4,850,000 Shares
LA QUINTA INNS, INC.
Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
, 1995
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Lead Managers for the Several Managers
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 970,000 shares (the "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 Managers named in
Schedule I hereto (the "Managers") for whom Smith Barney Inc., Alex. Brown &
Sons Incorporated and Montgomery Securities are acting as lead Managers (the
"Lead Managers").
It is understood that the Company and the Selling Shareholder are
concurrently entering into a U.S. Underwriting Agreement, dated the date hereof
(the "U.S. Underwriting Agreement"), providing for the sale by the Selling
Shareholder of 3,880,000 shares of Common Stock (the "Firm U.S. Shares") through
arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters"), for whom Smith Barney Inc., Alex. Brown & Sons
Incorporated and Montgomery Securities are acting as representatives (the
"Representatives"), and an option granted by the Selling Shareholder to the U.S.
Underwriters to purchase up to an additional 470,071 shares of Common Stock (the
"Additional U.S. Shares") solely for the purpose of covering over-allotments.
The Firm U.S. Shares and the Additional U.S. Shares are hereinafter collectively
referred to as the "U.S.
Shares". The U.S. Shares and the Shares, collectively, are herein called the
"Underwritten Shares".
The Company and the Selling Shareholder also understand that the Lead
Managers and the Representatives have entered into an agreement (the "Agreement
Between U.S. Underwriters and Managers") contemplating the coordination of
certain transactions between the Managers and the U.S. Underwriters and that,
pursuant thereto and subject to the conditions set forth therein, the Managers
may purchase from the U.S. Underwriters a portion of the U.S. Shares or sell to
the U.S. Underwriters a portion of the Shares. The Company and the Selling
Shareholder understand that any such purchases and sales between the Managers
and the U.S. Underwriters 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 U.S. Underwriting Agreement.
The Company and the Selling Shareholder wish to confirm as follows
their respective agreements with you and the other several Managers on whose
behalf you are acting, in connection with the several purchases of the Shares by
the Managers.
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 as supplemented by the addition of the Rule 430A information
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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
U.S. 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 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 Prospectus and the International Prepricing Prospectus are
herein
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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 Manager 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 Manager 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 Shares set forth opposite the name of such Manager in Schedule I hereto (or
such number of Shares increased as set forth in Section 13 hereof).
3. TERMS OF PUBLIC OFFERING. The Company and the Selling
Shareholder have been advised by you that the Managers 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 International Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Managers of and payment for the 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
Shares and the Closing Date may be varied by agreement among you, the Company
and the Selling Shareholder.
Certificates for the Shares shall be registered in such names and in
such denominations as you shall request prior to 1:00 P.M., New York City time,
on the second business day preceding the Closing Date. Such certificates shall
be made available to you in New York City for inspection and packaging not later
than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date. The certificates evidencing the Shares shall be delivered to you
on the Closing Date against payment of the purchase price therefor by certified
or official
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bank check or checks payable in New York Clearing House (next day) funds to the
order of the Selling Shareholder.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Managers 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
International Prospectus (as then amended or supplemented) untrue or that
requires the making of any additions to or changes in the International
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,
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and (B) of the necessity to amend or supplement the International
Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, 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 International
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
International Prepricing Prospectus. The Company consents to the use, in
accordance with the provisions of the Act, prior to the date of the
International Prospectus, of each International 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 Managers a prospectus is required by the Act to be
delivered in connection with sales by any Manager or dealer, the Company
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shall expeditiously furnish to each Manager and each dealer, without
charge, as many copies of the International Prospectus (and of any
amendment or supplement to the International Prospectus) as you may
reasonably request for the purposes contemplated by the Act. The Company
consents to the use of the International Prospectus and any amendment or
supplement thereto by you or any dealer in accordance with the provisions
of the Act, 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 Managers, to
amend or supplement the International 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 International 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 International Prospectus so that the statements in the International
Prospectus, as so amended or supplemented, will not, in the light of the
circumstances under which they were made, be misleading, and the
International 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 Managers in connection with the
registration or qualification of the Shares for offering and sale by the
Managers 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 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
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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 U.S. 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 International
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 International 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 U.S. 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.
(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.
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6. AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling Shareholder
agrees with the several Managers 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 Managers.
(c) The Selling Shareholder shall do or perform all things required
to be done or performed under this Agreement and the U.S. Underwriting
Agreement by the Selling Shareholder prior to the Closing Date to satisfy
all conditions precedent to the delivery of the Shares pursuant to this
Agreement.
(d) Except as provided in this Agreement and the U.S. 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 International 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 U.S. 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 International 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 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 International Prospectus (as then amended or
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supplemented) is or may be untrue or that requires or may require the
making of any additions to or changes in the International 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 International
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 Managers 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 Lead Managers for all
reasonable out-of-pocket expenses (including reasonable fees and expenses
of counsel for the Managers) incurred by you in connection herewith.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Manager and the Selling Shareholder that:
(a) The Company and the transactions contemplated by this Agreement
and the U.S. 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
International 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 International 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 and warranty does not apply to statements in or
omissions from the registration statement or the International Prospectus
made in reliance upon and in conformity with information relating to any
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Manager furnished to the Company in writing by or on behalf of any Manager
through you expressly for use therein.
(b) Each International 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 International 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 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
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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 U.S. Underwriting Agreement (i)
does not require 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
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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
International 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 International
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 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
-13-
than the litigation matters or proceedings described in the International
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 International 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 International 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 International 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 International
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 International 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 International Prospectus, (i) neither the Company nor any
of the 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
- 14 -
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 boycotts or other similar practices in
contravention of law affecting any of its actual or potential customers.
- 15 -
(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 International 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 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
- 16 -
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 International 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 International 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 International 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
International 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
U.S. Underwriting Agreement.
(v) Except as stated in this Agreement and the U.S. Underwriting
Agreement and in the Prepricing Prospectuses and the Prospectuses, the
Company has not taken, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
- 17 -
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 Manager and the Company
that:
(a) The Selling Shareholder now has, and on the 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 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 Managers
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 Managers.
(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 statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to the Selling Shareholder or to any
property or assets of the Selling
- 18 -
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 Managers 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 International 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 U.S. 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 Manager and each person,
if any, who controls any Manager 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
- 19 -
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any International Prepricing
Prospectus or in the Registration Statement or the International 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 International Prepricing Prospectus or the International 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 Manager furnished in writing to
the Company by or on behalf of any Manager 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 Manager (or to the benefit of any person controlling such
Manager) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Manager to any person if a copy of
the International 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 International Prepricing Prospectus was
corrected in the International Prospectus, provided that the Company has
delivered the International Prospectus to the several Managers 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
Manager or any person controlling any Manager in respect of which indemnity may
be sought against the Company, such Manager 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 Manager 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 Manager 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 defense and employ
counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such Manager or such controlling
person and the indemnifying parties and such Manager or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any
- 20 -
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 Manager
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 Managers 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 Manager, 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 Manager and each person, if any, who controls such Manager 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 Manager, 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 International Prospectus, any International Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against any Manager 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 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 Manager agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its
- 21 -
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
Manager, but only with respect to information relating to such Manager furnished
in writing by or on behalf of such Manager through you expressly for use in the
Registration Statement, the International Prospectus or any International
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 International Prospectus or any International
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Manager pursuant to this subsection
(d), such Manager 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 Manager 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 Manager'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 Managers by
subsection (b) above. The foregoing indemnity agreement shall be in addition to
any liability that any Manager 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 Managers 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 (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 Managers on the
- 22 -
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 Managers 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 Managers 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 Managers, in each
case as set forth in the table on the cover page of the International
Prospectus. The relative fault of the Company or the Selling Shareholder, as
the case may be, on the one hand and the Managers 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 Managers 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 Managers 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 Managers 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)
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 Manager 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 Manager 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 Managers'
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective numbers of Shares set forth opposite their names in Schedule I
hereto (or such numbers of Shares increased as set forth in Section 13 hereof)
and not joint.
- 23 -
(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 Manager or any
person controlling any Manager, 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 Manager or any person controlling any Manager, 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 MANAGERS' OBLIGATIONS. The several obligations of
the Managers to purchase the Shares hereunder are subject to the following
conditions:
(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 Manager, threatened by the Commission, and any
request of the Commission for additional information (to be included in the
registration statement or the International Prospectus or otherwise) shall
have been complied with to your satisfaction.
- 24 -
(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 International
Prospectus, that, in your reasonable opinion, as Lead Managers for the
several Managers, 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 International Prospectus
untrue in any material respect or that, in the opinion of the Company and
its counsel or the Managers and their counsel, requires the making of any
addition to or change in the International 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 International Prospectus to reflect such event or
development would, in your reasonable opinion, as Lead Managers for the
several Managers, 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 Lead Managers for the several Managers, 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
Act and no proceedings therefor have been initiated by the Commission;
and any required filing of the International 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 Managers;
- 25 -
(iii) The Registration Statement and the International 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 International
Prospectus. In passing upon the compliance as to form of the
Registration Statement and the International 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 Managers 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 International Prospectus in
the first, second, third, fifth, sixth and seventh paragraphs under
the heading "Underwriting" in the International 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 opinion also shall take further exceptions that shall be reasonably
acceptable to the Managers.
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 Managers and their counsel, at which the
contents of the Registration Statement and International 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 International 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
- 26 -
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 International 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 Lead Managers for the several
Managers, 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 connection with the purchase and distribution of the Shares
by the Managers;
(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 Managers 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
- 27 -
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 International 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;
(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 International 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
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"Capitalization" in the International 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 International Prospectus;
(vii) Except as described in the Registration Statement and the
International 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 International 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
International Prospectus or to 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 International 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,
- 29 -
service marks, service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets and rights described in the
International 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 International 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 International
Prospectus complies as to form in all material respects with the
applicable requirements of 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
International 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
- 30 -
(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 Managers.
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 International 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 International 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 International Prospectus (other than the
financial statements and 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
- 31 -
Closing Date and addressed to you, as Lead Managers for the several
Managers, 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 U.S.
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 Managers 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 Managers 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 Managers, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, 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 Lead
Managers for the several Managers, 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
- 32 -
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 International 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
International Prospectus (or any amendment or supplement thereto), except
as may otherwise be stated in the Registration Statement and the
International 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 International Prospectus (or any amendment
or supplement thereto); and (v) all the representations and warranties of
the Company contained in this Agreement and the U.S. 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 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.
- 33 -
(m) The closing under the U.S. 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 Lead Managers for the Managers,
or to counsel for the Managers, shall be deemed a representation and warranty by
the Company or the Selling Shareholder, as the case may be, to each Manager as
to the statements made therein.
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 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 Managers 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 Managers 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
- 34 -
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 Lead
Managers for the several Managers, by notifying the Company and the Selling
Shareholder.
If any one or more of the Managers 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 Manager or Managers are
obligated but fail or refuse to purchase is not more than one-tenth of the
aggregate number of Shares that the Managers are obligated to purchase on the
Closing Date, each non-defaulting Manager shall be obligated, severally, in the
proportion that the number of Shares set forth opposite its name in Schedule I
hereto bears to the aggregate number of Shares set forth opposite the names of
all non-defaulting Managers 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 Manager or Managers are
obligated, but fail or refuse, to purchase. If any one or more of the Managers
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 Managers 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 Managers or other
party or parties approved by you, the Company and the Selling Shareholder are
not made within 36 hours after
- 35 -
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Manager 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 International Prospectus or any other documents
or arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Manager from liability in respect of any such default
of any such Manager under this Agreement. The term "Manager" 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 Manager 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 liability on the part of any
Manager to the Company or the Selling Shareholder, by notice to the Company and
the Selling Shareholder, if prior to the Closing Date (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 International Prospectus or to enforce
contracts for the resale of the Shares by the Managers. 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
MANAGERS. 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 International Prepricing Prospectus and in the International Prospectus
constitute the only information furnished by or on behalf of the Managers
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 --
- 36 -
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 International Prepricing Prospectus and in the
International 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
International Prepricing Prospectus, the International 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
International Prepricing Prospectus shall have been amended or supplemented and
copies thereof, as so amended or supplemented, were furnished to the Selling
Shareholder and the Managers prior to the confirmation of any sales of Shares,
such indemnity with respect to the International 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 International Prepricing
Prospectus as so amended or supplemented and the untrue statement or omission of
a material fact contained in the International Prepricing Prospectus was
corrected in the International 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
- 37 -
omission of a material fact required to be stated in any International
Prepricing Prospectus, the International 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 International Prepricing
Prospectus, the International 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, 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
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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.
(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 Lead Managers of the several Managers,
care of Smith Barney Inc., 388 Greenwich
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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 Managers, 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 Manager 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 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 Managers.
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
Managers named in Schedule I hereto.
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Lead Managers for the Several Managers
By: SMITH BARNEY INC.
By: ________________________
Name:
Title:
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SCHEDULE I
LA QUINTA INNS, INC.
Number of
Manager Shares
------- ------
Smith Barney Inc. .................
Alex. Brown & Sons Incorporated ....
Montgomery Securities .............
-------------
Total.....
-------------
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