EXHIBIT 1(b)
4,850,000 Shares
LA QUINTA INNS, INC.
Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
, 1995
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Lead Managers for the Several Managers
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
AEW Partners, L.P., a Delaware limited partnership (the "Selling
Shareholder"), proposes to sell an aggregate of 970,000 shares (the "Shares") of
common stock, par value $0.10 per share (the "Common Stock"), of La Quinta Inns,
Inc., a Texas corporation (the "Company"), to the several Managers named in
Schedule I hereto (the "Managers") for whom Smith Barney Inc., Alex. Brown &
Sons Incorporated and Montgomery Securities are acting as lead Managers (the
"Lead Managers").
It is understood that the Company and the Selling Shareholder are
concurrently entering into a U.S. Underwriting Agreement, dated the date hereof
(the "U.S. Underwriting Agreement"), providing for the sale by the Selling
Shareholder of 3,880,000 shares of Common Stock (the "Firm U.S. Shares") through
arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters"), for whom Smith Barney Inc., Alex. Brown & Sons
Incorporated and Montgomery Securities are acting as representatives (the
"Representatives"), and an option granted by the Selling Shareholder to the U.S.
Underwriters to purchase up to an additional 470,071 shares of Common Stock (the
"Additional U.S. Shares") solely for the purpose of covering over-allotments.
The Firm U.S. Shares and the Additional U.S. Shares are hereinafter collectively
referred to as the "U.S.
Shares". The U.S. Shares and the Shares, collectively, are herein called the
"Underwritten Shares".
The Company and the Selling Shareholder also understand that the
Lead Managers and the Representatives have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the Managers and the U.S.
Underwriters and that, pursuant thereto and subject to the conditions set forth
therein, the Managers may purchase from the U.S. Underwriters a portion of the
U.S. Shares or sell to the U.S. Underwriters a portion of the Shares. The
Company and the Selling Shareholder understand that any such purchases and sales
between the Managers and the U.S. Underwriters shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement or the U.S. Underwriting Agreement.
The Company and the Selling Shareholder wish to confirm as follows
their respective agreements with you and the other several Managers on whose
behalf you are acting, in connection with the several purchases of the Shares by
the Managers.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 under the Act
(the "registration statement"), including two forms of prospectus subject to
completion relating to the Shares. The term "Registration Statement" as used in
this Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Underwritten Shares may commence,
the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. The term
"Registration Statement" shall also include any registration statement relating
to the Shares that is filed and declared effective pursuant to Rule 462(b) under
the Act. The term "Prospectuses" as used in this Agreement means the
prospectuses in the form included in the Registration Statement or, if the
prospectuses included in the Registration Statement omit information in reliance
on Rule 430A under the Act and such information is included in prospectuses
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
included in the Registration Statement as supplemented by the addition of the
Rule 430A information
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contained in the prospectuses filed with the Commission pursuant to Rule 424(b),
PROVIDED that if prospectuses that meet the requirements of Section 10(a) of
the Act are delivered pursuant to Rule 434(c) under the Act, then (i) the term
"Prospectuses" as used in this Agreement means the prospectuses subject to
completion (as defined in Rule 434(g) under the Act) as supplemented by (a) the
addition of Rule 430A or other information contained in the forms of prospectus
filed pursuant to Rule 434(c)(2) under the Act and (b) the information contained
in the abbreviated term sheets described in Rule 434(c)(3) under the Act, and
(ii) the date of such Prospectuses shall be deemed to be the date of such
abbreviated term sheets. The term "Prepricing Prospectuses" as used in this
Agreement means the prospectuses subject to completion in the form included in
the registration statement at the time of the initial filing of the registration
statement with the Commission, and as such prospectuses shall have been amended
from time to time prior to the date of the Prospectuses. Any reference in
this Agreement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectuses shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act as of the date of the registration statement, the
Registration Statement, such Prepricing Prospectus or the Prospectuses, as the
case may be, and any reference to any amendment or supplement to the
registration statement, the Registration Statement, any Prepricing Prospectus or
the Prospectuses shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Exchange
Act"), that, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means, at any time, the documents that at such time are incorporated
by reference in the registration statement, the Registration Statement, any
Prepricing Prospectus, the Prospectuses, or any amendment or supplement thereto.
It is understood that two forms of Prepricing Prospectus and two
forms of Prospectus are to be used in connection with the offering and sale of
the Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to
the U.S. Shares that are to be offered and sold in the United States (as defined
herein) or Canada (as defined herein) to U.S. or Canadian Persons (the "U.S.
Prepricing Prospectus" and the "U.S. Prospectus", respectively), and a
Prepricing Prospectus and a Prospectus relating to the Shares that are to be
offered and sold outside the United States or Canada to persons other than U.S.
or Canadian Persons (the "International Prepricing Prospectus" and the
"International Prospectus", respectively). The U.S. Prospectus and the
International Prospectus are herein collectively called the "Prospectuses", and
the U.S. Prepricing Prospectus and the International Prepricing Prospectus are
herein
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called the "Prepricing Prospectuses". For purposes of this Agreement: "U.S. or
Canadian Person" means any resident or national of the United States or Canada,
any corporation, partnership or other entity created or organized in or under
the laws of the United States or Canada or any estate or trust the income of
which is subject to United States or Canadian income taxation regardless of the
source of its income (other than the foreign branch of any U.S. or Canadian
Person), and includes any United States or Canadian branch of a person other
than a U.S. or Canadian Person; "United States" means the United States of
America (including the states thereof and the District of Columbia) and its
territories, its possessions and other areas subject to its jurisdiction; and
"Canada" means Canada and its territories, its possessions and other areas
subject to its jurisdiction.
2. AGREEMENTS TO SELL AND PURCHASE. The Selling Shareholder
hereby agrees, subject to all the terms and conditions set forth herein, to sell
to each Manager and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Shareholder herein contained and
subject to all the terms and conditions set forth herein, each Manager agrees,
severally and not jointly, to purchase from the Selling Shareholder, at a
purchase price of $____ per Share (the "purchase price per share"), the number
of Shares set forth opposite the name of such Manager in Schedule I hereto (or
such number of Shares increased as set forth in Section 13 hereof).
3. TERMS OF PUBLIC OFFERING. The Company and the Selling
Shareholder have been advised by you that the Managers propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Shares upon the terms set forth
in the International Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to
the Managers of and payment for the Shares shall be made at the office of Smith
Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M., New York
City time, on , 1995 (the "Closing Date"). The place of closing for the
Shares and the Closing Date may be varied by agreement among you, the Company
and the Selling Shareholder.
Certificates for the Shares shall be registered in such names and in
such denominations as you shall request prior to 1:00 P.M., New York City time,
on the second business day preceding the Closing Date. Such certificates shall
be made available to you in New York City for inspection and packaging not later
than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date. The certificates evidencing the Shares shall be delivered to you
on the Closing Date against payment of the purchase price therefor by certified
or official
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bank check or checks payable in New York Clearing House (next day) funds to the
order of the Selling Shareholder.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Managers and the Selling Shareholder as follows:
(a) The Company shall, if, at the time this Agreement is executed
and delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Shares may commence, use its best efforts to cause the
Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company shall comply fully
and in a timely manner with the applicable provisions of Rule 424, Rule
430A and Rule 434 under the Act.
(b) The Company shall advise you and the Selling Shareholder
promptly and, if requested by any of you, confirm such advice in writing,
(i) when the Registration Statement has become effective, if and when a
Prospectus or form of prospectus is sent for filing pursuant to Rule 424
under the Act and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the receipt of any comments from the
Commission that relate to the Registration Statement or any request by the
Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by the Commission or any
state securities commission or other regulatory authority, and (iv) during
the period referred to in subsection (f) below, (A) of any change in the
Company's condition (financial or other), business, prospects, properties,
net worth or results of operations, or of the happening of any event,
including the filing of any information, document or report pursuant to
the Exchange Act, that makes any statement of a material fact made in the
Registration Statement untrue or that requires the making of any additions
to or changes in the Registration Statement in order to state a material
fact required by the Act to be stated therein or to make the statements
therein not misleading or that makes any statement of a material fact made
in the International Prospectus (as then amended or supplemented) untrue
or that requires the making of any additions to or changes in the
International Prospectus (as then amended or supplemented) in order to
state a material fact required by the Act to be stated therein or in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading,
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and (B) of the necessity to amend or supplement the International
Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of the Shares under any state
securities or Blue Sky laws or real estate syndication laws, the Company
shall use every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time.
(c) The Company shall furnish to each of you and the Selling
Shareholder without charge (i) two (2) conformed copies (plus one (1)
additional similarly conformed copy to your legal counsel) of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits filed therewith, (ii) such number
of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request, (iii)
such number of copies of the Incorporated Documents, without exhibits, as
you may request, and (iv) two (2) copies of each of the exhibits to the
Incorporated Documents.
(d) The Company shall not file any amendment or supplement to the
Registration Statement, whether before or after the time when it becomes
effective, or make any amendment or supplement to the International
Prospectus, or, prior to the end of the period of time referred to in
subsection (f) below, file any document pursuant to the Exchange Act that
will, upon filing, become an Incorporated Document, of which you and the
Selling Shareholder shall not previously have been advised and provided a
copy within two business days (or such reasonable amount of time as is
necessitated by the exigency of such amendment, supplement or document)
prior to the filing thereof and to which you or the Selling Shareholder
shall reasonably object in writing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you and the Selling Shareholder, without charge,
in such quantities as you have requested, copies of each form of the
International Prepricing Prospectus. The Company consents to the use, in
accordance with the provisions of the Act, prior to the date of the
International Prospectus, of each International Prepricing Prospectus so
furnished by the Company.
(f) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the reasonable
opinion of counsel for the Managers a prospectus is required by the Act to
be delivered in connection with sales by any Manager or dealer, the
Company
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shall expeditiously furnish to each Manager and each dealer, without
charge, as many copies of the International Prospectus (and of any
amendment or supplement to the International Prospectus) as you may
reasonably request for the purposes contemplated by the Act. The Company
consents to the use of the International Prospectus and any amendment or
supplement thereto by you or any dealer in accordance with the provisions
of the Act, both in connection with the offering or sale of the Shares and
for such period of time thereafter as a prospectus is required by the Act
to be delivered in connection therewith.
(g) If during the period specified in subsection (f) above any
event shall occur as a result of which it becomes necessary, in the
judgment of the Company or in the reasonable opinion of counsel for the
Managers, to amend or supplement the International Prospectus (as them
amended or supplemented) in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it is necessary to amend or supplement the International Prospectus to
comply with the Act or any other law, the Company shall, as promptly as
practicable, prepare and, subject to the provisions of subsection (d)
above, file with the Commission an appropriate amendment or supplement to
the International Prospectus so that the statements in the International
Prospectus, as so amended or supplemented, will not, in the light of the
circumstances under which they were made, be misleading, and the
International Prospectus, as so amended or supplemented, will comply with
the Act or such other law, and shall expeditiously furnish to you without
charge such number of copies thereof as you may reasonably request.
(h) Prior to any public offering of the Shares, the Company shall
cooperate with you and with counsel for the Managers in connection with
the registration or qualification of the Shares for offering and sale by
the Managers and by dealers under the state securities or Blue Sky laws or
real estate syndication laws of such jurisdictions as you may request
(provided, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to take
any action that would subject it to consent to service of process in
suits, other than those arising out of the offering or sale of the Shares,
in any jurisdiction in which it is not now so subject). The Company shall
continue such qualification in effect so long as required by law for
distribution of the Shares and shall file such consents to service of
process or other documents as may be necessary or appropriate in order to
effect such registration or qualification (provided, that the Company
shall not be obligated to take any action that would subject it to consent
to service of process in suits, other than those
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arising out of the offering or sale of the Shares, in any jurisdiction in
which it is not now so subject).
(i) The Company shall make generally available to its security
holders as soon as reasonably practicable a consolidated earnings
statement covering a period of at least 12 months beginning after the
"effective date" (as defined in Rule 158 under the Act) of the
Registration Statement (but in no event later than 90 days after such
date) that shall satisfy the provisions of Section 11(a) of the Act.
(j) (i) During the period of five years hereafter, the Company
shall mail to each of you without charge as soon as available, a copy of
each report of the Company mailed to stockholders or filed with the
Commission, and (ii) during the period specified in subsection (f) above,
from time to time such other information concerning the Company as you may
reasonably request.
(k) Except as provided in this Agreement and the U.S. Underwriting
Agreement, the Company shall not sell, contract to sell or otherwise
dispose of any Common Stock (other than upon 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 International 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 U.S. Underwriting
Agreement and in the Prepricing Prospectuses and the Prospectuses, the
Company shall not take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Underwritten Shares.
(n) The Company shall use its best efforts to have the Shares
listed, subject to notice of issuance, on the New York Stock Exchange on
or before the Closing Date.
6. AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling
Shareholder agrees with the several Managers and the Company as follows:
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(a) The Selling Shareholder shall cooperate to the extent
necessary to cause the registration statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(b) The Selling Shareholder shall pay all Federal and other taxes,
if any, on the transfer or sale of the Shares to the Managers.
(c) The Selling Shareholder shall do or perform all things
required to be done or performed under this Agreement and the U.S.
Underwriting Agreement by the Selling Shareholder prior to the Closing
Date to satisfy all conditions precedent to the delivery of the Shares
pursuant to this Agreement.
(d) Except as provided in this Agreement and the U.S. Underwriting
Agreement, the Selling Shareholder shall not sell, contract to sell or
otherwise dispose of any Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock for a period of 90 days
after the date of the International Prospectus, without the prior written
consent of Smith Barney Inc., which shall not be unreasonably withheld.
(e) Except as stated in this Agreement and the U.S. Underwriting
Agreement and in the Prepricing Prospectuses and the Prospectuses, the
Selling Shareholder shall not take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Underwritten Shares.
(f) The Selling Shareholder shall advise you and the Company
promptly and, if requested by you, shall confirm such advice in writing,
within the period of time referred to in Section 5(f) hereof, of any
change in information furnished by or on behalf of the Selling Shareholder
expressly for use in the Registration Statement and the International
Prospectus that comes to the attention of the Selling Shareholder and that
suggests that any statement of a material fact made in the Registration
Statement is or may be untrue or that requires or may require the making
of any additions to or changes in the Registration Statement in order to
state a material fact required by the Act to be stated therein or to make
the statements therein not misleading or that suggests any statement of a
material fact made in the International Prospectus (as then amended or
supplemented) is or may be untrue or that requires or may require the
making of any additions to or changes in the International Prospectus (as
then amended or supplemented) in order to state a material fact required
by the Act to be
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stated therein or in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or that it
is or may be necessary to amend or supplement the International Prospectus
(as then amended or supplemented) to comply with the Act or any other law.
(g) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 13 hereof or by notice given by you
terminating this Agreement pursuant to Section 13 or Section 14 hereof) or
if this Agreement shall be terminated by the Managers because of any
failure or refusal on the part of the Company or the Selling Shareholder
to comply with the terms or fulfill any of the conditions of this
Agreement, the Selling Shareholder agrees to reimburse the Lead Managers
for all reasonable out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Managers) incurred by you in connection
herewith.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Manager and the Selling Shareholder that:
(a) The Company and the transactions contemplated by this
Agreement and the U.S. Underwriting Agreement meet the requirements for
using Form S-3 under the Act. The registration statement in the form in
which it became or becomes effective and also in such form as it may be
when any post-effective amendment thereto shall become effective and the
International Prospectus and any supplement or amendment thereto when
filed with the Commission under Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions of the Act; the
Registration Statement does not and will not at any such time contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and the International Prospectus and any supplement or
amendment thereto will not at any such time contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that this representation and warranty does not apply to statements in or
omissions from the registration statement or the International Prospectus
made in reliance upon and in conformity with information relating to any
Manager furnished to the Company in writing by or on behalf of any Manager
through you expressly for use therein.
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(b) Each International Prepricing Prospectus included as part of
the registration statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all material respects with the provisions of the
Act.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act, and any further Incorporated
Documents so filed will, when they are filed, conform in all material
respects with the requirements of the Exchange Act; no such document when
it was filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and no
such further document, when it is filed, will contain an untrue statement
of a material fact or will omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(d) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; and the capital stock of
the Company conforms to the description thereof in the Registration
Statement and the International Prospectus.
(e) All of the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, which is incorporated by
reference into the Registration Statement. The Company and each of the
Subsidiaries that is a "significant subsidiary" (as defined in Regulation
S-X under the Act) (collectively, the "Significant Subsidiaries") has been
duly organized, is validly existing (if applicable, as a corporation in
good standing) under the laws of its jurisdiction of organization and has
full corporate (or partnership) power and authority to carry on its
business as it is currently being conducted (and, in the case of the
Company, to execute, deliver and perform this Agreement) and to own, lease
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified could not reasonably be expected to have a material
adverse effect, singly or in the aggregate, on the condition (financial or
other), business, properties, net worth or
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results of operations of the Company and the Subsidiaries, taken as a
whole (a "Material Adverse Effect").
(f) All of the issued and outstanding shares of capital stock of,
or other ownership interests in, each Significant Subsidiary have been
duly authorized and validly issued, and certain shares of capital stock of
each Significant Subsidiary are owned, directly or through Subsidiaries,
by the Company as set forth on Exhibit 21 to the Company's annual report
on Form 10-K for the fiscal year ended December 31, 1994. All such shares
or other ownership interests in each Significant Subsidiary are fully paid
and nonassessable, and are free and clear of any security interest,
mortgage, pledge, claim, lien or encumbrance (each, a "Lien"), except for
Liens that are in the aggregate immaterial to the business of the Company
and the Subsidiaries, taken as a whole. There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale, or Liens related to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of any
Significant Subsidiary.
(g) Neither the Company nor any of the Significant Subsidiaries is
in violation of or in default in the performance of any of their
respective charters or bylaws (or partnership agreements, as the case may
be) or any bond, debenture, note or any other evidence of indebtedness or
any indenture, mortgage, deed of trust or other contract, lease or other
instrument to which the Company or any of the Significant Subsidiaries is
a party or by which it or any of them is bound, or to which any of the
property or assets of the Company or any of the Significant Subsidiaries
is subject, except as could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(h) This Agreement has been duly and validly executed and delivered
by the Company, and constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms
(assuming the due execution and delivery thereof by you and the Selling
Shareholder), except as rights to indemnity and contribution hereunder may
be limited by Federal or state securities laws, court decisions or public
policy.
(i) The execution and delivery of this Agreement by the Company and
the performance of this Agreement and the U.S. Underwriting Agreement (i)
does not require any consent, approval, authorization or order of or
registration or filing with any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may
be required for the registration of the Underwritten Shares under the Act
and the Exchange Act and compliance with the state securities or Blue Sky
laws or
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real estate syndication laws of various jurisdictions, all of which have
been or will be effected in accordance with this Agreement) and (ii) will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default or cause an acceleration of any obligation
under, any of the respective charters or bylaws (or partnership
agreements, as the case may be) of the Company or any of the Significant
Subsidiaries or any material bond, note, debenture or other evidence of
indebtedness or any material indenture, mortgage, deed of trust or other
material contract, lease or other instrument to which the Company or any
of the Significant Subsidiaries is a party or by which any of them is
bound, or to which any of the property or assets of the Company or any of
the Significant Subsidiaries is subject, or any order of any court or
governmental agency or authority entered in any proceeding to which the
Company or any of the Significant Subsidiaries was or is a party or by
which any of them is bound or (solely with respect to actions by the
Company or the Significant Subsidiaries) violate any applicable Federal,
state or local law, rule, administrative regulation or ordinance or
administrative or court decree, any of the foregoing of which could,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(j) Except as disclosed in the Registration Statement and the
International Prospectus, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, pending
against the Company or any of the Significant Subsidiaries that is
required to be disclosed in the Registration Statement or the
International Prospectus, or that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect or materially and
adversely to affect the performance of the Company's obligations pursuant
to this Agreement and, to the best of the Company's knowledge, no such
proceedings are contemplated or threatened. No action has been taken with
respect to the Company or any of the Significant Subsidiaries, and no
statute, rule or regulation or order has been enacted, adopted or issued
by any governmental agency that suspends the effectiveness of the
Registration Statement, prevents or suspends the use of any Prepricing
Prospectus or suspends the sale of the Shares in any jurisdiction referred
to in Section 5(h) hereof; no injunction, restraining order or order of
any nature by a Federal or state court of competent jurisdiction has been
issued with respect to the Company or any of the Significant Subsidiaries
that suspends the effectiveness of the Registration Statement, prevents or
suspends the use of any Prepricing Prospectus or suspends the sale of the
Shares in any jurisdiction referred to in Section 5(h) hereof; other than
the litigation matters or proceedings described in the International
Prospectus under the captions "Business --
- 13 -
Legal Proceedings" (collectively, the "Litigation"), no action, suit or
proceeding before any court or arbitrator or any governmental body, agency
or official (domestic or foreign), is pending against or, to the best of
the Company's knowledge, threatened against, the Company or any of the
Significant Subsidiaries that, if adversely determined, could, singly or
in the aggregate, reasonably be expected in any manner to invalidate this
Agreement or the Shares; and every request of the Commission, or any
securities authority or agency of any jurisdiction, for additional
information (to be included in the Registration Statement or the
International Prospectus or otherwise) has been complied with in all
material respects. No contract or document of a character required to be
described in the Registration Statement or the International Prospectus or
to be filed as an exhibit to or incorporated by reference in the
Registration Statement is not so described or filed or incorporated by
reference as required.
(k) The firm of accountants that has certified or shall certify the
applicable consolidated financial statements and supporting schedules of
the Company filed or to be filed with the Commission as part of the
Registration Statement and the International Prospectus are independent
public accountants with respect to the Company and the Subsidiaries, as
required by the Act and the Exchange Act. The consolidated financial
statements, together with related notes, set forth in the International
Prospectus and the Registration Statement comply as to form in all
material respects with the requirements of the Act and the Exchange Act
and fairly present, in all material respects, the financial position of
the Company and the Subsidiaries at the respective dates indicated and the
results of their operations and their cash flows for the respective
periods indicated, in accordance with generally accepted accounting
principles in the United States of America consistently applied throughout
such periods, except as disclosed in the notes to such financial
statements; and the other financial and statistical information and the
supporting schedules included in the International Prospectus and in the
Registration Statement present fairly, in all material respects, the
information required to be stated therein.
(l) Except as disclosed in the Registration Statement, subsequent
to the respective dates as of which information is given in the
Registration Statement and the International Prospectus, (i) neither the
Company nor any of the Significant Subsidiaries has incurred any
liabilities or obligations, direct or contingent, that are material to the
Company and the Subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business that is material to the
Company and the Subsidiaries, taken as a whole, (ii) there has been no
decision or judgment in
- 14 -
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.
(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
- 15 -
good faith, and all material taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to be due
from such entities have been paid, other than those being contested in
good faith or for which adequate reserves have been provided or those
currently payable without penalty or interest.
(q) Except as disclosed in the International Prospectus or except
as could not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (a) to the best of the Company's knowledge,
neither the Company nor the Subsidiaries is in violation of any Federal,
state or local law or regulation relating to pollution or protection of
public heath or welfare or the environment, including, without limitation,
the storage, handling, transportation, emissions, discharges, releases or
threatened releases of pollutants, contaminates, hazardous or toxic
materials, substances or wastes, or petroleum or petroleum products
("Environmental Laws"), (b) the Company and each of the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and
the Company and each of the Subsidiaries are in compliance with all terms
and conditions of any such permit, license or approval and (c) neither the
Company nor, to the best of the Company's knowledge, any of the
Subsidiaries, has received any notice or communication from any
governmental agency or any written notice from any other person regarding
violation of or liability under Environmental Laws and (d) there is no
pending action or proceeding, or to the best of the Company's knowledge,
pending or threatened claim or investigation against the Company or any of
the Subsidiaries regarding violation of or liability under Environmental
Laws.
(r) To the best of the Company's knowledge, there are no costs and
liabilities associated with Environmental Laws that could, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(s) To the best of the Company's knowledge, neither the Company nor
any of the Subsidiaries has (A) violated any Federal or state law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder, or (B) engaged in any unfair labor
practice that, with respect to any matter specified in clause (A) or (B)
above, could reasonably be expected to result, singly or in the 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
- 16 -
the Company's knowledge, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations
board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of the Subsidiaries or, to the best of the
Company's knowledge, threatened against any of them and (ii) to the best
of the Company's knowledge, no union representation question existing with
respect to the employees of the Company or any of the Subsidiaries and, to
the best of the Company's knowledge, no union organizing activities are
taking place, except (with respect to any matter specified in clause (i)
or (ii) above) such as would not, singly or in the aggregate, have a
Material Adverse Effect.
(t) To the best of the Company's knowledge, (i) each of the
Company and the Subsidiaries has good and marketable title to all property
(real and personal) described in the International Prospectus as being
owned by it, in fee simple in the case of real property (other than in the
case of certain buildings the land under which is leased to the Company
pursuant to long-term leases that are valid, subsisting and enforceable
against the Company), free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the
Registration Statement and the International Prospectus or in a document
filed as an exhibit to the Registration Statement and (ii) all the
property described in the Registration Statement and the International
Prospectus as being held under lease by each of the Company and the
Significant Subsidiaries is held by it under valid, subsisting and
enforceable leases, except (with respect to any matter specified in clause
(i) or (ii) above) such as would not, singly or in the aggregate, have a
Material Adverse Effect.
(u) Other than as described in the Registration Statement and the
International Prospectus, no holder of any security of the Company has any
right to require registration of shares of Common Stock or any other
security of the Company because of the filing of the registration
statement or consummation of the transactions contemplated by this
Agreement or the U.S. Underwriting Agreement.
(v) Except as stated in this Agreement and the U.S. Underwriting
Agreement and in the Prepricing Prospectuses and the Prospectuses, the
Company has not taken, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Underwritten Shares.
- 17 -
(w) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
The Selling Shareholder represents and warrants to each Manager and the Company
that:
(a) The Selling Shareholder now has, and on the Closing Date will
have, valid title to the Shares to be sold on such date, free and clear of
any lien, claim, security interest or other encumbrance, including,
without limitation, any restriction on transfer.
(b) The Selling Shareholder now has, and on the Closing Date will
have, full legal right, power and authorization to sell, assign transfer
and deliver such Shares in the manner provided in this Agreement, and upon
delivery of and payment for such Shares hereunder, the several Managers
will acquire valid title to such Shares free and clear of any lien, claim,
security interest, or other encumbrance except for any liens, claims,
security interests or other encumbrances created by the actions or status
of the Managers.
(c) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and is the valid
agreement of the Selling Shareholder.
(d) Neither the execution and delivery of this Agreement by or on
behalf of the Selling Shareholder nor the consummation by the Selling
Shareholder of the transactions herein contemplated requires any consent,
approval, authorization or order of, or registration or filing with, any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required for the registration of
the Underwritten Shares under the Act and compliance with the state
securities or Blue Sky laws or the real estate syndication laws of various
jurisdictions, all of which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or
will constitute a breach of, or default under, or violates or will
violate, any agreement, indenture or other instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder is or may be
bound or to which any of the Selling Shareholder's property or assets is
subject, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to the Selling Shareholder or to
any property or assets of the Selling 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
- 18 -
Managers upon delivery of the Shares pursuant to this Agreement and
payment therefor as contemplated herein.
(e) If any date on which the Registration Statement or any
post-effective amendment thereto is declared effective (each, an
"Effective Date") is prior to the execution and delivery of this
Agreement, on such Effective Date, to the extent, but only to the extent,
any statements or omissions made in the Registration Statement were made
in reliance upon and in conformity with written information furnished to
the Company by the Selling Shareholder expressly for use therein, such
statements and omissions did not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. If any Effective
Date is subsequent to the execution and delivery of this Agreement, on
such Effective Date, to the extent, but only to the extent, any statements
or omissions made in the Registration Statement are made in reliance upon
and in conformity with written information furnished to the Company by the
Selling Shareholder expressly for use therein, such statements and
omissions will not include an untrue statement of a material fact and will
not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. As of its date
and on the Closing Date, to the extent, but only to the extent, any
statements or omissions made in the International Prospectus are made in
reliance upon and in conformity with written information furnished to the
Company by the Selling Shareholder expressly for use therein, such
statements and omissions did not and will not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of circumstances under which they were made, not misleading.
(f) Except as stated in this Agreement and the U.S. Underwriting
Agreement and in the Prepricing Prospectuses and the Prospectuses, the
Selling Shareholder has not taken, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Underwritten Shares.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Manager and each person,
if any, who controls any Manager within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any International Prepricing Prospectus or in the
Registration
- 19 -
Statement or the International Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of the any International Prepricing
Prospectus or the International Prospectus, in the light of the circumstances
under which they were made) not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission that has
been made therein or omitted therefrom in reliance upon and in conformity with
the information relating to such Manager furnished in writing to the Company by
or on behalf of any Manager through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
subsection (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Manager (or to the benefit of any person controlling such
Manager) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Manager to any person if a copy of
the International Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder, and
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such International Prepricing Prospectus was
corrected in the International Prospectus, provided that the Company has
delivered the International Prospectus to the several Managers in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability that the Company may
otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Manager or any person controlling any Manager in respect of which indemnity may
be sought against the Company, such Manager or such controlling person shall
promptly notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Manager or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Manager or such controlling person unless (i)
the indemnifying parties have agreed in writing to pay such fees and expenses,
(ii) the indemnifying parties have failed to assume the defense and employ
counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such Manager or such controlling
person and the indemnifying parties and such Manager or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any 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)
- 20 -
due to actual or potential differing interests between them (in which case the
indemnifying party shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Manager or such controlling
person). It is understood, however, that the indemnifying parties shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such Managers
and controlling persons, which firm shall be designated in writing by Smith
Barney Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying parties shall not be liable for any settlement of
any such action, suit or proceeding effected without their written consent, but
if settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying parties agree
to indemnify and hold harmless any Manager, to the extent provided in the
preceding paragraph, and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
(c) The Selling Shareholder agrees to indemnify and hold harmless
each Manager and each person, if any, who controls such Manager within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, subject to
the limitations set forth in Section 12, to the same extent as the foregoing
indemnity from the Company to each Manager, but only with respect to information
specifically relating to the Selling Shareholder furnished in writing by or on
behalf of such Selling Shareholder expressly for use in the Registration
Statement, the International Prospectus, any International Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against any Manager or any such controlling person
in respect of which indemnity may be sought against the Selling Shareholder
pursuant to this subsection (c), the Selling Shareholder shall have the rights
and duties given to the indemnifying parties by subsection (b) above (except
that if the Company shall have assumed the defense thereof the Selling
Shareholder shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the Selling Shareholder's expense). The foregoing
indemnity agreement shall be in addition to any liability that the Selling
Shareholder may otherwise have.
(d) Each Manager agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its 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
- 21 -
or Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Selling Shareholder to each Manager, but only
with respect to information relating to such Manager furnished in writing by or
on behalf of such Manager through you expressly for use in the Registration
Statement, the International Prospectus or any International Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors, any such
officer, the Selling Shareholder, or any such controlling person based on the
Registration Statement, the International Prospectus or any International
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Manager pursuant to this subsection
(d), such Manager shall have the rights and duties given to the indemnifying
parties by subsection (b) above (except that if the Company shall have assumed
the defense thereof such Manager shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Manager's expense), and the
Company, its directors, any such officer, the Selling Shareholder, and any such
controlling person shall have the rights and duties given to the Managers by
subsection (b) above. The foregoing indemnity agreement shall be in addition to
any liability that any Manager may otherwise have.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsection (a) above or, where the
indemnified party is the Company or its officers, directors or controlling
persons, under subsection (d) above in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Managers on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsection (c) above or, where the
indemnified party is the Selling Shareholder, under subsection (d) above in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Selling Shareholder on the one hand and the Managers on the 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
- 22 -
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Selling Shareholder on the one hand and the Managers on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Selling
Shareholder on the one hand and the Managers on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Selling Shareholder bear to the total
underwriting discounts and commissions received by the Managers, in each case as
set forth in the table on the cover page of the International Prospectus. The
relative fault of the Company or the Selling Shareholder, as the case may be, on
the one hand and the Managers on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Shareholder, as
the case may be, on the one hand or by the Managers on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The Company, the Selling Shareholder and the Managers agree
that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Managers were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
subsection (e) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to
in subsection (e) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 9, no Manager shall be required to contribute any amount in excess of
the amount by which the total price of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages that such Manager
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Managers' obligations to contribute pursuant to this
Section 9 are several in proportion to the respective numbers of Shares set
forth opposite their names in Schedule I hereto (or such numbers of Shares
increased as set forth in Section 13 hereof) and not joint.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement
- 23 -
of any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Shareholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Manager or any
person controlling any Manager, the Company, its directors or officers or the
Selling Shareholder or any person controlling the Company, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Manager or any person controlling any Manager, or
to the Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
10. CONDITIONS OF MANAGERS' OBLIGATIONS. The several obligations
of the Managers to purchase the Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the registration statement or such post-effective amendment
shall have become effective not later than 5:30 P.M., New York City time,
on the date hereof, or at such later date and time as shall be consented
to in writing by you, and all filings, if any, required by Rules 424, 430A
and 434 under the Act shall have been timely made; no stop order
suspending the effectiveness of the registration statement shall have been
issued and no proceeding for that purpose shall have been instituted or,
to the knowledge of the Company or any Manager, threatened by the
Commission, and any request of the Commission for additional information
(to be included in the registration statement or the International
Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change in
- 24 -
or affecting the condition (financial or other), business, properties, net
worth, or results of operations of the Company or the Subsidiaries not
contemplated by the International Prospectus, that, in your reasonable
opinion, as Lead Managers for the several Managers, would materially
adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company or any officer or
director of the Company or the Selling Shareholder that makes any
statement made in the International Prospectus untrue in any material
respect or that, in the opinion of the Company and its counsel or the
Managers and their counsel, requires the making of any addition to or
change in the International Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, if amending or supplementing
the International Prospectus to reflect such event or development would,
in your reasonable opinion, as Lead Managers for the several Managers,
materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of
Latham & Watkins, counsel for the Company, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, to the effect
that:
(i) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the Act and no proceedings therefor have been initiated by the
Commission; and any required filing of the International Prospectus,
and any supplements thereto, pursuant to Rule 424(b) or Rule 434
under the Act has been made in the manner and within the time period
required by Rule 424(b) and Rule 430A under the Act;
(ii) To the best of such counsel's knowledge no consent,
approval, authorization or order of, or filing with, any federal or
New York court or governmental agency or body is required to be
obtained or made by the Company for the consummation of the sale of
the Shares by the Selling Shareholder pursuant to this Agreement,
except such as have been obtained under the Act and such as may be
required under the state securities laws in connection with the
purchase and distribution of the Shares by the Managers;
(iii) The Registration Statement and the International
Prospectus comply as to form in all material respects with the
requirements for
- 25 -
registration statements on Form S-3 under the Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel need express no opinion with respect to
the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the
International Prospectus. In passing upon the compliance as to form
of the Registration Statement and the International Prospectus, such
counsel may assume that the statements made and incorporated by
reference therein are correct and complete;
(iv) Neither the purchase of the Shares by the Managers nor
the sale of the Shares by the Selling Shareholder pursuant to the
terms of this Agreement will result in the breach of or a default
under those agreements identified to such counsel by an officer of
the Company as material to the Company; and
(v) The statements set forth in the International Prospectus
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
International Prospectus, insofar as such statements constitute a
summary of legal matters, are accurate in all material respects.
Such opinion may be limited to the internal laws of the State of New
York and the Federal laws of the United States. Such counsel may rely as
to factual matters on certificates of officers of the Company and of state
officials, in which case their opinion shall state that they are so doing.
Such opinion also shall take further exceptions that shall be reasonably
acceptable to the Managers.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the Managers and their counsel, at which the
contents of the Registration Statement and International Prospectus and
related matters were discussed and, although such counsel need not pass
upon and need not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the International Prospectus and such counsel may state that
they have made no independent check or verification thereof, during the
course of such participation, (relying as to materiality to a large extent
upon the statements of officers and other representatives of the Company),
no facts came to such counsel's attention that caused such counsel to
believe that the Registration Statement (as amended or
- 26 -
supplemented, if applicable, and including the Incorporated Documents), at
the time such Registration Statement or any post-effective amendment
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
International Prospectus (including the Incorporated Documents) as amended
or supplemented, as of its date and as of the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need express no belief with respect to the
financial statements, schedules and other financial and statistical data
included in the Registration Statement or the International Prospectus
or incorporated therein.
(d) You shall have received on the Closing Date, an opinion of
John F. Schmutz, Esq., Vice President and General Counsel of the Company,
dated the Closing Date and addressed to you, as Lead Managers for the
several Managers, to the effect that:
(i) To the best of such counsel's knowledge, no
authorization, approval, consent or order of, or registration or
filing with, any court or governmental authority or agency is
required to be obtained or made by the Company for the valid sale of
the Shares to you, except (a) such as have been obtained under the
Act and (b) such as may be required under the state securities or
Blue Sky laws or real estate syndication laws or regulations of any
jurisdiction in the United States in connection with the purchase
and distribution of the Shares by the Managers;
(ii) The Company has corporate power and authority to enter
into this Agreement and this Agreement has been duly authorized by
all necessary corporate action by the Company, and has been duly
executed and delivered by the Company;
(iii) Neither the purchase of the Shares by the Managers nor
the sale of the Shares by the Selling Shareholder pursuant to the
terms of this Agreement will conflict with or constitute a breach of
or a default under the certificate or articles of incorporation or
bylaws, or other organizational documents, of the Company or any of
the Significant Subsidiaries or the terms of any material agreement
or instrument to which the Company or any of the Significant
Subsidiaries is a party or by which any of them is bound, or to
which any of the properties of the
- 27 -
Company or any of the Significant Subsidiaries is subject, or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Significant Subsidiaries, or result in any violation of any statute,
rule or regulation applicable to the Company or, to the best of such
counsel's knowledge, any judgment, injunction, order or decree of
any court or governmental agency or body having jurisdiction over
the Company or any of the Significant Subsidiaries or any of their
respective properties;
(iv) Each of the Company and, to the best of such counsel's
knowledge, the Significant Subsidiaries that is a corporation has
been duly incorporated and is validly existing and is a corporation
in good standing under the laws of its jurisdiction of its
incorporation, and each of the Company and, to the best of such
counsel's knowledge, the Significant Subsidiaries has the corporate
(or partnership) power and authority and all necessary governmental
authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all governmental regulatory
officials and bodies to own and operate its properties and to
conduct its business as described in the Registration Statement and
the International Prospectus and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction in which such qualification is required wherein it owns
or leases material property or conducts business, except where the
failure so to qualify could not reasonably be expected to have a
Material Adverse Effect;
(v) All of the issued and outstanding capital stock of, or
other ownership interests in, each Significant Subsidiary has been
duly authorized and validly issued, and is fully paid and
nonassessable and, except as otherwise set forth in the Registration
Statement and the International Prospectus, certain shares of
capital stock of, or other ownership interests in, each Significant
Subsidiary are owned by the Company, either directly or through
Subsidiaries, as set forth on Exhibit 21 to the Company's annual
report on Form 10-K for the fiscal year ended December 31, 1994,
free and clear of any perfected security interest or, to the best of
such counsel's knowledge, 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
International Prospectus; and
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the authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof incorporated
by reference in the International Prospectus;
(vii) Except as described in the Registration Statement and
the International Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale, or Liens related to or entitling
any person to purchase or otherwise to acquire any shares of the
capital stock of the Company or any security convertible into or
exchangeable for the capital stock of the Company;
(viii) Except as described in the Registration Statement
and the International Prospectus, there is no holder of any security
of the Company or any other person who has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them,
or to permit them to underwrite the sale of, the Shares or the right
to have any Common Stock or other securities of the Company included
in the registration statement or the right, as a result of the
filing of the registration statement, to require registration under
the Act of any shares of Common Stock or other securities of the
Company;
(ix) To the best of such counsel's knowledge (A) there are no
franchises, contracts, indentures, mortgages, leases, loan
agreements, notes or other agreements or instruments to which the
Company or any Significant Subsidiary is a party or by which any of
them may be bound that are required to be described in the
Registration Statement or the International Prospectus or to be
filed as exhibits to or incorporated by reference in the
Registration Statement other than those described therein or filed
or incorporated by reference as exhibits thereto, (B) no default
exists in the due performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument, except for defaults that would not, singly or in the
aggregate, have a Material Adverse Effect and (C) the statements in
the International Prospectus under the caption "Business -- Legal
Proceedings" insofar as they relate to statements of law or legal
conclusions, are accurate in all material respects;
(x) The Company and the Significant Subsidiaries own all
patents, trademarks, trademark registrations, service marks, service
mark registrations, trade names,
- 29 -
copyrights, licenses, inventions, trade secrets and rights described
in the International Prospectus as being owned by them or any of
them or necessary for the conduct of their respective businesses,
and such counsel is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and the
Significant Subsidiaries with respect to the foregoing;
(xi) To the best of such counsel's knowledge, there is no
current, pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of the Significant Subsidiaries or any
of their respective properties of a character required to be
disclosed in the Registration Statement and the International
Prospectus that is not adequately so disclosed;
(xii) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, nonassessable and not subject to any preemptive or other
similar rights to subscribe for such Common Stock;
(xiii) The form of the certificates for the Shares conforms
to the requirements of the corporate law of the State of Texas;
(xiv) At the time it became effective and on the Closing
Date, the Registration Statement (except for financial statements,
the notes thereto and related schedules and other financial,
numerical, statistical or accounting data included therein or
omitted therefrom, as to which no opinion need be expressed) and the
International Prospectus complies as to form in all material
respects with the applicable requirements of the Act; and each of
the Incorporated Documents (except for financial statements, the
notes thereto and related schedules and other financial, numerical,
statistical or accounting data included therein or omitted
therefrom, as to which no opinion need be expressed) complies as to
form in all material respects with the Exchange Act;
(xv) The statements in the Registration Statement and the
International Prospectus, insofar as they are descriptions of
contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate and present
fairly the information required to be shown; and
- 30 -
(xvi) Neither the Company nor any of the Subsidiaries is an
"investment company" required to be registered under Section 8 of
the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or an entity "controlled by an investment company"
required to be registered under Section 8 of the Investment Company
Act.
Such opinion may be limited to the internal laws of the State of
Texas and the Federal laws of the United States. Such opinion shall take
further exceptions that shall be reasonably acceptable to the Managers.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, your representatives and your counsel, at which the contents of
the Registration Statement and International Prospectus (including the
Incorporated Documents) and related matters were discussed and, although
such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the International Prospectus, on the basis
of the foregoing, relying as to the factual matters underlying the
determination of materiality to a large extent upon the statements of
officers and other representatives of the Company, no facts came to such
counsel's attention that caused such counsel to believe that the
Registration Statement (as amended or supplemented, if applicable, and
including the Incorporated Documents), at the time such Registration
Statement or any post-effective amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading (other than information omitted therefrom in reliance on
Rule 430A under the Act), or the International Prospectus, as amended or
supplemented, as of its date and as of the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need express no belief with respect to the
financial statements, schedules and other financial and statistical data
included in the Registration Statement or the Prospectus or
incorporated therein.
(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
- 31 -
general partner of the Selling Shareholder, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, to the effect
that:
(i) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder;
(ii) To the best of such counsel's knowledge after reasonable
inquiry, the Selling Shareholder has the partnership power and
authorization to sell, assign, transfer and deliver the Shares;
(iii) The execution and delivery of this Agreement and the
U.S. Underwriting Agreement by the Selling Shareholder and the
consummation of the transactions contemplated hereby and thereby
will not conflict with, violate, result in a 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 Managers
free and clear of any lien, claim, security interest, or other
encumbrance, assuming that the Shares were validly authorized and
issued by the Company and the Managers are purchasers for value in
good faith without notice of any adverse claim (as defined in
Section 8-302 of the Uniform Commercial Code).
(f) You shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the Managers, dated the Closing Date
and addressed to you, as Lead Managers for the several Managers, with
respect to the matters referred to in clauses (i), (ii) and (iii) and in
the last paragraph of subsection (c) above and such other related matters
as you may request.
(g) You shall have received letters addressed to you, as Lead
Managers for the several Managers, and dated the date hereof and the
Closing Date from KPMG Peat Marwick LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(h)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to
- 32 -
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 International Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the
respective dates as of which information is given in the Registration
Statement and the International Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement
and the International Prospectus (or any amendment or supplement thereto),
any Material Adverse Change; (iv) the Company and the Subsidiaries shall
not have any liabilities or obligations, direct or contingent (whether or
not in the ordinary course of business), that are material to the Company
and the Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement and the International Prospectus (or any amendment
or supplement thereto); and (v) all the representations and warranties of
the Company contained in this Agreement and the U.S. Underwriting
Agreement shall be true and correct in all material respects on and as of
the date hereof and on and as of the Closing Date as if made on and as of
the Closing Date, and you shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable
to you), to the effect set forth in this Section 10(h) and in Section
10(i) hereof.
(i) The Company shall not have failed at or prior to the Closing
Date to have performed or complied in all material respects with any of
its agreements herein contained and required to be performed or complied
with by it hereunder at or prior to the Closing Date.
(j) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be true and correct in all
material respects on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by or on behalf
of the Selling Shareholder, to the effect set forth in this Section 10(j)
and in Section 10(k) hereof.
(k) The Selling Shareholder shall not have failed at or prior to
the Closing Date to have performed or complied in all material respects
with any of its agreements herein contained and required to be performed
or complied with by it hereunder at or prior to the Closing Date.
- 33 -
(l) The Company shall have furnished to you the "lock-up" letters
referred to in Section 5(l) hereof.
(m) The closing under the U.S. Underwriting Agreement shall have
occurred concurrently with the closing hereunder on the Closing Date.
(n) The Company and the Selling Shareholder shall have furnished or
caused to be furnished to you such further certificates and documents as
you shall have 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 Lead Managers for the Managers,
or to counsel for the Managers, shall be deemed a representation and warranty by
the Company or the Selling Shareholder, as the case may be, to each Manager as
to the statements made therein.
11. EXPENSES. The Selling Shareholder agrees to pay the
following costs and expenses and all other costs and expenses incident to the
performance by the Company and the Selling Shareholder of their obligations
hereunder: (i) the preparation, printing or reproduction, and filing with the
Commission of the registration statement (including financial statements and
exhibits thereto), each Prepricing Prospectus, the Prospectuses, and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the registration statement, each Prepricing
Prospectus, the Prospectuses, the Incorporated Documents, and all amendments or
supplements to any of them, as may be reasonably requested for use in connection
with the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
(iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the New York Stock Exchange;
(vi) the registration or qualification of the Shares for offer and sale under
the state securities or Blue Sky laws or real estate syndication laws of the
several states as provided herein (including the reasonable fees, expenses and
disbursements of counsel for the Managers relating to the preparation, printing
or reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification);
- 34 -
(vii) the filing fees and the fees and expenses of counsel for the Managers in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.; (viii) the transportation and other expenses incurred
by or on behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company and the Selling Shareholder.
12. LIMITATION OF LIABILITY. The total liabilities of the
Selling Shareholder under this Agreement, including without limitation any
liabilities for breach of representation or warranty or with respect to any
obligation of indemnity, shall not in any event exceed in aggregate amount the
proceeds of the Shares sold hereunder, provided that this Section 12 shall not
limit the liability of the Selling Shareholder to pay expenses as provided in
Section 6(g) or Section 11 hereof.
13. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company or the Selling Shareholder, by notifying you, or by you, as Lead
Managers for the several Managers, by notifying the Company and the Selling
Shareholder.
If any one or more of the Managers shall fail or refuse to purchase
Shares that it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares that such defaulting Manager or Managers are
obligated but fail or refuse to purchase is not more than one-tenth of the
aggregate number of Shares that the Managers are obligated to purchase on the
Closing Date, each non-defaulting Manager shall be obligated, severally, in the
proportion that the number of Shares set forth opposite its name in Schedule I
hereto bears to the aggregate number of Shares set forth opposite the names of
all non-defaulting Managers or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Smith
Barney Inc., to purchase the Shares that such defaulting Manager or Managers are
obligated, but fail or refuse, to purchase. If any one or more of the Managers
shall fail or refuse to purchase Shares that it or they are obligated to
purchase on the Closing Date and the aggregate number of Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Shares that the Managers are obligated to purchase on the Closing Date and
arrangements
- 35 -
satisfactory to you, the Company and the Selling Shareholder for the purchase of
such Shares by one or more non-defaulting Managers or other party or parties
approved by you, the Company and the Selling Shareholder are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Manager, 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 International Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Manager from liability in respect of any such default of any such
Manager under this Agreement. The term "Manager" as used in this Agreement
includes, for all purposes of this Agreement, any party not listed in Schedule I
hereto who, with your approval and the approval of the Company and the Selling
Shareholder, purchases Shares that a defaulting Manager is obligated, but fails
or refuses, to purchase.
Any notice under this Section 13 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
14. TERMINATION OF AGREEMENT. This Agreement shall be subject
to termination in your absolute discretion, without liability on the part of any
Manager to the Company or the Selling Shareholder, by notice to the Company and
the Selling Shareholder, if prior to the Closing Date (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York or Texas shall
have been declared by either federal or state authorities, or (iii) there shall
have occurred any outbreak or escalation of hostilities or other international
or domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your reasonable judgment, impracticable or inadvisable to
commence or continue the offering of the Shares at the offering price to the
public set forth on the cover page of the International Prospectus or to enforce
contracts for the resale of the Shares by the Managers. Notice of such
termination may be given to the Company by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
15. INFORMATION FURNISHED BY THE SELLING SHAREHOLDER AND THE
Managers. The statements set forth in the last paragraph on the cover page,
the stabilization legend on the inside cover page, and the statements in the
fourth, eighth, ninth, tenth and eleventh and fourteenth paragraphs under
the caption
- 36 -
"Underwriting" in any International Prepricing Prospectus and in the
International Prospectus constitute the only information furnished by or on
behalf of the Managers through you expressly for use therein as such information
is referred to in Sections 7(a) and 9 hereof. The statements set forth under
the caption "Prospectus Summary -- 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
International Prepricing Prospectus and in the International Prospectus
and, solely with respect to the International 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
International Prepricing Prospectus, the International Prospectus or the
Registration Statement, or in any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same arise out of or are based upon an untrue statement or
omission which was based upon information with respect to the Selling
Shareholder furnished in writing to the Company by or on behalf of the Selling
Shareholder expressly for use therein; provided that in the event that any
International Prepricing Prospectus shall have been amended or supplemented and
copies thereof, as so amended or supplemented, were furnished to the Selling
Shareholder and the Managers prior to the confirmation of any sales of Shares,
such indemnity with respect to the International Prepricing Prospectus shall not
inure to the benefit of the Selling Shareholder from whom the person asserting
such loss, claim, damage or liability purchased the Shares which are the subject
thereof if such person did not, at or prior to the confirmation of the sale of
the Shares to such person, receive a copy of the International Prepricing
Prospectus as so amended or supplemented and the untrue statement or omission of
a material fact contained in the International Prepricing Prospectus was
corrected in the International Prepricing Prospectus as so amended or
supplemented.
- 37 -
(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 International Prepricing Prospectus, the
International Prospectus, the Registration Statement or any amendment thereof or
supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent, that such untrue statement is contained
in or such omission relates to the information with respect to the Selling
Shareholder so furnished in writing by the Selling Shareholder or on behalf of
the Selling Shareholder by its agents or representatives specifically for
inclusion in any International Prepricing Prospectus, the International
Prospectus or the Registration Statement. In no event shall the liability of
the Selling Shareholder hereunder be greater in amount that the dollar amount of
the proceeds received by the Selling Shareholder upon the sale of the Shares
giving rise to such indemnification obligation.
(c) Any person entitled to indemnification hereunder agrees to give
prompt written notice to the indemnifying party after the receipt by such person
of any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such person will claim
indemnification or contribution pursuant to this Agreement and, unless in the
reasonable judgment of such indemnified party a conflict of interest may exist
between such indemnified party and the indemnifying party with respect to such
claim, permit the indemnifying party to assume the defense of such claim.
Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. If the indemnifying party is
not entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
(d) (i) If the indemnification provided for in this Section 16
from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses,
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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 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
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President and General Counsel; or (ii) if to the Selling Shareholder, at the
office of the Selling Shareholder, care of Aldrich Eastman Waltch, 225 Franklin
Street, 25th Floor, Boston, MA 02110-2803, Attention: Joseph S. Azrack,
President and Chief Executive Officer, or (iii) if to you, as Lead Managers of
the several Managers, care of Smith Barney Inc., 388 Greenwich Street, New York,
New York 10013, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Managers, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and the Selling
Shareholder and its affiliates and its and their respective partners, officers,
directors and controlling persons referred to in Sections 9 and 16 hereof, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Manager of any of
the Shares in his status as such purchaser.
18. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts that together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the several Managers.
Very truly yours,
LA QUINTA INNS, INC.
By: __________________________
Name:
Title:
AEW PARTNERS, L.P.
BY: AEW/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
Managers named in Schedule I hereto.
SMITH BARNEY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
As Lead Managers for the Several Managers
By: SMITH BARNEY INC.
By: ________________________
Name:
Title:
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SCHEDULE I
LA QUINTA INNS, INC.
Number of
Manager Shares
------- ------
Smith Barney Inc. .......................................
Alex. Brown & Sons Incorporated..........................
Montgomery Securities ...................................
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Total..................................................
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