Exhibit 1.1
Execution
Copy
HOST HOTELS & RESORTS,
INC.
Common Stock
Underwriting
Agreement
April 24, 2009
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
DEUTSCHE BANK SECURITIES INC.
c/o Merrill Lynch, Pierce, Fenner &
Smith Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
Host Hotels & Resorts,
Inc., a Maryland corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and
sell to the several underwriters named in Schedule I (the
“Underwriters”) an aggregate of 66,000,000 shares (the
“ Firm Shares”) of Common Stock, $0.01 par value
(“Stock”), of the Company. The Company also proposes to
issue and sell to the Underwriters not more than an additional
9,750,000 shares of Stock, par value $0.01 per share (the
“Additional Shares”), if and to the extent that you
shall have determined to exercise the right to purchase such shares
of Stock granted to the Underwriters in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively
referred to as the “Shares”.
1. The Company represents and
warrants to, and agrees with the Underwriters that:
(a) An “automatic shelf
registration statement” as defined under Rule 405 under the
Securities Act of 1933, as amended (the “Act”) on Form
S-3 (File No. 333-155689), which contains a base prospectus
(the “Base Prospectus”), to be used in connection with
the public offering and sale of the Shares, has been filed with the
Securities and Exchange Commission (the “Commission”)
not earlier than three years prior to the date hereof and became
effective upon filing. Such registration statement, as amended,
including the financial statements, exhibits and schedules thereto,
at each time of effectiveness under the Securities Act of 1933 and
the rules and regulations promulgated thereunder (collectively, the
“Act”), including any required information deemed to be
a part thereof at the time of effectiveness pursuant to Rule 430B
under the Act or the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (collectively, the
“Exchange Act”), is called the
“Registration
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Statement.” No stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceeding for that purpose has been initiated
or threatened by the Commission, and no notice of objection of the
Commission to the use of the Registration Statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under
the Act has been received by the Company. Any preliminary
prospectus supplement to the Base Prospectus that describes the
Shares and the offering thereof and is used prior to filing of the
Final Prospectus is called, together with the Base Prospectus, a
“Preliminary Prospectus.” The Preliminary Prospectus,
as amended and supplemented immediately prior to the Applicable
Time (as defined in Section 1(c) hereof) is hereinafter called
the “Pricing Prospectus.” The form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof is hereinafter called the
“Prospectus”. Any reference herein to the Base
Prospectus, the Pricing Prospectus, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such
prospectus; any reference to any amendment or supplement to the
Base Prospectus, the Pricing Prospectus, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such prospectus under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and incorporated by reference in such prospectus; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
“issuer free writing prospectus” as defined in Rule 433
under the Act relating to the Shares is hereinafter called an
“Issuer Free Writing Prospectus.”
(b) No order preventing or
suspending the use of any Preliminary Prospectus, Pricing
Prospectus or Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of
the Act, and did not 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, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the
Underwriters through you expressly for use therein.
(c) For the purposes of this
Agreement, the “Applicable Time” is 8:30 a.m. (Eastern
time) on the date of this Agreement. The Pricing Prospectus, when
considered together with the price to public of the Shares and the
number of Shares as set forth on the cover page of the Prospectus,
as of the Applicable Time, did not include any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and each
Issuer Free Writing Prospectus listed on Schedule III(b)
hereto does not conflict with the information contained in the
Registration Statement, the Pricing Prospectus or the Prospectus
and each such Issuer Free Writing Prospectus
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and any free writing prospectus listed on
Schedule III(a), as the case may be, as supplemented by and taken
together with the Pricing Prospectus as of the Applicable Time, did
not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided , however , that the
representations and warranties in this Section 1(c) shall not
apply to statements or omissions made in an Issuer Free Writing
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through you
expressly for use therein.
(d) The documents incorporated by
reference in the Pricing Prospectus and the Prospectus, when they
became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and none of such documents
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 any further
documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents
become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and will not 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; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through you
expressly for use therein.
(e) The Registration Statement and
any post effective amendment thereto, at each time of effectiveness
and at the date hereof, conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto, and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, 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; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through you
expressly for use therein.
(f) (i) At the time of filing the
Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with
Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of
prospectus), (iii) at the time the Company or any person
acting on its behalf (within the meaning, for this clause only, of
Rule 163(c) of the Securities Act) made any offer relating to the
Shares in reliance on the exemption of Rule 163 of the Securities
Act, and (iv) at the execution time of this Agreement (with
such date being used as the determination date for purposes of this
clause (iv)), the Company was and is a “well known seasoned
issuer” as defined in Rule 405 of the Securities
Act.
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(g) Each of the Company and its
consolidated subsidiaries has been duly organized, is validly
existing as a corporation (in the case of the Company), limited
liability company (in the case of the Company’s subsidiaries
that are limited liability companies) or limited partnership (in
the case of the Company’s subsidiaries that are limited
partnerships) in good standing under the laws of its respective
jurisdiction of organization and has the requisite power and
authority to carry on its business as it is currently being
conducted, and to own, lease and operate its properties as
described in the Pricing Prospectus; and, as applicable, has the
requisite power and authority to authorize the offering of the
Shares, to execute, deliver and perform this Agreement and to
issue, sell and deliver the Shares; and each of the Company and its
consolidated subsidiaries is duly qualified and is in good standing
as a foreign corporation (or other entity) authorized to do
business in each jurisdiction where the operation, ownership or
leasing of property or the conduct of its business requires such
qualification, except where the failure to be so qualified or to be
in good standing in such jurisdictions would not, singly or in the
aggregate, have a material adverse effect on the properties,
business, results of operations, condition (financial or
otherwise), business affairs or prospects of the Company and its
consolidated subsidiaries taken as a whole (a “Material
Adverse Effect”).
(h) All of the
issued and outstanding shares of capital stock of the Company have
been duly and validly authorized and issued. All of the issued and
outstanding shares of capital stock of, or other ownership
interests in, each consolidated subsidiary of the Company have been
duly and validly authorized and issued, and all of the shares of
capital stock of, or other ownership interests in, each such
subsidiary other than the subsidiaries set forth on Schedule
II hereto (which subsidiaries are so owned in the amounts
listed thereon) is owned, directly or through subsidiaries, by the
Company (in each case, except for 3% of the partnership interests
in Host Hotels & Resorts, L.P. held by third parties, as
described in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2008). All such shares of capital
stock owned by the Company through its subsidiaries are fully paid
and non-assessable (except for the capital stock of the
subsidiaries incorporated or amalgamated under the laws of the
Provinces of Nova Scotia, the capital stock of which, is assessable
pursuant to Section 135 of the Companies Act (Nova Scotia)),
and are owned free and clear of any security interest, mortgage,
pledge, claim, lien or encumbrance (each, a “Lien”),
except for security interests in shares of certain subsidiaries of
the Company pursuant to the Second Amended and Restated Pledge and
Security Agreement (the “Pledge and Security
Agreement”) relating to Host Hotels & Resorts,
L.P.’s, a Delaware limited partnership (the “Operating
Partnership”), 7 1 / 8 % Series K senior notes due
2013, 7% Series M senior notes dues August 2012, 6
3 / 8 % Series O senior notes due
March 2015, 6 3
/
4 % Series Q senior notes due June
2016 and 6 7 / 8 % Series S senior notes due
November 2014 and the Operating Partnership’s 3.25%
exchangeable senior debentures due 2024 and 2
5 / 8 % exchangeable senior debentures
due April 2027 (collectively, the “Senior Notes”),
borrowings under the Second Amended and Restated Credit Agreement,
dated as of May 25, 2007, among the Operating Partnership
and
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certain subsidiaries, the banks party thereto
from time to time, and Deutsche Bank AG New York Branch, as
administrative agent (the “Credit Facility”) and
certain other obligations as set forth in the Pledge and Security
Agreement. The unissued Shares to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and
non-assessable and the issuance of the Shares will not be subject
to any preemptive or similar rights and will conform to the
description thereof contained in the Pricing Prospectus. Except as
may be described in the Pricing Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or Liens (other than
Liens pursuant to the Pledge and Security Agreement) related to or
entitling any person to purchase or otherwise to acquire any shares
of the capital stock of, or other ownership interest in, any
subsidiary of the Company owned directly or indirectly by the
Company.
(i) The Company has an authorized
capitalization as set forth in the Pricing Prospectus and all of
the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in
the Pricing Prospectus and Prospectus; and all of the issued shares
of capital stock of each consolidated subsidiary of the Company
owned directly or indirectly by the Company have been duly and
validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear
of any Lien, other than Liens pursuant to the Pledge and Security
Agreement.
(j) Neither the Company nor any of
its consolidated subsidiaries has received from any governmental
authority notice of any condemnation of or zoning change affecting
their respective properties or any part thereof or of any violation
of any municipal, state or federal law, rule or regulation
concerning its properties or any part thereof which has not
heretofore been cured or which would have a Material Adverse
Effect, or which could reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any of its consolidated
subsidiaries knows of any such condemnation or zoning change which
is threatened on any of their properties or any such violation,
which could reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its consolidated
subsidiaries is in violation of its respective charter or bylaws or
other similar organizational instrument or in default in the
performance of 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 any of the Company or
any of its consolidated 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 its consolidated subsidiaries is subject, except
for such violations or defaults which would neither have a Material
Adverse Effect nor reasonably be expected materially and adversely
to affect the consummation of this Agreement or the transactions
contemplated hereby.
(k) This Agreement has been duly
authorized and validly executed and delivered by the
Company.
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(l) The execution and delivery of
this Agreement by the Company, the issuance and sale of the Shares,
the performance of this Agreement and the transactions contemplated
hereby and thereby will not (i) conflict with or result in a
breach or violation of any of the respective charter or bylaws or
other similar organizational instrument of the Company or any of
its consolidated subsidiaries or any of the terms or provisions
thereof, (ii) result in the suspension, termination or
revocation of any Authorization (as defined below) of the Company
or any of its consolidated subsidiaries, or other impairment of the
rights of the holder of any such Authorization, except for
suspensions, terminations or revocations or other impairments which
would not have a Material Adverse Effect, (iii) constitute a
default or cause an acceleration of any obligation under or result
in the imposition or creation of (or the obligation to create or
impose) a Lien with respect to, any bond, note, debenture or other
evidence of indebtedness or any indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any of its
consolidated subsidiaries is a party or by which it or any of them
is bound, or to which any properties of the Company or any of its
consolidated subsidiaries is or may be subject or
(iv) contravene any order of any court or governmental agency
or body having jurisdiction over the Company or any of its
consolidated subsidiaries or any of their properties, or violate or
conflict with any statute, rule or regulation or administrative or
court decree applicable to the Company or any of its consolidated
subsidiaries, or any of their respective properties except in the
case of clauses (iii) or (iv) above, for such
suspensions, terminations, revocations, impairments, conflicts or
violations which would neither have a Material Adverse Effect nor
reasonably be expected materially and adversely to affect the
consummation of this Agreement or the transactions contemplated
hereby.
(m) Except as may be described in
the Pricing Prospectus, there is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or
foreign, pending against or affecting the Company or any of its
consolidated subsidiaries, or their respective properties, which is
required to be disclosed in the Pricing Prospectus and are not so
described, or which would result, singly or in the aggregate, in a
Material Adverse Effect or which could reasonably be expected to
materially and adversely affect the consummation of this Agreement
or the transactions contemplated hereby, and to the best of the
Company’s knowledge, no such proceedings are contemplated or
threatened. No contract or document of a character required to be
described in the Pricing Prospectus, in order to prevent the
Pricing Prospectus, as of its date from containing any untrue
statement of a material fact or omitting to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, is not so
described.
(n) To the best knowledge of the
Company (A) no action has been taken and no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the issuance of the
Shares or prevents or suspends the use of the Pricing Prospectus or
Prospectus and (B) 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 its
consolidated subsidiaries which would prevent or suspend the
issuance or sale of the Shares or the
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use of the Pricing Prospectus or Prospectus.
Every request of any securities authority or agency of any
jurisdiction for additional information (to be included in the
Pricing Prospectus or Prospectus) has been complied with in all
material respects.
(o) Except as would not, singly or
in the aggregate, have a Material Adverse Effect, neither the
Company nor any of its consolidated subsidiaries is in violation of
any environmental, safety or similar law or regulation applicable
to its business relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”),
lacks any permits, licenses or other approvals required of them
under applicable Environmental Laws or is violating any terms and
conditions of any such permit, license or approval.
(p) The Company is not aware of any
existing or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors, or of
Marriott International, Inc. (or its consolidated subsidiaries)
which would have a Material Adverse Effect.
(q) Except with respect to the Hotel
Trades Council and Hotel Association Pension Fund and the Host
International, Inc. Cleveland Retirement Benefit Plan, neither the
Company nor any of its consolidated subsidiaries has sponsored,
maintained or contributed to, directly or indirectly, within the
last five years, any employee benefit plan subject to Title IV of
ERISA, including without limitation “multiemployer
plans” (as defined in Section 4001(a)(3) of
ERISA).
(r) Neither the Company nor any of
its consolidated subsidiaries has violated any provisions of the
Foreign Corrupt Practices Act or the rules and regulations
promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse
Effect.
(s) The operations of the Company
and its consolidated subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all applicable jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines issued,
administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”), except for any instances
of non-compliance that would not, singly or in the aggregate,
have a Material Adverse Effect. No action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened, except for any actions, suits
or proceedings that would not, singly or in the aggregate, have a
Material Adverse Effect.
(t) Neither the Company nor any of
its consolidated subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department
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(“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds, to any
subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(u) Each of the Company and its
consolidated subsidiaries have good and marketable and insurable
title, free and clear of all Liens, to all property and assets
described in the Pricing Prospectus as being owned by it, except
for Liens described in the Pricing Prospectus (including, without
limitation, all Liens relating to mortgages reflected on the
historical or pro forma financial statements or described in the
notes thereto included or incorporated by referenced in the Pricing
Prospectus) and Liens imposed pursuant to the Pledge and Security
Agreement or by the indentures relating to the Senior Notes and the
Credit Facility or Liens that would not have a Material Adverse
Effect and (ii) all liens, charges, encumbrances, claims or
restrictions on or affecting the properties and assets of the
Company or its consolidated subsidiaries that are required to be
disclosed in the Pricing Prospectus are disclosed.
(v) Except as disclosed in the
Pricing Prospectus (excluding any supplement or amendment after the
date hereof), subsequent to the date of the Pricing Prospectus and
up to each Closing Date (as defined below), neither the Company nor
any of its consolidated subsidiaries has incurred any liabilities
or obligations, direct or contingent, which are material to the
Company and its consolidated subsidiaries taken as a whole, nor
entered into any material transaction not in the ordinary course of
business and there has not been, singly or in the aggregate, any
material adverse change, or any development which would involve a
material adverse change, in the properties, business, results of
operations, condition (financial or otherwise), business affairs or
prospects of the Company and its consolidated subsidiaries taken as
a whole (a “Material Adverse Change”).
(w) No consent, approval,
authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters.
(x) Neither the Company nor any of
its respective affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in
Cuba.
(y) (i) The Company and its
consolidated subsidiaries have all certificates, consents,
exemptions, orders, permits, licenses, authorizations or other
approvals (each, an “Authorization”) of and from, and
have made all declarations and filings with, all Federal, state,
local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or
required to own, lease, license and use its properties and assets
and to conduct its business in the manner
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described in the Pricing Prospectus and all such
Authorizations are in full force and effect, except to the extent
that the failure to obtain or file or cause to remain in effect
would not, singly or in the aggregate, have a Material Adverse
Effect, (ii) the Company and its consolidated subsidiaries are
in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities and governing bodies
having jurisdiction with respect thereto and (iii) neither the
Company nor its consolidated subsidiaries has received any notice
of proceedings relating to the revocation or modification of any
Authorization, which singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.
(z) The Stock conforms in all
material respects to the description thereof set forth under the
caption “Description of Capital Stock” contained or
incorporated by reference in the Registration Statement and the
Pricing Prospectus.
(aa) The statements in the
Prospectus under the caption “Underwriting,” insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(bb) To the Company’s
knowledge, KPMG LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries, are
independent public accountants as required by the Act.
(cc) Neither the Company nor any of
its consolidated subsidiaries is, nor, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Pricing Prospectus, will be, an
“investment company” or a company
“controlled” by an investment company within the
meaning of the Investment Company Act of 1940, as
amended.
(dd) Each certificate signed by any
officer of the Company and delivered to the Underwriters or counsel
for the Underwriters pursuant to Section 8 shall be deemed to
be a representation and warranty by the Company to the Underwriters
as to the matters covered thereby.
(ee) The Company and each of its
consolidated subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with accounting
principles generally accepted in the United States, or GAAP, and to
maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(ff) The Company and its
subsidiaries maintain an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15(e) under
the Exchange Act) that is designed to ensure that information
required to be disclosed by the
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Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the
Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated
and communicated to the Company’s management as appropriate
to allow timely decisions regarding required disclosure. The
Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as
required by Rule 13a-15(e) under the Exchange Act.
(gg) Neither the Company nor any of
its consolidated subsidiaries is in violation of any statute, law,
ordinance, governmental rule or regulation or any judgment, decree,
rule or order of any court or governmental agency or authority
applicable to the Company or its consolidated subsidiaries or any
of their respective properties or assets or any applicable zoning
laws, ordinances and regulations, except such violations as would
not, singly or in the aggregate, have a Material Adverse
Effect.
(hh) Except as described in the
Pricing Prospectus, the leases under which the Company or its
consolidated subsidiaries holds or uses real property or other
material assets as a lessee (“Leases”) are in full
force and effect; and each of the Company and its consolidated
subsidiaries has complied with its obligations under the Leases and
its franchise agreements other than any non-compliance which,
individually or in the aggregate would not result in a Material
Adverse Effect; and neither the Company nor any of its consolidated
subsidiaries knows of any default by any other party to the Leases
and its franchise agreements which, alone or together with other
such defaults, would have a Material Adverse Effect.
(ii) Since January 1, 1999, the
Company has operated, and currently intends to continue to operate,
in a manner so as to be qualified and to be subject to tax as a
REIT under section 856 et seq of the Internal Revenue Code of 1986,
as amended (the “Code”), on and after January 1,
1999.
(jj) All material Tax returns
required to be filed by the Company and each of its material
consolidated subsidiaries have been filed or validly extended and
to the Company’s knowledge all such returns are true,
complete, and correct in all material respects. To the
Company’s knowledge, all material Taxes that are due from the
Company and each of its material consolidated subsidiaries have
been paid other than those (i) currently payable without
penalty or interest or (ii) those that have been or would be
contested in good faith and by appropriate proceedings and for
which, in the case of both clauses (i) and (ii), adequate
reserves have been established on the books and records of the
Company and its consolidated subsidiaries in accordance with GAAP.
For purposes of this Agreement, the term “Tax” and
“Taxes” shall mean all Federal, state, local and
foreign income taxes, and other assessments of a similar nature
(whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable
thereto.
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(kk) There are no persons with
registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement.
(ll) The Company has not taken and
will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Stock to
facilitate the sale or resale of the Shares.
2. Subject to the terms and
conditions herein set forth,
(a) the Company agrees to issue and
sell to the Underwriters, and each Underwriter agrees, severally
and not jointly, to purchase from the Company the respective number
of Firm Shares set forth in Schedule I hereto opposite its
name, at a purchase price per share of $6.336; and
(b) the Company agrees to sell to
the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to
9,750,000 Additional Shares at a purchase price of $6.336. If the
Underwriters elect to exercise such option, you shall so notify the
Company in writing not later than 30 days after the date of this
Agreement, which notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the
First Closing Date (as defined below) but not earlier than the
First Closing Date nor later than ten business days after the date
of such notice. Additional Shares may be purchased as provided in
Section 2 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be
purchased as the number of Firm Shares set forth in Schedule
I hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
3. Upon the authorization by you of
the release of the Shares, the Underwriters propose to offer the
Shares for sale upon the terms and conditions set forth in the
Prospectus.
4. (a) Payment for the Firm Shares
shall be made to the Company in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for
the respective accounts of the Underwriters at 10:00 a.m., New York
City time, on the third New York Business Day following the date of
this Agreement. The time and date of such payment are hereinafter
referred to as the “First Closing Date”.
(b) Payment for any Additional
Shares shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the Underwriters
at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or on such
11
other date, in any event not later than the
fifth New York Business Day following the date of the exercise of
such opti
