading or that suggests any statement of a
material fact made in the U.S. Prospectus (as then amended or
supplemented) is or may be untrue or that requires or may require the
making of any additions to or changes in the U.S. Prospectus (as then
amended or supplemented) in order to state a material fact required by the
Act to be stated therein or in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
or that it is or may be necessary to amend or supplement the U.S.
Prospectus (as then amended or supplemented) to comply with the Act or any
other law.
(g) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 13 hereof or by notice given by you
terminating this Agreement pursuant to Section 13 or Section 14 hereof) or
if this Agreement shall be terminated by the U.S. Underwriters because of
any failure or refusal on the part of the Company or the Selling
Shareholder to comply with the terms or fulfill any of the conditions of
this Agreement, the Selling Shareholder agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel for the U.S. Underwriters)
incurred by you in connection herewith.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each U.S. Underwriter and the Selling Shareholder
that:
(a) The Company and the transactions contemplated by this
Agreement and the International Underwriting Agreement meet the
requirements for using Form S-3 under the Act. The registration statement
in the form in which it became or becomes effective and also in such form
as it may be when any post-effective amendment thereto shall become
effective and the U.S. 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;
the Registration Statement does not and will not at any such time 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; and the U.S. Prospectus and any supplement or amendment
thereto will not at any such time contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that this representation
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and warranty does not apply to statements in or omissions from the
registration statement or the U.S. Prospectus made in reliance upon and in
conformity with information relating to any U.S. Underwriter furnished to
the Company in writing by or on behalf of any U.S. Underwriter through you
expressly for use therein.
(b) Each U.S. Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied
when so filed in all material respects with the provisions of the Act.
(c) 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 any further Incorporated
Documents so filed will, when they are filed, conform in all material
respects with the requirements of the Exchange Act; 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 to make the statements therein 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 to make the statements therein not misleading.
(d) 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; and the capital stock of
the Company conforms to the description thereof in the Registration
Statement and the U.S. Prospectus.
(e) All of the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, which is incorporated by
reference into the Registration Statement. The Company and each of the
Subsidiaries that is a "significant subsidiary" (as defined in Regulation
S-X under the Act) (collectively, the "Significant Subsidiaries") has been
duly organized, is validly existing (if applicable, as a corporation in
good standing) under the laws of its jurisdiction of organization and has
full corporate (or partnership) power and authority to carry on its
business as it is currently being conducted (and, in the case of the
Company, to execute, deliver and perform this Agreement) and to own, lease
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business
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in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified could not reasonably be expected to have a
material adverse effect, singly or in the aggregate, on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole (a
"Material Adverse Effect").
(f) All of the issued and outstanding shares of capital stock of,
or other ownership interests in, each Significant Subsidiary have been
duly authorized and validly issued, and certain shares of capital stock of
each Significant Subsidiary are owned, directly or through Subsidiaries,
by the Company as set forth on Exhibit 21 to the Company's annual report
on Form 10-K for the fiscal year ended December 31, 1994. All such shares
or other ownership interests in each Significant Subsidiary are fully paid
and nonassessable, and are free and clear of any security interest,
mortgage, pledge, claim, lien or encumbrance (each, a "Lien"), except for
Liens that are in the aggregate immaterial to the business of the Company
and the Subsidiaries, taken as a whole. There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale, or Liens related to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of any
Significant Subsidiary.
(g) Neither the Company nor any of the Significant Subsidiaries is
in violation of or in default in the performance of any of their
respective charters or bylaws (or partnership agreements, as the case may
be) or any bond, debenture, note or any other evidence of indebtedness or
any indenture, mortgage, deed of trust or other contract, lease or other
instrument to which the Company or any of the Significant Subsidiaries is
a party or by which it or any of them is bound, or to which any of the
property or assets of the Company or any of the Significant Subsidiaries
is subject, except as could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(h) This Agreement has been duly and validly executed and delivered
by the Company, and constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms
(assuming the due execution and delivery thereof by you and the Selling
Shareholder), except as rights to indemnity and contribution hereunder may
be limited by Federal or state securities laws, court decisions or public
policy.
(i) The execution and delivery of this Agreement by the Company and
the performance of this Agreement and the International Underwriting
Agreement (i) does not require
- 13 -
any consent, approval, authorization or 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 Underwritten Shares under the Act and the Exchange
Act and compliance with the state securities or Blue Sky laws or real
estate syndication laws of various jurisdictions, all of which have been
or will be effected in accordance with this Agreement) and (ii) will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default or cause an acceleration of any obligation under,
any of the respective charters or bylaws (or partnership agreements, as
the case may be) of the Company or any of the Significant Subsidiaries or
any material bond, note, debenture or other evidence of indebtedness or
any material indenture, mortgage, deed of trust or other material
contract, lease or other instrument to which the Company or any of the
Significant Subsidiaries is a party or by which any of them is bound, or
to which any of the property or assets of the Company or any of the
Significant Subsidiaries is subject, or any order of any court or
governmental agency or authority entered in any proceeding to which the
Company or any of the Significant Subsidiaries was or is a party or by
which any of them is bound or (solely with respect to actions by the
Company or the Significant Subsidiaries) violate any applicable Federal,
state or local law, rule, administrative regulation or ordinance or
administrative or court decree, any of the foregoing of which could,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(j) Except as disclosed in the Registration Statement and the U.S.
Prospectus, there is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, pending against the
Company or any of the Significant Subsidiaries that is required to be
disclosed in the Registration Statement or the U.S. Prospectus, or that
could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect or materially and adversely to affect the
performance of the Company's obligations pursuant to this Agreement and,
to the best of the Company's knowledge, no such proceedings are
contemplated or threatened. No action has been taken with respect to the
Company or any of the Significant Subsidiaries, and no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency that suspends the effectiveness of the Registration
Statement, prevents or suspends the use of any Prepricing Prospectus or
suspends the sale of the Shares in any jurisdiction referred to in Section
5(h) hereof; no injunction, restraining order or order of any nature by a
Federal or state court of competent jurisdiction has been issued with
respect to the Company or any of the Significant
- 14 -
Subsidiaries that suspends the effectiveness of the Registration
Statement, prevents or suspends the use of any Prepricing Prospectus or
suspends the sale of the Shares in any jurisdiction referred to in Section
5(h) hereof; other than the litigation matters or proceedings described in
the U.S. Prospectus under the captions "Business -- Legal Proceedings"
(collectively, the "Litigation"), no action, suit or proceeding before any
court or arbitrator or any governmental body, agency or official (domestic
or foreign), is pending against or, to the best of the Company's
knowledge, threatened against, the Company or any of the Significant
Subsidiaries that, if adversely determined, could, singly or in the
aggregate, reasonably be expected in any manner to invalidate this
Agreement or the Shares; and every request of the Commission, or any
securities authority or agency of any jurisdiction, for additional
information (to be included in the Registration Statement or the U.S.
Prospectus or otherwise) has been complied with in all material respects.
No contract or document of a character required to be described in the
Registration Statement or the U.S. Prospectus or to be filed as an exhibit
to or incorporated by reference in the Registration Statement is not so
described or filed or incorporated by reference as required.
(k) The firm of accountants that has certified or shall certify the
applicable consolidated financial statements and supporting schedules of
the Company filed or to be filed with the Commission as part of the
Registration Statement and the U.S. Prospectus are independent public
accountants with respect to the Company and the Subsidiaries, as required
by the Act and the Exchange Act. The consolidated financial statements,
together with related notes, set forth in the U.S. Prospectus and the
Registration Statement comply as to form in all material respects with the
requirements of the Act and the Exchange Act and fairly present, in all
material respects, the financial position of the Company and the
Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles in the United
States of America consistently applied throughout such periods, except as
disclosed in the notes to such financial statements; and the other
financial and statistical information and the supporting schedules
included in the U.S. Prospectus and in the Registration Statement present
fairly, in all material respects, the information required to be stated
therein.
(l) Except as disclosed in the Registration Statement, subsequent
to the respective dates as of which information is given in the
Registration Statement and the U.S. Prospectus, (i) neither the Company
nor any of the
- 15 -
Significant Subsidiaries has incurred any liabilities or obligations,
direct or contingent, that are material to the Company and the
Subsidiaries, taken as a whole, nor entered into any transaction not in
the ordinary course of business that is material to the Company and the
Subsidiaries, taken as a whole, (ii) there has been no decision or
judgment in the nature of litigation adverse to the Company or any of the
Significant Subsidiaries, and (iii) there has been no 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 (any of the above, a "Material Adverse Change").
(m) Neither the Company nor any of the Subsidiaries is involved in
any labor dispute nor, to the best of the Company's knowledge, is any
labor dispute imminent, other than routine disciplinary and grievance
matters, and the Company is not aware (without any independent
verification) of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors,
that could reasonably be expected to result in a Material Adverse Effect.
(n) The Company and each of the Significant Subsidiaries possess
such licenses, certificates, authorizations, approvals, franchises,
trademarks, service marks, trade names, permits and other rights issued by
local, state, federal or foreign regulatory agencies or bodies as are
necessary to conduct the businesses now conducted by them and the lack of
which could reasonably be expected to have a Material Adverse Effect on
the Company and the Subsidiaries, taken as a whole, and neither the
Company nor any of the Significant Subsidiaries has, to be the best of the
Company's knowledge, received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization,
approval, franchise, trademark, service mark, trade name, permit or right
that, if the subject of any unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect.
(o) The Company has not and, to the best of the Company's
knowledge, none of the Subsidiaries nor any employee or agent of the
Company has, directly or indirectly, paid or delivered any fee, commission
or other sum of money or item or property, however characterized, to any
finder, agent, government official or other party, in the United States or
any other country, that is in any manner related to the business or
operations of the Company that the Company knows or has reason to believe
to have been illegal under any federal, state or local laws of the United
States or any other country having jurisdiction; and the Company has not
participated, directly or indirectly, in any
- 16 -
boycotts or other similar practices in contravention of law affecting any
of its actual or potential customers.
(p) All material tax returns required to be filed by the Company or
any of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities have been paid,
other than those being contested in good faith or for which adequate
reserves have been provided or those currently payable without penalty or
interest.
(q) Except as disclosed in the U.S. Prospectus or except as could
not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) to the best of the Company's knowledge, neither the
Company nor the Subsidiaries is in violation of any Federal, state or
local law or regulation relating to pollution or protection of public
heath or welfare or the environment, including, without limitation, the
storage, handling, transportation, emissions, discharges, releases or
threatened releases of pollutants, contaminates, hazardous or toxic
materials, substances or wastes, or petroleum or petroleum products
("Environmental Laws"), (b) the Company and each of the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and
the Company and each of the Subsidiaries are in compliance with all terms
and conditions of any such permit, license or approval and (c) neither the
Company nor, to the best of the Company's knowledge, any of the
Subsidiaries, has received any notice or communication from any
governmental agency or any written notice from any other person regarding
violation of or liability under Environmental Laws and (d) there is no
pending action or proceeding, or to the best of the Company's knowledge,
pending or threatened claim or investigation against the Company or any of
the Subsidiaries regarding violation of or liability under Environmental
Laws.
(r) To the best of the Company's knowledge, there are no costs and
liabilities associated with Environmental Laws that could, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(s) To the best of the Company's knowledge, neither the Company nor
any of the Subsidiaries has (a) violated any Federal or state law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder, or (b) engaged
- 17 -
in any unfair labor practice that, with respect to any matter specified in
clause (a) or (b) above, could reasonably be expected to result, singly or
in the aggregate, in a Material Adverse Effect. There is (i) no
significant unfair labor practice complaint pending against the Company or
any of the Subsidiaries or, to the best of the Company's knowledge,
threatened against any of them, before the National Labor Relations Board
or any state or local labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any
of the Subsidiaries or, to the best of the Company's knowledge, threatened
against any of them and (ii) to the best of the Company's knowledge, no
union representation question existing with respect to the employees of
the Company or any of the Subsidiaries and, to the best of the Company's
knowledge, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i) or (ii) above) such as would
not, singly or in the aggregate, have a Material Adverse Effect.
(t) To the best of the Company's knowledge, (i) each of the
Company and the Subsidiaries has good and marketable title to all property
(real and personal) described in the U.S. Prospectus as being owned by it,
in fee simple in the case of real property (other than in the case of
certain buildings the land under which is leased to the Company pursuant
to long-term leases that are valid, subsisting and enforceable against the
Company), free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement
and the U.S. Prospectus or in a document filed as an exhibit to the
Registration Statement and (ii) all the property described in the
Registration Statement and the U.S. Prospectus as being held under lease
by each of the Company and the Significant Subsidiaries is held by it
under valid, subsisting and enforceable leases, except (with respect to
any matter specified in clause (i) or (ii) above) such as would not,
singly or in the aggregate, have a Material Adverse Effect.
(u) Other than as described in the Registration Statement and the
U.S. Prospectus, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of
the Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement or the
International Underwriting Agreement.
(v) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Company has not
- 18 -
taken, 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
Underwritten Shares.
(w) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
The Selling Shareholder represents and warrants to each U.S. Underwriter and the
Company that:
(a) The Selling Shareholder now has, and on the Closing Date and
any Option Closing Date will have, valid title to the Shares to be sold on
such date, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer.
(b) The Selling Shareholder now has, and on the Closing Date and
any Option Closing Date will have, full legal right, power and
authorization to sell, assign transfer and deliver such Shares in the
manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several U.S. Underwriters will acquire valid
title to such Shares free and clear of any lien, claim, security interest,
or other encumbrance except for any liens, claims, security interests or
other encumbrances created by the actions or status of the U.S.
Underwriters.
(c) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and is the valid
agreement of the Selling Shareholder.
(d) Neither the execution and delivery of this Agreement by or on
behalf of the Selling Shareholder nor the consummation by the Selling
Shareholder of the transactions herein contemplated requires any consent,
approval, authorization or 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 Underwritten Shares under the Act and compliance with the state
securities or Blue Sky laws or the real estate syndication 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 default under, or violates or will
violate, any agreement, indenture or other instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder is or may be
bound or to which any of the Selling Shareholder's property or assets is
subject, or any
- 19 -
statute, law, rule, regulation, ruling, judgment, injunction, order or
decree applicable to the Selling Shareholder or to any property or assets
of the Selling Shareholder, except any such breaches, defaults or
violations that would not, singly or in the aggregate, in any way impair
the valid title to be acquired by the U.S. Underwriters upon delivery of
the Shares pursuant to this Agreement and payment therefor as contemplated
herein.
(e) If any date on which the Registration Statement or any
post-effective amendment thereto is declared effective (each, an
"Effective Date") is prior to the execution and delivery of this
Agreement, on such Effective Date, to the extent, but only to the extent,
any statements or omissions made in the Registration Statement were made
in reliance upon and in conformity with written information furnished to
the Company by the Selling Shareholder expressly for use therein, such
statements and omissions did not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. If any Effective
Date is subsequent to the execution and delivery of this Agreement, on
such Effective Date, to the extent, but only to the extent, any statements
or omissions made in the Registration Statement are made in reliance upon
and in conformity with written information furnished to the Company by the
Selling Shareholder expressly for use therein, such statements and
omissions will not include an untrue statement of a material fact and will
not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. As of its date
and on the Closing Date, to the extent, but only to the extent, any
statements or omissions made in the U.S. Prospectus are made in reliance
upon and in conformity with written information furnished to the Company
by the Selling Shareholder expressly for use therein, such statements and
omissions did not and will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
circumstances under which they were made, not misleading.
(f) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Selling Shareholder has not taken, 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 Underwritten Shares.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other
- 20 -
U.S. Underwriter and each person, if any, who controls any U.S. Underwriter
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
U.S. Prepricing Prospectus or in the Registration Statement or the U.S.
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 (in the case of
the any U.S. Prepricing Prospectus or the U.S. Prospectus, in the light of the
circumstances under which they were made) 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 that
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such U.S. Underwriter furnished in writing to
the Company by or on behalf of any U.S. Underwriter through you expressly for
use in connection therewith; provided, however, that the indemnification
contained in this subsection (a) with respect to any Prepricing Prospectus shall
not inure to the benefit of any U.S. Underwriter (or to the benefit of any
person controlling such U.S. Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Shares by such U.S.
Underwriter to any person if a copy of the U.S. 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 U.S.
Prepricing Prospectus was corrected in the U.S. Prospectus, provided that the
Company has delivered the U.S. Prospectus to the several U.S. Underwriters in
requisite quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability that the
Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
U.S. Underwriter or any person controlling any U.S. Underwriter in respect of
which indemnity may be sought against the Company, such U.S. Underwriter or such
controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such U.S. Underwriter or any
such controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such U.S.
Underwriter or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the
- 21 -
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such U.S.
Underwriter or such controlling person and the indemnifying parties and such
U.S. Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and any indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of such U.S. Underwriter or such
controlling person). It is understood, however, that the indemnifying parties
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 all such U.S.
Underwriters and controlling persons, which firm shall be designated in writing
by Smith Barney Inc., and that all such fees and expenses shall be reimbursed as
they are incurred. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their 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
indemnifying parties agree to indemnify and hold harmless any U.S. 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 Selling Shareholder agrees to indemnify and hold harmless
each U.S. Underwriter and each person, if any, who controls such U.S.
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, subject to the limitations set forth in Section 12, to the same
extent as the foregoing indemnity from the Company to each U.S. Underwriter, but
only with respect to information specifically relating to the Selling
Shareholder furnished in writing by or on behalf of such Selling Shareholder
expressly for use in the Registration Statement, the U.S. Prospectus, any U.S.
Prepricing Prospectus, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against any U.S. Underwriter or any such
controlling person in respect of which indemnity may be sought against the
Selling Shareholder pursuant to this subsection (c), the Selling Shareholder
shall have the rights and duties given to the indemnifying parties by subsection
(b) above (except that if the Company shall have assumed the defense thereof the
Selling Shareholder 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
- 22 -
be at the Selling Shareholder's expense). The foregoing indemnity agreement
shall be in addition to any liability that the Selling Shareholder may otherwise
have.
(d) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Shareholder, and any person who controls
the Company or the Selling Shareholder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Selling Shareholder to each U.S. Underwriter,
but only with respect to information relating to such U.S. Underwriter furnished
in writing by or on behalf of such U.S. Underwriter through you expressly for
use in the Registration Statement, the U.S. Prospectus or any U.S. Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors, any such
officer, the Selling Shareholder, or any such controlling person based on the
Registration Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus,
or any amendment or supplement thereto, and in respect of which indemnity may be
sought against any U.S. Underwriter pursuant to this subsection (d), such U.S.
Underwriter shall have the rights and duties given to the indemnifying parties
by subsection (b) above (except that if the Company shall have assumed the
defense thereof such U.S. Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such U.S. Underwriter's expense),
and the Company, its directors, any such officer, the Selling Shareholder, and
any such controlling person shall have the rights and duties given to the U.S.
Underwriters by subsection (b) above. The foregoing indemnity agreement shall
be in addition to any liability that any U.S. Underwriter may otherwise have.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsection (a) above or, where the
indemnified party is the Company or its officers, directors or controlling
persons, under subsection (d) above 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 in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the U.S. Underwriters on the
other hand 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. If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsection (c) above or, where the
indemnified party is the Selling Shareholder, under subsection
- 23 -
(d) above 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 Selling Shareholder on the one hand and the U.S.
Underwriters 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 Selling
Shareholder on the one hand and the U.S. Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Selling Shareholder on the one hand and
the U.S. Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Selling Shareholder bear to the total underwriting discounts and
commissions received by the U.S. Underwriters, in each case as set forth in the
table on the cover page of the U.S. Prospectus; provided that, in the event that
the U.S. Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Selling Shareholder or
the U.S. Underwriters from the offering of the Shares shall include the net
proceeds (before deducting expenses) received by the Selling Shareholder, and
the underwriting discounts and commissions received by the U.S. Underwriters,
from the sale of such Additional Shares, in each case computed on the basis of
the respective amounts set forth in the notes to the table on the cover page of
the U.S. Prospectus. The relative fault of the Company or the Selling
Shareholder, as the case may be, on the one hand and the U.S. Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholder, as the case may be, on the one hand or by
the U.S. Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(f) The Company, the Selling Shareholder and the U.S. Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the U.S.
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in subsection (e) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in subsection (e)
- 24 -
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 9, no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages that such U.S. Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The U.S. Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 13 hereof) and not joint.
(g) 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.
(h) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 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 9 and the
representations and warranties of the Company and the Selling Shareholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any U.S. Underwriter
or any person controlling any U.S. Underwriter, the Company, its directors or
officers or the Selling Shareholder or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any U.S. Underwriter or any
person controlling any U.S. Underwriter, or to the Company, its directors or
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 9.
10. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The several
obligations of the U.S. Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
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(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 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, 430A
and 434 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 any U.S. Underwriter, threatened by the
Commission, and any request of the Commission for additional information
(to be included in the registration statement or the U.S. Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change in or affecting the condition
(financial or other), business, properties, net worth, or results of
operations of the Company or the Subsidiaries not contemplated by the U.S.
Prospectus, that, in your reasonable opinion, as Representatives of the
several U.S. Underwriters, would materially adversely affect the market
for the Shares, or (ii) any event or development relating to or involving
the Company or any officer or director of the Company or the Selling
Shareholder that makes any statement made in the U.S. Prospectus untrue in
any material respect or that, in the opinion of the Company and its
counsel or the U.S. Underwriters and their counsel, requires the making of
any addition to or change in the U.S. 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, in the light of the
circumstances under which they were made, not misleading, if amending or
supplementing the U.S. Prospectus to reflect such event or development
would, in your reasonable opinion, as Representatives of the several U.S.
Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of
Latham & Watkins, counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, to
the effect that:
(i) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the
- 26 -
Act and no proceedings therefor have been initiated by the
Commission; and any required filing of the U.S. Prospectus, and any
supplements thereto, pursuant to Rule 424(b) or Rule 434 under the
Act has been made in the manner and within the time period required
by Rule 424(b) and Rule 430A under the Act;
(ii) To the best of such counsel's knowledge no consent,
approval, authorization or order of, or filing with, any federal or
New York court or governmental agency or body is required to be
obtained or made by the Company for the consummation of the sale of
the Shares by the Selling Shareholder pursuant to this Agreement,
except such as have been obtained under the Act and such as may be
required under the state securities laws in connection with the
purchase and distribution of the Shares by the U.S. Underwriters;
(iii) The Registration Statement and the U.S. Prospectus
comply as to form in all material respects with the requirements for
registration statements on Form S-3 under the Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel need express no opinion with respect to
the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the U.S.
Prospectus. In passing upon the compliance as to form of the
Registration Statement and the U.S. Prospectus, such counsel may
assume that the statements made and incorporated by reference
therein are correct and complete;
(iv) Neither the purchase of the Shares by the U.S.
Underwriters nor the sale of the Shares by the Selling Shareholder
pursuant to the terms of this Agreement will result in the breach of
or a default under those agreements identified to such counsel by an
officer of the Company as material to the Company; and
(v) The statements set forth in the U.S. Prospectus in the
first, second, third, fifth, sixth and seventh paragraphs under the
heading "Underwriting" in the U.S. Prospectus, insofar as such
statements constitute a summary of legal matters, are accurate in
all material respects.
Such opinion may be limited to the internal laws of the State of New
York and the Federal laws of the United States. Such counsel may rely as
to factual matters on certificates of officers of the Company and of state
officials, in which case their opinion shall state that they are so doing.
Such
- 27 -
opinion also shall take further exceptions that shall be reasonably
acceptable to the U.S. Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the U.S. Underwriters and their counsel, at
which the contents of the Registration Statement and U.S. Prospectus and
related matters were discussed and, although such counsel need not pass
upon and need not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the U.S. Prospectus and such counsel may state that they
have made no independent check or verification thereof, during the course
of such participation, (relying as to materiality to a large extent upon
the statements of officers and other representatives of the Company), no
facts came to such counsel's attention that caused such counsel to believe
that the Registration Statement (as amended or supplemented, if
applicable, and including the Incorporated Documents), at the time such
Registration Statement or any post-effective amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the U.S. Prospectus (including
the Incorporated Documents) as amended or supplemented, as of its date and
as of the Closing Date, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that such counsel need
express no belief with respect to the financial statements, schedules and
other financial and statistical data included in the Registration
Statement or the Prospectus or incorporated therein.
(d) You shall have received on the Closing Date, an opinion of
John F. Schmutz, Esq., Vice President and General Counsel of the Company,
dated the Closing Date and addressed to you, as Representatives of the
several U.S. Underwriters, to the effect that:
(i) To the best of such counsel's knowledge, no
authorization, approval, consent or order of, or registration or
filing with, any court or governmental authority or agency is
required to be obtained or made by the Company for the valid sale of
the Shares to you, except (a) such as have been obtained under the
Act and (b) such as may be required under the state securities or
Blue Sky laws or real estate syndication laws or regulations of any
jurisdiction in the United States in
- 28 -
connection with the purchase and distribution of the Shares by the
U.S. Underwriters;
(ii) The Company has corporate power and authority to enter
into this Agreement and this Agreement has been duly authorized by
all necessary corporate action by the Company, and has been duly
executed and delivered by the Company;
(iii) Neither the purchase of the Shares by the U.S.
Underwriters nor the sale of the Shares by the Selling Shareholder
pursuant to the terms of this Agreement will conflict with or
constitute a breach of or a default under the certificate or
articles of incorporation or bylaws, or other organizational
documents, of the Company or any of the Significant Subsidiaries or
the terms of any material agreement or instrument to which the
Company or any of the Significant Subsidiaries is a party or by
which any of them is bound, or to which any of the properties of the
Company or any of the Significant Subsidiaries is subject, or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Significant Subsidiaries, or result in any violation of any statute,
rule or regulation applicable to the Company or, to the best of such
counsel's knowledge, any judgment, injunction, order or decree of
any court or governmental agency or body having jurisdiction over
the Company or any of the Significant Subsidiaries or any of their
respective properties;
(iv) Each of the Company and, to the best of such counsel's
knowledge, the Significant Subsidiaries that is a corporation has
been duly incorporated and is validly existing and is a corporation
in good standing under the laws of its jurisdiction of its
incorporation, and each of the Company and, to the best of such
counsel's knowledge, the Significant Subsidiaries has the corporate
(or partnership) power and authority and all necessary governmental
authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all governmental regulatory
officials and bodies to own and operate its properties and to
conduct its business as described in the Registration Statement and
the U.S. Prospectus and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which such qualification is required wherein it owns
or leases material property or conducts business, except where the
failure so to qualify could not reasonably be expected to have a
Material Adverse Effect;
- 29 -
(v) All of the issued and outstanding capital stock of, or
other ownership interests in, each Significant Subsidiary has been
duly authorized and validly issued, and is fully paid and
nonassessable and, except as otherwise set forth in the Registration
Statement and the U.S. Prospectus, certain shares of capital stock
of, or other ownership interests in, each Significant Subsidiary are
owned by the Company, either directly or through Subsidiaries, as
set forth on Exhibit 21 to the Company's annual report on Form 10-K
for the fiscal year ended December 31, 1994, free and clear of any
perfected security interest or, to the best of such counsel's
knowledge after reasonable inquiry, any other security interests,
claims, liens, equities or encumbrances;
(vi) The authorized and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
U.S. Prospectus; and the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof incorporated by reference in the U.S.
Prospectus;
(vii) Except as described in the Registration Statement and
the U.S. Prospectus, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of
sale, or Liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of the Company
or any security convertible into or exchangeable for the capital
stock of the Company;
(viii) Except as described in the Registration Statement
and the U.S. Prospectus, there is no holder of any security of the
Company or any other person who has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them,
or to permit them to underwrite the sale of, the Shares or the right
to have any Common Stock or other securities of the Company included
in the registration statement or the right, as a result of the
filing of the registration statement, to require registration under
the Act of any shares of Common Stock or other securities of the
Company;
(ix) To the best of such counsel's knowledge (a) there are no
franchises, contracts, indentures, mortgages, leases, loan
agreements, notes or other agreements or instruments to which the
Company or any Significant Subsidiary is a party or by which any of
them may be bound that are required to be described in the
Registration Statement or the U.S. Prospectus or to
- 30 -
be filed as exhibits to or incorporated by reference in the
Registration Statement other than those described therein or filed
or incorporated by reference as exhibits thereto, (b) no default
exists in the due performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument, except for defaults that would not, singly or in the
aggregate, have a Material Adverse Effect and (c) the statements in
the U.S. Prospectus under the caption "Business -- Legal
Proceedings" insofar as they relate to statements of law or legal
conclusions, are accurate in all material respects;
(x) The Company and the Significant Subsidiaries own all
patents, trademarks, trademark registrations, service marks, service
mark registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the U.S. Prospectus as being
owned by them or any of them or necessary for the conduct of their
respective businesses, and such counsel is not aware, after
reasonable inquiry, of any claim to the contrary or any challenge by
any other person to the rights of the Company and the Significant
Subsidiaries with respect to the foregoing;
(xi) To the best of such counsel's knowledge, there is no
current, pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of the Significant Subsidiaries or any
of their respective properties of a character required to be
disclosed in the Registration Statement and the U.S. Prospectus that
is not adequately so disclosed;
(xii) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, nonassessable and not subject to any preemptive or other
similar rights to subscribe for such Common Stock;
(xiii) The form of the certificates for the Shares conforms
to the requirements of the corporate law of the State of Texas;
(xiv) At the time it became effective and on the Closing
Date, the Registration Statement (except for financial statements,
the notes thereto and related schedules and other financial,
numerical, statistical or accounting data included therein or
omitted therefrom, as to which no opinion need be expressed) and the
U.S. Prospectus complies as to form in all material respects with
the applicable requirements of
- 31 -
the Act; and each of the Incorporated Documents (except for
financial statements, the notes thereto and related schedules and
other financial, numerical, statistical or accounting data included
therein or omitted therefrom, as to which no opinion need be
expressed) complies as to form in all material respects with the
Exchange Act;
(xv) The statements in the Registration Statement and the
U.S. Prospectus, insofar as they are descriptions of contracts,
agreements or other legal documents, or refer to statements of law
or legal conclusions, are accurate and present fairly the
information required to be shown; and
(xvi) Neither the Company nor any of the Subsidiaries is an
"investment company" required to be registered under Section 8 of
the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or an entity "controlled by an investment company"
required to be registered under Section 8 of the Investment Company
Act.
Such opinion may be limited to the internal laws of the State of
Texas and the Federal laws of the United States. Such opinion shall take
further exceptions that shall be reasonably acceptable to the U.S.
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, your representatives and your counsel, at which the contents of
the Registration Statement and U.S. Prospectus (including the Incorporated
Documents) and related matters were discussed and, although such counsel
is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the U.S. Prospectus, on the basis of the
foregoing, relying as to the factual matters underlying the determination
of materiality to a large extent upon the statements of officers and other
representatives of the Company, no facts came to such counsel's attention
that caused such counsel to believe that the Registration Statement (as
amended or supplemented, if applicable, and including the Incorporated
Documents), at the time such Registration Statement or any post-effective
amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (other than
information omitted therefrom in reliance on Rule 430A under the Act), or
the U.S. Prospectus (other than the financial statements and
- 32 -
notes thereto and other financial, numerical, statistical and accounting
data included therein or excluded therefrom, as to which he expresses no
belief), as amended or supplemented, as of its date and as of the Closing
Date, contained an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) You shall have received on the Closing Date, an opinion of
Goodwin, Procter & Hoar, counsel for the Selling Shareholder, or of J.
Grant Monahon, Director and General Counsel of [Aldrich Eastman Waltch,
parent company of the general partner of the Selling Shareholder], dated
the Closing Date and addressed to you, as Representatives of the several
U.S. Underwriters, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder;
(ii) To the best of such counsel's knowledge after reasonable
inquiry, the Selling Shareholder has the partnership power and
authorization to sell, assign, transfer and deliver to the Shares;
(iii) The execution and delivery of this Agreement and the
International Underwriting Agreement by the Selling Shareholder and
the consummation of the transactions contemplated hereby and thereby
will not conflict with, violate, result in a breach of or constitute
a material default under the terms or provisions of the Amended and
Restated Agreement of Limited Partnership of AEW Partners, L.P. or
any other agreement, indenture, mortgage or other instrument, known
to such counsel, to which the Selling Shareholder is a party; and
(iv) Upon delivery of the certificates representing the
Shares pursuant to this Agreement and payment therefor as
contemplated herein, title to the Shares will pass to the U.S.
Underwriters free and clear of any lien, claim, security interest,
or other encumbrance, assuming that the Shares were validly
authorized and issued by the Company and the U.S. Underwriters are
purchasers for value in good faith without notice of any adverse
claim (as such term is defined in Section 8-302 of the Uniform
Commercial Code).
(f) You shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the U.S. Underwriters, dated the
Closing Date and addressed to you,
- 33 -
as Representatives of the several U.S. Underwriters, with respect to the
matters referred to in clauses (i), (ii) and (iii) and in the last
paragraph of subsection (c) above and such other related matters as you
may request.
(g) You shall have received letters addressed to you, as
Representatives of the several U.S. Underwriters, and dated the date
hereof and the Closing Date from KPMG Peat Marwick LLP, independent
certified public accountants, substantially in the forms heretofore
approved by you.
(h)(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, shall
be contemplated by the Commission at or prior to the Closing Date; (ii)
there shall not have been any change in the capital stock of the Company
nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set
forth or contemplated in the Registration Statement or the U.S. 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 U.S. Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the Registration
Statement and the U.S. Prospectus (or any amendment or supplement
thereto), any Material Adverse Change; (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 in the Registration Statement and the U.S. Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement and the
International Underwriting Agreement shall be true and correct in all
material respects 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 (or such
other officers as are acceptable to you), to the effect set forth in this
Section 10(h) and in Section 10(i) hereof.
(i) The Company shall not have failed at or prior to the Closing
Date to have performed or complied in all material respects 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.
(j) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be
- 34 -
true and correct in all material respects 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 or on behalf of the Selling Shareholder, to the effect set forth
in this Section 10(j) and in Section 10(k) hereof.
(k) The Selling Shareholder shall not have failed at or prior to
the Closing Date to have performed or complied in all material respects
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.
(l) The Company shall have furnished to you the "lock-up" letters
referred to in Section 5(l) hereof.
(m) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the Closing
Date.
(n) The Company and the Selling Shareholder shall have furnished or
caused to be furnished to you such further certificates and documents as
you shall have requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or
the Selling Shareholder and delivered to you, as Representatives of the U.S.
Underwriters, or to counsel for the U.S. Underwriters, shall be deemed a
representation and warranty by the Company or the Selling Shareholder, as the
case may be, to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in subsections (c) through (j) above shall be
dated the Option Closing Date in question and the opinions called for by
subsections (c), (d), (e) and (f) shall be revised to reflect the sale of
Additional Shares.
11. EXPENSES. The Selling Shareholder agrees to pay the
following costs and expenses and all other costs and expenses incident to the
performance by the Company and the Selling Shareholder of their obligations
hereunder: (i) the preparation, printing or reproduction, and filing with the
Commission of the registration statement (including financial statements and
- 35 -
exhibits thereto), each Prepricing Prospectus, the Prospectuses, and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the registration statement, each Prepricing
Prospectus, the Prospectuses, 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
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the New York Stock Exchange;
(vi) the registration or qualification of the Shares for offer and sale under
the state securities or Blue Sky laws or real estate syndication laws of the
several states as provided herein (including the reasonable fees, expenses and
disbursements of counsel for the U.S. Underwriters relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification); (vii) the filing fees
and the fees and expenses of counsel for the U.S. Underwriters in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc.; (viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; 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 and the Selling Shareholder.
12. LIMITATION OF LIABILITY. The total liabilities of the
Selling Shareholder under this Agreement, including without limitation any
liabilities for breach of representation or warranty or with respect to any
obligation of indemnity, shall not in any event exceed in aggregate amount the
proceeds of the Shares sold hereunder, provided that this Section 12 shall not
limit the liability of the Selling Shareholder to pay expenses as provided in
Section 6(g) or Section 11 hereof.
13. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company or the Selling Shareholder, by notifying you, or by you, as
Representatives of
- 36 -
the several U.S. Underwriters, by notifying the Company and the Selling
Shareholder.
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares that it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares that such defaulting U.S.
Underwriter or U.S. Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares that the U.S.
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
U.S. Underwriter shall be obligated, severally, in the proportion that the
number of Firm Shares set forth opposite its name in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all
non-defaulting U.S. Underwriters or in such other proportion as you may specify
in accordance with Section 20 of the Master Agreement Among Underwriters of
Smith Barney Inc., to purchase the Shares that such defaulting U.S. Underwriter
or U.S. Underwriters are obligated, but fail or refuse, to purchase. If any one
or more of the U.S. Underwriters shall fail or refuse to purchase Shares that it
or they are obligated to purchase on the Closing Date and the aggregate number
of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares that the U.S. Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to you, the Company
and the Selling Shareholder for the purchase of such Shares by one or more
non-defaulting U.S. Underwriters or other party or parties approved by you, the
Company and the Selling Shareholder are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting U.S. Underwriter or the Company. In any such case that does not
result in termination of this Agreement, any of you, the Company or the Selling
Shareholder shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the U.S. Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting U.S. Underwriter from liability in respect of any such
default of any such U.S. Underwriter under this Agreement. The term "U.S.
Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
the approval of the Company and the Selling Shareholder, purchases Shares that a
defaulting U.S. Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 13 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
14. TERMINATION OF AGREEMENT. This Agreement shall be subject
to termination in your absolute discretion, without
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liability on the part of any U.S. Underwriter to the Company or the Selling
Shareholder, by notice to the Company and the Selling Shareholder, if prior to
the Closing Date or any Option Closing Date (if different from the Closing Date
and then only as to the Additional Shares), as the case may be, (i) trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market shall have been suspended or materially limited,
(ii) a general moratorium on commercial banking activities in New York or Texas
shall have been declared by either federal or state authorities, or (iii) there
shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial or
economic conditions, the effect of which on the financial markets of the United
States is such as to make it, in your reasonable judgment, impracticable or
inadvisable to commence or continue the offering of the Shares at the offering
price to the public set forth on the cover page of the U.S. Prospectus or to
enforce contracts for the resale of the Shares by the U.S. Underwriters. Notice
of such termination may be given to the Company by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
15. INFORMATION FURNISHED BY THE SELLING SHAREHOLDER AND THE U.S.
UNDERWRITERS. The statements set forth in the last paragraph on the cover
page, the stabilization legend on the inside cover page, and the statements in
the fourth, eighth, ninth, tenth and fourteenth paragraphs under the caption
"Underwriting" in any U.S. Prepricing Prospectus and in the U.S. Prospectus
constitute the only information furnished by or on behalf of the U.S.
Underwriters through you expressly for use therein as such information is
referred to in Sections 7(a) and 9 hereof. The statements set forth under the
caption "Prospectus Summary -- The Selling Shareholder" (except the fourth
sentence of the third paragraph thereof), in the first and second paragraphs
under the caption "Principal and Selling Shareholders" and the information
regarding the Selling Shareholder set forth in the table under the caption
"Principal and Selling Shareholders" and in footnote (1) thereto, in any U.S.
Prepricing Prospectus and in the U.S. Prospectus constitute the only information
furnished by or on behalf of the Selling Shareholder expressly for use therein
as such information is referred to in Sections 6(f), 8(e), 9 and 16 hereof.
16. FURTHER INDEMNIFICATION AND CONTRIBUTION PROVISIONS. (a)
The Company agrees to indemnify and hold harmless the Selling Shareholder and
its affiliates and its and their respective partners, officers and directors and
each person who controls the Selling Shareholder (within the meaning of the Act
or the Exchange Act), and any agent or investment advisor thereof against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees and costs of investigation) arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any U.S.
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Prepricing Prospectus, the U.S. Prospectus or the Registration Statement, or in
any amendment or supplement thereto, or 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 the same arise out of
or are based upon an untrue statement or omission which was based upon
information with respect to the Selling Shareholder furnished in writing to the
Company by or on behalf of the Selling Shareholder expressly for use therein;
provided that in the event that any U.S. Prepricing Prospectus shall have been
amended or supplemented and copies thereof, as so amended or supplemented, were
furnished to the Selling Shareholder and the U.S. Underwriters prior to the
confirmation of any sales of Shares, such indemnity with respect to the U.S.
Prepricing Prospectus shall not inure to the benefit of the Selling Shareholder
from whom the person asserting such loss, claim, damage or liability purchased
the Shares which are the subject thereof if such person did not, at or prior to
the confirmation of the sale of the Shares to such person, receive a copy of the
U.S. Prepricing Prospectus as so amended or supplemented and the untrue
statement or omission of a material fact contained in the U.S. Prepricing
Prospectus was corrected in the U.S. Prepricing Prospectus as so amended or
supplemented.
(b) The Selling Shareholder agrees to indemnify the Company, its
directors and officers and each person who controls the Company (within the
meaning of the Act and the Exchange Act), subject to the limitations set forth
in Section 12, against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees and the cost of investigation) resulting
from any untrue statement of a material fact or any omission of a material fact
required to be stated in any U.S. Prepricing Prospectus, the U.S. Prospectus,
the Registration Statement or any amendment thereof or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement is contained in or such omission
relates to the information with respect to the Selling Shareholder so furnished
in writing by the Selling Shareholder or on behalf of the Selling Shareholder by
its agents or representatives specifically for inclusion in any U.S. Prepricing
Prospectus, the U.S. Prospectus or the Registration Statement. In no event
shall the liability of the Selling Shareholder hereunder be greater in amount
that the dollar amount of the proceeds received by the Selling Shareholder upon
the sale of the Shares giving rise to such indemnification obligation.
(c) Any person entitled to indemnification hereunder agrees to give
prompt written notice to the indemnifying party after the receipt by such person
of any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such person will claim
indemnification or contribution pursuant to this Agreement and,
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unless in the reasonable judgment of such indemnified party a conflict of
interest may exist between such indemnified party and the indemnifying party
with respect to such claim, permit the indemnifying party to assume the defense
of such claim. Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be unreasonably
withheld). No indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation. If the indemnifying party
is not entitled to, or elects not to, assume the defense of a claim, it will not
be obligated to pay the fees and expenses of more than one counsel with respect
to such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
(d) (i) If the indemnification provided for in this Section 16
from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall, to the extent permitted by
applicable law, contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in connection with
the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations (for the
purposes of this subsection (d), the relevant equitable considerations
shall not include considerations based upon the relative benefits received
by the parties in the offering and sale of the Shares). The relative
fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
subsection (c) above, any reasonable legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
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(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined
by pro rata allocation or by any other method that does not take account
of the equitable considerations referred to in subsection (d)(i) above.
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.
(iii) If indemnification is available under this Section 16, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in subsections (a) and (b) above without regard to the
relative fault of said indemnifying party or indemnified party or any
other equitable consideration provided for in this subsection (d).
17. MISCELLANEOUS. Except as otherwise provided in Sections 5,
13 and 14 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at Weston Centre, 112 E. Pecan Street, P.O. Box 2636, San Antonio, Texas
78299-2636, Attention: John F. Schmutz, Esq., Vice President and General
Counsel; or (ii) if to the Selling Shareholder, at the office of the Selling
Shareholder, care of Aldrich Eastman Waltch, 225 Franklin Street, 25th Floor,
Boston, MA 02110-2803, Attention: Joseph S. Azrack, President and Chief
Executive Officer, or (iii) if to you, as Representatives of the several U.S.
Underwriters, care of Smith Barney Inc., 388 Greenwich Street, New York, New
York 10013, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company, its directors and officers, and the
other controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and the Selling
Shareholder and its affiliates and its and their respective partners, officers,
directors and controlling persons referred to in Sections 9 and 16 hereof, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any U.S. Underwriter of
any of the Shares in his status as such purchaser.
18. 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 that together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless
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at least one counterpart hereof shall have been executed and delivered on behalf
of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the several U.S. Underwriters.
Very truly yours,
LA QUINTA INNS, INC.
By:
-------------------------------
Name:
Title:
AEW PARTNERS, L.P.
By: AEW, INC.,
as general partner
By:
-------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
U.S. Underwriters named in
Schedule I hereto.
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Representatives of the Several U.S. Underwriters
By: SMITH BARNEY INC.
By:
-------------------------------
Name:
Title:
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SCHEDULE I
LA QUINTA INNS, INC.
Number of
U.S. Underwriter Firm Shares
---------------- -----------
Smith Barney Inc. .................
Alex. Brown & Sons Incorporated ....
Montgomery Securities .............
-----------
Total..... -----------
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