EXHIBIT 1(a)
4,850,000 Shares
LA QUINTA INNS, INC.
Common Stock
U.S. UNDERWRITING AGREEMENT
, 1995
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Representatives of the Several U.S. Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
AEW Partners, L.P., a Delaware limited partnership (the "Selling
Shareholder"), proposes to sell an aggregate of 3,880,000 shares (the "Firm
Shares") of common stock, par value $0.10 per share (the "Common Stock"), of
La Quinta Inns, Inc., a Texas corporation (the "Company"), to the several
Underwriters named in Schedule I hereto (the "U.S. Underwriters") for whom
Smith Barney Inc., Alex. Brown & Sons Incorporated and Montgomery Securities
are acting as representatives (the "Representatives"). In addition, solely
for the purpose of covering over-allotments, the Selling Shareholder proposes
to sell to the U.S. Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 470,071 shares (the "Additional
Shares") of Common Stock. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares".
It is understood that the Company and the Selling Shareholder are
concurrently entering into an International Underwriting Agreement, dated the
date hereof (the "International Underwriting Agreement"), providing for the
sale by the Selling Shareholder of 970,000 shares of Common Stock (the
"International Shares") through arrangements with certain underwriters
outside the United States and Canada (the "Managers"), for whom Smith Barney
Inc., Alex. Brown & Sons Incorporated and Montgomery Securities are acting as
lead Managers (the "Lead Managers").
The International Shares and the Shares, collectively, are herein called the
"Underwritten Shares".
The Company and the Selling Shareholder also understand that the
Representatives and the Lead Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from the Managers a portion of
the International Shares or sell to the Managers a portion of the Shares.
The Company and the Selling Shareholder understand that any such purchases
and sales between the U.S. Underwriters and the Managers shall be governed by
the Agreement Between U.S. Underwriters and Managers and shall not be
governed by the terms of this Agreement or the International Underwriting
Agreement.
The Company and the Selling Shareholder wish to confirm as
follows their respective agreements with you and the other several U.S.
Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the U.S. Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 under the Act
(the "registration statement"), including two forms of prospectus subject to
completion relating to the Shares. The term "Registration Statement" as used
in this Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective or, if
the registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this
Agreement. If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Underwritten Shares
may commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective amendment.
The term "Registration Statement" shall also include any registration
statement relating to the Shares that is filed and declared effective
pursuant to Rule 462(b) under the Act. The term "Prospectuses" as used in
this Agreement means the prospectuses in the form included in the
Registration Statement or, if the prospectuses included in the Registration
Statement omit information in reliance on Rule 430A under the Act and such
information is included in prospectuses filed with the Commission pursuant to
Rule 424(b) under the Act, the term "Prospectuses" as used in this Agreement
means the prospectuses in the forms included in the Registration Statement
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as supplemented by the addition of the Rule 430A information contained in the
prospectuses filed with the Commission pursuant to Rule 424(b), PROVIDED that
if prospectuses that meet the requirements of Section 10(a) of the Act are
delivered pursuant to Rule 434(c) under the Act, then (i) the term
"Prospectuses" as used in this Agreement means the prospectuses subject to
completion (as defined in Rule 434(g) under the Act) as supplemented by (A)
the addition of Rule 430A or other information contained in the forms of
prospectus filed pursuant to Rule 434(c)(2) under the Act and (B) the
information contained in the abbreviated term sheets described in Rule
434(c)(3) under the Act, and (ii) the date of such Prospectuses shall be
deemed to be the date of such abbreviated term sheets. The term "Prepricing
Prospectuses" as used in this Agreement means the prospectuses subject to
completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission, and as
such prospectuses shall have been amended from time to time prior to the date
of the Prospectuses. Any reference in this Agreement to the registration
statement, the Registration Statement, any Prepricing Prospectus or the
Prospectuses shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act as of the date of the registration statement, the Registration Statement,
such Prepricing Prospectus or the Prospectuses, as the case may be, and any
reference to any amendment or supplement to the registration statement, the
Registration Statement, any Prepricing Prospectus or the Prospectuses shall
be deemed to refer to and include any documents filed after such date under
the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act"),
that, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means, at any time, the documents that at such time are
incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectuses, or any amendment or
supplement thereto.
It is understood that two forms of Prepricing Prospectus and two
forms of Prospectus are to be used in connection with the offering and sale
of the Underwritten Shares: a Prepricing Prospectus and a Prospectus
relating to the Shares that are to be offered and sold in the United States
(as defined herein) or Canada (as defined herein) to U.S. or Canadian Persons
(the "U.S. Prepricing Prospectus" and the "U.S. Prospectus", respectively),
and a Prepricing Prospectus and a Prospectus relating to the International
Shares that are to be offered and sold outside the United States or Canada to
persons other than U.S. or Canadian Persons (the "International Prepricing
Prospectus" and the "International Prospectus", respectively). The U.S.
Prospectus and the International Prospectus are herein collectively called
the "Prospectuses", and the U.S. Prepricing
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Prospectus and the International Prepricing Prospectus are herein called the
"Prepricing Prospectuses". For purposes of this Agreement: "U.S. or
Canadian Person" means any resident or national of the United States or
Canada, any corporation, partnership or other entity created or organized in
or under the laws of the United States or Canada or any estate or trust the
income of which is subject to United States or Canadian income taxation
regardless of the source of its income (other than the foreign branch of any
U.S. or Canadian Person), and includes any United States or Canadian branch
of a person other than a U.S. or Canadian Person; "United States" means the
United States of America (including the states thereof and the District of
Columbia) and its territories, its possessions and other areas subject to its
jurisdiction; and "Canada" means Canada and its territories, its possessions
and other areas subject to its jurisdiction.
2. AGREEMENTS TO SELL AND PURCHASE. The Selling Shareholder
hereby agrees, subject to all the terms and conditions set forth herein, to
sell to each U.S. Underwriter and, upon the basis of the representations,
warranties and agreements of the Company and the Selling Shareholder herein
contained and subject to all the terms and conditions set forth herein, each
U.S. Underwriter agrees, severally and not jointly, to purchase from the
Selling Shareholder, at a purchase price of $____ per Share (the "purchase
price per share"), the number of Firm Shares set forth opposite the name of
such U.S. Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 13 hereof).
The Selling Shareholder also agrees, subject to all the terms and
conditions set forth herein, to sell to the U.S. Underwriters, and, upon the
basis of the representations, warranties and agreements of the Company and
the Selling Shareholder herein contained and subject to all the terms and
conditions set forth herein, the U.S. Underwriters shall have the right to
purchase from the Selling Shareholder, at the purchase price per share,
pursuant to an option (the "over-allotment option") that may be exercised at
any time and from time to time prior to 9:00 P.M., New York City time, on the
30th day after the date of the U.S. Prospectus (or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter when
the New York Stock Exchange is open for trading), up to an aggregate of
470,071 Additional Shares from the Selling Shareholder. Additional Shares
may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. Upon any exercise of the
over-allotment option, each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Selling Shareholder the number of Additional
Shares (subject to such adjustments as you may determine in order to avoid
fractional shares) that bears the same proportion to the number of Additional
Shares to be purchased by the U.S. Underwriters as the number of Firm Shares
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set forth opposite the name of such U.S. Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 13 hereof) bears
to the aggregate number of Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Company and the Selling
Shareholder have been advised by you that the U.S. Underwriters propose to
make a public offering of their respective portions of the Shares as soon
after the Registration Statement and this Agreement have become effective as
in your judgment is advisable and initially to offer the Shares upon the
terms set forth in the U.S. Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to
the U.S. Underwriters of and payment for the Firm Shares shall be made at the
office of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at
10:00 A.M., New York City time, on , 1995 (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date may be varied
by agreement among you, the Company and the Selling Shareholder.
Delivery to the U.S. Underwriters of and payment for any
Additional Shares to be purchased by the U.S. Underwriters shall be made at
the aforementioned office of Smith Barney Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date nor earlier than two nor later
than five business days after the giving of the notice hereinafter referred
to, as shall be specified in a written notice from you on behalf of the U.S.
Underwriters to the Company and the Selling Shareholder of the U.S.
Underwriters' determination to purchase a number, specified in such notice,
of Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement among you, the
Company and the Selling Shareholder.
Certificates for the Firm Shares and for any Additional Shares to
be purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 1:00 P.M., New York City time, on
the second business day preceding the Closing Date or any Option Closing
Date, as the case may be. Such certificates shall be made available to you
in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Option Closing Date, as the case
may be, against payment of the purchase price therefor by certified or
official bank check or checks payable in New York Clearing House (next day)
funds to the order of the Selling Shareholder.
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5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several U.S. Underwriters and the Selling Shareholder as follows:
(a) The Company shall, if, at the time this Agreement is executed
and delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Shares may commence, use its best efforts to cause the
Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company shall comply fully
and in a timely manner with the applicable provisions of Rule 424, Rule
430A and Rule 434 under the Act.
(b) The Company shall advise you and the Selling Shareholder
promptly and, if requested by any of you, confirm such advice in writing,
(i) when the Registration Statement has become effective, if and when a
Prospectus or form of prospectus is sent for filing pursuant to Rule 424
under the Act and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the receipt of any comments from the
Commission that relate to the Registration Statement or any request by the
Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by the Commission or any
state securities commission or other regulatory authority, and (iv) during
the period referred to in subsection (f) below, (A) of any change in the
Company's condition (financial or other), business, prospects, properties,
net worth or results of operations, or of the happening of any event,
including the filing of any information, document or report pursuant to
the Exchange Act, that makes any statement of a material fact made in the
Registration Statement untrue or that requires the making of any additions
to or changes in the Registration Statement in order to state a material
fact required by the Act to be stated therein or to make the statements
therein not misleading or that makes any statement of a material fact made
in the U.S. Prospectus (as then amended or supplemented) untrue or that
requires the making of any additions to or changes in the U.S. Prospectus
(as then amended or supplemented) in order to state a material fact
required by the Act to be stated therein or in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and (B) of the necessity to amend or supplement
the U.S. Prospectus (as then amended or supplemented) to comply with the
Act or any
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other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of the Shares under any state
securities or Blue Sky laws or real estate syndication laws, the Company
shall use every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time.
(c) The Company shall furnish to each of you and the Selling
Shareholder without charge (i) two (2) conformed copies (plus one (1)
additional similarly conformed copy to your legal counsel) of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits filed therewith, (ii) such number
of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request, (iii)
such number of copies of the Incorporated Documents, without exhibits, as
you may request, and (iv) two (2) copies of each of the exhibits to the
Incorporated Documents.
(d) The Company shall not file any amendment or supplement to the
Registration Statement, whether before or after the time when it becomes
effective, or make any amendment or supplement to the U.S. Prospectus, or,
prior to the end of the period of time referred to in subsection (f)
below, file any document pursuant to the Exchange Act that will, upon
filing, become an Incorporated Document, of which you and the Selling
Shareholder shall not previously have been advised and provided a copy
within two business days (or such reasonable amount of time as is
necessitated by the exigency of such amendment, supplement or document)
prior to the filing thereof and to which you or the Selling Shareholder
shall reasonably object in writing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you and the Selling Shareholder, without charge,
in such quantities as you have requested, copies of each form of the U.S.
Prepricing Prospectus. The Company consents to the use, in accordance
with the provisions of the Act and with the state securities or Blue Sky
laws or real estate syndication laws of the jurisdictions in which the
Shares are offered by the several U.S. Underwriters and by dealers, prior
to the date of the U.S. Prospectus, of each U.S. Prepricing Prospectus so
furnished by the Company.
(f) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the reasonable
opinion of counsel for the U.S. Underwriters a prospectus is required by
the Act to be
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delivered in connection with sales by any U.S. Underwriter or dealer, the
Company shall expeditiously furnish to each U.S. Underwriter and each
dealer, without charge, as many copies of the U.S. Prospectus (and of any
amendment or supplement to the U.S. Prospectus) as you may reasonably
request for the purposes contemplated by the Act. The Company consents to
the use of the U.S. Prospectus and any amendment or supplement thereto by
you or any dealer in accordance with the provisions of the Act and with
the state securities or Blue Sky laws or real estate syndication laws of
the jurisdictions in which the Shares are offered by the several U.S.
Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering or sale of the Shares and for such period of
time thereafter as a prospectus is required by the Act to be delivered in
connection therewith.
(g) If during the period specified in subsection (f) above any
event shall occur as a result of which it becomes necessary, in the
judgment of the Company or in the reasonable opinion of counsel for the
U.S. Underwriters, to amend or supplement the U.S. Prospectus (as them
amended or supplemented) in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it is necessary to amend or supplement the U.S. Prospectus to comply
with the Act or any other law, the Company shall, as promptly as
practicable, prepare and, subject to the provisions of subsection (d)
above, file with the Commission an appropriate amendment or supplement to
the U.S. Prospectus so that the statements in the U.S. Prospectus, as so
amended or supplemented, will not, in the light of the circumstances under
which they were made, be misleading, and the U.S. Prospectus, as so
amended or supplemented, will comply with the Act or such other law, and
shall expeditiously furnish to you without charge such number of copies
thereof as you may reasonably request.
(h) Prior to any public offering of the Shares, the Company shall
cooperate with you and with counsel for the U.S. Underwriters in
connection with the registration or qualification of the Shares for
offering and sale by the U.S. Underwriters and by dealers under the state
securities or Blue Sky laws or real estate syndication laws of such
jurisdictions as you may request (provided, that the Company shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to take any action that would subject it to
consent to service of process in suits, other than those arising out of
the offering or sale of the Shares, in any jurisdiction in which it is not
now so subject). The Company shall continue such qualification in effect
so long as required by law for distribution of the Shares and shall file
such consents to service of process or other documents as may be necessary
or
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appropriate in order to effect such registration or qualification
(provided, that the Company shall not be obligated to take any action that
would subject it to consent to service of process in suits, other than
those arising out of the offering or sale of the Shares, in any
jurisdiction in which it is not now so subject).
(i) The Company shall make generally available to its security
holders as soon as reasonably practicable a consolidated earnings
statement covering a period of at least 12 months beginning after the
"effective date" (as defined in Rule 158 under the Act) of the
Registration Statement (but in no event later than 90 days after such
date) that shall satisfy the provisions of Section 11(a) of the Act.
(j) (i) During the period of five years hereafter, the Company
shall mail to each of you without charge as soon as available, a copy of
each report of the Company mailed to stockholders or filed with the
Commission, and (ii) during the period specified in subsection (f) above,
from time to time such other information concerning the Company as you may
reasonably request.
(k) Except as provided in this Agreement and the International
Underwriting Agreement, the Company shall not sell, contract to sell or
otherwise dispose of any Common Stock (other than upon exercise of options
or warrants outstanding as of the date of this Agreement) or any
securities convertible into or exercisable or exchangeable for Common
Stock, or grant any options (other than the grant of options to employees
or directors in the ordinary course of business) or warrants to purchase
Common Stock, for a period of 90 days after the date of the U.S.
Prospectus, without the prior written consent of Smith Barney Inc., which
shall not be unreasonably withheld.
(l) The Company has furnished to you "lock-up" letters, in form and
substance satisfactory to you, signed by each of its current executive
officers and directors.
(m) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Company shall not take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Underwritten Shares.
(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 U.S. Underwriters and the Company as
follows:
(a) The Selling Shareholder shall cooperate to the extent
necessary to cause the registration statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(b) The Selling Shareholder shall pay all Federal and other taxes,
if any, on the transfer or sale of the Shares to the U.S. Underwriters.
(c) The Selling Shareholder shall do or perform all things
required to be done or performed under this Agreement and the
International Underwriting Agreement by the Selling Shareholder prior to
the Closing Date or any Option Closing Date, as the case may be, to
satisfy all conditions precedent to the delivery of the Shares pursuant to
this Agreement.
(d) Except as provided in this Agreement and the International
Underwriting Agreement, the Selling Shareholder shall not sell, contract
to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock for a
period of 90 days after the date of the U.S. Prospectus, without the prior
written consent of Smith Barney Inc., which shall not be unreasonably
withheld.
(e) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Selling Shareholder shall not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Underwritten Shares.
(f) The Selling Shareholder shall advise you and the Company
promptly and, if requested by you, shall confirm such advice in writing,
within the period of time referred to in Section 5(f) hereof, of any
change in information furnished by or on behalf of the Selling Shareholder
expressly for use in the Registration Statement and the U.S. Prospectus
that comes to the attention of the Selling Shareholder and that suggests
that any statement of a material fact made in the Registration Statement
is or may be untrue or that requires or may require the making of any
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
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made in the U.S. Prospectus (as then amended or supplemented) is or may be
untrue or that requires or may require the making of any additions to or
changes in the U.S. Prospectus (as then amended or supplemented) in order
to state a material fact required by the Act to be stated therein or in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or that it is or may be
necessary to amend or supplement the U.S. Prospectus (as then amended or
supplemented) to comply with the Act or any other law.
(g) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 13 hereof or by notice given by you
terminating this Agreement pursuant to Section 13 or Section 14 hereof) or
if this Agreement shall be terminated by the U.S. Underwriters because of
any failure or refusal on the part of the Company or the Selling
Shareholder to comply with the terms or fulfill any of the conditions of
this Agreement, the Selling Shareholder agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel for the U.S. Underwriters)
incurred by you in connection herewith.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each U.S. Underwriter and the Selling Shareholder
that:
(a) The Company and the transactions contemplated by this
Agreement and the International Underwriting Agreement meet the
requirements for using Form S-3 under the Act. The registration statement
in the form in which it became or becomes effective and also in such form
as it may be when any post-effective amendment thereto shall become
effective and the U.S. Prospectus and any supplement or amendment thereto
when filed with the Commission under Rule 424(b) under the Act, complied
or will comply in all material respects with the provisions of the Act;
the Registration Statement does not and will not at any such time contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and the U.S. Prospectus and any supplement or amendment
thereto will not at any such time contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that this representation and warranty does not apply to statements in or
omissions from the registration statement or the U.S. Prospectus made in
reliance upon and in conformity with information relating to any U.S.
Underwriter furnished to the Company in writing
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by or on behalf of any U.S. Underwriter through you expressly for use
therein.
(b) Each U.S. Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied
when so filed in all material respects with the provisions of the Act.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act, and any further Incorporated
Documents so filed will, when they are filed, conform in all material
respects with the requirements of the Exchange Act; no such document when
it was filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and no
such further document, when it is filed, will contain an untrue statement
of a material fact or will omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(d) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; and the capital stock of
the Company conforms to the description thereof in the Registration
Statement and the U.S. Prospectus.
(e) All of the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, which is incorporated by
reference into the Registration Statement. The Company and each of the
Subsidiaries that is a "significant subsidiary" (as defined in Regulation
S-X under the Act) (collectively, the "Significant Subsidiaries") has been
duly organized, is validly existing (if applicable, as a corporation in
good standing) under the laws of its jurisdiction of organization and has
full corporate (or partnership) power and authority to carry on its
business as it is currently being conducted (and, in the case of the
Company, to execute, deliver and perform this Agreement) and to own, lease
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business 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 International 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
- 13 -
registration of the Underwritten Shares under the Act and the Exchange Act
and compliance with the state securities or Blue Sky laws or real estate
syndication laws of various jurisdictions, all of which have been or will
be effected in accordance with this Agreement) and (ii) will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default or cause an acceleration of any obligation under, any
of the respective charters or bylaws (or partnership agreements, as the
case may be) of the Company or any of the Significant Subsidiaries or any
material bond, note, debenture or other evidence of indebtedness or any
material indenture, mortgage, deed of trust or other material contract,
lease or other instrument to which the Company or any of the Significant
Subsidiaries is a party or by which any of them is bound, or to which any
of the property or assets of the Company or any of the Significant
Subsidiaries is subject, or any order of any court or governmental agency
or authority entered in any proceeding to which the Company or any of the
Significant Subsidiaries was or is a party or by which any of them is
bound or (solely with respect to actions by the Company or the Significant
Subsidiaries) violate any applicable Federal, state or local law, rule,
administrative regulation or ordinance or administrative or court decree,
any of the foregoing of which could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(j) Except as disclosed in the Registration Statement and the U.S.
Prospectus, there is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, pending against the
Company or any of the Significant Subsidiaries that is required to be
disclosed in the Registration Statement or the U.S. Prospectus, or that
could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect or materially and adversely to affect the
performance of the Company's obligations pursuant to this Agreement and,
to the best of the Company's knowledge, no such proceedings are
contemplated or threatened. No action has been taken with respect to the
Company or any of the Significant Subsidiaries, and no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency that suspends the effectiveness of the Registration
Statement, prevents or suspends the use of any Prepricing Prospectus or
suspends the sale of the Shares in any jurisdiction referred to in Section
5(h) hereof; no injunction, restraining order or order of any nature by a
Federal or state court of competent jurisdiction has been issued with
respect to the Company or any of the Significant 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
- 14 -
than the litigation matters or proceedings described in the U.S.
Prospectus under the captions "Business -- Legal Proceedings"
(collectively, the "Litigation"), no action, suit or proceeding before any
court or arbitrator or any governmental body, agency or official (domestic
or foreign), is pending against or, to the best of the Company's
knowledge, threatened against, the Company or any of the Significant
Subsidiaries that, if adversely determined, could, singly or in the
aggregate, reasonably be expected in any manner to invalidate this
Agreement or the Shares; and every request of the Commission, or any
securities authority or agency of any jurisdiction, for additional
information (to be included in the Registration Statement or the U.S.
Prospectus or otherwise) has been complied with in all material respects.
No contract or document of a character required to be described in the
Registration Statement or the U.S. Prospectus or to be filed as an exhibit
to or incorporated by reference in the Registration Statement is not so
described or filed or incorporated by reference as required.
(k) The firm of accountants that has certified or shall certify the
applicable consolidated financial statements and supporting schedules of
the Company filed or to be filed with the Commission as part of the
Registration Statement and the U.S. Prospectus are independent public
accountants with respect to the Company and the Subsidiaries, as required
by the Act and the Exchange Act. The consolidated financial statements,
together with related notes, set forth in the U.S. Prospectus and the
Registration Statement comply as to form in all material respects with the
requirements of the Act and the Exchange Act and fairly present, in all
material respects, the financial position of the Company and the
Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles in the United
States of America consistently applied throughout such periods, except as
disclosed in the notes to such financial statements; and the other
financial and statistical information and the supporting schedules
included in the U.S. Prospectus and in the Registration Statement present
fairly, in all material respects, the information required to be stated
therein.
(l) Except as disclosed in the Registration Statement, subsequent
to the respective dates as of which information is given in the
Registration Statement and the U.S. Prospectus, (i) neither the Company
nor any of the 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
- 15 -
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.
- 16 -
(p) All material tax returns required to be filed by the Company or
any of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities have been paid,
other than those being contested in good faith or for which adequate
reserves have been provided or those currently payable without penalty or
interest.
(q) Except as disclosed in the U.S. Prospectus or except as could
not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) to the best of the Company's knowledge, neither the
Company nor the Subsidiaries is in violation of any Federal, state or
local law or regulation relating to pollution or protection of public
heath or welfare or the environment, including, without limitation, the
storage, handling, transportation, emissions, discharges, releases or
threatened releases of pollutants, contaminates, hazardous or toxic
materials, substances or wastes, or petroleum or petroleum products
("Environmental Laws"), (b) the Company and each of the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and
the Company and each of the Subsidiaries are in compliance with all terms
and conditions of any such permit, license or approval and (c) neither the
Company nor, to the best of the Company's knowledge, any of the
Subsidiaries, has received any notice or communication from any
governmental agency or any written notice from any other person regarding
violation of or liability under Environmental Laws and (d) there is no
pending action or proceeding, or to the best of the Company's knowledge,
pending or threatened claim or investigation against the Company or any of
the Subsidiaries regarding violation of or liability under Environmental
Laws.
(r) To the best of the Company's knowledge, there are no costs and
liabilities associated with Environmental Laws that could, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(s) To the best of the Company's knowledge, neither the Company nor
any of the Subsidiaries has (A) violated any Federal or state law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder, or (B) engaged 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
- 17 -
aggregate, in a Material Adverse Effect. There is (i) no significant
unfair labor practice complaint pending against the Company or any of the
Subsidiaries or, to the best of the Company's knowledge, threatened
against any of them, before the National Labor Relations Board or any
state or local labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of the
Subsidiaries or, to the best of the Company's knowledge, threatened
against any of them and (ii) to the best of the Company's knowledge, no
union representation question existing with respect to the employees of
the Company or any of the Subsidiaries and, to the best of the Company's
knowledge, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i) or (ii) above) such as would
not, singly or in the aggregate, have a Material Adverse Effect.
(t) To the best of the Company's knowledge, (i) each of the
Company and the Subsidiaries has good and marketable title to all property
(real and personal) described in the U.S. Prospectus as being owned by it,
in fee simple in the case of real property (other than in the case of
certain buildings the land under which is leased to the Company pursuant
to long-term leases that are valid, subsisting and enforceable against the
Company), free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement
and the U.S. Prospectus or in a document filed as an exhibit to the
Registration Statement and (ii) all the property described in the
Registration Statement and the U.S. Prospectus as being held under lease
by each of the Company and the Significant Subsidiaries is held by it
under valid, subsisting and enforceable leases, except (with respect to
any matter specified in clause (i) or (ii) above) such as would not,
singly or in the aggregate, have a Material Adverse Effect.
(u) Other than as described in the Registration Statement and the
U.S. Prospectus, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of
the Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement or the
International Underwriting Agreement.
(v) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Company has not 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
- 18 -
Stock to facilitate the sale or resale of the Underwritten Shares.
(w) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
The Selling Shareholder represents and warrants to each U.S. Underwriter and the
Company that:
(a) The Selling Shareholder now has, and on the Closing Date and
any Option Closing Date will have, valid title to the Shares to be sold on
such date, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer.
(b) The Selling Shareholder now has, and on the Closing Date and
any Option Closing Date will have, full legal right, power and
authorization to sell, assign transfer and deliver such Shares in the
manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several U.S. Underwriters will acquire valid
title to such Shares free and clear of any lien, claim, security interest,
or other encumbrance except for any liens, claims, security interests or
other encumbrances created by the actions or status of the U.S.
Underwriters.
(c) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and is the valid
agreement of the Selling Shareholder.
(d) Neither the execution and delivery of this Agreement by or on
behalf of the Selling Shareholder nor the consummation by the Selling
Shareholder of the transactions herein contemplated requires any consent,
approval, authorization or order of, or registration or filing with, any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required for the registration of
the Underwritten Shares under the Act and compliance with the state
securities or Blue Sky laws or the real estate syndication laws of various
jurisdictions, all of which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or
will constitute a breach of, or default under, or violates or will
violate, any agreement, indenture or other instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder is or may be
bound or to which any of the Selling Shareholder's property or assets is
subject, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to the Selling Shareholder or to
any property or assets of the Selling
- 19 -
Shareholder, except any such breaches, defaults or violations that would
not, singly or in the aggregate, in any way impair the valid title to be
acquired by the U.S. Underwriters upon delivery of the Shares pursuant to
this Agreement and payment therefor as contemplated herein.
(e) If any date on which the Registration Statement or any
post-effective amendment thereto is declared effective (each, an
"Effective Date") is prior to the execution and delivery of this
Agreement, on such Effective Date, to the extent, but only to the extent,
any statements or omissions made in the Registration Statement were made
in reliance upon and in conformity with written information furnished to
the Company by the Selling Shareholder expressly for use therein, such
statements and omissions did not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. If any Effective
Date is subsequent to the execution and delivery of this Agreement, on
such Effective Date, to the extent, but only to the extent, any statements
or omissions made in the Registration Statement are made in reliance upon
and in conformity with written information furnished to the Company by the
Selling Shareholder expressly for use therein, such statements and
omissions will not include an untrue statement of a material fact and will
not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. As of its date
and on the Closing Date, to the extent, but only to the extent, any
statements or omissions made in the U.S. Prospectus are made in reliance
upon and in conformity with written information furnished to the Company
by the Selling Shareholder expressly for use therein, such statements and
omissions did not and will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
circumstances under which they were made, not misleading.
(f) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, the Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Underwritten Shares.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act from and against any and all
- 20 -
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any U.S. Prepricing Prospectus
or in the Registration Statement or the U.S. Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the any U.S. Prepricing
Prospectus or the U.S. Prospectus, in the light of the circumstances under which
they were made) not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission that has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such U.S. Underwriter furnished in writing to the Company by or on
behalf of any U.S. Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
subsection (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any U.S. Underwriter (or to the benefit of any person controlling
such U.S. Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such U.S. Underwriter to any
person if a copy of the U.S. Prospectus shall not have been delivered or sent to
such person within the time required by the Act and the regulations thereunder,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such U.S. Prepricing Prospectus was
corrected in the U.S. Prospectus, provided that the Company has delivered the
U.S. Prospectus to the several U.S. Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability that the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought against any
U.S. Underwriter or any person controlling any U.S. Underwriter in respect of
which indemnity may be sought against the Company, such U.S. Underwriter or such
controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such U.S. Underwriter or any
such controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such U.S.
Underwriter or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel, or (iii) the named parties
to any such action, suit or proceeding (including any impleaded parties) include
both such U.S. Underwriter or such controlling person and
- 21 -
the indemnifying parties and such U.S. Underwriter or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the indemnifying party shall not
have the right to assume the defense of such action, suit or proceeding on
behalf of such U.S. Underwriter or such controlling person). It is understood,
however, that the indemnifying parties shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such U.S. Underwriters and controlling persons,
which firm shall be designated in writing by Smith Barney Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any U.S. Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) The Selling Shareholder agrees to indemnify and hold harmless
each U.S. Underwriter and each person, if any, who controls such U.S.
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, subject to the limitations set forth in Section 12, to the same
extent as the foregoing indemnity from the Company to each U.S. Underwriter, but
only with respect to information specifically relating to the Selling
Shareholder furnished in writing by or on behalf of such Selling Shareholder
expressly for use in the Registration Statement, the U.S. Prospectus, any U.S.
Prepricing Prospectus, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against any U.S. Underwriter or any such
controlling person in respect of which indemnity may be sought against the
Selling Shareholder pursuant to this subsection (c), the Selling Shareholder
shall have the rights and duties given to the indemnifying parties by subsection
(b) above (except that if the Company shall have assumed the defense thereof the
Selling Shareholder shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall 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.
- 22 -
(d) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Shareholder, and any person who controls
the Company or the Selling Shareholder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Selling Shareholder to each U.S. Underwriter,
but only with respect to information relating to such U.S. Underwriter furnished
in writing by or on behalf of such U.S. Underwriter through you expressly for
use in the Registration Statement, the U.S. Prospectus or any U.S. Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors, any such
officer, the Selling Shareholder, or any such controlling person based on the
Registration Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus,
or any amendment or supplement thereto, and in respect of which indemnity may be
sought against any U.S. Underwriter pursuant to this subsection (d), such U.S.
Underwriter shall have the rights and duties given to the indemnifying parties
by subsection (b) above (except that if the Company shall have assumed the
defense thereof such U.S. Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such U.S. Underwriter's expense),
and the Company, its directors, any such officer, the Selling Shareholder, and
any such controlling person shall have the rights and duties given to the U.S.
Underwriters by subsection (b) above. The foregoing indemnity agreement shall
be in addition to any liability that any U.S. Underwriter may otherwise have.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsection (a) above or, where the
indemnified party is the Company or its officers, directors or controlling
persons, under subsection (d) above in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the U.S. Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsection (c) above or, where the
indemnified party is the Selling Shareholder, under subsection (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
- 23 -
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Selling
Shareholder on the one hand and the U.S. Underwriters on the other hand from the
offering of the Shares, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Selling Shareholder on the one hand and the U.S.
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Selling Shareholder on the one hand and the U.S. Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Selling Shareholder bear to
the total underwriting discounts and commissions received by the U.S.
Underwriters, in each case as set forth in the table on the cover page of the
U.S. Prospectus; provided that, in the event that the U.S. Underwriters shall
have purchased any Additional Shares hereunder, any determination of the
relative benefits received by the Selling Shareholder or the U.S. Underwriters
from the offering of the Shares shall include the net proceeds (before deducting
expenses) received by the Selling Shareholder, and the underwriting discounts
and commissions received by the U.S. Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective amounts
set forth in the notes to the table on the cover page of the U.S. Prospectus.
The relative fault of the Company or the Selling Shareholder, as the case may
be, on the one hand and the U.S. Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Shareholder, as the case may be, on the one hand or by the U.S. Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(f) The Company, the Selling Shareholder and the U.S. Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the U.S.
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in subsection (e) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in subsection (e) 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.
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Notwithstanding the provisions of this Section 9, no U.S. Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds the
amount of any damages that such U.S. Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The U.S. Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective numbers of Firm Shares set forth opposite their names in
Schedule I hereto (or such numbers of Firm Shares increased as set forth in
Section 13 hereof) and not joint.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Shareholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any U.S. Underwriter
or any person controlling any U.S. Underwriter, the Company, its directors or
officers or the Selling Shareholder or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any U.S. Underwriter or any
person controlling any U.S. Underwriter, or to the Company, its directors or
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 9.
10. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The several
obligations of the U.S. Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(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
- 25 -
before the offering of the Shares may commence, the registration statement
or such post-effective amendment shall have become effective not later
than 5:30 P.M., New York City time, on the date hereof, or at such later
date and time as shall be consented to in writing by you, and all filings,
if any, required by Rules 424, 430A and 434 under the Act shall have been
timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or
any U.S. Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the registration
statement or the U.S. Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change in or affecting the condition
(financial or other), business, properties, net worth, or results of
operations of the Company or the Subsidiaries not contemplated by the U.S.
Prospectus, that, in your reasonable opinion, as Representatives of the
several U.S. Underwriters, would materially adversely affect the market
for the Shares, or (ii) any event or development relating to or involving
the Company or any officer or director of the Company or the Selling
Shareholder that makes any statement made in the U.S. Prospectus untrue in
any material respect or that, in the opinion of the Company and its
counsel or the U.S. Underwriters and their counsel, requires the making of
any addition to or change in the U.S. Prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, if amending or
supplementing the U.S. Prospectus to reflect such event or development
would, in your reasonable opinion, as Representatives of the several U.S.
Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of
Latham & Watkins, counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, to
the effect that:
(i) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the Act and no proceedings therefor have been initiated by the
Commission; and any required filing of the U.S. Prospectus, and any
supplements thereto, pursuant to
- 26 -
Rule 424(b) or Rule 434 under the Act has been made in the manner
and within the time period required by Rule 424(b) and Rule 430A
under the Act;
(ii) To the best of such counsel's knowledge no consent,
approval, authorization or order of, or filing with, any federal or
New York court or governmental agency or body is required to be
obtained or made by the Company for the consummation of the sale of
the Shares by the Selling Shareholder pursuant to this Agreement,
except such as have been obtained under the Act and such as may be
required under the state securities laws in connection with the
purchase and distribution of the Shares by the U.S. Underwriters;
(iii) The Registration Statement and the U.S. Prospectus
comply as to form in all material respects with the requirements for
registration statements on Form S-3 under the Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel need express no opinion with respect to
the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the U.S.
Prospectus. In passing upon the compliance as to form of the
Registration Statement and the U.S. Prospectus, such counsel may
assume that the statements made and incorporated by reference
therein are correct and complete;
(iv) Neither the purchase of the Shares by the U.S.
Underwriters nor the sale of the Shares by the Selling Shareholder
pursuant to the terms of this Agreement will result in the breach of
or a default under those agreements identified to such counsel by an
officer of the Company as material to the Company; and
(v) The statements set forth in the U.S. Prospectus under
the heading "Certain U.S. Tax Consequences to Non-U.S.
Shareholders" and in the first, second, third, fifth, sixth and
seventh paragraphs under the heading "Underwriting" in the U.S.
Prospectus, insofar as such statements constitute a summary of legal
matters, are accurate in all material respects.
Such opinion may be limited to the internal laws of the State of New
York and the Federal laws of the United States. Such counsel may rely as
to factual matters on certificates of officers of the Company and of state
officials, in which case their opinion shall state that they are so doing.
Such opinion also shall take further exceptions that shall be reasonably
acceptable to the U.S. Underwriters.
- 27 -
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the U.S. Underwriters and their counsel, at
which the contents of the Registration Statement and U.S. Prospectus and
related matters were discussed and, although such counsel need not pass
upon and need not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the U.S. Prospectus and such counsel may state that they
have made no independent check or verification thereof, during the course
of such participation, (relying as to materiality to a large extent upon
the statements of officers and other representatives of the Company), no
facts came to such counsel's attention that caused such counsel to believe
that the Registration Statement (as amended or supplemented, if
applicable, and including the Incorporated Documents), at the time such
Registration Statement or any post-effective amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the U.S. Prospectus (including
the Incorporated Documents) as amended or supplemented, as of its date and
as of the Closing Date, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that such counsel need
express no belief with respect to the financial statements, schedules and
other financial and statistical data included in the Registration
Statement or the U.S. Prospectus or incorporated therein.
(d) You shall have received on the Closing Date, an opinion of
John F. Schmutz, Esq., Vice President and General Counsel of the Company,
dated the Closing Date and addressed to you, as Representatives of the
several U.S. Underwriters, to the effect that:
(i) To the best of such counsel's knowledge, no
authorization, approval, consent or order of, or registration or
filing with, any court or governmental authority or agency is
required to be obtained or made by the Company for the valid sale of
the Shares to you, except (a) such as have been obtained under the
Act and (b) such as may be required under the state securities or
Blue Sky laws or real estate syndication laws or regulations of any
jurisdiction in the United States in connection with the purchase
and distribution of the Shares by the U.S. Underwriters;
- 28 -
(ii) The Company has corporate power and authority to enter
into this Agreement and this Agreement has been duly authorized by
all necessary corporate action by the Company, and has been duly
executed and delivered by the Company;
(iii) Neither the purchase of the Shares by the U.S.
Underwriters nor the sale of the Shares by the Selling Shareholder
pursuant to the terms of this Agreement will conflict with or
constitute a breach of or a default under the certificate or
articles of incorporation or bylaws, or other organizational
documents, of the Company or any of the Significant Subsidiaries or
the terms of any material agreement or instrument to which the
Company or any of the Significant Subsidiaries is a party or by
which any of them is bound, or to which any of the properties of the
Company or any of the Significant Subsidiaries is subject, or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Significant Subsidiaries, or result in any violation of any statute,
rule or regulation applicable to the Company or, to the best of such
counsel's knowledge, any judgment, injunction, order or decree of
any court or governmental agency or body having jurisdiction over
the Company or any of the Significant Subsidiaries or any of their
respective properties;
(iv) Each of the Company and, to the best of such counsel's
knowledge, the Significant Subsidiaries that is a corporation has
been duly incorporated and is validly existing and is a corporation
in good standing under the laws of its jurisdiction of its
incorporation, and each of the Company and, to the best of such
counsel's knowledge, the Significant Subsidiaries has the corporate
(or partnership) power and authority and all necessary governmental
authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all governmental regulatory
officials and bodies to own and operate its properties and to
conduct its business as described in the Registration Statement and
the U.S. Prospectus and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which such qualification is required wherein it owns
or leases material property or conducts business, except where the
failure so to qualify could not reasonably be expected to have a
Material Adverse Effect;
(v) All of the issued and outstanding capital stock of, or
other ownership interests in, each
- 29 -
Significant Subsidiary has been duly authorized and validly issued,
and is fully paid and nonassessable and, except as otherwise set
forth in the Registration Statement and the U.S. Prospectus, certain
shares of capital stock of, or other ownership interests in, each
Significant Subsidiary are owned by the Company, either directly or
through Subsidiaries, as set forth on Exhibit 21 to the Company's
annual report on Form 10-K for the fiscal year ended December 31,
1994, free and clear of any perfected security interest or, to the
best of such counsel's knowledge, any other security interests,
claims, liens, equities or encumbrances;
(vi) The authorized and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
U.S. Prospectus; and the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof incorporated by reference in the U.S.
Prospectus;
(vii) Except as described in the Registration Statement and
the U.S. Prospectus, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of
sale, or Liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of the Company
or any security convertible into or exchangeable for the capital
stock of the Company;
(viii) Except as described in the Registration Statement
and the U.S. Prospectus, there is no holder of any security of the
Company or any other person who has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them,
or to permit them to underwrite the sale of, the Shares or the right
to have any Common Stock or other securities of the Company included
in the registration statement or the right, as a result of the
filing of the registration statement, to require registration under
the Act of any shares of Common Stock or other securities of the
Company;
(ix) To the best of such counsel's knowledge (A) there are no
franchises, contracts, indentures, mortgages, leases, loan
agreements, notes or other agreements or instruments to which the
Company or any Significant Subsidiary is a party or by which any of
them may be bound that are required to be described in the
Registration Statement or the U.S. Prospectus or to 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
- 30 -
exhibits thereto, (B) no default exists in the due performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument, except for defaults that would not,
singly or in the aggregate, have a Material Adverse Effect and (C)
the statements in the U.S. Prospectus under the caption "Business --
Legal Proceedings" insofar as they relate to statements of law or
legal conclusions, are accurate in all material respects;
(x) The Company and the Significant Subsidiaries own all
patents, trademarks, trademark registrations, service marks, service
mark registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the U.S. Prospectus as being
owned by them or any of them or necessary for the conduct of their
respective businesses, and such counsel is not aware of any claim
to the contrary or any challenge by any other person to the rights
of the Company and the Significant Subsidiaries with respect to the
foregoing;
(xi) To the best of such counsel's knowledge, there is no
current, pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of the Significant Subsidiaries or any
of their respective properties of a character required to be
disclosed in the Registration Statement and the U.S. Prospectus that
is not adequately so disclosed;
(xii) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, nonassessable and not subject to any preemptive or other
similar rights to subscribe for such Common Stock;
(xiii) The form of the certificates for the Shares conforms
to the requirements of the corporate law of the State of Texas;
(xiv) At the time it became effective and on the Closing
Date, the Registration Statement (except for financial statements,
the notes thereto and related schedules and other financial,
numerical, statistical or accounting data included therein or
omitted therefrom, as to which no opinion need be expressed) and the
U.S. Prospectus complies as to form in all material respects with
the applicable requirements of 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
- 31 -
therefrom, as to which no opinion need be expressed) complies as to
form in all material respects with the Exchange Act;
(xv) The statements in the Registration Statement and the
U.S. Prospectus, insofar as they are descriptions of contracts,
agreements or other legal documents, or refer to statements of law
or legal conclusions, are accurate and present fairly the
information required to be shown; and
(xvi) Neither the Company nor any of the Subsidiaries is an
"investment company" required to be registered under Section 8 of
the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or an entity "controlled by an investment company"
required to be registered under Section 8 of the Investment Company
Act.
Such opinion may be limited to the internal laws of the State of
Texas and the Federal laws of the United States. Such opinion shall take
further exceptions that shall be reasonably acceptable to the U.S.
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, your representatives and your counsel, at which the contents of
the Registration Statement and U.S. Prospectus (including the Incorporated
Documents) and related matters were discussed and, although such counsel
is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the U.S. Prospectus, on the basis of the
foregoing, relying as to the factual matters underlying the determination
of materiality to a large extent upon the statements of officers and other
representatives of the Company, no facts came to such counsel's attention
that caused such counsel to believe that the Registration Statement (as
amended or supplemented, if applicable, and including the Incorporated
Documents), at the time such Registration Statement or any post-effective
amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (other than
information omitted therefrom in reliance on Rule 430A under the Act), or
the U.S. Prospectus, 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
- 32 -
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.
(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 AEW, Inc., the general
partner of AEW/L.P., the general partner of the Selling Shareholder,
dated the Closing Date and addressed to you, as Representatives of the
several U.S. Underwriters, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder;
(ii) To the best of such counsel's knowledge after reasonable
inquiry, the Selling Shareholder has the partnership power and
authorization to sell, assign, transfer and deliver the Shares;
(iii) The execution and delivery of this Agreement and the
International Underwriting Agreement by the Selling Shareholder and
the consummation of the transactions contemplated hereby and thereby
will not conflict with, violate, result in a material 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 material agreement, indenture,
mortgage or other instrument, known to such counsel, to which the
Selling Shareholder is a party; and
(iv) Upon delivery of the certificates representing the
Shares pursuant to this Agreement and payment therefor as
contemplated herein, title to the Shares will pass to the U.S.
Underwriters free and clear of any lien, claim, security interest,
or other encumbrance, assuming that the Shares were validly
authorized and issued by the Company and the U.S. Underwriters are
purchasers for value in good faith without notice of any adverse
claim (as defined in Section 8-302 of the Uniform Commercial Code).
(f) You shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the U.S. Underwriters, dated the
Closing Date and addressed to you, as Representatives of the several U.S.
Underwriters, with respect to the matters referred to in clauses (i), (ii)
and (iii) and in the last paragraph of subsection (c) above and such other
related matters as you may request.
- 33 -
(g) You shall have received letters addressed to you, as
Representatives of the several U.S. Underwriters, and dated the date
hereof and the Closing Date from KPMG Peat Marwick LLP, independent
certified public accountants, substantially in the forms heretofore
approved by you.
(h)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall
be contemplated by the Commission at or prior to the Closing Date; (ii)
there shall not have been any change in the capital stock of the Company
nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set
forth or contemplated in the Registration Statement or the U.S. Prospectus
(or any amendment or supplement thereto); (iii) there shall not have been,
since the respective dates as of which information is given in the
Registration Statement and the U.S. Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the Registration
Statement and the U.S. Prospectus (or any amendment or supplement
thereto), any Material Adverse Change; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company and the Subsidiaries, taken as a whole, other than
those reflected in the Registration Statement and the U.S. Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement and the
International Underwriting Agreement shall be true and correct in all
material respects on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to you), to the effect set forth in this
Section 10(h) and in Section 10(i) hereof.
(i) The Company shall not have failed at or prior to the Closing
Date to have performed or complied in all material respects with any of
its agreements herein contained and required to be performed or complied
with by it hereunder at or prior to the Closing Date.
(j) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be 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
- 34 -
behalf of the Selling Shareholder, to the effect set forth in this
Section 10(j) and in Section 10(k) hereof.
(k) The Selling Shareholder shall not have failed at or prior to
the Closing Date to have performed or complied in all material respects
with any of its agreements herein contained and required to be performed
or complied with by it hereunder at or prior to the Closing Date.
(l) The Company shall have furnished to you the "lock-up" letters
referred to in Section 5(l) hereof.
(m) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the Closing
Date.
(n) The Company and the Selling Shareholder shall have furnished or
caused to be furnished to you such further certificates and documents as
you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or
the Selling Shareholder and delivered to you, as Representatives of the U.S.
Underwriters, or to counsel for the U.S. Underwriters, shall be deemed a
representation and warranty by the Company or the Selling Shareholder, as the
case may be, to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in subsections (c) through (j) above shall be
dated the Option Closing Date in question and the opinions called for by
subsections (c), (d), (e) and (f) shall be revised to reflect the sale of
Additional Shares.
11. EXPENSES. The Selling Shareholder agrees to pay the
following costs and expenses and all other costs and expenses incident to the
performance by the Company and the Selling Shareholder of their obligations
hereunder: (i) the preparation, printing or reproduction, and filing with the
Commission of the registration statement (including financial statements and
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
- 35 -
freight charges and charges for counting and packaging) of such copies of the
registration statement, each Prepricing Prospectus, the Prospectuses, the
Incorporated Documents, and all amendments or supplements to any of them, as may
be reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with the
original issuance and sale of the Shares; (iv) the printing (or reproduction)
and delivery of this Agreement, the preliminary and supplemental Blue Sky
Memoranda and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Shares; (v) the listing of the
Shares on the New York Stock Exchange; (vi) the registration or qualification of
the Shares for offer and sale under the state securities or Blue Sky laws or
real estate syndication laws of the several states as provided herein (including
the reasonable fees, expenses and disbursements of counsel for the U.S.
Underwriters relating to the preparation, printing or reproduction, and delivery
of the preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the U.S. Underwriters in connection with any filings required to be made with
the National Association of Securities Dealers, Inc.; (viii) the transportation
and other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and (ix)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Shareholder.
12. LIMITATION OF LIABILITY. The total liabilities of the
Selling Shareholder under this Agreement, including without limitation any
liabilities for breach of representation or warranty or with respect to any
obligation of indemnity, shall not in any event exceed in aggregate amount the
proceeds of the Shares sold hereunder, provided that this Section 12 shall not
limit the liability of the Selling Shareholder to pay expenses as provided in
Section 6(g) or Section 11 hereof.
13. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company or the Selling Shareholder, by notifying you, or by you, as
Representatives of the several U.S. Underwriters, by notifying the Company and
the Selling Shareholder.
- 36 -
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares that it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares that such defaulting U.S.
Underwriter or U.S. Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares that the U.S.
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
U.S. Underwriter shall be obligated, severally, in the proportion that the
number of Firm Shares set forth opposite its name in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all
non-defaulting U.S. Underwriters or in such other proportion as you may specify
in accordance with Section 20 of the Master Agreement Among Underwriters of
Smith Barney Inc., to purchase the Shares that such defaulting U.S. Underwriter
or U.S. Underwriters are obligated, but fail or refuse, to purchase. If any one
or more of the U.S. Underwriters shall fail or refuse to purchase Shares that it
or they are obligated to purchase on the Closing Date and the aggregate number
of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares that the U.S. Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to you, the Company
and the Selling Shareholder for the purchase of such Shares by one or more
non-defaulting U.S. Underwriters or other party or parties approved by you, the
Company and the Selling Shareholder are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting U.S. Underwriter, the Company or the Selling Shareholder. In
any such case that does not result in termination of this Agreement, any of you,
the Company or the Selling Shareholder shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the U.S. Prospectus
or any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting U.S. Underwriter from liability
in respect of any such default of any such U.S. Underwriter under this
Agreement. The term "U.S. Underwriter" as used in this Agreement includes, for
all purposes of this Agreement, any party not listed in Schedule I hereto who,
with your approval and the approval of the Company and the Selling Shareholder,
purchases Shares that a defaulting U.S. Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 13 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
14. TERMINATION OF AGREEMENT. This Agreement shall be subject
to termination in your absolute discretion, without liability on the part of any
U.S. Underwriter to the Company or the Selling Shareholder, by notice to the
Company and the Selling Shareholder, if prior to the Closing Date or any Option
Closing
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Date (if different from the Closing Date and then only as to the Additional
Shares), as the case may be, (i) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market shall
have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York or Texas shall have been declared by
either federal or state authorities, or (iii) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to make
it, in your reasonable judgment, impracticable or inadvisable to commence or
continue the offering of the Shares at the offering price to the public set
forth on the cover page of the U.S. Prospectus or to enforce contracts for the
resale of the Shares by the U.S. Underwriters. Notice of such termination may
be given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
15. INFORMATION FURNISHED BY THE SELLING SHAREHOLDER AND THE
U.S. UNDERWRITERS. The statements set forth in the last paragraph on the
cover page, the stabilization legend on the inside cover page, and the
statements in the fourth, eighth, ninth, tenth and fourteenth paragraphs under
the caption "Underwriting" in any U.S. Prepricing Prospectus and in the U.S.
Prospectus constitute the only information furnished by or on behalf of the U.S.
Underwriters through you expressly for use therein as such information is
referred to in Sections 7(a) and 9 hereof. The statements set forth under the
caption "Prospectus Summary -- The Selling Shareholder" (except the fifth
sentence of the third paragraph thereof), in the first and second paragraphs
under the caption "Principal and Selling Shareholders" and the information
regarding the Selling Shareholder set forth in the table under the caption
"Principal and Selling Shareholders" and in footnote (1) thereto, in any U.S.
Prepricing Prospectus and in the U.S. Prospectus and, solely with respect to
the U.S. Prospectus, in footnote (2) to the table under the caption
"Principal and Selling Shareholders," constitute the only information
furnished by or on behalf of the Selling Shareholder expressly for use therein
as such information is referred to in Sections 6(f), 8(e), 9 and 16 hereof.
16. FURTHER INDEMNIFICATION AND CONTRIBUTION PROVISIONS. (a)
The Company agrees to indemnify and hold harmless the Selling Shareholder and
its affiliates and its and their respective partners, officers and directors and
each person who controls the Selling Shareholder (within the meaning of the Act
or the Exchange Act), and any agent or investment advisor thereof against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees and costs of investigation) arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any U.S.
Prepricing Prospectus, the U.S. Prospectus or the Registration Statement, or in
any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact
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required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same arise out of or are based upon an untrue
statement or omission which was based upon information with respect to the
Selling Shareholder furnished in writing to the Company by or on behalf of the
Selling Shareholder expressly for use therein; provided that in the event that
any U.S. Prepricing Prospectus shall have been amended or supplemented and
copies thereof, as so amended or supplemented, were furnished to the Selling
Shareholder and the U.S. Underwriters prior to the confirmation of any sales of
Shares, such indemnity with respect to the U.S. Prepricing Prospectus shall not
inure to the benefit of the Selling Shareholder from whom the person asserting
such loss, claim, damage or liability purchased the Shares which are the subject
thereof if such person did not, at or prior to the confirmation of the sale of
the Shares to such person, receive a copy of the U.S. Prepricing Prospectus as
so amended or supplemented and the untrue statement or omission of a material
fact contained in the U.S. Prepricing Prospectus was corrected in the U.S.
Prepricing Prospectus as so amended or supplemented.
(b) The Selling Shareholder agrees to indemnify the Company, its
directors and officers and each person who controls the Company (within the
meaning of the Act and the Exchange Act), subject to the limitations set forth
in Section 12, against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees and the cost of investigation) resulting
from any untrue statement of a material fact or any omission of a material fact
required to be stated in any U.S. Prepricing Prospectus, the U.S. Prospectus,
the Registration Statement or any amendment thereof or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement is contained in or such omission
relates to the information with respect to the Selling Shareholder so furnished
in writing by the Selling Shareholder or on behalf of the Selling Shareholder by
its agents or representatives specifically for inclusion in any U.S. Prepricing
Prospectus, the U.S. Prospectus or the Registration Statement. In no event
shall the liability of the Selling Shareholder hereunder be greater in amount
that the dollar amount of the proceeds received by the Selling Shareholder upon
the sale of the Shares giving rise to such indemnification obligation.
(c) Any person entitled to indemnification hereunder agrees to give
prompt written notice to the indemnifying party after the receipt by such person
of any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such person will claim
indemnification or contribution pursuant to this Agreement and, 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
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indemnifying party to assume the defense of such claim. Whether or not such
defense is assumed by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its consent (but such
consent will not be unreasonably withheld). No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. If the indemnifying party is not entitled to, or elects not to,
assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of such additional counsel or counsels.
(d) (i) If the indemnification provided for in this Section 16
from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall, to the extent permitted by
applicable law, contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in connection with
the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations (for the
purposes of this subsection (d), the relevant equitable considerations
shall not include considerations based upon the relative benefits received
by the parties in the offering and sale of the Shares). The relative
fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
subsection (c) above, any reasonable legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this
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subsection (d) were determined by pro rata allocation or by any other
method that does not take account of the equitable considerations referred
to in subsection (d)(i) above. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(iii) If indemnification is available under this Section 16, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in subsections (a) and (b) above without regard to the
relative fault of said indemnifying party or indemnified party or any
other equitable consideration provided for in this subsection (d).
17. MISCELLANEOUS. Except as otherwise provided in Sections 5,
13 and 14 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at Weston Centre, 112 E. Pecan Street, P.O. Box 2636, San Antonio, Texas
78299-2636, Attention: John F. Schmutz, Esq., Vice President and General
Counsel; or (ii) if to the Selling Shareholder, at the office of the Selling
Shareholder, care of Aldrich Eastman Waltch, 225 Franklin Street, 25th Floor,
Boston, MA 02110-2803, Attention: Joseph S. Azrack, President and Chief
Executive Officer, or (iii) if to you, as Representatives of the several U.S.
Underwriters, care of Smith Barney Inc., 388 Greenwich Street, New York, New
York 10013, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company, its directors and officers, and the
other controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and the Selling
Shareholder and its affiliates and its and their respective partners, officers,
directors and controlling persons referred to in Sections 9 and 16 hereof, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any U.S. Underwriter of
any of the Shares in his status as such purchaser.
18. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts that together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless
- 41 -
at least one counterpart hereof shall have been executed and delivered on behalf
of each party hereto.
- 42 -
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the several U.S. Underwriters.
Very truly yours,
LA QUINTA INNS, INC.
By: __________________________
Name:
Title:
AEW PARTNERS, L.P.
BY: AEW/L.P.,
its general partner
By: AEW, INC.,
its general partner
By: __________________________
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
U.S. Underwriters named in
Schedule I hereto.
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Representatives of the Several U.S. Underwriters
By: SMITH BARNEY INC.
By: ________________________
Name:
Title:
- 43 -
SCHEDULE I
LA QUINTA INNS, INC.
Number of
U.S. UNDERWRITER Firm Shares
-----------
Smith Barney Inc. ..............................
Alex. Brown & Sons Incorporated ................
Montgomery Securities ..........................
----------
Total........................... ----------
- 1 -